A lawyer dealing with a live dispute often starts thinking about the next procedural step: file the suit, seek an interim injunction, issue a notice, prepare for evidence, or argue the next application. But when should you use mediation in litigation? The answer is not simply “when both parties are willing to compromise.” A good litigator looks at mediation as part of the case strategy and asks whether settlement can achieve the client’s objective more effectively than continuing the fight.
Mediation does not mean abandoning your client’s legal position. It means understanding that the best outcome in a dispute is not always a judgment after years of litigation.
Mediation is not a “last resort”
One common mistake is to treat mediation as something to be suggested only after the case starts going badly.
By then, the parties may have already spent substantial time and money. Positions may have hardened. Personal relationships may have deteriorated. The lawyers may have exchanged aggressive pleadings and notices. The possibility of a practical settlement can become harder to explore.
The better approach is to assess mediation early.
Under Section 5 of the Mediation Act, 2023, parties may voluntarily and by mutual consent attempt pre-litigation mediation before filing a civil or commercial proceeding. The Act also permits a court or tribunal to refer parties to mediation at any stage of the proceedings.1
That gives a lawyer more than one opportunity to consider settlement.
Look at the dispute, not just the cause of action
Suppose a client approaches you because a business partner has failed to make a payment of Rs. 15 lakh.
You could immediately start preparing a recovery suit.
But before doing that, ask:
- Is the amount genuinely disputed?
- Does the other party have the ability to pay?
- Is the client more interested in recovering money or proving that they were legally right?
- Does the client want to continue doing business with the other party?
- Would instalments, revised timelines or a different commercial arrangement solve the problem?
- How much will litigation cost in time, fees and management attention?
- What happens if the client wins but enforcement becomes difficult?
These questions can change the litigation strategy.
A lawyer’s job is not merely to identify a cause of action. It is to identify the most useful route to the client’s objective.
When mediation can make strategic sense
Mediation is particularly worth considering where the dispute involves a continuing relationship, a negotiable financial claim, or an outcome that can be structured in several ways.
For example:
| Situation | Why mediation may be useful |
| Commercial payment dispute | Parties can negotiate amount, instalments and timelines |
| Partnership dispute | Settlement can address exit, accounts and future obligations |
| Property dispute within a family | Parties may want a solution that preserves relationships |
| Employment dispute | Compensation, reference letters or exit terms may be negotiated |
| Matrimonial dispute | Parties may need practical arrangements beyond a simple legal determination |
| Contract dispute | Parties can modify performance terms rather than simply seek damages |
The key word is flexibility.
A court generally decides the legal issues placed before it. Mediation can allow parties to negotiate a wider commercial or personal solution, provided the proposed settlement is legally permissible.
This is why a litigator should understand the difference between the client’s legal claim and the client’s actual interest.
A client may say, “I want the other side to pay Rs. 20 lakh.”
After a proper discussion, you may discover that the real objective is receiving ₹12 lakh quickly, recovering certain documents, ending the business relationship and avoiding further litigation.
That distinction matters.
But do not send every case to mediation
Mediation is not automatically the right strategy.
The Mediation Act, 2023 contains a framework identifying disputes or matters that are not fit for mediation. Section 6 and the First Schedule cover categories including disputes involving criminal prosecution, certain matters affecting third-party rights, specified regulatory proceedings and other matters that cannot appropriately be submitted to mediation.2
There is also a practical question: Does the other side have a genuine reason to settle?
If the opposing party has no incentive to negotiate, mediation may simply become another procedural step.
A lawyer should therefore assess at least four things before recommending mediation:
1. Legal suitability
Can the dispute legally be mediated? Are there statutory restrictions or third-party interests involved?
2. Settlement authority
Does the person attending mediation actually have authority to negotiate and conclude a settlement?
3. Settlement range
Is there a realistic range within which the dispute could be resolved?
4. Negotiation dynamics
Is the other side likely to participate in good faith, or is mediation being used merely to delay proceedings?
Delhi District Courts’ mediation guidance similarly cautions against referring cases to mediation where there is no genuine intention to settle or where mediation is likely to operate as a delaying tactic.3
That is an important litigation lesson: mediation should be a strategy, not a reflex.
Preparation before mediation is still litigation preparation
Another misconception is that mediation requires less preparation because there is no trial.
The opposite can be true.
A lawyer going into mediation should know the case almost as well as they would before arguing it.
Prepare a simple mediation brief covering:
Facts: What actually happened?
Documents: Which documents support the client’s position?
Legal position: What are the strongest legal arguments?
Weaknesses: What is the opposing side likely to attack?
Relief: What can the court realistically grant?
BATNA: What happens if the matter does not settle?
Settlement range: What is the client’s ideal outcome, acceptable outcome and walk-away position?
The last three are particularly important.
Imagine that your client has a Rs. 20 lakh claim. Saying “we will settle only for Rs. 20 lakh” is not a strategy.
You should know:
- What happens if the case goes to trial?
- What will litigation cost?
- How strong is the evidence?
- How long might enforcement take?
- What is the minimum commercially acceptable settlement?
- Which terms other than money can create value for the client?
This is where case assessment becomes negotiation strategy.
The settlement agreement is where good strategy becomes useful
Getting the parties to say “we have settled” is not the end of the lawyer’s job.
The settlement must be drafted carefully.
A settlement agreement may need to deal with:
- exact payment amounts;
- payment dates and instalments;
- mode of payment;
- withdrawal of proceedings;
- delivery or return of documents;
- transfer of property or other assets;
- confidentiality, where legally appropriate;
- future claims;
- default consequences;
- undertakings;
- treatment of pending applications;
- responsibility for court fees and other costs; and
- the steps to be taken after settlement.
This is where drafting skill becomes critical.
An ambiguous settlement can create a second dispute.
The Mediation Act, 2023 gives mediated settlement agreements significant legal force. Under Section 27, a mediated settlement agreement signed by the parties and authenticated by the mediator is final and binding, subject to the Act, and is enforceable in the same manner as a judgment or decree under the CPC.4
At the same time, lawyers must understand the statutory framework governing challenge to such agreements. Section 28 provides limited grounds for challenge, including fraud, corruption, impersonation and mediation of matters not fit for mediation under Section 6.5
So the drafting stage deserves as much attention as the negotiation itself.
The real litigation skill: knowing when not to fight
A strong litigator is not necessarily the lawyer who takes every dispute to judgment.
It is the lawyer who can look at a case and identify the available routes: litigation, mediation, arbitration, negotiation or another appropriate mechanism and explain the consequences of each to the client.
Mediation becomes particularly valuable when the client needs a practical outcome, not merely a legal declaration.
For a young lawyer, this requires three connected skills: case assessment, negotiation and precise settlement drafting. These are not separate from litigation practice. They are part of it.
If you want to build these skills through practical case handling, drafting exercises and litigation-focused learning, explore Lawctopus Law School’s Civil Litigation & Drafting course or the Mastering Litigation and Becoming an Independent Litigator course.
Disclaimer: This article is intended for educational purposes and does not constitute legal advice. The applicability of mediation depends on the facts of each dispute and the law in force at the relevant time.
References
- Mediation Act, 2023: Section 5 and Section 7: The Act permits voluntary pre-litigation mediation and allows courts/tribunals to refer parties to mediation at any stage. (India Code) ↩︎
- Mediation Act, 2023: Section 6 and First Schedule: Categories of disputes/matters not fit for mediation. (IndiaCode by eCourtsIndia) ↩︎
- Delhi District Courts: Mediation Guidelines: Practical considerations for deciding whether a case is suitable for mediation and the risk of mediation being used as a delaying tactic. (Delhi District Courts) ↩︎
- Mediation Act, 2023: Section 27: Enforcement of mediated settlement agreements. (IndiaCode by eCourtsIndia) ↩︎
- Mediation Act, 2023: Section 28: Grounds and limitation for challenging a mediated settlement agreement. (Indian Kanoon) ↩︎
About the Author
Vishakha Girhe is a Learning Manager at Lawctopus Law School. She holds an LL.M. in Business Laws and has practised as an independent litigator at the Nagpur District Court and Bombay High Court, Nagpur Bench.