# Mediation

Source: https://contracko.com/glossary/mediation

# Mediation

A voluntary process where a neutral mediator helps parties reach their own settlement of a dispute.

## Definition

Mediation is a form of alternative dispute resolution in which an impartial mediator facilitates negotiation but does not impose a decision; control of the outcome remains with the parties. It is typically faster, cheaper, and more confidential than litigation or arbitration, and it preserves the commercial relationship. Many contracts make mediation a mandatory first step in an escalation ladder before court or arbitration.

## Example

> Before going to court the parties must, under their dispute resolution clause, attempt mediation through a registered mediator.

## Why this is a business risk

Skipping a contractually required mediation step before litigating can result in proceedings being stayed or costs being awarded against you, even if you ultimately win. Businesses that go straight to court without attempting mediation may also miss a faster and cheaper resolution. Conversely, agreeing to mediation without time limits can delay enforcement of a clear right.

## How to manage it

- Check the dispute resolution clause before starting any formal proceeding to confirm whether mediation is a mandatory first step.
- Set a time limit for mediation in the clause so it does not drag on indefinitely while the underlying dispute worsens.
- Choose a registered mediator from a recognised body (such as the MfN register in the Netherlands) to ensure quality and confidentiality.
- Document your mediation attempts and outcome (or failure) carefully: this may be required before court proceedings are admitted.

### How Contracko helps

Contracko surfaces dispute resolution clauses during AI contract review, including whether mediation is mandatory and any prescribed timelines. Having this information readily available means a team facing a dispute can identify its procedural obligations within minutes rather than re-reading the contract from scratch.

## Relevant for

[Legal Services](https://contracko.com/industries/legal-services)[Construction](https://contracko.com/industries/construction-industry)[Consulting](https://contracko.com/industries/consulting)

## Related clauses

- [Dispute Resolution Clause](https://contracko.com/clause-library/dispute-resolution)
- [Arbitration Clause](https://contracko.com/clause-library/arbitration)

## Related terms

- [Arbitration](https://contracko.com/glossary/arbitration)
- [Dispute resolution clause](https://contracko.com/glossary/dispute-resolution-clause)
- [Jurisdiction](https://contracko.com/glossary/jurisdiction)
- [Good faith](https://contracko.com/glossary/good-faith)

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## Frequently asked questions

Common questions about this term.

- **Q:** Is the outcome of mediation binding?
  **A:** Mediation itself is non-binding; it becomes binding only once the parties record their agreement in a settlement contract (vaststellingsovereenkomst).

- **Q:** Can a contract require mediation before litigation?
  **A:** Yes. A dispute resolution clause often makes mediation a mandatory step, and courts may stay proceedings if it was skipped.

- **Q:** How is mediation different from arbitration?
  **A:** In mediation the mediator has no power to impose a decision; the parties control the outcome. In arbitration the arbitrator makes a binding award. Mediation is collaborative; arbitration is adjudicative.

- **Q:** Is mediation confidential?
  **A:** Yes, typically. Statements and information exchanged during mediation are generally inadmissible in later court or arbitration proceedings. This confidentiality is one of its key advantages over litigation, and is usually reinforced in the mediation agreement.

- **Q:** What happens if one party refuses to participate in mediation?
  **A:** If mediation is contractually mandatory, a refusal may be a breach of the dispute resolution clause. A court may stay proceedings, award costs against the refusing party, or take the refusal into account in cost decisions. Mediation cannot ultimately be forced because it requires voluntary cooperation to succeed.

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