The Goldilocks Zone of Mediation

Fri, Apr 18th, 2025 | by Miles Mediation and Arbitration | Article | Social Share

By Steve Dunn

I am often asked, “When is the best time to schedule a mediation?”

Some lawyers like to schedule mediation as early as possible in the litigation, as soon as it becomes clear the parties will not be able to settle it through direct negotiations. Others prefer to wait until discovery is done and dispositive motions are imminent.

Timing matters. The stage of litigation affects how readily the parties move toward resolution, and can determine they settle at all. The goal in all cases should be to schedule mediation for a moment when the parties are ready to settle and can achieve maximum value. Not too soon, and not too late. Just right. The Goldilocks Zone of mediation.

Too Soon?

Parties sometimes come to see me before they are ready to settle their case. The wounds are still fresh, emotions still raw. There may not be enough emotional distance from the events leading up to the dispute to permit a dispassionate analysis of the case. Mediation cannot always overcome this dynamic.

Plaintiffs are often full of optimism about the evidence. Until the spotlight of discovery and cross examination shines on the evidence, plaintiffs do not realize how equivocal witness testimony tends to be, or how documents they think are clear can be interpreted in multiple ways.

Meanwhile, on the defense side, the participants in mediation often were not personally involved in the dispute. Early in the litigation, corporate representatives, insurance professionals, and outside counsel only know what they have been told and the people providing that information tend to paint a rosy picture. The defense may be unaware of text messages, social media postings, secretly recorded conversations, and other evidence that will come out later.

Both sides, then, often begin the litigation with an unrealistically optimistic assessment of their case. While mediation can be useful in illuminating this potential error, parties who come in too soon tend to overestimate the likelihood of their winning scenarios and downplay the chances they will lose.

On the defense side, when mediating early, decisions makers may be focused on whether they did anything wrong, or what they think the plaintiff deserves and may not understand the greater cost of litigation is not the money they pay to their lawyers, but the time and effort required to see it through. It is a bitter pill for the defense to realize there is no pot of gold at the end of the litigation rainbow for them. Winning the case outright usually just means they are back where they started. Sometimes it takes a few months of emails and information requests from their lawyers (and yes, bills) for the true cost of litigation to sink in.

Too Late?   

Waiting too long to mediate is also problematic. Although many attorneys prefer to mediate as close to the deadline as possible (usually around the filing of motions for summary judgment), there are significant downsides to this approach. As discovery ends, the inertia of a case may shift so that parties want to keep it going instead of getting it resolved.

First, the parties are deeply invested, both emotionally and financially. The defense has already spent a lot of money that could have gone toward settling the case and the cost of defense to finish out discovery is comparatively low. Defendants often feel as though they might as well see it through, particularly if they think the finish line is in sight.

Similar dynamics apply on the plaintiff’s side. The same coping mechanisms that enable a plaintiff to get through it can also create obstacles to settlement. Having steeled themselves to make it this far continuing the litigation seems like just more of the same.

Both sides, then, are susceptible to the sunk cost fallacy. They are so invested in litigating toward motions and trial that they find it difficult to change course. This cognitive bias is only one disadvantage of mediating late in case. When summary judgment is imminent, one side’s case or the other is about to get a lot better.

At the end of discovery, the defense knows (or should know!) whether it has a realistic chance of getting the case dismissed. If the defense thinks summary judgment is a plausible outcome, it may be economically rational to roll the dice and see what happens. It only costs a little more to file a motion and write a brief, while the outcome is only upside and includes the prospect of total victory.

Meanwhile, the plaintiff feels the same way. Having been run through the wringer of discovery, plaintiffs regard the hard part as nearly over. And lawyers who operate on feast-or-famine contingency arrangements are not scared of losing at summary judgment; they’re thinking about how the value of the case goes up if they get past summary judgment. Once a case is headed for trial, settlement offers tend to go up, sometimes in dramatic fashion.

Just Right

So, what is the Goldilocks Zone for mediation?

In my experience, our best shot is after one round of written discovery, but before depositions. This gives the parties enough of a taste of litigation to know what it is like, but not so much that they dig in and see no value in resolution. And it gives the parties enough information to make informed judgments but leaves enough uncertainty that they perceive risk in moving forward.

Mediating after an initial round of discovery usually means the parties have gotten through the initial series of communications through counsel, which often includes a failed attempt at settlement. They have been through the filing of suit, service of process, responsive pleadings, and digging up documents for discovery. Anyone who had any illusions that litigation would be easy or fun now has a better sense of what they are in for.

The real beauty of mediating at this stage is that there is still a lot of value for both sides to realize from settling. There is still a long road of litigation ahead, including the mediator’s favorite bogeyman, the prospect of endless appeals! There is plenty of pain, misery, and expense to be save from settling. Mediating before depositions enables the parties to save one of the most burdensome aspects of the dispute both in terms of time and money.

Even if the first document production has illuminated many important issues, both sides still must wonder how their witnesses will hold up under cross-examination. Typically at this stage of the litigation, the parties have a good sense of where they stand, but there is still the possibility their case could get significantly better… or worse!

While the Goldilocks Zone is a good moment for mediation, it is not the only time we can settle cases. When in doubt, it’s better to mediate too early than too late because this enables the parties to avoid the greatest amount of expense and risk. Exchanging exchange information and documents, either in advance or during the mediation itself, improves the chances of settlement.

While a good mediator can work with parties at any time, scheduling mediation in the Goldilocks Zone — not too early, not too late, and just right — will maximize the chance of settling your case.

*Originally published in North Carolina Lawyers Weekly.

About Steve Dunn

Steve Dunn was a litigator for over 20 years before becoming a full-time mediator in 2019. His law practice focused on business litigation, trade secrets, non-competes, wage disputes, and all forms of employment discrimination. In addition to private companies and educational institutions, Steve represented municipalities and public officials in cases involving the First Amendment, public records, and constitutional torts.