Mediation is a voluntary process by which the parties, with the assistance of the mediator, systematically isolate issues in dispute, develop options for the resolution of those issues, explore the usefulness of those options and consider the alternatives with the aim of reaching an agreement that accommodates the interests and needs of the parties and has the effect of resolving the dispute or, at least, agreeing on some of the issues.
Many written agreements contain dispute resolution provisions whereby mediation is the, chosen method of dispute resolution, or, is one of the steps in dispute resolution. Mediation proceedings are time effective and cost effective. Mediation can be held at any time before or during litigation. Mediation is confidential to the extent that the law permits. Generally, nothing said in mediation proceedings can be used in subsequent Court proceedings. Although there are some exceptions, that is the general rule.
A Court , in proceedings pending, may order mediation with, or without, the consent of the parties. Parties must participate in the mediation in good faith. Mediation proceedings are very successful because the interests of the parties are identified and addressed. Parties realise that a dispute can be quickly and relatively cheaply, resolved. It is the agreement between the parties which resolves a dispute referred to mediation, not a Court imposed decision.
See an example of an agreement for mediation here.