Bad faith in mediation happens when a party complies with a court’s order to mediate on paper but refuses to engage with the process in substance: no settlement authority in the room, no preparation, no willingness to discuss the merits. Federal and state courts take this seriously because mandatory mediation only works when participants treat it as more than a box to check on the way to trial. When a judge finds that a party crossed the line, the consequences range from paying the other side’s attorney fees and mediator costs to, in extreme cases, having pleadings struck or a default judgment entered.
What Good Faith Participation Actually Requires
The baseline is straightforward. Show up prepared, bring someone who can actually say yes to a deal, and engage with the substance of the dispute. Most court orders spell this out. A federal appeals court has held that even a party taking a “no pay” position still has to send a principal with settlement authority; failing to do so violates the order and undermines the session.
Preparation counts too. A party cannot, as one federal court put it, “be an ostrich” about the mediation process. That means reviewing the relevant facts, exchanging information the court or mediator has requested, and arriving ready to discuss the merits. Many court-annexed programs also require a pre-mediation statement from each side, and skipping that submission is itself a form of noncompliance.
One point to be clear about: failing to reach an agreement is not evidence of bad faith. You can attend, negotiate hard, refuse to move off a position you believe is fair, and walk away without a deal. That is fine. The line sits between driving a hard bargain and refusing to bargain at all.
Conduct Courts Treat as Bad Faith
Bad faith shows up in specific, observable behaviors rather than a vague sense that the other side wasn’t trying. Courts have flagged several patterns that reliably trigger sanctions:
- No settlement authority in the room. A corporate representative attends but cannot approve any dollar amount without calling headquarters, so hours of negotiation happen with someone who has no power to close.
- Withholding information the court or mediator ordered exchanged before or during the session. One federal case involved defendants refusing to let the plaintiff review requested documents during mediation, though the appellate court ultimately required clearer evidence linking the party to that decision.
- Failure to appear or prepare. Skipping the session, arriving hours late, or showing up without having read the case materials. Outright no-shows are the clearest form of bad faith.
- Attending only to gather intelligence. Using the session to probe the other side’s evidence and strategy with no intention of making or accepting any offer turns settlement talks into unauthorized discovery.
- Rigid ultimatum without discussion. A firm opening position is legal. Refusing to explain it, refusing to engage with the mediator’s analysis, and treating the day as a formality often is not.
Hard Bargaining Versus Bad Faith
Most disputes over mediation conduct land on this distinction. Hard bargaining means making aggressive offers, holding firm on key points, and pushing for favorable terms. Bad faith means sabotaging the process itself. You can reject every offer the other side makes and still participate in good faith, as long as you’re actually evaluating what they put on the table. A party who opens with a demand far above or below the case value isn’t automatically acting in bad faith. A party who opens with that number, refuses to explain it, ignores the mediator, and spends the day checking email is a different story.
The legal standard includes an element of intent. A finding of bad faith requires more than poor judgment or negligence. It implies “the conscious doing of wrong because of dishonest purpose,” meaning the party knew it was undermining the process and did it anyway. In practice, judges infer intent from the pattern of behavior, so the objective facts usually tell the story.
Why Proving Bad Faith Is Hard
Proving it runs headfirst into one of mediation’s foundational protections: confidentiality. The Uniform Mediation Act, adopted in some form by a majority of states, creates a privilege that keeps mediation communications out of later court proceedings. The point is to let parties speak candidly without worrying that an admission of weakness or a lowball offer will be used against them at trial. Remove that protection and the open dialogue that makes mediation work collapses.
That creates an obvious problem when one side wants to report misconduct. A judge cannot easily examine what happened in the mediation room without piercing the confidentiality that makes the process function. Even when a party is clearly obstructive, the legal system generally prioritizes the long-term benefit of confidential settlement talks over punishing bad behavior in a single case.
Mediators work inside a narrow corridor. They can typically report objective facts: whether a party attended, whether a required representative was present, whether the session actually happened. They are generally barred from disclosing the substance of the negotiations, meaning who said what, what offers were made, and where positions diverged. A mediator’s report to the court is usually limited to compliance data rather than a narrative of what went wrong.
The UMA’s privilege has exceptions, but “bad faith participation” is not one of them. A party who wants to prove the other side sandbagged the mediation often cannot use the substance of what was said in the room to make the case. Courts navigating this gap rely on the objective, non-privileged facts: attendance records, whether required documents were exchanged, whether a representative with authority was present.
Sanctions a Court Can Impose
When a court finds bad faith, Federal Rule of Civil Procedure 16(f) authorizes “any just orders” for a party who fails to appear, is substantially unprepared, or does not participate in good faith at a pretrial conference. The rule also incorporates the sanctions available under Rule 37(b)(2)(A), which include striking pleadings, dismissing the action, or entering a default judgment.1Legal Information Institute. Federal Rules of Civil Procedure Rule 16 State courts operate under parallel authority through their own procedural rules and ADR statutes, so the exposure exists in both systems.
Monetary Sanctions
The most common outcome is a financial penalty, and the rule makes expense-shifting mandatory rather than discretionary. Under FRCP 16(f)(2), the court “must order” the noncompliant party or its attorney to pay the reasonable expenses, including attorney fees, caused by the violation, unless the noncompliance was substantially justified.1Legal Information Institute. Federal Rules of Civil Procedure Rule 16
Nick v. Morgan’s Foods shows what this looks like in dollars. The defendant failed to submit a required mediation memorandum and sent no corporate representative with settlement authority. The court ordered the defendant and its counsel to split roughly $2,780 in combined attorney fees and mediator costs payable to the plaintiff, plus $1,500 to the Clerk of Court reflecting the savings the defendant gained by not preparing. An additional $2,500 in sanctions followed when the defendant filed a frivolous motion to reconsider.2Justia Law. Nick v Morgans Foods Inc 99 F Supp 2d 1056 These amounts add up fast. Attorney time for the mediation itself, preparation, and the subsequent sanctions motion are all on the table, and the court can shift all of it.
Stays and Repeat Mediation
A court may stay the proceedings, freezing the case until the party complies with the mediation requirement. For a party eager to resolve the case or facing ongoing costs, that delay becomes its own form of pressure. The judge can also order the parties back to mediation with specific conditions attached, such as requiring a named individual with defined authority to attend in person.
Striking Pleadings and Default
In egregious cases, particularly where a party has ignored multiple court orders or shown a pattern of obstruction, a judge can strike the offending party’s answer or complaint. That effectively ends the case in favor of the compliant side. Courts reserve this for situations where lesser sanctions have failed or where the conduct shows complete contempt for the process. It is rare, but the authority sits directly in the text of Rule 16(f).1Legal Information Institute. Federal Rules of Civil Procedure Rule 16
How to Seek Sanctions After a Bad Mediation
If the other side undermined your mediation, the process starts with a motion filed after the session. You need to lay out specific conduct that violated the court’s order or local rules, not a general complaint that the other party was difficult. “We didn’t settle and I’m frustrated” will not get you there. You need concrete behavior: the representative lacked authority, required documents were not produced, the party refused to engage with the mediator, or nobody showed up.
The court will typically hold an evidentiary hearing before imposing sanctions, and this is where the confidentiality tension becomes real. You will likely be limited to non-privileged evidence: the court’s own mediation order, proof of who attended, whether pre-mediation submissions were filed, and the mediator’s limited compliance report. Some courts have found that a mediator’s report confirming the session was conducted properly can itself serve as evidence on the quality of participation. The burden falls on the moving party to show that the opposing side’s conduct went beyond hard bargaining, and courts have stressed that this requires more than “unsubstantiated allegations of an adverse party.”
Insurance Carriers and Settlement Authority
When one side is insured, the carrier’s participation becomes a common flashpoint. Many court-ordered mediations require the insurer to send a representative with authority to settle or at least recommend settlement of the claim. A claims adjuster who attends with a $5,000 authority limit on a case valued at $200,000 creates the same problem as a corporate employee who needs to call headquarters. The negotiation stalls because the person in the room cannot actually make decisions.
Courts in multiple jurisdictions have addressed this by requiring the insurer’s representative to attend in person with meaningful settlement authority. Some allow telephone or video participation with advance permission from the mediator, but that is the exception. If you are the plaintiff in a case where the defendant’s insurer is the real decision-maker, check whether the mediation order addresses carrier attendance. If it does not, consider asking the court to add that requirement before the session. Discovering at the mediation that the adjuster has no authority is a common and avoidable frustration.
Appealing a Sanctions Order
A party sanctioned for mediation bad faith can appeal, but the standard of review works against them. Appellate courts review sanctions orders for abuse of discretion, meaning the trial judge’s decision stands unless it rested on a clear error of judgment or applied the wrong legal standard. The trial judge issued the mediation order and watched the parties’ conduct throughout the case, so appellate courts overturn these sanctions infrequently. If a court orders you to mediate, take the order seriously the first time. Fighting sanctions on appeal is an uphill effort that adds even more cost to a case you were ordered to try to settle.