Good faith participation in mediation means showing up prepared, bringing someone who can actually say yes to a deal, and genuinely engaging with the other side, even though no one can force you to settle. Federal courts can sanction a party who treats the session as a formality, with penalties ranging from paying the other side’s attorney fees to, in extreme cases, dismissal of the lawsuit or a default judgment.1Legal Information Institute. Federal Rules of Civil Procedure Rule 16 – Pretrial Conferences; Scheduling; Management The standard protects the integrity of a court-ordered process while leaving you free to hold firm on a legitimate legal position.
What Good Faith Actually Requires
Good faith is easier to define by what it does not demand. You do not have to agree to anything. You do not have to make a specific dollar offer. You do not have to abandon a legal theory you believe in. What you do have to do is attend, come prepared, and genuinely consider what the other side puts on the table.
Courts assess the question through a mix of objective conduct and apparent intent. The objective side is simple: Did you attend? Did you bring the right documents and the right people? Did you stay for the full session? The intent side is harder to pin down, but judges look at whether you treated the session as a real opportunity to resolve the dispute or just went through the motions. Standing firm on a well-founded position is fine. Sitting in the room refusing to speak is not.
A common misconception is that the Uniform Mediation Act imposes a good faith duty. It does not. The UMA deals with mediation privilege and confidentiality rather than conduct standards. The obligation to participate in good faith comes primarily from Federal Rule of Civil Procedure 16(f), which authorizes sanctions when a party “does not participate in good faith” in a pretrial conference or related proceeding, and from the local rules of individual federal districts that spell out what participation looks like.1Legal Information Institute. Federal Rules of Civil Procedure Rule 16 – Pretrial Conferences; Scheduling; Management
Preparing for the Session
Most good faith problems start before anyone walks in the door. Showing up without the right documents, the right people, or the required brief signals to the court that you never intended to take the process seriously.
Documents and the Pre-Mediation Brief
Collect everything relevant to the dispute: contracts, financial records, medical records, correspondence, and any documents that establish what happened and what you are claiming. Calculate the full scope of your damages, including attorney fees already incurred. Concrete numbers let you negotiate from a realistic position and show the mediator you came ready to work.
Most courts also require each side to submit a pre-mediation brief or confidential statement to the mediator several days in advance, summarizing the key facts, the legal arguments, and the main sticking points. Local rules or standing orders specify the deadline and format. Skipping the brief, or sending in a half-page summary, is one of the clearest tells of bad faith.
Bringing Someone With Settlement Authority
This is the single most common reason parties get sanctioned. The person who attends has to have the power to make a binding decision on the spot, up to the full value of the claim, without calling a supervisor or a board for approval. Federal appellate courts require that attorneys “consult with their clients and obtain as much authority as feasible to settle the case” before the session begins.2U.S. Court of Appeals for the Fourth Circuit. Federal Rule 33 and Local Rule 33 Establishing the Mediation Program
When an insurance carrier is involved, most courts require a company representative, not outside counsel, who can authorize a settlement figure. If the representative has to phone someone for approval on every number, that defeats the purpose. Some courts allow a representative to attend by phone or video if they can communicate with decision-makers in real time, but this typically requires advance approval from the mediator or the court. Sending someone who lacks authority is treated essentially the same as not showing up at all.
Conduct During the Session
Physical attendance for the full scheduled session is the baseline. If the court orders a four-hour mediation, walking out after an hour without a valid reason looks like exactly what it is. The same standard applies to remote sessions, where logging off early or going on mute for long stretches raises the same concerns.
Beyond showing up, you need to actually engage. Listen to the other side’s opening. Respond to the mediator’s questions with real answers. When an offer comes across, consider it and respond with a reasoned explanation, even if the answer is no. Courts have sanctioned parties for refusing to let their attorney negotiate, refusing to speak despite repeated requests from the mediator, and being so disengaged that they were “substantially unprepared” to participate.
The mediator will likely call private caucuses to meet with each side separately and discuss strengths and weaknesses candidly. These conversations are where most progress happens. Being honest with the mediator about your vulnerabilities in a caucus is not a concession; it helps the mediator understand what kind of deal might actually work. Refusing to engage in those private discussions, or treating them as an interrogation to be stonewalled, undercuts the whole process.
Hard Bargaining vs. Bad Faith
There is a real difference between negotiating aggressively and refusing to negotiate at all. Courts recognize that mediation involves give and take, and no one expects you to cave on the first offer. Opening with a high demand, rejecting lowball offers, or insisting on terms that favor your side are all legitimate tactics. The line gets crossed when the conduct makes productive negotiation impossible.
Conduct courts have treated as bad faith includes refusing to make any offer or counteroffer, attending without authority to settle, failing to prepare or submit required documents, using the session to threaten the opposing party with collateral consequences unrelated to the dispute, and walking out before the mediator declares an impasse. In one case, a court found bad faith where a party used mediation to demand a large payment in exchange for not disclosing alleged regulatory violations, essentially treating the session as an extortion opportunity.
The totality of your conduct matters more than any single moment. A judge evaluating a bad faith motion will look at the full picture: Did you prepare? Did you bring authority? Did you stay? Did you engage? One awkward exchange or a firm “no” on a particular term will not get you sanctioned. A pattern of obstruction across the entire session very well might.
Sanctions for Bad Faith
Federal Rule of Civil Procedure 16(f) gives courts broad power to sanction a party or attorney who fails to appear, shows up substantially unprepared, or does not participate in good faith. The rule authorizes “any just orders,” including the full menu of sanctions available under Rule 37(b)(2): striking pleadings, prohibiting a party from presenting certain evidence, dismissing claims, or entering a default judgment.1Legal Information Institute. Federal Rules of Civil Procedure Rule 16 – Pretrial Conferences; Scheduling; Management
On top of any other sanction, the court must order the noncompliant party to pay the opposing party’s reasonable expenses, including attorney fees, unless the failure was substantially justified.1Legal Information Institute. Federal Rules of Civil Procedure Rule 16 – Pretrial Conferences; Scheduling; Management That language is mandatory, not discretionary. If the court finds bad faith, a fee-shifting order follows unless there is a good excuse.
Federal courts also possess inherent authority, separate from any specific rule, to sanction parties who engage in bad faith conduct or obstruct the administration of justice. The Supreme Court has held that this power includes shifting attorney fees to the offending party, even though the default American rule normally requires each side to pay its own lawyers.3Legal Information Institute. Inherent Powers Over Contempt and Sanctions Repeated or deliberate failures to comply with court orders can also result in contempt charges.
The severity of the sanction usually matches the severity of the conduct. A party who showed up but was underprepared might face a fee award covering the wasted session. A party who deliberately sabotaged the process or never appeared at all risks dismissal or a default judgment. Judges do not reach for the harshest options lightly, but the authority is there and courts have used it.
How Bad Faith Gets Proven When the Session Is Confidential
Mediation works in part because parties can speak freely without worrying their words will be used against them. Federal Rule of Evidence 408 makes settlement offers and statements made during negotiations inadmissible to prove the validity or amount of a disputed claim.4Legal Information Institute. Federal Rules of Evidence Rule 408 – Compromise Offers and Negotiations That protection creates a practical problem: if a party acts in bad faith, how does the judge find out?
In most jurisdictions, the mediator’s report to the court is limited to three things: whether the mediation occurred, whether it resulted in a settlement, and whether it ended in impasse. The mediator generally cannot tell the judge that one side refused to negotiate, lacked authority, or behaved badly. Some federal bankruptcy courts have adopted local rules requiring mediators to report whether a party “failed to negotiate in good faith,” but those are exceptions.
The practical result is that bad faith claims almost always come from the opposing party filing a motion, not from the mediator. The party alleging bad faith has to present enough evidence of the other side’s conduct to support the motion without disclosing privileged settlement communications. Courts handle this by focusing on objective, observable facts like attendance, preparation, and authority rather than the substance of what was offered or discussed.
When Mediation Does Not Produce a Deal
Not every mediation ends in a settlement, and that outcome by itself carries no penalty. The mediator declares an impasse, and both sides return to the litigation track with their legal rights intact. No judge will hold it against you that mediation did not produce a deal, as long as you participated in good faith.
After an impasse, the case picks up where it left off under the court’s scheduling order. Discovery deadlines, motion practice, and the trial date all proceed as if the mediation had not occurred. One point that catches people off guard: statutes of limitations keep running during the mediation process. Mediation does not automatically pause any filing deadlines. If your limitations period is close to expiring, you may need to file a protective lawsuit before or during mediation, or negotiate a written tolling agreement with the other side, to preserve your claims.