Will the Court Order Us to Mediate? Mediation in Texas Business Lawsuits

The statute: a court may refer any case to mediation

Section 154.021 of the Texas Civil Practice and Remedies Code lets a court, on its own motion or a party's, refer a pending dispute to an alternative dispute resolution procedure, and names mediation among them. The court is to confer with the parties about which procedure fits. Section 154.002 states the policy behind it: Texas encourages the peaceable resolution of disputes and the early settlement of pending litigation through voluntary settlement procedures.

"Voluntary" describes the settlement, not the attendance. A court can require the parties to show up and mediate. Under § 154.053(a) the mediator may encourage and assist the parties toward settlement but may not compel or coerce one, and § 154.023 forbids the mediator from imposing a judgment on the issues. The court cannot do indirectly what the mediator cannot do directly: nobody can be made to accept a deal.

What Dallas County civil district courts actually do

In practice the question is settled by the court's standing policies and scheduling order rather than case by case. Each Dallas County civil district court publishes its own procedures, and they differ in detail. Two examples, from the courts' own documents as of the dates shown:

• The 160th District Court's policies (February 2024) state that Level 1, 2 and 3 cases require mediation 30 days before trial, that the parties are to choose their own mediator or notify the court so one can be appointed, and that parties opposed to mediation must notify the court of the reasons for their opposition.
• The 193rd District Court's policies (June 2025) describe a policy to require mediation of all cases, but not to force parties to mediate if good reason exists not to; parties opposed must give the court their reasons, should agree on a mediator of their choice, and if they cannot agree within 30 days after the trial notice issues, the court will appoint one.

Other Dallas civil district courts follow the same pattern with their own deadlines, often tied to a uniform scheduling order that places mediation about a month before trial. The order in your case controls; read it, and read the judge's posted procedures. For what else to expect in these courts, see what to expect in Dallas County civil district courts. Federal courts in Dallas have their own local rules on ADR and routinely order mediation as well; the mechanics differ, the practical answer does not.

How to object, and when a court will listen

Section 154.022 sets the procedure. When a court decides a case is appropriate for referral it notifies the parties, and any party may file a written objection within 10 days after receiving that notice. If the court finds a reasonable basis for the objection, it may not refer the dispute. Where the referral comes in a scheduling order, the practical route is a motion asking the court to excuse or defer mediation, filed promptly rather than on the eve of the deadline.

Grounds courts have treated as reasonable include a mediation of the same dispute that already failed, a pending dispositive motion that would end the case, a party who is plainly unable to pay anything, and a procedural posture in which the facts needed to value the case are not yet known. One statutory limit stands out: under § 154.021(c), except by agreement of the parties, a court may not order mediation in an action subject to the Federal Arbitration Act. A party that has been ordered to arbitrate under an FAA clause cannot be ordered to mediate in that court case as well.

Objections that courts do not find reasonable are the common ones: the other side is unreasonable, the case has no settlement value, or the client does not want to pay a mediator. Judges hear those every week and refer the case anyway.

What the order requires of you

• Attendance. Most orders require each party to attend through a representative with full authority to settle, with counsel. Many Dallas courts permit video attendance; some require in-person attendance unless excused.
• A mediator. The parties pick one by agreement; if they cannot, the court appoints one. Under § 154.052 a court-appointed mediator must have at least 40 classroom hours of dispute resolution training.
• The fee. Under § 154.054 the court may set a reasonable fee for an appointed mediator and, unless the parties agree on a method of payment, taxes it as costs of suit. In practice the parties split it, most often equally, and the order often says so.
• Participation. Showing up and refusing to speak is noncompliance with the order. Showing up, listening to the mediator and declining to move from a position you hold in good faith is not. The line is attendance and engagement, not generosity.
• A report. The mediator tells the court whether the case settled, and nothing else. Under § 154.053(c) the conduct of the parties and counsel during the process is confidential and may not be disclosed to the appointing court.

Example

Suppose a Dallas commercial landlord sues a former tenant for two years of rent after an early move-out, and the tenant counterclaims for constructive eviction. The scheduling order sets trial for March and requires mediation by early February. The tenant's counsel believes the landlord is unreasonable and asks the court to excuse mediation. The court declines: that is not a reasonable basis under § 154.022. Counsel then agree on a former commercial judge as mediator, each side sends a confidential statement, and at mediation the tenant learns the landlord relet the space in month eight and the landlord learns the tenant's HVAC complaints were documented in writing. The case settles that afternoon for a fraction of the claim, with a Rule 11 agreement signed in the mediator's conference room.

Why the order is usually good news

A mediation order forces both sides to put a number on the case before spending the last and most expensive month before trial. It gives the principals a day in a room with a neutral who has read both files. And it does so under the confidentiality of § 154.073, so a number offered to end the case cannot be used as evidence later. Even when the case does not settle on the day, each side leaves knowing the other's real range. What mediation is and how the day runs is laid out in what business mediation is and how it works; how to use the day well is in how to prepare for mediation in a business dispute.

What to do when the order arrives

• Calendar the mediation deadline and the 10-day objection window, and decide within it whether you have a reasonable basis to object.
• Propose mediators early; the person matters more than the date.
• Make sure the person attending can say yes to a number without a phone call.
• Treat the order as a deadline for having your damages model and your settlement range finished.

Tina Wysk represents Dallas businesses in court-ordered and voluntary mediations and in the litigation around them. More on the business arbitration and mediation practice page.