Mediation preparation is often limited, as there is no formal discovery. Frequently, mediation begins with a "general caucus" where the parties and the mediator meet in the same room. The mediator establishes the ground rules in an "agreement to mediate." In court-mandated mediation, the court order will often contain or refer to the "rules of mediation." One of the most important mediation rules is the requirement for confidentiality. Typically, all matters disclosed or occurring during mediation, and any record made during the procedure, are confidential and generally may not be disclosed to anyone unless the parties agree to the disclosure. Additionally, state law may require that the mediator maintain confidentiality.

After the mediator covers the rules of mediation and insures that any necessary agreements to mediate are signed, the mediator explains the mediation process. The parties or their representative may then make opening statements to identify issues and clarify perceptions. Many mediators will encourage the parties to begin a dialogue during general caucus.

If the parties are hostile or overly emotional, the mediator will separate the parties and shuttle back and forth between them in "private caucuses." A private caucus is a conference between the mediator and one party, without the other party being present. The mediator passes offers and demands between the parties. Conversations between a party and the mediator during private caucus are confidential unless a party authorizes the mediator to disclose information to the other side.

The parties in a mediation are not required to reach an agreement, and sometimes they do not. Whether the case settles or reaches an impasse, the mediator usually meets with the parties together at the end of the session. If the case has neither settled nor reached an impasse, the mediator will likely encourage the parties to attend another mediation session. If the case does settle, the mediator will urge the parties to sign a settlement to memorialize the agreement. A written settlement agreement is a contract between the parties, which is generally enforceable in the same manner as any other written contract. Generally, there is no record of the mediation session, and the only document produced is the settlement (or mediation) agreement.

If settlement is not reached the parties may decide to litigate.