Will Your New Jersey Business Lawsuit Go to Mediation, Arbitration, or Trial?
A New Jersey court can require the parties in a business lawsuit to go through mediation or, in eligible civil cases, court-annexed arbitration before the case reaches trial.
That means being sued does not necessarily put your business on a straight path to the courtroom. The next stage depends on the case and how the court handles it. If you are still at the beginning of the lawsuit, first make sure you understand how to respond after being served with a summons and complaint.
Once the case is moving, mediation, arbitration, and trial each create different decisions, deadlines, costs, and opportunities to resolve the dispute.
Key Points for Business Owners
Your lawsuit may go to mediation or arbitration before trial. A New Jersey court can require either process in appropriate civil cases.
Court-ordered mediation does not mean you must settle. You may have to participate, but whether to accept a settlement remains your decision.
Act quickly when you receive a mediation or arbitration notice. Some deadlines are short, including potentially just 10 days to seek removal from mediation for good cause.
Do not assume ADR pauses your lawsuit. Discovery, motion, and other court deadlines may continue while mediation is underway.
A court-annexed arbitration award may not end the case. It is generally non-binding, and the standard deadline to demand a trial de novo is 30 days after the award is filed.
Can a New Jersey Court Require Mediation?
Yes. A New Jersey court can refer your business lawsuit to mediation, even if neither party requested it. Participation may be required, but settlement remains voluntary.
In the Superior Court of New Jersey, some civil matters are referred to mediation based on the type of case. Your New Jersey Civil Case Information Statement can provide an early clue because it identifies the case type and helps the court decide whether mediation may be appropriate.
Your case may be referred to mediation for several reasons, and understanding why helps you and your attorney prepare for the process.
Common situations include:
Contract or commercial transaction cases. Mediation may help the parties address disputed payment, performance, or contract terms through a negotiated settlement.
Complex commercial disputes. A judge may refer a case when mediation could narrow issues, control discovery costs, or produce a practical business resolution.
Ongoing business relationships. Mediation may be useful when preserving a working relationship or finding common ground matters to both parties.
Disputes requiring flexible solutions. Settlement can address payment terms, ownership issues, contract changes, or other results a court may not easily provide.
Cases the parties want to mediate. The parties may also request mediation when both sides believe a private resolution process could help resolve the matter.
A mediation referral usually comes through a written court order. Review it with a lawyer immediately because it may set deadlines, mediator-selection procedures, and attendance requirements. You can also check your New Jersey civil case online to review available orders, notices, and other case activity.
If you believe mediation is inappropriate, speak with your lawyer immediately. You may have only 10 days to seek removal for good cause.
Once your business is referred to mediation:
Calendar any objection, mediator-selection, and session deadlines.
Confirm who must attend and whether someone with settlement authority must be available.
Ask whether discovery, motion, or trial deadlines continue during the mediation process.
Identify your preferred settlement result, acceptable compromises, and issues your business cannot concede.
Mediation is a form of alternative dispute resolution, or ADR. The mediator facilitates discussion and helps the parties explore settlement, but does not decide the case.
Mediation sessions are generally private and confidential, giving both sides room to discuss risk, cost, and possible resolution outside the courtroom.
If mediation is unsuccessful, the lawsuit generally returns to court and continues through discovery, possible motions such as a motion for summary judgment, arbitration if applicable, or trial.
Can a New Jersey Court Require Arbitration in Your Business Lawsuit?
Yes, but not every New Jersey business lawsuit goes through arbitration. The Superior Court of New Jersey requires arbitration only for certain eligible civil cases.
Your commercial dispute may be scheduled for court-annexed arbitration when the case falls within specific categories or has been screened as appropriate for the process.
That may include:
A lawsuit involving a book account or instrument of obligation
A contract or commercial dispute screened and identified as suitable for arbitration
An eligible matter assigned to Track I, II, or III
A Track IV case when the managing judge specifically directs arbitration
If you are unsure which track applies to your lawsuit, your Track Assignment Notice identifies the track the court assigned to your case.
Arbitration is a form of alternative dispute resolution, but it works differently from mediation. The arbitrator considers the legal issues, evidence, and arguments presented. A mediator facilitates settlement discussions and helps each party search for common ground.
If your case has already gone through unsuccessful court-referred mediation, it generally will not proceed to arbitration unless the court finds good cause or all parties request it.
When you receive an arbitration notice, you and your counsel should:
Confirm the hearing date and filing deadlines.
Organize contracts, invoices, communications, and other evidence supporting your position.
Identify witnesses and important factual or legal issues.
Confirm whether required discovery has been completed.
Review your damages, defenses, and preferred resolution.
Discuss whether accepting an arbitration result would serve your business interests.
The arbitrator will issue an award after hearing the matter. Unlike many forms of private arbitration, New Jersey court-annexed arbitration is generally non-binding.
If you disagree with the result, you may demand a trial de novo, but the request must be filed and served within 30 days.
Court-annexed arbitration is also different from private arbitration required by a contract. A contractual arbitration clause may create separate procedures and potentially binding consequences.
Does Mediation or Arbitration Stop Your Lawsuit From Moving Forward?
No. Being referred to mediation or arbitration does not necessarily pause your New Jersey lawsuit or relieve your business of existing court deadlines.
During mediation, the discovery process in a New Jersey civil lawsuit generally continues unless the judge specifically orders a stay. Your attorney may still need to exchange documents, answer discovery, or attend depositions.
That means your business and its attorney should continue preparing the case while settlement discussions are underway, even when both parties believe mediation could resolve the dispute.
You should continue to:
Track discovery, motion, and court deadlines.
Maintain your litigation hold and preserve documents, communications, and other evidence relevant to the dispute.
Respond to discovery requests with your attorney.
Prepare witnesses and evaluate your legal position.
Continue planning for trial unless the case settles or ends through arbitration.
Court-annexed arbitration usually occurs later. In most eligible cases, the arbitration hearing is scheduled after the applicable discovery period has ended.
The arbitrator then issues an award. If either party timely rejects the award and demands a trial de novo, the lawsuit continues toward trial instead of ending with arbitration.
Speak to Our New Jersey Business Litigation Attorneys
If your dispute is moving toward mediation or arbitration, a business litigation attorney can help you evaluate the strength of your position, prepare for the proceeding, and decide whether settlement makes business sense.
Daniel Bitonti represents business owners in commercial disputes and litigation, including matters that may move through mediation, arbitration, and trial.
Are you wondering about any of the issues mentioned above? Please email us at Info@staturelegal.law or call (732) 320-9831 for assistance.
At Stature Legal, we give business owners the clarity they need to fund, grow, protect, and sell their businesses. We are trustworthy business advisors keeping your business on TRACK: Trustworthy. Reliable. Available. Caring. Knowledgeable.®
Frequently Asked Questions
How Much Will Court-Ordered Mediation Cost My Business?
If you use a mediator on New Jersey’s court roster, the first two hours of mediation are generally provided without charge.
If you continue beyond that period, you and the other party generally share the mediator’s market-rate fee. A non-roster mediator may charge from the outset.
Can My Business Choose the Mediator?
Yes. After your case is referred to mediation, you and the other party have 14 days to agree on a mediator.
If you do not make a timely selection, the mediator identified in the court’s referral order will serve. Discuss suitable candidates with your attorney early.
Who From My Business Has to Attend Mediation?
Your attorney and someone with authority to settle on behalf of your business must attend unless the mediator specifically excuses their attendance.
Before the session, confirm who will represent your business and how much authority that person will have to negotiate and approve proposed terms.
Will What My Business Says in Mediation Become Public?
Generally, no. Your mediation discussions and documents are confidential, subject to limited exceptions, and the mediator does not report your negotiating positions to the judge.
A settlement placed on the court record or incorporated into a consent judgment may become public, so discuss confidentiality concerns before finalizing an agreement.
What Happens if My Business Misses an Arbitration Hearing?
Missing a court-ordered arbitration hearing can have serious consequences. If no appearance is made for your business, your pleadings and right to continue challenging the result may be affected.
If you are defending the lawsuit, your pleading can be stricken, and you may lose your right to demand a trial de novo. Contact counsel immediately if attendance becomes an issue.
Is There a Downside to Rejecting an Arbitration Award and Going to Trial?
Yes. A trial de novo means additional litigation expense, attorney time, uncertainty, and you must pay the required fee when requesting one.
You may also become responsible for certain post-arbitration costs if the eventual trial result does not sufficiently improve your position over the arbitration award.
Before rejecting an award, compare the likely value of continuing toward trial against the award, remaining litigation costs, available evidence, and your business’s overall exposure.
What if the Contract at the Center of My Lawsuit Already Requires Arbitration?
Tell your attorney immediately. A contractual arbitration clause is different from the court-annexed, generally non-binding arbitration discussed in this article.
A valid arbitration agreement can require your dispute to proceed through private arbitration instead of court, and the court may stay litigation involving claims covered by that agreement.
Your attorney should review the exact clause before you assume it applies. Its wording can determine which disputes are covered and what arbitration process you agreed to.