Do you have to go to mediation before court in NSW?

The short answer, and the reasons behind it.

You are not always required to mediate before you file, but the system is built to push you towards it. Courts can order mediation over a party's objection, many tribunals require a conciliation or mediation step before a hearing, and a party who refuses to engage in resolution can be penalised in costs. So while there is not a universal rule that you must mediate first, in practice most civil disputes will pass through mediation before they reach a final hearing.

This is general information, not advice on your matter. Whether mediation is required in your case depends on the court or tribunal, any contract between the parties, and the stage of the proceedings. The safe assumption is that you will be expected to try, and that refusing without good reason carries a cost.

Can a court order you to mediate?

Yes. Under the Civil Procedure Act, a NSW court can refer a civil case to mediation whether or not the parties consent. Once referred, the parties are required to attend and to take part in good faith. The court cannot force a settlement, because mediation only produces an outcome if the parties agree, but it can force the parties to the table and expect them to participate genuinely.

Court-ordered mediation is common in civil lists, and it is often scheduled before a hearing date is given. The reasoning is simple: most cases settle, mediation settles them cheaply, and a case that resolves at mediation frees the court's time for the cases that genuinely need a judge. Attending and taking part in good faith is an obligation, not a courtesy.

What are genuine steps to resolve a dispute?

Australian courts increasingly expect parties to have tried to resolve a dispute before litigating. This is sometimes framed as a duty to take genuine steps, such as writing a letter of demand, responding to it, exchanging information, and considering an offer or mediation. The idea is that court should be a last resort, not the first move, and that a party who runs to court without trying to resolve the matter has not behaved reasonably.

Genuine steps do not mean surrender. They mean an honest attempt to resolve or narrow the dispute: setting out your position, listening to the other side's, and considering a sensible compromise. A party who has taken genuine steps and still cannot resolve the matter is well placed if the case proceeds. A party who refused to engage at all is exposed, both to criticism from the court and to a costs order.

What happens if you refuse to mediate?

Refusing to mediate is not itself an offence, but it can cost you. If a court has ordered mediation, refusing to attend or taking part in bad faith can lead to sanctions. Even without an order, a party who unreasonably refuses a genuine chance to resolve a dispute can be penalised in costs, meaning they pay more of the other side's legal bill than they otherwise would, on the ground that some of the fight was avoidable.

The costs consequence is the real teeth behind the push to mediate. A party who turns down a reasonable offer or refuses to mediate, and then wins, may still be denied some of their costs; one who does the same and loses may pay costs on a higher basis. Our guide on costs in civil claims explains how offers and conduct affect the costs order.

Where is mediation or conciliation compulsory?

Some forums build a resolution step in. Many tribunals require a conciliation conference before they will list a hearing. Some statutory schemes, such as farm debt and certain retail and building disputes, require mediation before a party can go to court. Anti-discrimination and some workplace complaints go through compulsory conciliation. In those areas, trying resolution is not optional; it is a gate you pass through before a hearing.

For neighbour disputes, mediation through a Community Justice Centre is often expected before a court or tribunal will deal with the matter, which our guide on Community Justice Centres explains. Even where it is not strictly required, a court will look more favourably on a party who tried mediation than on one who refused, so the practical answer is almost always to try.

Should you mediate even when you do not have to?

In most cases, yes. Mediation is cheaper and faster than a hearing, it keeps control of the outcome with the parties, and it protects you on costs. Even where you are confident of winning, a hearing carries risk, and a settlement removes that risk on your terms. A party who mediates in good faith loses very little by trying, because if it fails the case simply goes on.

The exception is where mediation would be pointless or unsafe, such as where the other side will not engage at all or where there is a genuine safety concern. Even then, a documented willingness to mediate protects your costs position. For the ordinary civil dispute, treating mediation as the expected first serious attempt at resolution is both the sensible strategy and what the courts expect.

Primary sources: court-referred mediation, including referral without the parties' consent, is provided for in Part 4 (in particular section 26) of the Civil Procedure Act 2005 (NSW), and the overriding purpose to resolve disputes justly, quickly and cheaply is in section 56. Farm debt mediation is required under the Farm Debt Mediation Act 1994 (NSW). NSW decisions on refusal to mediate and costs are searchable on JADE.

Common questions

Do you have to try mediation before going to court in NSW?

Not in every case, but the system pushes you towards it. Courts can order mediation whether or not the parties agree, many tribunals require a conciliation or mediation step first, and a party who unreasonably refuses to try can be penalised in costs. In practice most civil disputes pass through mediation before a final hearing.

Can a court force you to mediate?

A court can order the parties to attend mediation and take part in good faith, whether or not they consent, under the Civil Procedure Act. It cannot force a settlement, because mediation only produces an outcome if the parties agree, but it can require them to attend and participate genuinely.

What happens if you refuse to mediate?

Refusing is not an offence, but it can cost you. Refusing a court-ordered mediation, or taking part in bad faith, can lead to sanctions. Even without an order, a party who unreasonably refuses a genuine chance to resolve a dispute can be penalised in costs. The costs consequence is the real teeth behind the push to mediate.

What are genuine steps to resolve a dispute?

An honest attempt to resolve or narrow a dispute before litigating: writing and answering a letter of demand, exchanging information, and considering an offer or mediation. Courts expect court to be a last resort. A party who took genuine steps is well placed if the case proceeds; one who refused to engage is exposed to criticism and a costs order.

Should you mediate even when you do not have to?

Usually yes. Mediation is cheaper and faster than a hearing, keeps control of the outcome with the parties, and protects your costs position. Even a confident party faces risk at a hearing, and a settlement removes it on your terms. The main exceptions are where the other side will not engage at all or there is a genuine safety concern.

To speak to a litigation lawyer, call Aaron Kernaghan on 0421 717 019.

This article is written by Aaron Kernaghan, Special Counsel at Good Legal Lawyers, as at 30 August 2026. It is general information and reflects the personal opinion of the author only. It is not legal advice, it is not a substitute for advice on your own matter, and it does not purport to be accurate or complete. The law changes and procedure varies from case to case. For advice on a specific matter, contact Aaron Kernaghan on 0421 717 019 or contact the firm.

More commentary by Aaron Kernaghan.

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