Here's an example of a recent personal injury mediation from a serious car accident (with some details changed to protect the privacy and confidentiality of the parties and the mediation):
The parties at the mediation were the injured woman (the plaintiff) and her attorney as well as the insurance carrier and the attorney appointed by the insurance carrier to defend the driver against the plaintiff's claims of serious personal injury from the car accident. The driver was not present because the insurance carrier and its attorney were there to represent his interests and they had the authority needed to make the decisions. (This is why we pay for car insurance.) The plaintiff was seeking almost $1 million in damages.
The parties had submitted mediation briefs with the facts, claims, defenses, medical claims and out-of-pocket costs, medical liens from the health insurance company and information from the carrier's accident reconstructionist.
After a joint session with brief openings by the attorneys, separate caucuses were held to discuss with the plaintiff her demand for financial compensation of her injuries and costs and to discuss with the insurance carrier its position on the driver's liability (including questions of comparative fault for the plaintiff's own actions) and what it was willing to pay for this claim.
Both parties had chosen to mediate this case in an effort to avoid a costly trial which would include expert witness testimony on accident reconstruction, toxicity and other issues, and would also consume at least a week or two of trial time, significant attorney's fees and costs in preparing the case for trial, and uncertainty in the outcome.
There were uncertainties for both sides which made mediation a great alternative to trial. A jury might: a) sympathize with the plaintiff for her injuries and emotional suffering and award the plaintiff an amount in the hundreds of thousands of dollars; b) compensate the plaintiff for her medical costs but nothing else, since she had made a full recovery; or c) see this as just an accident, with both parties to blame for the collision and award nothing. The jury would probably do something in between "a" and "b" and all the parties were aware of this.
This uncertainty, as well as the ability to resolve the case months, and sometimes years, before the parties will ever get to trial, and get a solution which satisfies the parties, is one of the reasons this personal injury case and many others like it, are resolved in mediation. The parties, their attorneys and the mediator work together to come up with solutions everyone can live with and that's what happened in this case. The plaintiff was compensated for her medical costs and for some of her emotional distress. The carrier was out a significant amount of money but which was far less than it could have paid in attorney's fees and costs to defend the case as well as whatever verdict was returned by the jury. Everybody was able to close the case and move on with their lives, satisfied that compromises were made and satisfaction was achieved.