NJ Small Claims Mediation and Settlement Conference

Mediation Is Mandatory — Settlement Is Not

Every contested Small Claims case in New Jersey is referred to a settlement conference or mediation on the trial date under Rule 1:40-6 and Rule 6:4-7. You must attend. But attending mediation does not mean you must agree to anything.

The mediator — a trained court staff member or volunteer — is a neutral facilitator. They cannot decide the case, force a settlement, or penalize you for declining to agree. Their job is to help you and the plaintiff explore whether a resolution is possible without going before the judge. The service is free.

What Happens During the Session

After calendar call, cases that are contested are sent to mediation before any trial begins. In some courthouses, this happens in a separate room or a virtual breakout session. The mediator asks each side to explain their position and then works to find common ground.

Everything said during mediation is confidential under N.J.R.E. 519. If you make an offer or admit something during the session, it cannot be used against you at trial if mediation fails. This is designed to encourage honest conversation without the fear that it will backfire.

A typical session lasts 15 to 45 minutes, though it can go longer if both sides are close to an agreement.

When Mediation Feels Like Pressure

Defendants commonly describe feeling pushed to settle during trial-morning mediation — particularly in virtual sessions where the mediator is the only person guiding the conversation. Some mediators are more assertive than others, and the time pressure of a same-day trial can make a quick settlement feel like the path of least resistance.

Know your boundaries before you walk in. Decide in advance what amount or terms you would accept, and what your walk-away number is. If the mediator suggests terms you are not comfortable with, you can say: "I appreciate the effort, but I would prefer to have the judge decide this." That is a complete answer. You do not need to justify it.

If You Reach an Agreement

Get it in writing before you leave the courthouse or close the video session. The two common forms are:

Stipulation of Settlement — a formal written contract signed by both parties spelling out the payment amount, due dates, and default provisions.

Consent Judgment — a formal judgment entered on the court docket, often with a payment plan attached. The judgment may be stayed (enforcement paused) while you make the agreed payments; the written terms specify when enforcement can resume.

Make sure the agreement specifies whether dismissal is "with prejudice" (permanent — the plaintiff cannot refile) or "without prejudice" (the plaintiff can reinstate if you default on payments). Ask for "with prejudice" if you are paying the full amount upfront.

If You Do Not Reach an Agreement

The case goes back to the judicial queue for a bench trial, usually the same day if the court schedule permits. Mediation failure does not count against you — the judge does not know what was discussed or offered during the session.

The New Jersey Small Claims Response Guide includes settlement-conference boundary guidance to help you prepare for mediation with clear limits and a strategy for the conversation.

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