Vermont Small Claims Mediation: Voluntary Settlement Before Trial

Small Claims Cases Are Exempt from Mandatory Mediation

If you've been served with a small claims complaint in Vermont and are wondering whether you'll be required to mediate, the short answer is no. Small claims actions are specifically exempt from the mandatory civil pre-trial mediation program under V.R.C.P. Rule 16.3(a)(2)(A). Unlike general civil cases, where a judge can order you into mediation before trial, small claims keeps the path simpler.

That said, mediation remains an option — and for many defendants, it's worth considering.

How Voluntary Mediation Works

Either party can propose mediation at any stage before trial. There are two routes:

Court-connected mediation. You and the plaintiff can file a joint Stipulation for Mediation identifying a chosen mediator, how fees will be split, and a completion deadline. Some county Civil Division units also offer voluntary, no-cost settlement conferences on the day of the hearing itself — essentially a brief, informal mediation session before the trial begins.

Private mediation. You can hire a private mediator outside the court system. This costs more but gives you flexibility on timing and location. The Vermont Bar Association maintains a list of mediators, and community mediation centers in some counties offer sliding-scale fees.

In mediation, a neutral third party helps you and the plaintiff talk through the dispute and explore whether a compromise exists. The mediator doesn't decide your case — they facilitate conversation. Nothing said in mediation can be used against you at trial if it falls through, because settlement communications are confidential under 12 V.S.A. Chapter 194 and V.R.E. 408.

When Mediation Makes Sense for Defendants

Mediation tends to work well in disputes where both sides have some exposure. A contractor who did most of the work but left a few items unfinished, a landlord holding a security deposit against cleaning costs the tenant disputes, a car buyer and seller arguing over undisclosed mechanical problems — these are cases where the real question isn't "who's right" but "how much."

It also makes sense when the plaintiff's claim is for the full amount but you believe you owe something smaller. Mediation lets you negotiate a figure without a judge deciding, and you avoid the unpredictability of trial.

If you genuinely owe nothing and have strong evidence, trial may be the better path.

Formalizing a Mediated Agreement

This is where defendants make a critical mistake: reaching a deal and then assuming the court case disappears on its own. It doesn't. If you settle in mediation — or negotiate any out-of-court agreement — you must get it into the court record.

Two common instruments:

• Stipulated dismissal. You and the plaintiff file a joint request asking the court to dismiss the action. This can be "without prejudice" (allowing refiling if terms are breached) or "with prejudice" (permanently ending the suit).
• Stipulated agreement / agreed judgment. You sign a written agreement outlining specific payment terms, and the court enters an enforceable judgment order reflecting those terms.

Without one of these filed, the plaintiff can still seek a default judgment against you — even if you already paid in full. Settlement negotiations do not pause your 30-day answer deadline, your scheduled hearing date, or any other court deadline. Until a signed dismissal or stipulation is formally entered on the docket, you're still on the hook.

How to Confirm the Case Is Closed

Once payment is complete, the plaintiff is supposed to file a Notification by Plaintiff Judgment Has Been Paid in Full (Form 100-00290) within 21 days. If they don't, you can file a written request asking the court to enter a satisfaction of judgment. The court will record the judgment as paid unless the plaintiff objects within 21 days.

Keep every receipt, bank transfer confirmation, and written communication from the settlement. If the plaintiff files an objection, you'll need that paper trail.

Preparing for the Possibility That Mediation Fails

Go into mediation prepared for trial. If talks break down, you'll still need your evidence organized, your answer filed, and your hearing logistics figured out. The Responding to a Small Claims Case in Vermont guide walks through every step from reading your papers through the hearing — including worksheets for deadline verification, evidence organization, and filing logs that keep your response on track whether you settle or go to trial.

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