There has been some debate as to when is the best time to use mediation.
The following judge’s comment is a useful guide:
“It is a common difficulty in cases of this sort, trying to work out when the best time might be to attempt ADR or mediation. Mediation is often suggested by the claiming party at an early stage.
But the responding party, who is likely to be the party writing the cheque, will often want proper information relating to the claim in order to be able to assess the commercial risk that the claim represents before embarking on a sensible mediation.
A premature mediation simply wastes time and can sometime lead to a hardening of the positions on both sides which makes any subsequent attempt of settlement doomed to fail.
Conversely, a delay in any mediation until after full particulars and documents have been exchanged can mean that the costs which have now been incurred to get to that point themselves become the principal obstacle to a successful mediation.
The trick in many cases is to identify the happy medium: the point when the detail of the claim and the response are known to both sides, but before the costs that have been incurred in reaching that stage are so great that a settlement is no longer possible”
(HH Judge Coulson QC (Nigel Witham Ltd v Smith & Anor (No. 2)  EWHC 12 (TCC) (04 January 2008)