AB 1523 and the Changing Logic of Court-Ordered Mediation Post

California’s AB 1523 marks a quiet but consequential shift in how courts use mandatory mediation in civil cases. Rather than simply expanding eligibility, the statute redefines: (a) when mediation should occur: and (b) what qualifies as meaningful participation. The result is a more disciplined and rule bound approach that treats mediation as an integral stage of civil justice rather than a procedural afterthought.

AB 1523 raises the amount in controversy limit for court ordered mediation from $50,000 to $75,000. The threshold had remained unchanged for decades despite rising litigation costs. The higher cap expands mediation into a wider range of employment, consumer, and small commercial disputes. Precisely, the category of cases where mediation can offer the greatest efficiency and cost savings.

The new limit takes effect on January 1, 2027, allowing courts and practitioners time to adjust case management practices. Importantly, the statute clarifies that the amount in controversy determination is made without prejudice to later findings at trial, preserving litigation positions while encouraging early resolution.

The most significant change introduced by AB 1523 is not the dollar figure, but the conditions placed on a judge’s authority to order mediation. Courts may not compel mediation unless: (a) the case has been set for trial; (b) discovery disputes have been resolved; (c) at least one party has expressed interest in mediation; and (d) the parties have been informed of their right to jointly select a mediator. These requirements are designed to prevent premature mediations that occur before the facts are developed or parties are prepared to negotiate in good faith.

The statute reflects growing recognition that mediation works best when parties have sufficient information, realistic expectations, and decision-makers at the table. Mandatory mediation, under AB 1523, must still be meaningful mediation.

Once mediation is ordered, AB 1523 standardizes several core process elements.

These provisions position mediation as a serious, time-bounded intervention rather than a tactical delay or procedural formality.

Legislative analyses acknowledge that the prior $50,000 cap had become increasingly disconnected from modern litigation realities, limiting the usefulness of court-ordered mediation. By raising the ceiling while adding readiness safeguards, AB 1523 attempts to balance broader access with higher process quality.

Some stakeholders have questioned whether the new requirements are too rigid or whether the $75,000 cap remains overly conservative. Others view the statute as a necessary correction to years of ADR expansion without sufficient attention to timing and effectiveness. How the law operates in practice will ultimately determine which view prevails.

AB 1523 reflects a broader shift in civil procedure: mediation is no longer treated as an informal alternative, but as a structured component of case resolution subject to defined standards. Courts are moving away from ad hoc referrals and toward criteria-based integration, emphasizing both efficiency and legitimacy.

For practitioners, this means mediation planning must begin earlier and be taken more seriously. Discovery strategy, trial readiness, and settlement authority will increasingly shape outcomes before parties ever reach the courtroom.

By 2027, mediation in California civil litigation will be broader in reach, more tightly regulated, and harder to dismiss as a procedural formality. AB 1523 does not merely expand mediation it signals a maturing view of its role in the justice system.