This is particularly common in disputes between neighbors or small business people who work in the same area and really don't want the dispute to fester. Mediation has other benefits, too. People who agree to mediate their cases are more likely to be satisfied with the outcome than are small claims litigants who go directly to court, according to a 1992 study by the National Center for State Courts. One big reason for this is that people who arrive at a mediated settlement are more likely to pay up than are people who lose at trial. Mediation isn't a good idea in every case.
Mediators can help with that, too.
They have lots of practice at convincing reluctance people to sit down at the bargaining table. You really don't have anything to lose. The above links are connected to Nolo's on-line store where you will find a detailed description of each product.