In the diploma paper we are going to analyze mediation process, as one of the method of alternative dispute resolution. We are going to provide arguments in favor and against mediation. Throughout the paper commercial mediation will be in out focus. We are going to explain the background for rise in number of mediation proceedings we were witnessing in 2006, but also it will be intresting to make an insight into the reasons of an sudden drop in numbers we started to expirience soon after 2006. The paper has 8 chapters. In the first chapter we shall go trough legislative history of the Act of mediation. Afterwards we shall also make an insight in the system of mediation in certain common law legal systems in oreder to examine the differences, and find out what solutions we should take into account when tailoring national normative framework. We are going to analyze Directive 2008/52/EC wich is implemented in our legal system, and is valid when Croatia joined the EU. We will go trough two very intresting cases, Alessini case and Halsey case, in wich courts have completely diffrent aproach, considering voluntary and mandatory mediation. In the second chapter, we will thoroughly go throw mediation act, and what the settlement in mediation process means for parties in conflict, but we will also explain the problem of mediation practice. In the last chapter we will explain the problems between companies, and how to awake the consciousness of mediation process and ask an important question, does mediation has a future.