It is not uncommon for judges to order all parties to mediation in a lawsuit even when no one has requested mediation and the parties agree it is unlikely to resolve the case. This is known as "court ordered mediation".
One reason for this is cynical. Some judges are lazy and care only about moving cases along with as little trouble to themselves as possible. These types of judges don't care that mediation is expensive in both the mediator's fees and the attorney's time, nor are they concerned with the additional, hidden cost of the employees having to leave work or business for half of a day.
However, there is a more positive reason for court ordered mediation and that is because it works in 80+% of the cases. Some put the number as high as 90% but I think the 80% number is more likely to be right.
Mediation is an easy concept to understand. It is where the parties sit down with a specially trained person, normally an attorney or a former judge, and attempt to resolve the case by way of settlement. The session typically begins with everyone gathered in one room with each attorney taking a few minutes to explain their case to the mediator as well as explaining why they think they will win.
The session then splits with each party going to a different room and the mediator carrying offers back and forth between the parties and rooms, in an attempt to reach an agreement. Some mediators are extremely involved, offering their experience and opinions on the positives and negatives of each side, while others take a more passive approach.
The important things to remember about mediation is 1) no one can force you to settle, 2) the mediator is not a judge on your case and cannot make any rulings, and 3) the things said in mediation cannot be used in court.
Many attorneys, myself included, believe it is always better to resolve/settle a case than it is to take it to trial. Those of us who were very active in trial work know that cases that absolutely should not lose, can, and those that absolutely should not win, do. In addition, if an appeal takes place following the verdict then you can add another year or three onto the time it takes to ultimately resolve the case in addition to it costing more money.
For those of you who like videos, below is a short one providing additional information on mediations: