Mediation talks designed to lead to a settlement of the Microsoft antitrust case are expected to begin in Chicago tomorrow. The two sides have reportedly been summoned to a meeting with court-appointed mediator Judge Richard Posner, whose task is to assess the chances of a settlement.

In a meeting behind closed doors, lawyers acting for Microsoft, the Justice Department and the 19 states involved in the antitrust trial will attempt to hammer out a compromise deal. A source quoted by The New York Times said that a settlement would happen by the end of January, or it won’t happen.

Judge Thomas Penfield Jackson, presiding over the antitrust case, has set February 22 to hear oral argument if no settlement is reached.

For both sides, the talks are a huge gamble on whether they can negotiate a better deal in the mediation discussions than they could if the case returns to court.

Judge Posner, who heads the 7th US Circuit Court of Appeals in Chicago, is renowned for his mediation skills, and while he will only be at the discussions in a private capacity, he will be expected to nudge the two sides towards an agreement.