Have you seen how Bisq works? I suggest try to look around how that whole application works. On the docs, there's also a mention of decentralized dispute resolution. Bisq is a decentralized bitcoin exchange that does not use smart contracts instead it uses a specific trading protocol. I believe if you take a look at it, it will somehow be able to widen your understanding if you really want to create decentralized escrow.
Thank you for this quote, I read their dispute terms documentation, maybe I'll do something similar.
Agreed, you would need to set up very clear conditions for the release of funds plus be prepared with a mechanism for dispute resolution. This doesn't need to be expensive; you can do it in-house if you have an experienced lawyer on your team.
I've been thinking of a similar project, and might suggest you also plan on incorporating reviews and reputation scores. People will need to understand they can't withhold payment for services which were actually completed - but they can leave a negative review or score to protect others in the future.
Great idea. And the "mediators" could be chosen based on the reputation and rating of whoever proposes to become a mediator.