The Rugby Football Union insists a row with England's top clubs about player availability and withholding of payments can be resolved in two weeks.
RFU chairman Martyn Thomas said: "It's not unduly optimistic - the sooner we can resolve this the better.
"Both sides have looked at the situation and realised mistakes were made. We can move forward as a result."
Premier Rugby chief executive Mark McCafferty said: "We have never wanted to go to court."
McCafferty added: "We would be prepared to settle if all the Lions' money owed to the clubs is paid, together with our legal costs.
"The total bill for this action is already at the £500,000 mark and there are voices in Twickenham questioning why money is being wasted in this way."
The RFU and Premier Rugby - which represents England's top clubs - fell out during the summer over the rest period for England players who toured with the Lions in New Zealand.
The RFU withheld a total of £120,000 from three clubs - Sale, Wasps and Leicester - who fielded players during an 11-week rest period which it claims had been agreed with the clubs.
Premier Rugby said the agreement only applied to England games and took legal action to recover the money from the RFU.
The case was due to be heard in the High Court on 27 February.
"I certainly am not looking for this to end up in court," Thomas told BBC Sport.
"We've got to remove this as an area of conflict. I believe there has been some genuine misunderstanding between both sides.
"The reason we want to settle is that we don't see the litigation as now being of any benefit to either side."
Thomas said Premier Rugby's willingness to release England players on certain dates in the run-up to the 2007 World Cup had been crucial to improved relations.
"We needed to know we had got (England coach) Andy Robinson the release dates for the England players through to and including the 2007 World Cup," Thomas said.
"We got that in writing on 23 December and from that point on we didn't need the legal proceedings."
Premier Rugby also suggested it would be happy to accept a settlement.
In a separate disagreement, the two sides are also at loggerheads over whether England players should play for their clubs before the upcoming Six Nations game with Wales on 4 February.
Only seven days before the match with the Six Nations champions, Leicester take on Sale and Bath face Wasps in two heavyweight Premiership clashes likely to feature the majority of the England line-up.
England coach Andy Robinson wants his England players to miss those games but the clubs are reluctant to see their top stars sit out such an important weekend.