Mediating with mental Illness

I am increasingly aware that there is a broad spectrum of frustrated individuals amongst us.  Some turn to their doctors, others to lawyers, still others to clergy members, best friends or family members when problems seem too great to cope with on their own.  What I learned this week from a psychologist who observed a hearing I conducted,  is that many people with mild to moderate mental health disturbances seek out validation for their conduct (or vindication for  the misconduct of others) through repeated legal challenges.  Whether they are truly "vexatious litigants" or merely forever challenging authority in their work place or their communities, there are plenty of instances where my non-professional opinion leads me to conclude that something other than the facts and law are driving the particular dispute before me.  As we often say, even with those not mentally ill, "it's never just about the money".  In those cases, it would appear to me that the best "treatment" that a mediator (or Judge) can offer is to allow the individual to fully vent, demonstrate attentiveness and understanding and then proceed to work to find the best outcome possible based upon that genuine understanding.
Still, I am not a psychologist and frankly have no confidence that what I do as a mediator is adequate to "hear them out" and allow the necessary venting.  Sometimes, in fact, I am tempted to blow up at them and recommend they seek out mental help, not legal help.  Of course, I never have allowed myself to go that far, but I wonder what others do to manage parties who exhibit signs of mental illness in the course of the mediation?  Can it be ignored? Can it be helped or changed? What are the best strategies to manage these challenging disputants?