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Navigating the Proposal for Settlement Statute in Your Business Dispute

Under the American rule, each party to a lawsuit is required to pay its own attorney’s fees and costs unless a contract or statute states otherwise. One creature of statute that is available to shift attorney’s fees is the Proposal for Settlement. Another facet of the Proposal for Settlement is that it provides a way to offer settlement proposals through formal means.

To be binding, there are several procedural requirements that the proposal for settlement must meet. These include citing to the statute and rules of civil procedure, properly identifying the parties, apportioning liability if there are multiple parties to the case, identifying which claims are being resolved; identifying if there are any punitive damages included in the offer, identifying whether attorney’s fees are part of the claim, and finally it must include a proper certificate of service. Further, the Proposal for Settlement must completely resolve one or more of the claims made in the litigation if it is accepted.

Of note, the Proposal for Settlement is not filed with the Court, but it is served to the parties. A Notice of Serving Proposal for Settlement is filed with the Court to advise that it was served, but this Notice does not include any of the details that are in the Proposal for Settlement.

To shift the attorney’s fees, there is some math that would need to be done at the end of the litigation and prior to filing the Motion for Attorney’s Fees. That math is different depending on whether the person making the Proposal for Settlement is the Plaintiff or the Defendant.

If the Plaintiff is the one making the Proposal for Settlement, then if the offer is not accepted within 30 days of being made and the Plaintiff recovers a judgment more than 125% of the offer, then the Defendant would be liable for reasonable attorney’s fees and costs since the date of service of the Proposal for Settlement.

If the Defendant is the one making the Proposal for Settlement and the offer is not accepted within 30 days, then the Plaintiff will be liable for reasonable attorney’s fees and costs if the Plaintiff does not recover anything in the final judgment or if the plaintiff fails to recover 75 percent or more than the amount set forth in the offer.

In May of 2022, the Florida Supreme Court amended the Proposal for Settlement rule to remove the ability to include any non-monetary condition in the Proposal for Settlement other than a dismissal of the Complaint. In the past, many parties would include non-monetary terms such as general releases or the like in order to better protect themselves. However, under the new rule in effect beginning July 1, 2022, this will no longer be allowed.

This is a very basic overview of Proposals for Settlement and the Proposal for Settlement process is confusing and there are many technical requirements that need to be followed when they are filed or served. Should you need an attorney to represent you or your business in litigation in Florida, please contact Nathan Meloon or the litigation attorneys at Widerman Malek today.