Civil litigation in Florida can be a long process filled with ambiguities and questions regarding the resolution of a case. In an effort to control the outcome of a civil action, a party may use a proposal for settlement in Florida to avoid a court’s final judgment.
Our guide explains how proposals for settlement work in Florida along with other important considerations and requirements for using them in litigation.
What Is a Proposal for Settlement in Florida?
A proposal for settlement in Florida (PFS) is the process in which a party to a civil action makes an offer to settle the case before final judgment. You can find the rules for settlement proposals under Florida rules of civil procedure 1.442 and Fla Stat. 768.79.
During the trial court process, you will likely hear about PFS legal terms and other topics related to an offer of settlement in Florida. These legal rules and procedures exist to provide structure around the settlement of a legal claim and to encourage parties to resolve matters prior to trial. This incentive exists to promote efficient use of court resources and to discourage parties from not making settlement offers in good faith.
Is a Florida Offer of Judgment the Same Thing?
Although related to a proposal for settlement, an offer of judgment Florida is a distinct legal term that details the potential consequences of rejecting a proposed settlement. The offer of judgment creates different potential outcomes for a case based on how the terms of a judgment compare to the terms previously offered in the proposal for settlement.
Defendants and plaintiffs (along with their attorneys) must have a strong familiarity with a Florida offer of judgment when making or rejecting a settlement proposal. As explained in more detail below, Florida’s statute and rules of civil procedure force parties to weigh the risks of settling against the risk of proceeding to trial and final judgment.
How Does a Proposal for Settlement Work in Florida?
A Florida proposal for settlement can be a somewhat technical process because of its many formal requirements. These requirements focus on the substance of the settlement offer along with various timing elements in relation to the other parts of a civil action (e.g., service of process, trial, etc.).
Generally, either party (i.e., plaintiffs or defendants) may serve the other with a proposal for settlement. The other party then has the opportunity to accept or reject the proposal. If accepted, the case resolves. However, if either party declines a proposed settlement, then it may affect the overall net judgment from the case.
The Framework of a Proposal for Settlement Under Florida Statute 768.79
Florida Statutes 768.79 imposes liability for attorney’s fees and other costs associated with pursuing a legal claim on a party that rejects a settlement offer when the court or jury’s judgment is within a certain range.
When a Plaintiff Rejects an Offer of Judgment Pursuant to FS 768.79
A plaintiff that rejects a defendant’s settlement proposal under 768.79 Florida Statutes incurs the risk of a court offsetting the plaintiff’s judgment by defendant’s attorney’s fees and other costs. In order for FS 768.79 to apply, the plaintiff’s award must be at least 25% less than the defendant’s settlement offer.
The court may also enter a judgment against the plaintiff for the defendant’s award of attorney’s fees if the judgment is for no liability (or if the defendant’s attorney’s fees are more than the plaintiff’s award).
The Risk of a Defendant’s Failure to Accept Under the Florida Proposal for Settlement Statute
Conversely, when a defendant declines a plaintiff’s proposal for settlement they may be liable for the plaintiff’s reasonable costs and attorney’s fees incurred from the date of the demand. For this rule to apply, the plaintiff must recover a judgment award that is at least 25% greater than the offer to the defendant.
What Are Reasonable Costs and Attorney’s Fees under FS 768.79?
The Florida Supreme Court produces guidelines to help trial courts and parties calculate and determine the reasonableness of an award of attorney’s fees and costs (e.g., filing fees, investigative expenses, etc.). Florida statute 768.79 specifically mentions that a court may incorporate the following factors into its award determination among others:
- The apparent merit or lack thereof of a claim
- The amount of offers made by the parties to a case (along with the substance of those offers)
- The closeness of questions of fact and law (i.e., how frivolous were the claims)
- Whether the offeror unreasonably refused to provide the offeree with information needed to assess the settlement offer
Other Requirements for Settlement Offers Pursuant to 768.79 Florida Statutes
The offeree of a proposal for settlement has 30 days to accept an offer before Florida’s statute 768.79 could apply to a court’s final judgment. Additionally, offerors must keep the following requirements in mind when making an offer of settlement to an opposing party:
- The offer must be in writing and state its application to FS 768.79
- The written offer must state the name of the offeror and the name of the offeree
- State the amount offered to settle a punitive damages claim with particularity
- State the total amount of the offered settlement
In an effort to encourage additional attempts at settlement, Florida does not preclude parties from making other settlement proposals after the rejection of an initial offer. Parties also have the power to withdraw an offer so long as the offeror serves notice of the withdrawal prior to the offeree filing an acceptance of the offer.
Florida Rule of Civil Procedure 1.442 for Settlement Proposals
Florida rule 1.442 is what governs the requirements surrounding a formal settlement proposal by a party during litigation. Specifically, a Florida rules of civil procedure proposal for settlement must comply with the following:
- must be in writing and state the applicable Florida law (i.e., Florida rule 1.442)
- name the offeror and offeree of the proposal
- state that the settlement would resolve damages otherwise awarded as part of the legal claim of the case
- state with particularity any settlement amounts attributable to punitive damages
- state all relevant conditions and non-monetary terms of the settlement (e.g., issuance of a formal apology, Non-disclosure, etc.)
- address whether the settlement accounts for attorney’s fees and if attorney’s fees are part of the legal claim
Similar to FS 768.79, an offeror can withdraw a settlement proposal under Florida rule 1.442 by delivering written notice of withdrawal prior to the offeree accepting. The effect of a successful withdrawal is the voiding of the settlement proposal. Additionally, evidence of a proposed settlement or its acceptance is only admissible for purposes of its enforcement or for imposing sanctions (i.e., as a part of a trial court, district court of appeals, or another appellate case).
Proposal for Settlement Insurance
Florida’s offer of judgment statute creates the risk of additional liability to parties that reject a reasonable settlement offer based on the actual judgment obtained. To mitigate the risk of rejecting an offer, parties can purchase related insurance through an insurance company.
An insured party can file an insurance claim after court’s judgment results in liability of attorney’s fees and costs to the other party. Being able to claim on the insurance can limit the need for extra litigation to collect on party’s liability under Florida’s offer of judgment statute.
Florida Proposal for Settlement Form
No standard Florida proposal for settlement form exists through the state or district courts. However, parties must comply with the formal requirements of FS 678.79 and Rule 1.442 (summarized above) to properly enforce any subsequent claim for attorney’s fees and costs.
Notice of Acceptance of Proposal for Settlement Florida
A party can only provide its notice of acceptance of a proposal for settlement through the delivery of a written notice to the opposing party and local court. Notice of acceptance must occur within 30 days after the initial service of the proposal for settlement.
Florida Proposal for Settlement Timing
Florida rule of civil procedure 1.442 also places restrictions around the timing of a party’s decision to serve an opposing party with a proposed settlement. For service to a defendant, the plaintiff may not serve the proposal any earlier than 90 days after service of process on the defendant. Service to a plaintiff can happen no earlier than 90 days after commencing the civil action.
However, rule 1.442 limits service of a settlement proposal from either party to no later than 45 days before the earlier of the date set for trial or the first day of the docket on which the case is set for trial.
Proposal for Settlement Florida Example
To illustrate Florida’s proposal for settlement framework, let’s assume Alice filed a personal injury claim against Bob for a slip and fall accident on his property.
Before trial, Bob sends Alice a proposal for settlement under FS 678.79 and Rule 1.442. The proposal offers to pay Alice $50,000 for her injuries. Alice thinks about the offer for a few days but ultimately rejects it because she thinks her claim is worth way more than Bob’s offer.
The case proceeds to trial and a jury awards Alice $25,000. Because Alice’s final judgment was more than 25% less than Bob’s settlement offer, Alice is now liable for Bob’s attorney’s fees and other costs. Bob had $15,000 in attorney’s fees, which the court can subtract from Alice’s award, netting her a final judgment of $10,000.
Need Help with Proposal for Settlement Florida Law?
A Florida proposal of settlement can be an effective technique for incentivizing the resolution of a case. Alternatively, it can pose additional risks for taking a case to trial. The litigators at Cueto Law Group rely on their legal skill and experience to help clients navigate issues with FS 678.79 and Rule 1.442 as it relates to their civil case.
Contact Cueto Law Group today for a free consultation about Florida proposal for settlement.
FAQs
Below are some brief answers to other common questions about Florida’s proposal for settlement system.
When can I file a proposal for Settlement in Florida?
When you can file a proposal for settlement in Florida will depend on if you are the plaintiff or defendant. Generally, you can file 90 days after either service of process on the defendant or the commencement of the action. However, no proposal can happen within 45 days of trial.
How long is a PFS good for in Florida?
A PFS Florida is good for 30 days once delivered to the opposing party. The offeree must accept the settlement within those 30 days, otherwise, the court considers the offer rejected. One party’s rejection of a PFS does not preclude later PFSs being made afterward.
How do you write a proposal for a settlement?
A proposal for settlement must comply with certain requirements listed in FS 768.79 and Rule 1.442 such as being written and stating other items necessary for a party to evaluate the offer (e.g., amount of settlement, statutory references, etc.). Usually, a proposal for settlement comes in letter form.
