What does it mean to settle a Florida business dispute
A settlement of claims in a business dispute is a compromise. A compromise is generally defined as one side giving or paying more than they would like and the other accepting less than they desired.
Settlements can occur independent of a lawsuit or arbitration or as part of that process in a mediation or directly between the parties. In a lawsuit or arbitration a settlement returns control over the outcome to the parties from the party that would otherwise decide their fate such as a judge, arbitrator, or jury. What may be contained in settlement terms and whether such terms are appropriate or beneficial are highly personal to the parties and dependent on the unique facts of the case.
Settlements can occur independent of a lawsuit or arbitration or as part of that process in a mediation or directly between the parties. In a lawsuit or arbitration a settlement returns control over the outcome to the parties from the party that would otherwise decide their fate such as a judge, arbitrator, or jury. What may be contained in settlement terms and whether such terms are appropriate or beneficial are highly personal to the parties and dependent on the unique facts of the case.
Common terms used in settlement agreements in Florida business disputes
Settlements are most often in writing but do not always have to be written. However absent a writing it is almost impossible to enforce such an agreement. Settlement agreements do not have set terms. Commonly there is some recitation of the background that brought the parties to the agreement and the terms on which they have agreed. But while there may be some settlement payment involved there can be additional provisions such as releases of liability and dismissal of claims. Settlement agreements can also contain confidentiality and non-disparagement provisions if the parties require those kinds of terms.
Without specific terms such as a confidentiality provision settlement agreements are not confidential. The process that led to them may be confidential and protected from disclosure but mediators who often work in that arena will be the first to tell you that the confidentiality imparted to mediations or settlement negotiations can be pierced if one party to a settlement refutes the agreement or disputes the meaning of its terms.
Whether additional terms beyond payment provisions are required should be addressed with counsel before entering into any settlement agreement as that is the time to disclose all demands and come to agreement on the settlement terms.
Without specific terms such as a confidentiality provision settlement agreements are not confidential. The process that led to them may be confidential and protected from disclosure but mediators who often work in that arena will be the first to tell you that the confidentiality imparted to mediations or settlement negotiations can be pierced if one party to a settlement refutes the agreement or disputes the meaning of its terms.
Whether additional terms beyond payment provisions are required should be addressed with counsel before entering into any settlement agreement as that is the time to disclose all demands and come to agreement on the settlement terms.
Settlement agreements are treated as a contract in Florida
Written settlement agreements are enforced as a normal contract meaning that judges are charged to apply the unambiguous terms to which the parties agreed. In Florida we follow what is commonly called the American Rule regarding attorney’s fees. This Rule provides that a party is not entitled to such fees unless they are contained in a contract, statute, or rule of procedure, such as a discovery rule.
The only statutes that apply to settlement agreements are Sections 44.401-44.406 in the Florida Statutes. That group of statutes is commonly called the Mediation Confidentiality and Privilege Act. But those only cover the confidentiality of mediation. Because there is no law in Florida automatically imposing liability for fees in private settlement agreements a party enforcing the agreement cannot recover the fees incurred in so doing unless those are in the contract itself. As with other terms whether to include an attorney’s fee provision and precisely what that provision should say and the depth to which it can or should extend is a conversation that should occur with counsel before entering into the settlement agreement.
The only statutes that apply to settlement agreements are Sections 44.401-44.406 in the Florida Statutes. That group of statutes is commonly called the Mediation Confidentiality and Privilege Act. But those only cover the confidentiality of mediation. Because there is no law in Florida automatically imposing liability for fees in private settlement agreements a party enforcing the agreement cannot recover the fees incurred in so doing unless those are in the contract itself. As with other terms whether to include an attorney’s fee provision and precisely what that provision should say and the depth to which it can or should extend is a conversation that should occur with counsel before entering into the settlement agreement.
Do you have to mediate to settle in Florida
No. A party in a business dispute can settle directly with any other party without participating in the mediation process if they so desire. But by doing so they may lose the benefits that a mediation can provide if they undertake a direct settlement. But that is also not to say that a party must initiate a lawsuit or arbitration just to mediate. Mediation is not exclusive to lawsuit or arbitration and the parties can take advantage of the process without initiating a formal lawsuit or arbitration in what is commonly called pre-suit mediation. Whether to consider pre-suit mediation or not is the topic of another article,
In Florida almost all civil lawsuits must participate in mediation before they can proceed to trial. This is to maximize the opportunity to devise a settlement though the mediation process. While most arbitration rules do not mandate mediation as the courts do those rules most often recommend mediation to the parties and offer the opportunity to arrange that through the arbitration company. To learn more about mediation in a business lawsuit please refer to my article on that topic.
In Florida almost all civil lawsuits must participate in mediation before they can proceed to trial. This is to maximize the opportunity to devise a settlement though the mediation process. While most arbitration rules do not mandate mediation as the courts do those rules most often recommend mediation to the parties and offer the opportunity to arrange that through the arbitration company. To learn more about mediation in a business lawsuit please refer to my article on that topic.
Final thoughts on settlement of Florida business disputes
In sum the settlement of a business dispute gives the parties the chance to dictate the outcome of the matter instead of leaving that up to an outsider in the form of the judge, arbitrator, or jury. A settlement is also often a compromise with each side contributing to meet in the middle. While one side may feel they are paying more than they wish in a monetary settlement and the other believing they are getting less than they deserve the settlement process creates an option that did not otherwise exist that the parties can evaluate against the existing option of a trial or arbitration.
Whether the product of a mediation or direct negotiations between the parties the discussions for a settlement enjoy a limited confidentiality that the eventual settlement does not unless the parties provide for that. Thus the terms of any settlement agreement are within the power of the parties to it and can contain far more than just payment provisions. Whether to settle, how to structure a settlement agreement, and the meaning and impact of the terms should be discussed with an experienced business litigator such as those who have achieved Board Certification from the Florida Bar meaning their expertise in this area of the law has been thoroughly tested and evaluated.
Whether the product of a mediation or direct negotiations between the parties the discussions for a settlement enjoy a limited confidentiality that the eventual settlement does not unless the parties provide for that. Thus the terms of any settlement agreement are within the power of the parties to it and can contain far more than just payment provisions. Whether to settle, how to structure a settlement agreement, and the meaning and impact of the terms should be discussed with an experienced business litigator such as those who have achieved Board Certification from the Florida Bar meaning their expertise in this area of the law has been thoroughly tested and evaluated.
Written by Board Certified business lawyer David Steinfeld
David Steinfeld is one of the few Board Certified business law experts in Florida. He has been licensed for over 25 years. He is AV-Preeminent rated, ranked as one of the Best Lawyers in America by U.S. News and World Report, and consistently named a Florida Super Lawyer and one of Florida’s Legal Elite. Dave has also received Martindale’s prestigious Judicial Edition Award for high reviews by Judges, its Platinum Client Champion Award and has a 10.0-Superb rating on AVVO as well as a 10.0 rating on Justia, lawyer reviews websites.
Check out business lawyer David Steinfeld online for helpful videos and articles on Florida business law, real estate disputes, and electronic discovery solutions for your business. This article is provided for informational purposes only.
Check out business lawyer David Steinfeld online for helpful videos and articles on Florida business law, real estate disputes, and electronic discovery solutions for your business. This article is provided for informational purposes only.
