Changes to Florida’s Proposal for Settlement
For many years, Florida’s defense practitioners have used a Proposal for Settlement (PFS) as a tool to demand certain nonmonetary terms, such as the execution of a settlement release, as a condition to a plaintiff’s acceptance of a PFS. Effective July 1, 2022, however, the Florida Supreme Court has amended Florida Rule of Civil Procedure 1.442, which governs the procedural requirements for a PFS.
The stated purpose of the Court’s Amendment is to “align rule 1.442 with the substantive elements of Florida’s settlement proposal statutes.” Under the Amendment, however, parties are precluded from serving a PFS containing “nonmonetary terms, with the exceptions of a voluntary dismissal of all claims with prejudice and any other nonmonetary terms permitted by statute.” (For example, section 70.001(4)(c), Florida Statutes, lists the nonmonetary terms that a governmental entity may include in a settlement offer when the government action inordinately burdens private property rights, such as land swaps or the transfer of development rights.) Thus, the Amendment no longer permits a defendant to include the execution of a settlement release as a nonmonetary term required for the acceptance of a PFS. Other important nonmonetary settlement terms, such as lien satisfaction, confidentiality and non-disparagement clauses, would similarly be excluded under the Amendment as nonmonetary terms of a PFS.
Through this Amendment, the Court seeks to encourage settlement and reduce litigation over the enforceability of proposals for settlements due to ambiguity concerns. Nevertheless, the greater impact of the Amendment appears to benefit plaintiffs, who typically do not include nonmonetary terms in a PFS. For example, defendants may now be left exposed, among other ramifications, to non-confidential settlements, the amounts of which may likely appear on billboards and advertisements throughout Florida.
It is important to note that the Amendment does not impact settlement terms and releases that are reached outside of submitting a PFS. When determining whether to accept or serve a PFS, defendants and their insurers should consult with experienced defense counsel who can evaluate the multiple considerations and factors at issue in the case, including the impact of shifting one party’s attorneys’ fees and costs to the other party.