Attorneys Fees And Florida’s Offer Of Judgment Statute
In many business law cases, a contract says that the winning party gets their attorneys fees from the losing party. Alternatively, a law may say that if you sue, and win, that you get attorneys fees, depending on what you’re suing for. Outside of those options – a contract or law—the winning party in court doesn’t automatically get their attorneys fees.
But there is one vehicle to get attorneys fees, even if there is no contract or law that says you get them. That vehicle is Florida’s offer or judgment statute.
Why Does the Law Exist?
The offer of judgment statute was passed in order to make settling cases more appealing to parties. The law wanted to entice parties to take reasonable settlement offers, thus reducing trial loads on our courts. The potential of getting hit with paying the other side’s attorneys fees, presumably, is incentive to get people to settle cases.
Here’s how the law works: Let’s say that you are suing someone else. If you make an offer of judgment (OJ) under the statute, and the other side accepts the offer, the case is over for whatever was offered.
But if your offer was rejected, and it goes to trial, the other side now must also pay your attorneys fees, if you win more than 25% of the original offer.
So, let’s assume you offered $100,000 to settle a case, and that offer was rejected (or allowed to expire, which operates as a rejection). If you go to trial, and you win more than $125,000, the other side (the Defendant) will have to pay your attorneys fees, in addition to the amount that you won.
The law works the other way also. A Defendant can also make an offer. If the offer is rejected, and the Plaintiff wins less than 25% of the offer, the Plaintiff has to pay the Defendant’s attorney fees.
So let’s assume the Defendant offered $100,000 to settle the case. If the Plaintiff won, say, $70,000 – less than $100,000 minus $25,000 (25%)—the Plaintiff would have to pay the other side’s attorneys fees.
That means that even though the Plaintiff technically “won” the case, the amount for the attorneys fees is taken out of what the Plaintiff actually receives. In a large, ongoing, and expensive case, this can lead the Plaintiff to getting little or nothing.
In fact, it can even lead to a situation where the Plaintiff, despite winning the case, owes the Defendant money. If the Defendant’s attorneys fees are more than what the Plaintiff won, the balance will be a judgment against the Plaintiff.
Not Every Offer Counts
Not every offer falls under the statute—there are specific requirements for these proposals to settle the case. A standard, informal offer to settle a case won’t lead to any award of attorneys fees. But if a formal offer, served under the statute, is sent, whichever party receives the offer, needs to seriously consider it, to avoid paying the other side’s attorneys fees.
Make sure your lawyers know how to take your business law case to trial, if needed. Call the West Palm Beach business litigation attorneys at Pike & Lustig today.