There are many methods through which parties to a lawsuit can resolve their differences. The most commonly known ways to settle a lawsuit are at mediation (where a settlement is reached) and trial (where a jury returns a verdict). However, due to the costly, time-consuming, and complex nature of lawsuits, especially if the case continues to trial, matters are more likely to settle outside of court. One common, but not as widely known, method of settling a case involves filing what is called a “proposal for settlement,” also known as an “offer of judgement.” This is a formal, written offer given to the other side. It essentially says, “We will accept X amount to settle this case and if Defendant A pays X amount, we will dismiss the lawsuit”. A notice that the formal, written offer was served on the other side must be contemporaneously filed with the Court.
Both parties may file proposals for settlement, so long as the proposal is filed and served to the opposing side no earlier than 90 days following the initiation of the lawsuit and no later than 45 days before trial. Further, should you wish to accept the proposed offer, you must do so in writing within 30 days. However, should you not wish to accept the offer, you simply do nothing and after the 30-day acceptance period expires, the offer is deemed rejected.
Sometimes a Proposals for Settlement is filed with the hopes that it will be accepted, and that the litigation will come to an end. When this is done the PFS is used as a settlement tool. However, sometimes a Proposal for Settlement is filed with the hopes that it will not be accepted. When this is done the PFS is used as a (potential) fee shifting mechanism. This is because when a PFS is not accepted and the other side ‘wins’, they can attempt to use the PFS to get you to pay their attorneys fees and costs.
So what does a “win” mean when it comes to a PFS? For a Defendant: Should the Plaintiff reject the Defendant’s PFS and later obtain a final judgment that is 25% or less than the defendant’s proposal, you may be responsible for paying the other side’s reasonable costs and attorney’s fees (from the date the offer was filed).
On May 1, 2016, Defendant files a Proposal for Settlement to Plaintiff for $75,000. Believing she can obtain more than $56,250, Plaintiff chooses not to accept the $75,000 offer, and the 30-day acceptance period ends. At trial, Plaintiff obtains a final judgment in the amount of only $55,000. As this judgment is more than 25% less than Defendant’s $75,000 proposal, Plaintiff is now on the hook for Defendant’s reasonable costs and attorney’s fees he has incurred since May 1, 2016.
What does a “win” mean for a Plaintiff? When the Defendant reject the Plaintiff’s PFS and later the Plaintiff obtains a final judgment that is 25% more than the amount of the PFS that he or she filed, the Defendant(s) may be on the hook for paying the Plaintiff’s reasonable costs and attorney’s fees (from the date the offer was filed).
On May 1, 2016, Plaintiff files a Proposal for Settlement to Defendant for $100,000.
The Defendant fails to accept the PFS in writing within the 30-day acceptance period. At trial, the Plaintiff obtains a final judgment in the amount of $130,000. As this judgment is 25% or more than the PFS originally filed, Defendant is now on the hook for Plaintiff’s reasonable costs and attorney’s fees she has incurred since May 1, 2016.
Personal Injury Attorney Chelsie M. Lamie always relays all Proposals for Settlement filed by Defendants to her clients immediately. She also counsels her clients on what they can do to protect themselves in the event of a low or zero verdict. One of the most powerful ways Plaintiffs can protect themselves is by purchasing PFS Insurance.
With her extensive knowledge and experience in civil cases, Attorney Chelsie M. Lamie, has helped clients obtain successful outcomes using Proposals for Settlement, both as a settlement tool and as a fee shifting mechanism. Attorney Lamie takes the time to review your Clearwater injury case, discuss your options, and guide you in making informed decisions about the resolution of your case.
Attorney Chelsie M. Lamie is a personal injury attorney located in Safety Harbor, Florida. If you or a loved one have been injured in a car accident or slip and fall accident, please call 727-501-3464 for a free consultation. You can also learn more about Attorney Lamie at www.chelsielamie.com.