Whether you are the injured or the “at-fault” party in a personal injury accident, the most important step you can take following the accident is to retain the services of an experienced personal injury attorney. Once you have done so, however, you may not pay much attention to the legal steps and procedures that occur behind the scenes of your personal injury litigation case. One powerful, and sometimes risky, tool that is frequently employed in a personal injury lawsuit is Florida’s ‘Proposal for Settlement’ (PFS), also known as an Offer of Judgment. On the most recent episode of his weekly Lawyers Podcast, attorney Paul Reed discussed a real-life case involving a PFS that helps illustrate how the use of one might impact your personal injury case.
Understanding Attorney Fees in Florida
When the topic of “attorney fees” comes up, the average person assumes it refers to what an attorney charges a client when the attorney is hired to present the client. While that can be an accurate description, the term “attorney fees” can refer to a much more complex concept that involves one party to litigation being legally obligated to pay the attorney fees of another (opposing) party. For example, if you file a lawsuit against XYZ corporation, and you lose, you could be required to pay XYZ’s attorney fees related to defending the lawsuit.
Listen to Paul and Jason discuss this case on the LiveFeedReed podcast
In Florida, such a situation can only occur under two circumstances. The first is when a contractual obligation exists, allowing for the payment of attorney fees. Although most people fail to read the small print in everyday contracts, many of those contracts explicitly provide for attorney fees. The other way that attorney fees may apply is when there is a statute that directly provides you with the right to pursue attorney fees. In the podcast, Attorney Reed discusses a recent case involving statutory attorney fees related to a Proposal for Settlement.
What Is a Proposal for Settlement?
In a typical personal injury lawsuit, both sides will engage in the “discovery” process, which involves the sharing of relevant information and evidence, effectively giving all parties an idea of the strengths and weaknesses of the case. Once discovery is complete, either side can offer to settle the case by filing a “Proposal for Settlement.” As the name implies, this is just a formal offer to settle the case out of court. Strategically, however, a PFS can play an important role down the road if it is rejected, because if a PFS is rejected, and the rejecting party doesn’t achieve a result at trial that is at least 25 percent better, they could be on the hook for the offering party’s attorney’s fees and costs from the date the offer was made.
For example, imagine that you are involved in a car accident and the defendant files PFS offering you $100,000 to settle your case. You reject that offer and proceed to trial. At trial, you would need to get an award of more than $125,000 (the offered $100,000 plus 25 percent) to avoid being responsible for the defendant’s attorney fees. The idea behind the statute is to encourage both parties to accept reasonable settlement offers.
Paul Reed’s “Hairball” Case
To illustrate how attorney fees work when a Proposal for Settlement is involved, attorney Paul Reed revisited a case (jokingly referred to as a “hairball”) that has been discussed several times on the podcast. The case involved a road rage incident that turned ugly and litigious. Attorney Reed represented the Defendant in the case and, in that role, filed a Proposal for Settlement early on in the litigation, offering the Plaintiff $1.00 to settle the case. Clearly, attorney Reed was confident that the Defendant had zero liability exposure. After six years of litigation, including an appeal, the Defendant did, indeed, prevail. As such, the defendant owed the Plaintiff nothing, placing the original PFS within the 25 percent margins of error and exposing the Plaintiff to a statutory obligation to pay the Defendant’s attorney fees. At an attorney’s fees hearing, attorney Reed was awarded attorney fees and litigation costs based on the PFS he filed early in the litigation, illustrating the strategic use of a Proposal for Settlement.
If you have questions or concerns about a personal injury lawsuit, contact the experienced personal injury attorneys at Reed & Reed.