“They’re Negotiating in Bad Faith!” 

Written by: Alfred A. LaSorte, Jr.
Published: January 2024

A common mediation complaint is that the other side is negotiating in bad faith, usually prompted by dissatisfaction with their offers or demands.  “Their nuisance-value offer is insulting! They’re not here in good faith!” or “That offer is less than they offered a year ago. You can’t move backwards.  That’s bad faith!” or “Plaintiff’s demand is higher than they could ever get on their best day in court. That’s bad faith!”

A mediator helps the parties reach an acceptable settlement. (Most mediations do settle. I confess to taking it personally when they don’t!)  I understand parties’ frustration when the other side takes unreasonable positions, making settlement less likely.

But many attorneys misunderstand what parties are, and are not, obligated to do in court-ordered mediation. In the absence of a court order to the contrary, parties are under no obligation to make “good faith” offers.

Note – Some courts’ local rules impose a good faith requirement on parties’ mediation conduct.  See, Local Rule 9019-2(C)(4), U.S. Bankruptcy Court, Southern District of Florida: mediators “shall report to the court the failure of any party to participate in the mediation process in good faith.” This reporting obligation conflicts with the Florida Mediation Confidentiality Act, F.S. Sections 44.403 and 44.405. See, MEAC Opinions 95-009, 2001-004 and 2004-006.  (A similar provision was removed from Middle District of Florida’s Bankruptcy Local Rules.) Whether such rules are enforceable is beyond this article’s scope.

In Avril v Civilmar, 605 So.2d 988 (Fla. 4th DCA 1992), the Fourth DCA took on this issue.  There, mediation occurred early in the case, when little discovery had occurred. The defendants offered $1,000.00.  Plaintiff’s counsel moved for sanctions, asserting they acted “with unclean hands and not in good faith.” The trial court agreed, granting sanctions against the defendants. 

In reversing the sanctions order, the Fourth District pointed out that, while parties are required to 1) attend court-ordered mediations (FRCP 1.720(f)), and 2) comply with mediated settlement agreements (FRCP 1.730(d)), there is no requirement that any party make any offer in any amount:

At bottom, plaintiff’s only basis for sanctions is merely that defendants were unwilling to make an offer of settlement satisfactory to him. The mediation statutes, however, do not require that parties actually settle cases. [Florida Statutes] Section 44.1011(2), explains that mediation “is an informal and non-adversarial process with the objective of helping the disputing parties reach a mutually acceptable and voluntary agreement.”

In mediation, decision-making authority rests with the parties. It is clearly not the intent to force parties to settle cases they want to submit to trial before a jury. There is no requirement that a party even make an offer at mediation, let alone offer what the opposition wants to settle. (Emphasis added.)

Take a moment and let that sink in. Avril is thirty years old, but is still good law. See, Massey v Beagle, 754 So.2d 146 (Fla. 1st DCA 2000); MEAC Opinions 2001-004, 2004-006, and 2012-005.

Parties are constitutionally entitled to their day in court and cannot be forced to settle. Your opposing party’s intransigence does not create a remedy when mediation fails.  Note – it’s different where a party fails to appear for a court-ordered mediation, or to have required settlement authority, or to bring an insurance representative, if required by the Court’s mediation order. This article only focuses on bad faith claims based on dissatisfaction with opposing parties’ offers.

So, what can you do if the other side isn’t playing fair? (Hint – don’t file a sanctions motion.)  First, remember that while most mediated cases settle, many don’t. That’s why we have courtrooms.  An opponent may seem intransigent, but that’s their right.  That’s how our system works.

Try viewing the case from the other side’s point of view, to better understand their motivations.  Maybe this is “bet the company” litigation where a loss could put the company out of business, or one where a settlement could open the door to other claimants.  There may be extrinsic pressures  preventing a defendant from offering an amount it might otherwise offer. Similarly, some plaintiffs demand unreasonable amounts out of the gate, hoping to leave themselves some room to maneuver.  A demand higher than a plaintiff’s “best day” in court will understandably be seen by the other side as bad faith.

My advice? Be reasonable in your demands and offers, regardless which side you’re on.  If the other side isn’t reciprocating, let your mediator talk to them. Often, unreasonable demands and offers result from failure to appreciate the risks and expenses of a trial.  A mediator can help educate parties, leading to more realistic offers.

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After a long career at Shutts & Bowen LLP as a commercial litigator specializing in real estate and general business cases, Mr. LaSorte now acts exclusively as mediator (over 500 cases so far) and expert witness through his own firm, Alfred A. LaSorte, Jr., P.A. d/b/a LaSorte Mediation.  (www.LaSorteMediation.com).  Mr. LaSorte can be reached at (561) 286-7994 and Al@LaSorteMediation.com.

For additional ADR tips and resources, go to https://www.palmbeachbar.org/alternative-dispute-resolution-committee/

GOVERNOR RON DESANTIS APPOINTS SANTO DIGANGI TO THE BENCH

Santo Digangi to serve as Judge on the Palm Beach County Court.

Digangi joined the law firm of Critton, Luttier & Coleman in September 2013 focusing his practice in the areas of complex commercial litigation, personal injury, complex probate and trust litigation, and legal malpractice. Before joining the firm, DiGangi served as an Assistant State Attorney with the Miami-Dade State Attorney’s Office. DiGangi earned his bachelor’s degree and his Juris Doctor from the University of Florida. DiGangi fills the judicial vacancy for a County Court Judge position created by the elevation of Judge James Sherman.