ADR CORNER
ADR CORNER
" They ’ re Negotiating in Bad Faith !”
ALFRED LASORTE , JR .
A common mediation complaint is that the other side is negotiating in bad faith , usually prompted by dissatisfaction with their offers or demands . “ Their nuisancevalue 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 courtordered 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 courtordered 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 .
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 / alternativedispute-resolution-committee /.
PBCBA BAR BULLETIN 6