January 31, 2022
We are all too aware of the hiccups and interruptions of our normal routines caused by the COVID-19 emergency. Courts have had different restrictions and changes that have not always been consistent across the board, but one thing every jurisdiction experienced without exception was a bottleneck of cases awaiting trial over the course of 2020 and the first half of 2021. The Florida Supreme Court issued Administrative Order AOSC20-23 on April 6, 2020 with guidelines for Florida’s courts to mitigate COVID-19 safety risks while maintaining judicial efficiency. Amendment 12 to AOSC20-23 was issued April 13, 2021 with an additional directive at Section G for Chief Judges to issue administrative orders to actively manage pending circuit court cases and move them toward resolution. Different circuits have implemented AOSC20-23’s guidelines in various ways, but the overwhelming consequence here in South Florida has been an influx of Orders setting cases for trial.
Many, if not all, Uniform Trial Orders include a mediation requirement. Increasingly, some judges have also been uniformly ordering cases to non-binding arbitration as an alternative method of resolution. Non-binding arbitration can be both a blessing and a nuisance. Like mediation, it can be a cost-effective way to resolve your case. However, it also has its drawbacks, which will be discussed below. Either way, if you receive an order to non-binding arbitration, don’t panic! Arbitration is essentially a controlled environment to match your case’s strengths against your opponent’s, without the finality of trial.
Florida Statutes §44.103 and Florida Rule of Civil Procedure 1.820 work in tandem to lay out the procedures and consequences of non-binding arbitration. Procedurally, non-binding arbitration is somewhere between a more formal mediation and a less formal bench trial. Under the guidelines of §44.103(3), Florida Statutes, and Florida Rule of Civil Procedure 1.820, the cost of non-binding arbitration is no more than $1,500.00 per day, which is comparable to mediation fees. The arbitrator is typically designated by the Court unless a different arbitrator is stipulated to by the parties.
Typically, all evidence the parties want the arbitrator to consider is submitted to the arbitrator in advance of the hearing, along with a brief statement of the case. The rules do allow live witness testimony, but often testimony is proffered by counsel for Plaintiff and Defendant during the informal arbitration hearing, at the discretion of the parties. The arbitrator may also ask questions of both parties regarding testimony and the evidence presented. The rules mandate that the arbitrator submit their decision within 10 days of the hearing. Either party then has 20 days from service of the arbitrator’s decision to move for a trial de novo, or else the trial court judge will adopt the arbitrator’s findings and the decision will become binding.
There are a handful of reasons why a party would move for trial de novo. Some examples would be:
- Plaintiff wins at arbitration but is awarded an amount lower than a jury might award;
- Plaintiff loses at arbitration and feels strongly they would prevail at trial;
- Defendant loses at arbitration and feels strongly they would prevail at trial; or
- Defendant loses at arbitration and believes the Plaintiff’s award is much higher than it ought to be.
I’m sure you are thinking, “this all sounds great,” right? You may be thinking, “what’s the big deal – if I lose at arbitration, I still have another bite at the apple.” The catch is that if a party moves for trial de novo, they may become on the hook for fees and costs if:
- Plaintiff is the party who filed for trial de novo and prevails, but is awarded 25% less than the arbitration award; or
- Defendant is the party who filed for trial de novo and judgment is entered against Defendant at trial in an amount that is 25% more than the arbitration award.
Now you may be thinking, “this sounds an awful lot like the consequence of a Florida Statutes §768.79 Offer of Judgment.” You would be correct, more or less. The calculation of fees and costs assessed as a result of a trial de novo from non-binding arbitration is nuanced and could be the subject of another article altogether. That said, if a judge has referred your case to non-binding arbitration, chances are one or both parties has already served an offer of judgment at some point in litigation. You may or may not already be at risk of exposure to fees and costs in the event of a loss. Therefore, moving for a trial de novo may be a reasonable calculated risk, depending on the strength of your case and whether you are comfortable rolling the dice.
There are some real benefits of having gone through non-binding arbitration, should you find yourself moving for trial de novo. First, unlike mediation, the evidence submitted by each party is available to all parties. Next, each side gets to hear the other’s arguments to the trier of fact, in this case the arbitrator, whether done through live testimony or a proffered summary. What that means is if you are headed to trial after losing at arbitration, you will have a very good picture of not only your own side’s strengths and weaknesses, but also your adversary’s. This window into the other side’s strategy can be a valuable tool in focusing your arguments at trial. Now that you have a better picture of your adversary’s weaknesses, you know exactly where to apply the pressure when you get to trial. Keep in mind, though, this is a double-edged sword. Your adversary will have the same benefit of knowing your arguments and how you intend to utilize your evidence. Ultimately, just because an arbitrator decided a certain way does not mean a jury would come to the same conclusion.
Another potential advantage is that if you prevail at arbitration and the other side forgets or chooses not to move for trial de novo, you will have saved the time and costs of trial. The 20-day deadline to do so is strictly enforced so if you wish to move for trial de novo it is paramount to keep a tight diary of the deadline and timely file the request.
In sum, non-binding arbitrations are increasingly commonplace as trial judges continue to clean out their backlog of cases that were halted during the pandemic. There are benefits and drawbacks to arbitration and, like anything else, there is no guarantee of the outcome. With careful preparation and understanding of the mechanics of Florida Statutes §44.103 and Florida Rule of Civil Procedure 1.820, non-binding arbitration is nothing to fear.
Florida Statutes §44.103
Florida Rule of Civil Procedure 1.820