The purpose of this article is to explain Presuit Mediation and how inclusion of a Presuit Mediation provision in your business contract can help you avoid costly litigation in the future.

A. What is Presuit Mediation?

Presuit Mediation is an informal process where the parties meet with an impartial mediator in an attempt to address disputes and reach a mutual agreement resolving the disputes.

Section 44.1011(2), Florida Statutes, defines “mediation” as a process whereby a neutral third person called a Mediator acts to encourage and facilitate the resolution of a dispute between two or more parties. It 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. The role of the Mediator, includes, but is not limited to, assisting the parties and identifying issues, fostering joint problem-solving and exploring settlement alternatives.

Presuit Mediation has significant advantages over court-ordered mediation. Presuit Mediation occurs before costly litigation has ever been commenced and is handled outside the judicial system. Unlike court-ordered mediation, Presuit Mediation is not required to comply with the Florida Statutes and the Florida Rules of Civil Procedure requirements.

In addition, communications between the parties in a Presuit Mediation are entitled to confidentiality protections.

B. What are the compelling reasons for Presuit Mediation?

1. Cost. As a business person, would you rather (a) initiate and conduct an informal mediation conference within thirty days of a dispute arising, or (b) write the check for a team of attorneys to litigate the dispute over the course of the next year?

2. Speed. In the Presuit Mediation provision, the parties can specify the time period in which the mediation conference will be initiated. For example, the parties can specify that the conference will be held within thirty days of a party requesting mediation.

3. Informality. The mediation conference can be held in one of the parties’ offices or in the conference room of the mediator. Contrast one of these informal settings with the formality of an imposing courtroom complete with attorneys, a judge and jury.
4. The parties control the process. In a mediation conference, the parties are at liberty to tell their stories and negotiate a resolution in an informal, private setting without a judge or rigid rules dictating the process.

5. Confidential. A trial is open to the public. A mediation conference is a private meeting in which the parties are obligated to maintain confidentiality.

C. How is Presuit Mediation implemented?

The parties can simply include a Presuit Mediation provision when negotiating the terms of a business contract.

The Presuit Mediation provision should address how the mediator is selected, how the mediation conference will be conducted, payment of the mediator’s fees, what happens if no agreement can be reached, and the confidentiality of the parties.

When drafting the Presuit Mediation provision, its also important to consider an arbitration provision or choice of forum provision (in the event the mediation ends with an impasse), and the choice of law that will govern the contract.

D. Is it expensive to have an attorney prepare a Presuit Mediation provision for inclusion in your business contracts?

No. To draft a Presuit Mediation provision that you can include in all your business contracts, I charge a flat fee of US$275.00.

ABOUT THE AUTHOR

Fred Reilly’s law practice includes advising clients on international business transactions, corporations, contractual issues, real estate transactions, civil litigation and administrative proceedings.

Fred has been an attorney for more than 20 years. He is licensed to practice law in California, District of Columbia, Florida and as an English Solicitor. He has been admitted to practice before the United States Supreme Court and the United States Court of International Trade. Fred graduated from the London School of Economics and Political Science (LL.M. in International Business Law), Cumberland School of Law at Samford University (J.D. and Associate Editor of The Cumberland Law Review) and Purdue University (B.S. in Management). Fred spends time each month in Los Angeles and Central Florida. He is a member of The Beverly Hills Bar Association.

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