What Is a PFS in Law? The 25% Rule and 30-Day Window

In Florida civil litigation, a Proposal for Settlement (PFS) is a formal written offer that uses fee-shifting to pressure the other side to settle. Under Florida Statute 768.79 and Florida Rule of Civil Procedure 1.442, if you reject a PFS and the final judgment comes out at least 25 percent worse for you than the offer, the court can order you to pay the other side’s attorney fees and taxable costs from the date the proposal was served.¹ That one feature is what makes the document so consequential: ignoring it, or guessing wrong about your case, can cost more than the verdict itself.

What Makes a Proposal Valid

Florida courts routinely invalidate proposals that miss the formal requirements, so the first thing to check on any PFS you receive is whether it actually qualifies. The document must be in writing and must state explicitly that it is being made under Florida Statute 768.79.¹ It must name the party making the offer and the party receiving it.²

The proposal must also state a specific dollar amount, say whether that amount includes attorney fees, and say whether fees are part of the underlying legal claim. It must state that it resolves all damages that would otherwise be awarded in a final judgment, unless it is directed at only specific claims; if the offer covers less than all claims, those claims have to be listed individually. Ambiguity on any of these points can be enough for a court to throw the proposal out, which also wipes out any fee-shifting consequences.

Timing and the 30-Day Response Window

A PFS cannot be served immediately. The earliest it can go out is 90 days after service of process on the defendant, or 90 days after the lawsuit was filed if the proposal is directed at a plaintiff. The latest it can be served is 45 days before the scheduled trial date.² The window gives both sides time to complete enough discovery to evaluate the case realistically.

Once you receive a PFS, you have 30 days to accept it in writing. Acceptance means filing a written acceptance with the court, which then has jurisdiction to enforce the settlement.¹ Silence is not neutral. If you let the 30 days pass without a written response, the law treats the proposal as rejected automatically, and that deemed rejection is what starts the fee-shifting clock. Oral communications do not count as an acceptance, rejection, or counteroffer.²

The 25 Percent Rule That Triggers Fees

The whole mechanism turns on one comparison: the rejected offer against the final judgment. Which side owes fees depends on which direction the number moves.

If a plaintiff served a PFS offering to settle for $100,000 and the defendant rejected it, the plaintiff is entitled to fees if the final judgment comes in at $125,000 or more.¹
If a defendant offered $100,000 and the plaintiff rejected it, the defendant is entitled to fees if the plaintiff’s final judgment comes in at $75,000 or less. The defendant also recovers fees if the court finds no liability at all.¹

Here is the part people miss on the defense side. When the fees and costs awarded exceed the plaintiff’s judgment, the court enters a net judgment for the defendant against the plaintiff.³ A plaintiff who technically won at trial can walk out owing money.

How “Judgment Obtained” Is Calculated

The 25 percent comparison is not simply the offer against the jury’s verdict. The statute defines “judgment obtained” differently depending on who made the offer.

For a defendant’s rejected offer, “judgment obtained” means the net judgment entered, plus any post-offer collateral source payments the plaintiff received or is owed as of the judgment date, plus any post-offer settlement amounts that reduced the verdict. For a plaintiff’s rejected offer, the calculation is the same except collateral source payments are not included.¹

That distinction matters in cases with insurance payments, partial settlements with co-defendants, or any other adjustment that shifts the final numbers after the offer was served. Evaluating a PFS realistically means accounting for those adjustments, not just the raw verdict a jury might return.

What the Losing Party Pays

If the 25 percent threshold is crossed, the party claiming fees has to file a motion within 30 days after entry of judgment, or after voluntary or involuntary dismissal.¹ Missing that 30-day window forfeits the right to recover, no matter how clearly the math favors them.

The award covers reasonable attorney fees and taxable costs incurred from the date the proposal was served. Taxable costs in Florida include court filing fees, service of process charges, court reporter expenses, and expert witness fees.⁴ Expert witness fees are recoverable only if the party provided the opposing side with a signed written report summarizing the expert’s opinions and supporting evidence before the discovery deadline. Investigative expenses are also recoverable under the statute. Fees and costs piled up over months or years of litigation can easily exceed the underlying verdict, and that is exactly why the mechanism works.

Good Faith and the Court’s Discretion

The court has discretion to deny a fee award if it finds the proposal was not made in good faith.¹ This is the safeguard against offers designed to generate fee awards rather than resolve the case.

In weighing reasonableness, courts look at the strength of the claim when the offer was made, the number and nature of offers exchanged, whether the factual and legal issues were genuinely contested, whether the offering party unreasonably refused to provide information needed to evaluate the offer, whether the lawsuit raised novel legal questions affecting people beyond the parties, and the delay and expense the offeror would reasonably expect from continued litigation.

A nominal offer is not automatically bad faith. Florida courts have held that a minimal offer, even $100 from a defendant, can be valid if the party making it had a reasonable basis to believe exposure was nominal when the offer was served. A token offer in a case with clear liability and significant damages, by contrast, is likely to be rejected as a tactical ploy.

When a Proposal for Settlement Does Not Apply

The statute reaches only “civil actions for damages,” meaning lawsuits seeking money.¹ If the case seeks only non-monetary relief, such as an injunction, a court order to do or stop doing something, or a declaratory judgment, the PFS mechanism does not apply. In mixed cases involving both monetary and equitable claims, courts look at the “real issue” in dispute. If the core of the case is money, the statute may still apply, but a proposal that tries to resolve equitable claims along with monetary ones risks being invalidated.

Multi-party cases create additional traps. When a lawsuit involves multiple plaintiffs or defendants, each party generally needs a separate proposal with an individually allocated amount; a single lump-sum offer bundling everyone together is usually invalid. The exception is joint and several liability, such as an employer and employee in a vicarious liability scenario, where a joint proposal may be allowed if the settlement would dismiss the claims against all jointly liable parties.² Failure to properly apportion amounts in a multi-party proposal is one of the most common reasons courts strike them down.

How Federal Court Is Different

If your case is in federal court rather than Florida state court, the closest equivalent is an offer of judgment under Federal Rule of Civil Procedure 68. The two tools share a purpose but work very differently.

Only the defending party can make a Rule 68 offer. It must be served at least 14 days before trial, and the opposing party has 14 days to accept in writing. If accepted, the clerk enters judgment on the offer’s terms. If rejected, the offer is automatically withdrawn and cannot be used as evidence at trial.⁵

The penalty is narrower than Florida’s. A plaintiff who rejects a Rule 68 offer and does worse at trial pays only post-offer “costs” as defined by federal law, which typically covers court fees, witness fees, and copying expenses but not attorney fees. The major exception comes from the Supreme Court’s decision in Marek v. Chesny (1985), which held that when the underlying statute includes a fee-shifting provision, as many civil rights and employment statutes do, attorney fees count as “costs” for Rule 68 purposes. Florida’s PFS is the more aggressive tool: it applies to both plaintiffs and defendants, covers attorney fees by default, and runs on a clear 25 percent mathematical trigger.

1
Florida Senate. Florida Statutes 768.79 – Offer of Judgment and Demand for Judgment
2
The Florida Bar. Florida Rule of Civil Procedure 1.442 – Proposals for Settlement
3
The Florida Legislature. Florida Statutes 768.79 – Offer of Judgment and Demand for Judgment
4
The Florida Legislature. Florida Statutes 57.071 – Costs; What Taxable
5
Legal Information Institute. Federal Rules of Civil Procedure Rule 68 – Offer of Judgment