How many times have you heard an attorney end his mediation opening statement by proclaiming that his or her client is attending the mediation in “good faith?”  Is there actually a requirement of good faith in mediation?  If so, what does it mandate and who enforces it?  In Florida, these questions may depend on the court in which litigation is occurring.

There is no general statute or rule requiring a party to show good faith in a Florida state court civil action.  In fact, the only requirement of Florida Rule of Civil Procedure 1.720 is that a party appears at the mediation.[1]  There are statutes, however, which require good faith in the attempted resolution of certain disputes such as those between governmental entities (Fla. Stat. 164.1058) and some insurance claims (Fla. Stat. 627.745).  In addition, local rules in some circuits have good faith requirements.  In the Ninth Circuit, while there is no overarching good faith requirement, Section 8 of the rules of the Complex Business Litigation Court states that “[t]he court will impose sanctions upon Lead Trial Counsel and parties who do not attend and participate in good faith in the mediation conference.”

Similarly, there is no federal rule of civil procedure that mandates good faith in mediation and the author is unable to find any good faith requirement in any of the civil court local rules.  Many case management orders, however, require that “all parties shall participate in good faith in mediation.”  Until very recently, the United States Bankruptcy Court for the Middle District of Florida not only required good faith but also required a mediator to report to the judge when a party does not mediate in good faith.

Rules and orders such as those referenced above beg the question: what constitutes good faith?  Better yet, what is bad faith?  Unfortunately, none of the cited rules defines the term.  In a 2004 report, the ABA Section of Dispute Resolution cited to a 2002 article by Professor John Lande entitled Using Dispute System Design Methods to Promote Good Faith Participation in Court-Connected Mediation Programs, 50 UCLA L. Rev. 69 (2002).  In this article, Professor Lande found that in cases alleging bad faith in mediation, courts found bad faith in which a party violated certain court rules such as by failing to attend the mediation or failing to submit a pre-mediation memorandum.  Courts were split in cases in which a party failed to provide a representative with sufficient settlement authority.  As long as a party appears at and participates in mediation, however, a good faith requirement, generally, does not require the party to make a “suitable” settlement offer or even any offer at all.[2]

Alleging bad faith at mediation is almost always the responsibility of a party.  In fact, Florida’s Mediator Ethics Advisory Committee (MEAC) has opined that it is a violation of a mediator’s duty to maintain confidentiality if the mediator makes an allegation of bad faith to the court even when a court order requires the mediator to do so.  MEAC, however, provides an exception when a court rule specifically requires a report by the mediator.

In conclusion, there are no hard and fast rules regarding “good faith” in mediation.  Clearly, the term is ambiguous and subjective.  At a minimum, attorneys should strictly adhere to court rules and orders governing mediation, appearing at the mediation with the appropriate individuals and complete settlement authority and submitting mediation statements when required.  Otherwise, it is suggested that attorneys utilize common sense when participating in mediation.  Paraphrasing Justice Potter Stewart’s famous quote regarding pornography; good faith may be hard to define but it is likely that a judge will know it when he or she sees it.

[1] Appearance requires the physical presence of a party or party representative having full authority to settle, the party’s counsel of record, if any, and a representative of an applicable insurance carrier with full authority to settle up to the plaintiff’s last demand or policy limits.  Having full authority to settle means the final decision maker as to all issues presented in the case and the legal capacity to execute a binding settlement agreement on behalf of the party.

[2] It should be noted that there are other instances in which bad faith was found such as failing to notify the other party prior to mediation that a client intends to refuse to pay any amount at settlement or even filing a summary judgment motion just before mediation.