By Steven M. Katzman

A distributor and a supplier fall out over $180,000 in disputed invoices. The supply agreement is a supplier form with a clause entitling the supplier to its attorney’s fees if it has to enforce the contract. The distributor refuses to pay, claiming defective product. The supplier sues. Two years, a dozen depositions, and three expert reports later, a jury awards the supplier $95,000. Both sides have spent more than $300,000 on lawyers. Who pays those fees?

The answer turns on questions most business owners never consider when the dispute begins. Does the one-sided fee clause work in both directions? Who counts as the “prevailing party” when the plaintiff recovers about half of what it sued for? Did either side serve a proposal for settlement, and if so, for how much and when? Did the lawyers plead entitlement to fees and file the fee motion on time? In Florida commercial litigation, the fee award is frequently larger than the judgment, and it is often what decides who really won.

This article covers how attorney’s fees are shifted in Florida business disputes, and how to treat fee exposure as part of the strategy from the first day.

The starting point: the American rule

Florida follows the American rule: each side pays its own lawyers unless a contract or a statute provides otherwise. Courts do not award fees simply because one side won, or because the losing side’s position was weak. There must be a specific legal basis for the award, and the party seeking fees bears the burden of identifying it.

In practice, Florida business litigation has several fee-shifting mechanisms, and more than one can apply in the same case:

A contractual fee provision in the agreement at issue.
A statute that authorizes fees for a particular type of claim.
A proposal for settlement under Fla. Stat. § 768.79 that the other side rejected and then failed to beat.
Sanctions under Fla. Stat. § 57.105(1) for claims or defenses without factual or legal support.
The court’s inherent authority to sanction bad-faith litigation conduct.

Each has its own rules, and each can be lost through a procedural mistake.

Contractual fee clauses

Most commercial contracts contain a fee provision. They range from a single sentence awarding fees to “the prevailing party in any litigation arising out of this Agreement” to multi-paragraph clauses that define prevailing party, cover arbitration and appeals, and include fees incurred in collection and bankruptcy proceedings. Florida enforces these provisions according to their terms.

One-sided clauses are reciprocal

Under Fla. Stat. § 57.105(7), when a contract allows attorney’s fees to one party when that party must take action to enforce the contract, the court may also award fees to the other party when it prevails in any action with respect to the contract. The rule applies to contracts entered into on or after October 1, 1988.

The practical effect is that a fee clause drafted to protect only the landlord, the lender, the franchisor, or the supplier protects the other side too. In the opening example, the supplier’s form clause gives the distributor a fee claim if the distributor is the prevailing party. Parties who draft one-sided clauses on the assumption that they shift risk in only one direction are often surprised.

Scope: what the clause actually covers

Whether a fee clause reaches a particular claim depends on its wording. A clause limited to actions “to enforce this Agreement” generally covers claims for breach of the contract. A clause covering any dispute “arising out of or relating to” the agreement is broader, and Florida courts have applied such clauses to tort and statutory claims that are closely tied to the contract, such as fraudulent inducement or claims under the Florida Deceptive and Unfair Trade Practices Act. Where a case combines covered and uncovered claims, the court may have to allocate fees between them unless the claims are so intertwined that their work cannot reasonably be separated.

The clause can also matter when the contract itself is the subject of the dispute. In Katz v. Van Der Noord, 546 So. 2d 1047 (Fla. 1989), the Florida Supreme Court held that a party may recover fees under a prevailing-party provision even where the contract is rescinded or held unenforceable. A defendant that defeats the contract can still use its fee clause. The rule has a limit: where the court finds that no contract was ever formed, there is no fee provision to enforce.

Our guide to breach of contract in Florida covers the underlying contract claims in more detail.

Who is the “prevailing party”?

Many fee clauses and fee statutes award fees only to the “prevailing party,” and in a commercial case with claims and counterclaims, that is often the most contested question in the fee phase.

The Florida Supreme Court addressed it in Moritz v. Hoyt Enterprises, Inc., 604 So. 2d 807 (Fla. 1992): the prevailing party is the party that prevailed on the significant issues in the litigation. The test is not mechanical. A plaintiff that recovers less than it sought may still be the prevailing party if it won the central dispute. A defendant that loses a minor claim but defeats the main one may prevail. In some cases with mixed results, trial courts find that neither side prevailed, and no fees are awarded under a prevailing-party clause.

A few recurring situations deserve attention:

Voluntary dismissal. Under Thornber v. City of Fort Walton Beach, 568 So. 2d 914 (Fla. 1990), when a plaintiff voluntarily dismisses its action, the defendant is generally the prevailing party for purposes of a fee provision. A plaintiff that files, litigates for a year, and then dismisses to refile elsewhere or simply to walk away can owe the defendant’s fees.
Claims and counterclaims. When both sides assert claims under the same contract, the court looks at the outcome of the dispute as a whole, not claim by claim.
Contract definitions. Many contracts define “prevailing party” themselves, for example as the party that obtains a net monetary recovery, or the party whose final settlement offer was closest to the result. When the contract supplies its own definition, it controls over the Moritz test.

Statutory fee provisions

Florida statutes authorize fee awards for many of the claims that appear in business litigation, independent of any contract. Among the most common:

FDUTPA. Fla. Stat. § 501.2105 permits the court to award fees to the prevailing party, plaintiff or defendant, in a claim under the Florida Deceptive and Unfair Trade Practices Act. The award is discretionary, and because it runs both directions it is a real risk for plaintiffs who add a FDUTPA count by reflex. Our FDUTPA guide covers the factors courts weigh.
Civil theft. Under Fla. Stat. § 772.11, a successful civil theft plaintiff recovers threefold damages and fees. A defendant who prevails is entitled to fees if the court finds the claim was without substantial fact or legal support. Civil theft counts in ordinary commercial disputes carry real downside for the plaintiff that asserts them.
Civil RICO. Fla. Stat. § 772.104 contains a similar two-way structure for Florida civil RICO claims.
Restrictive covenants. Under Fla. Stat. § 542.335(1)(k), the court may award fees to the prevailing party in an action to enforce or challenge a non-compete, non-solicitation, or confidentiality covenant, and the statute forbids enforcing a contract provision that limits that authority. Covered noncompete and garden leave agreements under Florida’s 2025 CHOICE Act, §§ 542.41-542.45, carry their own prevailing-party fee provision. See our guide to non-compete agreements in Florida.
Construction liens. Fla. Stat. § 713.29 awards fees to the prevailing party in an action to enforce a construction lien.
Trade secrets. The Florida Uniform Trade Secrets Act, Fla. Stat. § 688.005, authorizes fees for willful and malicious misappropriation, and against a party that asserts or resists a misappropriation claim in bad faith.
Unpaid wages. Fla. Stat. § 448.08 permits fees to the prevailing party in an action for unpaid wages, which frequently appears in disputes with former executives.
Post-judgment collection. Fla. Stat. § 57.115 permits the court to award fees and costs incurred in post-judgment execution proceedings. Our guide to collecting a judgment in Florida explains how those proceedings work.

One statute that no longer does the work it once did is the insurance fee statute. Florida’s one-way fee provision for insureds, former § 627.428, was first cut back for property insurance suits in December 2022 and then repealed by 2023 legislation effective March 24, 2023, though it may still apply under policies issued before that date. The change has reshaped the economics of insurance coverage disputes. Our guide to commercial property insurance disputes covers that shift.

Proposals for settlement: the fee-shifting tool every party can use

Even without a fee clause or a fee statute, any party to a Florida civil action for damages can create fee exposure for the other side by serving a proposal for settlement under Fla. Stat. § 768.79 and Florida Rule of Civil Procedure 1.442. It is the most important fee-shifting mechanism in Florida litigation, and the one that is most often mishandled.

How the statute works

Defendant’s proposal. If a defendant serves a proposal that the plaintiff does not accept within 30 days, and the plaintiff then obtains a judgment of no liability or a judgment that is at least 25 percent less than the proposal, the defendant is entitled to its reasonable costs and attorney’s fees incurred from the date the proposal was served.
Plaintiff’s proposal. If a plaintiff serves a proposal that the defendant does not accept within 30 days, and the plaintiff then recovers a judgment at least 25 percent greater than the proposal, the plaintiff is entitled to its reasonable costs and attorney’s fees from the date of service.

A proposal that is not accepted within 30 days is deemed rejected. Proposals are served on the other side and are not filed with the court unless necessary to enforce the rule, typically in support of a fee motion after judgment.

Timing

Under Rule 1.442, a proposal to a defendant may not be served earlier than 90 days after service of process on that defendant, and a proposal to a plaintiff may not be served earlier than 90 days after the action has been commenced. No proposal may be served later than 45 days before the date set for trial or the first day of the docket on which the case is set for trial, whichever is earlier. A pre-suit settlement demand, however well documented, is not a proposal for settlement.

The technical requirements are enforced strictly

Because the statute is in derogation of the common law, Florida courts construe it and the rule strictly, and a defect in the proposal can defeat a fee claim worth hundreds of thousands of dollars. Rule 1.442 was substantially revised effective July 1, 2022, and proposals drafted from older forms are a recurring problem. Under the current rule, a proposal must be in writing, identify the Florida law under which it is made, and:

Name the party or parties making it and the party or parties to whom it is made.
State that it resolves all damages that would otherwise be awarded in a final judgment in the action.
Exclude nonmonetary terms, except a voluntary dismissal of all claims with prejudice and any other nonmonetary terms permitted by statute.
State the total amount.
State with particularity any amount proposed to settle a claim for punitive damages.
State whether it includes attorney’s fees and whether fees are part of the legal claim.
Include a certificate of service.

Joint proposals made by or to multiple parties must state the amount and terms attributable to each party, with a limited exception for a party alleged to be only vicariously or derivatively liable. Unapportioned joint proposals, and proposals that carry nonmonetary terms such as broad releases or confidentiality conditions, are among the most common reasons fee claims fail.

Acceptance must be by written notice delivered within the 30 days. Oral communications do not count, and the extra days normally allowed for mail service do not apply.

Good faith, nominal offers, and equitable claims

Under § 768.79(7)(a), the court may disallow an award if it finds the proposal was not made in good faith. A defendant can serve a nominal proposal when it has a reasonable basis to believe its exposure is minimal, but a token offer in a case with real liability risk invites a good-faith challenge.

The statute applies to civil actions for damages. In Diamond Aircraft Industries, Inc. v. Horowitch, 107 So. 3d 362 (Fla. 2013), the Florida Supreme Court held that it does not apply to an action in which the plaintiff seeks both damages and equitable relief and the defendant served a general proposal seeking release of all claims. Later decisions have looked at the true relief sought, and have applied the statute where the nominally equitable claim is really a claim for money. Business cases that combine damages claims with claims for an injunction, specific performance, rescission, or an accounting require careful analysis before either side relies on a proposal.

The Eleventh Circuit treats § 768.79 as substantive Florida law, so it generally applies to Florida-law claims litigated in federal court.

Why it matters in commercial cases

A proposal for settlement shifts risk to the side that rejects a reasonable number. In a case where the fees incurred after the proposal are likely to exceed the amount in dispute, a well-timed, properly drafted proposal can change the outcome of the case without changing a single fact. It also stacks with other fee mechanisms: a party can be entitled to fees under a contract or statute and separately under § 768.79, and the proposal can supply a fee claim in a case where the contract has none.

Sanctions for unsupported claims and defenses

Fla. Stat. § 57.105(1) requires the court to award fees against a party, and that party’s lawyer in equal amounts, on any claim or defense that the party or lawyer knew or should have known was not supported by the material facts necessary to establish it, or would not be supported by the application of then-existing law to those facts. The statute protects good-faith arguments to extend, modify, or reverse existing law.

The statute has a mandatory safe harbor. Under § 57.105(4), the motion must be served but not filed for 21 days, giving the other side the opportunity to withdraw or correct the challenged claim or defense. Only if it does not may the motion be filed. A party that files the motion without first serving it and waiting out the safe harbor loses the right to sanctions under the statute.

Separately, Florida courts have inherent authority to award fees for bad-faith conduct during litigation, recognized in Moakley v. Smallwood, 826 So. 2d 221 (Fla. 2002). The power is reserved for egregious conduct, requires express findings, and is rarely the primary basis for a fee award in a commercial case.

How courts decide the amount

Entitlement to fees and the amount of fees are separate questions, usually decided in separate hearings.

The lodestar. Florida courts calculate fees using the lodestar method adopted in Florida Patient’s Compensation Fund v. Rowe, 472 So. 2d 1145 (Fla. 1985): the number of hours reasonably expended multiplied by a reasonable hourly rate for comparable work in the community. The court then considers the factors in Rule 4-1.5 of the Rules Regulating The Florida Bar, including the complexity of the matter, the results obtained, and the experience of the lawyers involved. Hours that are excessive, duplicative, or spent on claims for which fees are not recoverable are cut.

Multipliers. Florida courts once added contingency risk multipliers to the lodestar with some regularity. In 2023, the Legislature enacted Fla. Stat. § 57.104(2), which creates a strong presumption that the lodestar fee is sufficient and reasonable, and permits a multiplier only in a rare and exceptional circumstance with evidence that competent counsel could not otherwise be retained. Multipliers are now uncommon.

Proof. The party seeking fees must present detailed contemporaneous time records and evidence of reasonableness. For decades, Florida’s district courts of appeal have required testimony from an independent fee expert and an evidentiary hearing before a contested fee award. In March 2026, the Sixth District broke with that line in Ruffenach v. Deutsche Bank National Trust Co., holding that neither is always required and certifying conflict with dozens of decisions from the other districts. Until the Florida Supreme Court resolves the conflict, parties outside the Sixth District should assume an expert and a hearing will be needed.

Fees for litigating fees. Florida generally permits recovery of fees for establishing entitlement to fees, but not for litigating the amount. The Florida Supreme Court drew that line under the insurance fee statute in State Farm Fire & Casualty Co. v. Palma, 629 So. 2d 830 (Fla. 1993), and courts have applied it to other fee provisions, unless the contract or statute supports a broader award. Well-drafted fee clauses address this expressly.

Costs are a separate item. Under Fla. Stat. § 57.041, the prevailing party recovers taxable costs, guided by the Statewide Uniform Guidelines for Taxation of Costs in Civil Actions. Expert witness fees, deposition costs, and certain e-discovery expenses can add significantly to the total.

Procedural traps that forfeit fee claims

The most painful fee outcomes in Florida involve parties that would have been entitled to fees and lost the claim through procedure.

Plead the claim. Under Stockman v. Downs, 573 So. 2d 835 (Fla. 1991), a claim for attorney’s fees, whether based on a contract or a statute, must be pled in the complaint, answer, or other pleading. Failure to plead entitlement generally waives the claim, unless the opposing party recognized or acquiesced in the claim without objecting. A defendant that wants fees under the contract or a fee statute should plead them in its answer, even if it asserts no counterclaim.

File the motion within 30 days. Under Florida Rule of Civil Procedure 1.525, a party seeking fees or costs must serve its motion no later than 30 days after the filing of the judgment, including a judgment of dismissal, or the service of a notice of voluntary dismissal. The deadline is enforced. A party that waits to see whether the losing side appeals can lose its claim entirely.

Preserve fees on appeal. Appellate fees require a separate motion in the appellate court under Florida Rule of Appellate Procedure 9.400(b), served in an appeal no later than the time for service of the reply brief and stating the grounds for the claim.

Keep records from the first day. Fee awards depend on contemporaneous time entries that describe the work and can be separated by claim. Block billing and vague entries invite reductions.

Fees in arbitration

Many commercial contracts send disputes to arbitration, and the fee rules there follow the agreement and the governing arbitration law. Under the Revised Florida Arbitration Code, Fla. Stat. § 682.11, an arbitrator may award reasonable attorney’s fees if authorized by law in a civil action involving the same claim or by the parties’ agreement. Many arbitration clauses and institutional rules allow the arbitrator to allocate fees and the costs of the arbitration itself, which can be substantial. Whether a party can seek fees from the court for confirming or vacating an award is a separate question that depends on the clause and the statute. Our guide to arbitration vs. litigation in Florida covers the broader tradeoffs.

Using fee exposure as a strategy

Because fee awards so often exceed the amount in dispute, sophisticated parties treat fees as a central part of the case, not an afterthought.

Before you sign the contract. Decide whether you want a fee clause at all. A prevailing-party clause deters weak claims against you and supports your strong claims, but it also raises the stakes of losing. Define “prevailing party.” Address arbitration, appeals, bankruptcy, and fees for litigating fees. Remember that a one-sided clause becomes reciprocal under § 57.105(7).

Before you file or respond. Identify every fee basis that might apply, on both sides. A FDUTPA count, a civil theft count, or a weak counterclaim may add more fee risk than value. Our guide to what to do when your business is sued in Florida covers the first decisions in a new case.

Ninety days in. Evaluate a proposal for settlement as soon as the rule permits. The earlier a proposal is served, the more of the case’s fees it can shift. A realistic proposal, properly drafted and apportioned, puts pressure on the other side every month the case continues.

As the case develops. Revisit the proposal analysis after key rulings and expert disclosures. A new proposal can be served if the case value changes, subject to the 45-day cutoff before trial.

At judgment. Calendar the 30-day deadline under Rule 1.525 the day the judgment is entered. File the motion, gather the time records, and retain a fee expert.

Frequently asked questions

If I win my business lawsuit in Florida, will the other side pay my attorney’s fees? Only if there is a legal basis: a fee clause in the contract, a statute that authorizes fees for your claim, a proposal for settlement the other side rejected and then failed to beat by the required margin, or a sanctions award. Winning alone is not enough.

Our contract says only the other party can recover attorney’s fees. Can we still get fees if we win? Generally yes. Section 57.105(7) makes a one-sided contractual fee provision reciprocal for contracts entered into on or after October 1, 1988, so the party the clause did not name can recover fees if it prevails.

Who is the prevailing party if both sides win something? Florida courts look at which party prevailed on the significant issues in the case as a whole. When the result is genuinely mixed, the court may find that no party prevailed, and no fees are awarded under a prevailing-party clause. If the contract defines “prevailing party,” that definition controls.

What is a proposal for settlement? A formal written offer under § 768.79 and Rule 1.442. If the other side rejects it and then does at least 25 percent worse at trial than the offer, the offering party recovers its fees and costs incurred from the date the proposal was served. The proposal must meet strict technical requirements, including, since 2022, the exclusion of most nonmonetary terms, and it generally cannot be served until 90 days into the case or later than 45 days before trial.

Can I be sanctioned for filing a weak lawsuit? Yes, if the claim lacked support in the material facts or in then-existing law. Under § 57.105, the court awards fees against both the party and its lawyer, but only after the moving party serves the motion and gives the other side 21 days to withdraw or correct the claim.

If I drop my lawsuit, can I be ordered to pay the defendant’s fees? Possibly. When a plaintiff voluntarily dismisses its case, Florida law generally treats the defendant as the prevailing party, which can trigger a contractual or statutory fee provision.

How long do I have to ask for fees after the judgment? Thirty days after the judgment is filed, under Rule 1.525. Missing that deadline can forfeit the claim. Fees must also have been pled earlier in the case.

Are attorney’s fees awarded in arbitration? If the arbitration agreement, the institution’s rules, or a statute that would apply to the claim in court authorizes them. The arbitrator decides entitlement and amount, usually in the final award.

Talk to a Florida business litigation attorney

In Florida commercial litigation, the fee award can be worth more than the judgment, and it is often decided by choices made long before trial: the fee clause in the contract, the claims and counterclaims each side decides to assert, the timing and wording of a proposal for settlement, and whether anyone remembered to plead entitlement and file the motion on time. The parties that come out ahead are the ones that plan for fees from the start.

KWBR’s complex commercial litigation, financial damages, and business transactions practices represent Florida businesses, owners, and investors in contract, partnership, shareholder, and business tort disputes, including fee litigation, proposals for settlement, and post-judgment collection, from our Boca Raton, Fort Lauderdale, and Orlando offices. If you are facing a business dispute, or evaluating whether a case is worth pursuing once fees are counted, contact us to discuss your options.

This article is for general informational purposes and is not legal advice. Statutes, rules, and case law change, and every matter turns on its own facts; consult a qualified Florida attorney about your situation.

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