Business and Legal Insights

Introduction: The Provision That Decides Where the Battle Is Fought 

Most contract provisions allocate substantive rights and duties. Dispute resolution clauses do something different: they decide where and how any future fight will unfold. A mediation, arbitration, or alternative dispute resolution (“ADR”) clause fixes the forum before anyone knows the nature of the dispute, the stakes, or the sympathies involved. Like the contract provisions covered earlier in our blog post series, these clauses allocate risk in advance and, if handled carelessly, invite litigation over the very question of where to litigate. 

This article examines how ADR clauses operate across two phases: the transaction phase, when the parties draft them, and the post-dispute phase, when one party invokes them. It gives particular attention to mediation as a favored first step, then addresses enforceability, including against constitutional challenge. It closes by weighing the advantages and limitations of arbitration as an alternative to the courthouse. It also touches on the special rules governing a lawyer who includes an arbitration clause in the firm’s own engagement agreement. 

The Transaction Phase: Drafting the Off-Ramp 

At the drafting table, ADR clauses are quiet. They rarely draw the negotiating attention lavished on price, indemnity, or representations and warranties. Yet, the choices made here govern everything that follows. 

Parties can build a contractual tier, or “step,” clause: mandatory negotiation, followed by mediation, and if mediation is unsuccessful, arbitration. Each rung is a chance to de-escalate before positions harden. Scope language matters most. A clause reaching disputes “arising out of or relating to” the agreement sweeps in related tort and statutory claims; a narrower clause tied to claims “under” the contract may leave adjacent disputes in court. Drafters also select the arbitral rules, the arbitrators, fee allocation, and any carve-outs (commonly for injunctive relief). Florida law gives parties wide latitude to tailor these terms.  

A Special Case: Arbitration Clauses in the Firm’s Own Engagement Agreement 

Lawyers who draft arbitration clauses for clients should remember that a different set of rules applies when the clause appears in the firm’s own engagement agreement. A lawyer may not enter an agreement with a client that requires mandatory arbitration of fee disputes without first advising the client, in writing, to consider obtaining independent legal advice about the advisability of such a clause; and the agreement must contain a specific bold-print notice warning the client that arbitration waives the right to resolve fee disputes before a judge or jury. R. Regulating Fla. Bar 4-1.5(i). These are conditions of enforceability, not formalities.  

An arbitration clause that omits the required written notice is unenforceable on its face, and even a clause that provides notice but fails to use the mandatory bold type is void; courts construe such clauses against the drafting attorney. Owens v. Corrigan, 252 So. 3d 747 (Fla. 4th DCA 2018); see also Feldman v. Davis, 53 So. 3d 1132 (Fla. 4th DCA 2011). Florida courts have applied the rule even where the client’s claim sounded in malpractice rather than fees. See Owens, 252 So. 3d 747. A related limit governs any attempt to use an arbitration clause to curtail malpractice exposure: a lawyer may not prospectively limit liability to a client for malpractice unless the limitation is permitted by law and the client is independently represented in making the agreement. R. Regulating Fla. Bar 4-1.8(h). 

Mediation: A Favored First Step 

Of the mechanisms a tiered clause can invoke, mediation is the least coercive and the most encouraged. Florida law strongly favors mediation and the settlements it produces, a policy that is “especially fitting when settlement results from formal mediation.” Dozier v. Scruggs, 380 So. 3d 505, 508–09 (Fla. 5th DCA 2024) (quoting Lentz v. Cmty. Bank of Fla., Inc., 189 So. 3d 882, 887 (Fla. 3d DCA 2016)); accord C & F Berry Farms, LLC v. Chandler, 388 So. 3d 1186, 1187 (Fla. 5th DCA 2024). Florida courts describe alternative dispute resolution as “a favored means of dispute resolution” and read its provisions broadly to keep disputes out of court. Auchter Co. v. Zagloul, 949 So. 2d 1189, 1195 (Fla. 1st DCA 2007).  

A contractual agreement to mediate is enforceable like any other promise. A court will compel parties who agreed to mediate before litigating or arbitrating to honor that bargain; in Auchter, the First District reversed the denial of a motion to compel and directed the trial court to send the parties to mediation and stay the action pending compliance. Auchter, 949 So. 2d at 1190. 

A mediation requirement also has procedural teeth, because courts treat a pre-suit mediation clause as a condition precedent. In Kemiron Atlantic, Inc. v. Aguakem International, Inc., the Eleventh Circuit held that a clause requiring the parties to request and complete mediation before arbitrating made mediation a condition precedent; because neither party had requested mediation, “the arbitration provision has not been activated.” 290 F.3d 1287, 1291 (11th Cir. 2002). Florida treats premature litigation as curable rather than fatal: “[t]he proper remedy for premature litigation is an abatement or stay of the claim for the period necessary for its maturation.” Bierman v. Miller, 639 So. 2d 627, 628 (Fla. 3d DCA 1994); accord Blumberg v. USAA Cas. Ins. Co., 790 So. 2d 1061, 1068 (Fla. 2001). The stay is not automatic; a party who wants it must ask the trial court or risk forfeiting the point. Wright v. Life Ins. Co. of Ga., 762 So. 2d 992, 994 (Fla. 4th DCA 2000). 

The Post-Dispute Phase: Invoking the Arbitration Clause 

Once a dispute erupts, the clause converts from dormant text into a procedural weapon. A party sued in court moves to compel arbitration and to stay the litigation. Florida courts deciding that motion apply a three-element test: whether a valid written agreement to arbitrate exists, whether an arbitrable issue exists, and whether the right to arbitrate was waived. Glob. Travel Mktg., Inc. v. Shea, 908 So. 2d 392, 398 (Fla. 2005). The court resolves the gateway questions of whether an agreement exists and whether the controversy falls within it; other challenges are for the arbitrator. See § 682.02(2), Fla. Stat. Where a party attacks the validity of the entire contract rather than the arbitration clause specifically, that challenge itself goes to the arbitrators. Kaplan v. Kimball Hill Homes Fla., Inc., 915 So. 2d 755, 760–61 (Fla. 2d DCA 2005). Timing counts: a party that litigates on the merits before invoking the arbitration clause risks a finding that it waived arbitration. This is the mirror image of the waiver problem that haunts the jury trial waivers discussed in our last article: Jury Trial Waivers: What Florida Practitioners Should Know.

Enforceability, Including Against Constitutional Challenge 

Arbitration and ADR clauses enjoy robust support. Under Florida law, “arbitration is a favored means of dispute resolution and courts indulge every reasonable presumption to uphold proceedings resulting in an award.” Roe, 533 So. 2d at 281. The Florida Arbitration Code provides that an agreement to submit existing or future controversies to arbitration is “valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.” § 682.02(1), Fla. Stat. The Federal Arbitration Act, which applies in state and federal court alike, reflects the same strong policy, permitting invalidation only on generally applicable contract defenses (e.g., fraud, duress, and unconscionability) that are not peculiar to arbitration. Glob. Travel, 908 So. 2d at 397. 

A frequently asserted objection is constitutional: that compelling arbitration strips a party of its rights of access to courts and to trial by jury. Florida courts have consistently rejected this objection to arbitration. As the Florida Supreme Court explained in Global Travel, “the rights of access to courts and trial by jury may be contractually relinquished,” subject only to ordinary contract defenses. Glob. Travel, 908 So. 2d at 398. The Second District applied that principle directly in Kaplan, holding that “[c]ompelled arbitration does not violate the [parties’] constitutional rights,” and that a specific waiver of the jury and access rights is not even necessary because an agreement to arbitrate inherently relinquishes them. Kaplan, 915 So. 2d at 761.  

What Makes Arbitration Distinctive 

Several characteristics distinguish arbitration from litigation. It is usually private. The parties substitute “a tribunal of their own choosing for the one provided and established by law.” Schnurmacher Holding, Inc. v. Noriega, 542 So. 2d 1327, 1328 (Fla. 1989) (quoting Johnson v. Wells, 73 So. 188, 190 (Fla. 1916)). It is often confidential: by statute, an arbitrator “is not competent to testify” and may not be compelled to produce records of the proceeding, to the same extent as a sitting judge. See § 682.051(4), Fla. Stat. It can be faster and cheaper. However, as explained below, neither economy nor speed is guaranteed. Florida recognizes arbitration as “an efficient means of settling disputes, because it avoids the delays and expenses of litigation.” Cassedy v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 751 So. 2d 143, 150 (Fla. 1st DCA 2000) (quoting KFC Nat’l Mgmt. Co. v. Beauregard, 739 So. 2d 630, 631 (Fla. 5th DCA 1999)). It is “an alternative to litigation designed to limit litigation and promote finality.” Amalgamated Transit Union, Loc. 1579 v. City of Gainesville, 264 So. 3d 375, 379 (Fla. 1st DCA 2019). 

Another distinguishing feature is the limited scope of appellate review. Section 682.13 lists the exclusive grounds for vacating an award: corruption, fraud, evident partiality, arbitrator misconduct, exceeding powers, or the absence of an agreement. See § 682.13(1), Fla. Stat. An award “cannot be set aside for mere errors of judgment either as to the law or as to the facts.” Schnurmacher, 542 So. 2d at 1328 (quoting Cassara v. Wofford, 55 So. 2d 102, 105 (Fla. 1951)). Even a genuine legal error is not enough; the Florida Supreme Court has confirmed an award “may not be reversed on the ground that the arbitrator made an error of law.” Id. at 1330. A reviewing court “may not comb the record of an arbitration hearing for errors of fact or law.” Cassedy, 751 So. 2d at 150. Absent a statutory ground, “neither a circuit court nor a district court of appeal has the authority to overturn the award.” Visiting Nurse Ass’n of Fla., Inc. v. Jupiter Med. Ctr., Inc., 154 So. 3d 1115, 1124 (Fla. 2014) (quoting Schnurmacher, 542 So. 2d at 1328).  

The Other Side of the Ledger: Arbitration’s Limitations 

A drafter should weigh arbitration’s limitations as carefully as its advantages. Cost comes first. Arbitration is not always cheaper than litigation. The parties must pay the arbitrator or panel for prehearing conferences and a daily rate for the hearing itself. Together with the administrative fees of the arbitral forum, these expenses are not charged by a court and can rival or exceed the cost of a lawsuit. Arbitrators may be less willing than Florida courts to dispose of weak claims or defenses summarily, so a party holding a clearly meritorious position may lose the early exit that a motion to dismiss or for summary judgment can offer. 

Outcomes are a second concern. Because an arbitrator is not constrained to render the all-or-nothing judgment a court might enter, arbitration can produce compromise awards that split the difference and leave neither side satisfied. 

Finality is the third, and it is a double-edged sword. The same narrow review that makes an award efficient and final also means there may be no meaningful appeal when an arbitrator simply gets it wrong. As noted above, an award will not be vacated for an error of law or fact; the statutory grounds for vacatur reach arbitral misconduct and lack of authority, not mistaken reasoning. § 682.13, Fla. Stat.; Schnurmacher, 542 So. 2d at 1330 (an award “may not be reversed on the ground that the arbitrator made an error of law”); Visiting Nurse, 154 So. 3d at 1124 (the statutory grounds are “directed at arbitral misconduct or lack of authority, and not mere errors of law”). A party who agrees to arbitrate therefore trades the right to appeal a bad decision for the speed and finality of a single one—a bargain worth making for some disputes, but not all. 

Conclusion 

Mediation and arbitration clauses are powerful tools. They de-escalate conflict by channeling disputes through negotiation and a neutral forum before litigation calcifies. But they are not a cure-all. Arbitration in particular carries real trade-offs. Arbitration can be as expensive as litigation, may yield compromise results, and may foreclose an appeal of an erroneous award. The decision to arbitrate should be deliberate, not reflexive, and should match the kind of dispute the parties anticipate. And, lawyers using an arbitration clause in the firm’s own engagement agreement must first satisfy the Florida Bar’s specific requirements. As with every provision in this blog post series, the protection is only as good as the drafting. If you intend disputes to leave the courthouse, say so—clearly, and before the fight begins. 

As part of their mentorship plan for the year, Eric and Melodie will be authoring 10 articles throughout the year on the 10 most impactful contract provisions in commercial litigation. The blog post above serves as Article 6 in their 10-part blog post series.