what is a 998 settlement offer

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What is a 998 settlement offer in a personal injury case?

In a lawsuit, each person often pays their own legal fees. However, California law allows for a shift of legal costs from one party to the other through the use of California Code of Civil Procedure Section 998. Lawyers commonly call this a 998 settlement offer or just a 998, and it can be useful as a form of leverage in a personal injury case.

What is a 998 offer and how does it work?

Your 998 offer is effectively a cost-shifting option that places a greater financial burden on the party that does not accept a reasonable pre-trial settlement made in good faith. It allows you to suggest a deal with strings attached, where there is a disincentive to allow the case to proceed to arbitration or trial. Why Would I Make a 998 Offer?

What is a Section 998 a judgment?

A judgment entered pursuant to section 998 prevents findings of wrongful misconduct by Defendant and the case may not be reopened to obtain such findings. Whether the offer may include non-monetary terms (i.e. changes to employment policies)

What is the pre-judgment interest on a 998 offer?

In addition, Civil Code Section 3291 provides pre-judgment interest on plaintiff's judgment at the legal rate of 10 percent commencing on the date of plaintiff's first 998 offer which is exceeded by the trial judgment. b. Mechanics: The Offer Must Specifically Refer to Section 998.

How long is a 998 offer good for?

thirty daysA section 998 offer expires after thirty days or upon the commencement of trial or arbitration, whichever comes first. (Ibid.) A section 998 offer may be served on the opposing party at any time ten or more days before a trial or arbitration begins. (Code Civ.

What happens after a 998 offer is accepted?

If the offer is accepted, the accepted offer is filed with the court and judgment entered accordingly. If the offer is not accepted, and the person rejecting the offer does not obtain a trial result better than the offer, certain cost-shifting mechanisms kick in.

What costs are included in 998 offer?

§ 998 Offer “For $X Plus Costs and Attorneys' Fees” A second option for defendants wishing to cap a plaintiff's attorney fees is to offer a §998 “plus attorney fees.” That means that if the plaintiff rejects the offer, it must win a monetary judgment that is greater than the § 998 offer, excluding the attorneys' fees.

Can you counter a 998 offer?

If a party doesn't accept the offer and the case is tried, the declining party must “beat” the 998 (for either side this means obtaining a more favorable judgment), otherwise it will be liable for the other side's costs.

What are the advantages to making a CCP 998 offer?

A § 998 offer is a reasonable, good faith offer proposed by either the defendant or the plaintiff. A § 998 offer shifts costs to the other party so the prevailing party can recover certain costs from the losing party. This encourages both parties to evaluate the value of the case one last time before it goes to trial.

What costs are recoverable in California?

A: California Code of Civil Procedure Section 1033.5 details recoverable costs. Such costs include court filing fees, law and motion fees, jury fees, expert witness fees (if ordered by the court), service of process, and transcriber expenses associated with depositions.

Does a 998 offer include attorneys fees?

Nevertheless, a 998 offer that includes an offer to pay “reasonable attorneys' fees and costs” is, as a general proposition, not too uncertain to be enforced, because applicable statutes and court rules (i.e., California Code of Civil Procedure section 1033.5(c) and California Rule of Court 3.1702) set forth the ...

How do 998 offers work California?

What is a 998 Offer and How Would I Use It? A statutory offer to compromise, codified as the California Code of Civil Procedure (CCP) Section 998 offer, allows for either the plaintiff or the defendant to offer the other party financial incentive to accept a pretrial settlement.

Does a 998 offer get filed with the court?

Proc., § 998, subd. (b).) If the offer is accepted, it is filed with the court, and judgment is entered. If the case is in arbitration, the offer and proof of acceptance are filed with the arbitrator, who then renders an award in accordance with its terms.

Why is a 998 offer a settlement offer with teeth?

What’s important to know is that a 998 offer is a settlement offer with teeth because it allows a party to shift certain costs to the other party.

What is a 998 offer?

What is a 998 offer? It’s a settlement offer with teeth.

What happens if a defendant accepts a 998?

Defendant goes to trial and wins. The jury awards nothing to Plaintiff. Defendant has “beat” the $10,000 998. Defendant should be able to recover some (possibly not all) of the $15,000 in costs. If, however, Plaintiff accepted the $10,000 998 offer before July 1, then the case should be over.

When does the 998 offer close?

Here’s how it works from the Defendant side: Defendant sends Plaintiff a $10,000 998 offer on June 1. Plaintiff doesn’t accept the offer by July 1 (30 days later). The 998 offer is now closed. Defendant prepares for trial, spending $15,000 in costs. Defendant goes to trial and wins.

Who must pay the Defendant's post-offer costs?

And Plaintiff must pay the Defendant’s post-offer costs.

How much interest does a plaintiff get on an offer?

Plaintiff gets 10% interest from the date of the offer.

What is a 998?

998 is the section of California’s Code of Civil Procedure that permits special offers for settlements. It details that you (as the plaintiff) can provide a specified cash amount that you’d be willing to receive from the defendant to settle your case.

What happens if an insurer declines to accept a 998 offer?

If an insurer declines to accept a 998 offer and the plaintiff is later awarded a better verdict at trial, the insurer will need to pay interest from the date the 998 offer was made along with other costs relating to the trial , such as expert witness fees.

Can a defendant serve a 998?

A defendant can serve a 998 as well. If the case goes to trial and the plaintiff is given a lesser amount than the 998, the plaintiff can be ordered to pay extra costs as a result of the rejected 998.

What is Section 998?

The Statutory Scheme. Section 998 is straightforward, but varies according to whether the offer comes from a defendant or a plaintiff. Defense Offers. Under Section 998 (c), if an offer made by a defendant is not accepted and plaintiff fails to obtain a more favorable judgment, the plaintiff.

What is 998 D?

Section 998 (d) provides that if plaintiff's 998 offer is refused and defendant fails to obtain a more favorable judgment, then the court may award (in addition to the costs that plaintiff will already be eligible to recover as "prevailing party") a "reasonable sum" to cover plaintiff's incurred expenses for expert witnesses. In addition, Civil Code Section 3291 provides pre-judgment interest on plaintiff's judgment at the legal rate of 10 percent commencing on the date of plaintiff's first 998 offer which is exceeded by the trial judgment.

How long does it take to withdraw an offer of judgment?

Section 998 of the Code of Civil Procedure provides that, not less than 10 days before commencement of trial, any party to an action "may serve an offer in writing upon any other party to the action to allow judgment to be taken in accordance with the terms and conditions stated at that time." The offer is deemed withdrawn if not accepted before trial commences or within 30 days, whichever occurs first.

Why do most cases settle before trial?

The overwhelming majority of cases settle before trial and the entire court system is geared to facilitate settlement since the cost of a trial to the State is significant. Mandatory settlement conferences, persuasion by judges, and encouragement of mediation and arbitration are some of the tools utilized to attempt to achieve a settlement.

Can a 998 be used to settle a case?

If there is any desire to settle the matter reasonably, the 998 can at least cause the issue to be placed on the table.

Can a 998 offer be made to multiple parties?

In General, Separate Offers Must Be Made to Multiple Parties. Case law makes 998 offers from or to multiple adverse parties vulnerable to challenge unless

Can you relinquish a 998?

Relinquishment of Outside Claims Cannot Be Required. A defense 998 offer that provided not only an end to the pending litigation but a release of all other potential claims against the defendant, its attorneys, and its insurers, was rejected by the court in Valentino v. Elliott Sav-On Gas, Inc. (1988) 201 Cal. App. 3d 692, 701. Although the court was troubled by the release on policy grounds, it also found that the value of the other released claims was sufficiently imponderable that the court could not realistically measure the value of the offer compared to the trial result.

Make sure your offer has a valid acceptance provision

In Mostafavi Law Group, APC v. Larry Rabineau, APC, the Court of Appeal considered whether a 998 offer that was accepted could be upheld if the offer did not include a provision indicating how to accept the offer. 61 Cal.App.5th 614, 2021.

Make sure your offer is specific enough for valuation

In Khosravan v. Chevron Corporation, the Court of Appeal determined that indemnity clauses must be specific enough to allow for accurate valuation. 2021 WL 2797742 at 6.

Necessary offer terms to include

When considering what terms you desire to include in your 998 offer, we recommend that you keep in mind that the following terms must be included to maximize the chances that your offer will be upheld in court:

What is Section 998?

Section 998 provides a statutorily-protected method of making a settlement offer. But to be entitled to those protections, the terms of the statute must be strictly satisfied, creating a landmine for the unwary attorney. Moreover, as San Mateo Superior Court Judge Stephen Dylina observed at a recent seminar, “the plaintiff’s bar often does not utilize 998 offers to their fullest advantage.”

Why is a 998 not issued?

Why is this? For some attorneys issuing a 998 simply does not occur to them. Others are focused on going to trial so they can “stick it to the defense attorney.” Still others have failed to moderate their clients’ expectations, making it very difficult to get the clients’ approval to ever issue a reasonable offer. There are a few cases (where the outcome is truly unpredictable), when a 998 may not be appropriate.

How to avoid pitfalls when making an offer?

First, in all cases with a single plaintiff and defendant, use the Judicial Council form (CIV-090) or be absolutely certain that your standard 998 offer has all of the elements required for a valid offer.

How early can you issue a 998?

Now you are ready to issue your offer. Though the 998 offer should be issued as early as practicable, it can be done up to 10 days before trial. Accordingly, Judge Dylina recommends bringing a blank 998 offer to any pre-trial settlement conference. So long as it is hand-served no less than 10 days before trial, it will comply with the statute.

When making a joint offer from multiple plaintiffs, should an allocation be included?

And when making a joint offer from several plaintiffs, include an allocation to each plaintiff so the court can determine whether each plaintiff’s recovery at trial exceeded their 998 offer.

Do you have to serve separate offers?

In general, separate offers should be served that allow each plaintiff to accept individually. But if plaintiffs have a unity of interest, separate offers may not be required, such as: (a) where married plaintiffs are suing on a community property claim ( Farag v.

Is a 998 offer too early?

Second, be sure not to issue the offer too early or too late. If you make a 998 offer too early (such as serving it along with the complaint), it may be deemed invalid because defense counsel will not have sufficient information to evaluate the case (see Najera v. Huerta (2011) 191 Cal.App.4th 872). On the other hand, you will violate the statute by serving the offer less than 10 days before trial or arbitration (and no less than 15 days if service is by mail within California). (Cal. Code Civ. Proc., § 998.)

What Is The Role of A 998?

• 998 is the section of California’s Code of Civil Procedure that permits special offers for settlements. It details that you (as the plaintiff) can provide a specified cash amount that you’d be willing to receive from the defendant to settle your case. Insurance companies recognize the formal request and associated risks of a 998, making the offer d...

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