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An offer of judgment is used to encourage settlements and protect parties willing to settle early in the litigation process. It is an extremely useful tool however there are important nuances to using this strategy successfully.
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. It's important to understand that timing is key with a 998 offer.
Rule 68 - Offer of Judgment (a) Time for Making; Procedure. Any party may serve on any other party an offer to allow judgment to be entered in the action. (1)Trial. An offer of judgment must be made more than 30 days before trial begins.
Rule 68 - Offers of Judgment (a)The Offer. At any time more than 21 days before trial, any party may serve an offer in writing to allow judgment to be taken in ance with its terms and conditions.
(a) Making an Offer; Judgment on an Accepted Offer. At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued.
If the plaintiff either (1) declines the offer; or (2) fails to respond to the offer by the deadline, then the offer is considered withdrawn. A withdrawn offer does not preclude the defendant from making a subsequent offer.
Rule 68 appears at first blush to promote settlement by forcing a plaintiff to either ac- cept a proffered offer of judgment or risk paying the defendant's subsequent litigation costs in the event the plaintiff recovers less than the amount offered.
? At any time more than 10 days before the trial begins, a party defending against a claim may serve upon the adverse party an offer to allow judgment to be taken against him for the money or property or to the effect specified in his offer, with costs then accrued.