In California, like most states, clients usually pay their own legal fees. However, California has a way to shift those costs from one party to the other, through the 998 settlement.

998 is named for the code section of Civil Procedure where the law can be found. It is a cost-shifting option that places the financial burden on the party that rejects a reasonable settlement offer made in good faith.

The majority of cases will settle before a 998 is ever necessary. In fact, the 998 offer can only be made once litigation is initiated with an injury attorney in Newport Beach. Some cases require a little more work, and the 998 is a valuable tool to assist in the resolution of claims before trial.

Section 998 states 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 The offer is deemed withdrawn if not accepted before trial commences or within 30 days, whichever occurs first.

If the offer is accepted then the accepted offer is filed with the court and judgment is entered accordingly. If the offer is rejected and the person rejecting the offer does not receive a judgment better than the offer then certain cost-shifting mechanisms set in. This is all in an effort to encourage settlement before trial.

The types of costs that can be shifted include filing fees, jury fees, expert witness fees and certain other legal fees. The 998 offer does not include attorneys’ fees, and liens are generally excluded, too. The way a 998 offer works also depends on who is making the offer.

Offers from the Plaintiff
When the plaintiff sends a 998 offer to settle and the defendant rejects that offer without offering an alternative, the court may award a “reasonable sum” to cover the plaintiff’s expenses for expert witnesses. There are additional codes that provide for pre-judgment interest on the plaintiff’s judgment.

Offers from the Defense
When the 998 offer to settle comes from the defendant and the plaintiff rejects it, the plaintiff must then receive a more favorable judgment. Otherwise, the plaintiff is not entitled to recover court costs and must pay the offering defendant’s costs from the time of the offer.

Under section 998(e), if the awarded costs exceed the plaintiff’s recovery, the court will enter a judgment in favor of the defendant for the difference. As such, the risk of rejecting a 998 offer from the defendant can be substantial.

Multiple Parties
Some cases have multiple plaintiffs or defendants and there are special rules to follow for 998 offers. Generally, a separate offer must be made to each party in the lawsuit, and each party can accept the offer without consent of the other parties. In addition, the offer should set forth individual allocations to each party. However, in cases where there is proof the claim cannot be divided, then joint offers have been accepted by the court.

Used properly, the 998 offer can show the opposing party that you are dealing in good faith, are ready to negotiate, and want to avoid trial. It is wise to remember that 998 laws can be complex and require an experienced attorney on your side. That’s why at Accident Lawyers Firm we strive to make the 998 process simple and effective.

Contact Accident Lawyers Firm to speak with an experienced accident injury attorney in Newport Beach today.