What Is a CCP §998 Offer?
Unless you are an attorney who routinely litigates, you may not know what a CCP §998 offer is. In short, it is a way to force a settlement of a case or change the outcome of the case entirely. Litigation is expensive, and this type of offer’s purpose is to encourage parties to settle their claims outside of the courtroom. It is essential that you understand its use, how it works, and what the outcome could be before accepting. Here is a brief rundown on a CCP §998 offer and what it could mean for your case.
Why Is a CCP§998 Offer Made?
The primary purpose of a CCP §998 offer is to provide a party with an incentive to settle their case out of court. The incentive is to avoid penalties that may occur if the case ends up in litigation. This can be made by either a Plaintiff or a Defendant any time up to 10 days before trial or arbitration. If either party fails to get a “better deal” either through a more favorable judgment or award, then there are penalties for failing to accept a CCP §998 offer. These penalties include:
Mandatory penalties- The party who failed to “beat” the CCP §998 offer (for a Plaintiff this typically means they failed to get more money than what Defendant offered and for a Defendant it typically means the award was higher than what Plaintiff offered to accept), loses the right to recover court costs incurred after receiving the CCP §998 and must pay the other side’s post-CCP §998 court costs.
Discretionary penalties- The court may order the party that failed to “beat” the CCP §998 offer to pay expert witnesses fees that the other side incurred after sending the CCP §998. This is a huge risk for both sides. Expert witness costs can range from tens of thousands of dollars to hundreds of thousands of dollars
How to Evaluate a CCP §998 Offer
Determining whether to take or reject a CCP §998 offer can be difficult. This is where the experience and knowledge of your attorney comes in. You will want to take into account a few aspects of your case including:
Odds of you getting a more favorable judgment.
Pre-offer costs and fees. (including attorney’s fees)
While a CCP §998 offer can shorten the duration of a case, it must be done with care. Talk with your attorney at length about evaluating the other side’s chances at trial, their court and expert costs, and your damages component. After carefully taking into account all the math involved, it may be worth it to either make or accept a CCP §998 offer.
Do you have questions about a San Francisco personal injury or employment law case? Contact the Law Offices of Tanya Gomerman at (415) 545-8608 today. We are happy to provide you with a free attorney consultation.