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Advantages and Disadvantages of CCP 998 Offer

Hayward, CA |

I am a plaintiff in an unlimited civil case. What are advantages and disadvantages of sending CCP 998 offer to a defendant?

Attorney Answers 3

Posted

Obviously, the advantage of a 998 is the ability to recoup costs if you beat the offer and the pressure to settle that puts on the other side. The main disadvantage is that, since you want to ensure you beat the 998 at trial, you want to be conservative with your offer, and when you are conservative, you potentially rule out the possibility of a higher settlement.

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This answer is a general interpretation of the law and is not fact specific to your case. Likewise it does not create an attorney-client relationship. You should seek an attorney for a review of your specific facts and documents.

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5 comments

Kevin Samuel Sullivan

Kevin Samuel Sullivan

Posted

this is the topic of hours of MCLE lectures. A 998 is an offer to compromise the case for a certain dollar amount. The risks are that if you serve one and do not beat it you open yourself up to post offer costs. I think 998's are inherently risky and try to avoid them in most situations.

Patrick John Phillips

Patrick John Phillips

Posted

All respect intended, but a party who makes a 998 and fails to beat it is not then liable for the other side's costs. 998's are a one-way street. You can only be liable for costs if you reject one, never if you make one.

Kevin Samuel Sullivan

Kevin Samuel Sullivan

Posted

There can be significant consequences to failing to accept an offer to compromise and then not securing a judgment or award better than the offer. For plaintiffs who refuse a defendant’s offer and then either suffer a defense verdict or a judgment or award less than that offer, they do not recover their post-offer statutory costs normally allowed by CCP Sections 1032 and 1033.5, and they must pay the defendant’s same costs. Further, they may be required to pay the defendant’s “actually incurred and reasonably necessary” expert witness costs, including costs incurred pre-offer.1 For defendants who reject a plaintiff’s offer and then suffer a verdict or judgment in excess of the value of the offer, they may be required to pay the plaintiff’s statutory costs, as well as post-offer expert witness costs. In personal injury actions, defendants also will be liable for prejudgment interest.2

Patrick John Phillips

Patrick John Phillips

Posted

Well stated, and I agree. Perhaps I misunderstood your post but I was only responding to this statement: "The risks are that if you serve one and do not beat it you open yourself up to post offer costs." A party that fails to beat their own 998 does not, by virtue of the 998, open themselves up to costs. Perhaps costs can be obtained on other grounds, such as the grounds you describe above, but this does not have to do with the 998. I appreciate the discussion.

Kevin Samuel Sullivan

Kevin Samuel Sullivan

Posted

no problem. 998's even this far into my career still can be intimidating.

Posted

Patrick laid it out well

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Posted

Also, certain cases allow you to accrue pre-Judgment interest on the principal sum awarded.
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