The benefits of prevailing on a California Code of Civil Procedure section 998 (CCP 998) offer are widely known. If the defendant makes an offer and the plaintiff fails to obtain a more favorable judgement or award, the plaintiff is not entitled to recover its post-offer costs and must pay the defendant’s costs from the time of the offer. These costs may, in the discretion of the court or arbitrator, include the defendant’s post-offer costs for expert witnesses. Similarly, if an offer made by the plaintiff is not accepted and the defendant fails to obtain a more favorable judgement or award, the plaintiff is entitled to recover all of its costs, and the court or arbitrator, in its discretion, may award the plaintiff its post-offer expert witness fees. Finally, if the defendant prevails on its offer, its costs from the time of the offer will be deducted from the plaintiff’s verdict or award. If those costs exceed the plaintiff’s damages, the net amount will be awarded to the defendant.
Nothing can be more frustrating, however, than to file a CCP 998 offer; receive a favorable verdict or award after an arduous trial; and prepare a memo of costs and disbursements, expecting to receive the cost-shifting benefits of CCP 998, only to have the offer invalidated by the trial court or arbitrator.
To avoid this unfortunate scenario, and to reap the rewards of the CCP 998 offer, here are 10 tips to keep in mind...
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