Settlement Offers Under Code of Civil Procedure section 998
Mandatory: A plaintiff loses the right to recover court costs incurred after the offer was made and, in addition, must pay the defendant’s postoffer court costs. The plaintiff may still recover preoffer court costs if found to be the prevailing party. Court costs here do not include attorney fees.
Discretionary: In addition, the court has discretion to order the plaintiff to pay reasonable expert witnesses fees incurred by the defendant in connection with trial.
The policy behind CCP 998 consequences/penalties is to encourage settlement by providing a financial disincentive to a party who fails to achieve a better judgment or award at trial. It is, in essence, a cost-shifting provision. Therefore, a party who receives a settlement offer made under CCP 998 should carefully consider such offers with the assistance of experienced trial counsel.
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