While the vast majority of car, truck, and motorcycle accidents settle outside of court, there are a set few that unfortunately can’t settle and litigation becomes necessary. Part of the litigation process involves settlement offers and negotiations (oftentimes right before trial commences). A catalyst to a successful settlement is what is known as the “998” offer. Read the full text of the Code section here. This is a formal offer that remains open for 30 days from the date it was made, subject to an agreement otherwise by counsel. The importance of a 998 offer is two-fold. First, it sets in stone the maximum amount of money the accident victim will take to settle his/her lawsuit. Second, and more importantly, the failure on the part of the defense to accept the offer in-full exposes them to having to pay for the personal injury victim’s costs (such as expert fees) incurred after the 998 offer was made should the plaintiff obtain a verdict in excess of their 998 offer amount. For example, a truck accident victim makes a 998 offer to settle the entire case for $500,000, which is not accepted by the at-fault party. The case ends up going to trial and the plaintiff obtains a verdict of $600,000. Because the amount of the judgment was in excess of the 998 offer, the accident victim is able to receive reimbursement for all costs incurred after the $500,000 offer was made. With costs sometimes in the hundreds of thousands of dollars, one can see how this can be quite an incentive to the recipient of the offer to think twice about rolling the dice at trial as opposed to settling the case right then and there. Don’t be mistaken; a defendant can make a 998 offer as well, and if not accepted, the plaintiff in the personal injury trial will have to cover the defendant’s costs if the defendant obtains a verdict that is less than the 998 amount. For example, if the defendant offers $100,000 in a 998 and obtains a verdict for $90,000, the plaintiff will have to cover the defendant’s costs. The public policy behind the 998 offer is to incentivize the parties to settle and, in essence, penalize the losing party with costs for not settling. For a discussion of awarding costs where there is more than one 998 offer, see Recovering Costs After Multiple CCP 998 Offers. If you’re the victim of a car, truck, motorcycle accident or other personal injury matter, contact our personal injury attorney for a free consultation.

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