The Offer of Judgment rule is a United States
tort reform
Tort reform refers to changes in the civil justice system in common law countries that aim to reduce the ability of plaintiffs to bring tort litigation (particularly actions for negligence) or to reduce damages they can receive. Such changes a ...
law aimed at controlling unnecessary litigation and at encouraging settlement. Under this rule, if a
settlement offer
A settlement offer or offer to settle is an offer to resolve an outstanding issue or account. This may involve a statutory offer to compromise in a civil lawsuit. In either case, it involves communication from one party to the other suggesting a ...
designated as an offer of judgment is made in civil litigation, the offer is rejected and the final court decision is ''less'' favorable than the final offer that was made, then the party who rejected the offer is subject to certain penalties. The same principle can be found in the
Calderbank offer jurisprudence in England.
The penalties vary by state, but often include some combination of an award to the other party of certain attorneys' fees, compensable litigation costs and prejudgment interest. Most jurisdictions limit these awards to fees, costs and interest accumulated after the offer is made or rejected. In addition, the party who rejected the offer may lose their entitlement to certain attorneys' fees, compensable litigation costs and prejudgment interest. Here again, most jurisdictions provide that the party who rejected the offer loses no more than their entitlement to the attorneys' fees, costs and interest incurred after the making or rejection of the settlement offer.
The rule is not applicable in divorce proceedings or child custody proceedings.
This rule was first introduced in a number of states in the late 19th and early 20th centuries, subsequently adopted in 1938 in the
Federal Rules of Civil Procedure
The Federal Rules of Civil Procedure (officially abbreviated Fed. R. Civ. P.; colloquially FRCP) govern civil procedure in United States district courts. The FRCP are promulgated by the United States Supreme Court pursuant to the Rules Enabling ...
, and is currently designated as Rule 68 of the
Federal Rules of Civil Procedure
The Federal Rules of Civil Procedure (officially abbreviated Fed. R. Civ. P.; colloquially FRCP) govern civil procedure in United States district courts. The FRCP are promulgated by the United States Supreme Court pursuant to the Rules Enabling ...
. Many states have modified the rule by varying degrees. A survey of state Offer of Judgement Provisions has been compiled by the American College of Trial Lawyers and indicates the use by each state. In the
U.S. state
In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sover ...
of Maryland the rule is only applicable to
medical malpractice
Medical malpractice is a legal cause of action that occurs when a medical or health care professional, through a negligent act or omission, deviates from standards in their profession, thereby causing injury or death to a patient. The negligen ...
cases.
This rule became law in the
U.S. state
In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sover ...
of
Georgia
Georgia most commonly refers to:
* Georgia (country), a country in the Caucasus region of Eurasia
* Georgia (U.S. state), a state in the Southeast United States
Georgia may also refer to:
Places
Historical states and entities
* Related to the ...
on 27 April 2006. In Georgia, the threshold was set such that the final court decision must be no more than 25% less favorable than the last settlement offer or the rejector becomes liable for attorney fees. However, the Georgia Supreme Court struck the statute down in 2007, on the ground that it purported to act retroactively and was therefore unconstitutional. A new version of the statute survived subsequent challenge and is now law.
[Official Code of Georgia Annotated ยง 9-11-68 (2015)]
The Nevada Supreme Court's 1998 adoption of a replacement offer of judgment rule in NRCP 68 introduced a tremendous degree of flexibility to parties that choose to serve offers of judgment. This high degree of flexibility is unique to Nevada, and it has greatly complicated Nevada's offer of judgment law. In departing from prior law and from the practice in every other state, the 1998 Rule allows for the following: unapportioned offers of judgment may be served to multiple parties under limited circumstances; any unrelated parties may serve an unapportioned offer to any party; a party may draft an offer for a lump sum or for an amount that includes any combination of costs, attorneys' fees and interest; a party may draft an offer that apportions the offered amounts by claim; a party (or multiple parties) may serve an apportioned offer to multiple parties that includes a condition that it be accepted by all parties; and a party may proceed to trial but shield itself from offer of judgment penalties by "accepting" an apportioned offer of judgment that is conditioned by the acceptance of all parties where all parties do not accept.
References
{{DEFAULTSORT:Offer Of Judgment
Tort law