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We often hear about lawyers who delay cases and trials. Are there any ways to bring an injury case to a fair conclusion more swiftly ? Yes, and one of the ways is called the "Offer of Judgement." An Offer of Judgment is a tool our law firm has used in civil litigation such as car crashes, dog attacks, motor vehicle accidents and defective product cases to encourage settlement. One party will make an offer to settle the case for a certain amount of money. If the offer is not accepted, and the party who declined to accept the offer does not receive a more favorable judgment at trial, that person must pay certain expenses incurred by the other party after making the offer. Such a rule is designed to offer defendants an incentive to make serious settlement offers and to encourage plaintiffs to take these offers seriously because of the risk of proceeding to trial and paying the defendant’s post-offer costs if the plaintiff fails to obtain a result more favorable than the offer of judgment.

Currently, 42 states have an Offer of Judgment rule, with 30 of them based on Federal Rule of Civil Procedure 68. In New Jersey, Offers of Judgment are governed by Rule 4:58 of the New Jersey Court. Rule 4:58-2 provides that, “If the offer of a claimant is not accepted and the claimant obtains a money judgment, in an amount that is 120% of the offer or more, excluding allowable prejudgment interest and counsel fees, the claimant shall be allowed, in addition to costs of suit:

(1) all reasonable litigation expenses incurred following non-acceptance;

(2) prejudgment interest of eight percent on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later, but only to the extent that such prejudgment interest exceeds the interest prescribed by R. 4:42-11(b), which also shall be allowable; and

(3) a reasonable attorney’s fee, which shall belong to the client, for such subsequent services as are compelled by the non-acceptance.”

An Offer of Judgment can only be used in cases where the award sought is exclusively monetary in nature. An Offer of Judgment can be a very good thing for disabled plaintiffs. For starters, it makes sure that defendants take any settlement offer that is made seriously by the injured victim’s lawyer. Defendants do not want to pay even more costs and fees if they have already paid for an unsuccessful trial and defense counsel. In a truck crash, dog bite, defective product or dangerous premises case, early review of the provable losses can help counsel formulate a reasonable amount for an Offer of Judgment such that the insurance company and their lawyers are put in the tough position of potentially paying more money than their insured paid premiums for before the lawsuit !

Second, and even more important, it may be possible for a plaintiff to recover more than their policy limits from the insurance company. In Gonzales v. Safe and Sound Security Corp., 185 N.J. 100 (2005, the New Jersey Supreme Court determined that the amount to be compared to the Offer of Judgment is the final jury award, and not the policy limit of the defendant. The Court stated, “The available monies under the insurance policy are not the measuring stick to determine whether plaintiff prevailed.” In other words, the court will not use your policy limit to determine whether you have received a money judgment that is 120% of your offer of judgment. Finally, an Offer of Judgment can save both the plaintiff and defendant time and money. By encouraging serious settlement offers, cases are more likely to settle.

One Comment

  1. Gravatar for Mike Bryant

    Minnesota just updated their law a year ago, it seems to be making a difference, but many people are still trying to figure it out. The additional incentive, is the doubling of costs if the plaintiff beats the Rule 68 offer.

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