What is a 998 Offer?

The American legal system is one in which every litigant must pay their own costs. While that is the general rule, there are several cost shifting exceptions found within California Law. The most prominent one, and one of the most powerful tools that you can use to shift costs is a 998 offer.

A 998 offer refers to Code of Civil Procedure Section 998. Essentially the code says that if you give a 998 offer and the other side rejects it, they can be held responsible for all post-offers costs. Most importantly this includes expert costs which can been exceedingly expensive. For example, if you have to depose a surgeon, you may be looking at a $3,500 bill for that testimony alone and this does not include the court reporter cost, the cost for a copy of the transcript, etc.

As a result, in some cases you could see this provision being used to force the opposing side pay over $100,000 in costs.

Something to keep in mind, this provision does not kick in only if you win. This provision takes effect if a 998 offer is made, is rejected, and the side that rejects it gets a less favorable result than the 998 offer. So, in theory, you could win a $3,000,000 wrongful death award, but have that award reduced by the defendant’s costs if they made a 998 offer to you for $3,500,000.