Wrinkles
Code of Civil Procedure section 998 offers rest upon a simple concept. As one Court of Appeal put it, 998 offers "encourage settlement by providing a strong financial disincentive to a party--whether it be a plaintiff or a defendant--who fails to achieve a better result than that party could have achieved by accepting [a 998] settlement offer. (This is the stick. The carrot is that by awarding costs to the putative settler the statute provides a financial incentive to make reasonable settlement offers.)" (Bank of San Pedro v. Superior Court (1992) 3 Cal. 4th 797, 804.) But if the carrot and stick is a simple concept, it's the actual business that can be complicated.
The starting point is a valid offer that a trial court finds to be "reasonable and made in good faith." (See, e.g., Nelson v. Anderson (1992) 72 Cal.App.4th 111, 134.) A recent Court of Appeal decision aptly demonstrates a wrinkle--the tricky business of serving a 998 offer with a complaint. Wait a minute, can you do that? The answer is, "it depends."
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