A CCP 998 offer strategy California litigators build early in a case can shift tens or hundreds of thousands of dollars in costs and expert fees, and in the insurance context it can become the very evidence that supports a later bad faith claim. Code of Civil Procedure section 998 is a cost-shifting statute, not a settlement statute in the ordinary sense, but its strategic uses go well beyond costs when an insurance carrier is on the other side of the table.
10 days
Minimum notice a 998 offer must give before trial
Expert fees
What a rejected 998 offer can shift to the losing side
California Code of Civil Procedure section 998 allows any party to serve a formal written offer to compromise before trial. If the offer is rejected and the case proceeds to judgment, the outcome is compared against the offer. When a plaintiff's 998 offer is rejected and the plaintiff obtains a judgment more favorable than the offer, the plaintiff can recover expert witness fees incurred after the offer, in addition to ordinary costs. When a defendant's 998 offer is rejected and the plaintiff fails to do better than the offer, the plaintiff's own post-offer costs are barred and the defendant can recover its post-offer costs, including expert fees. This asymmetry creates real financial pressure.
Section 998 has specific procedural requirements that must be followed exactly, and a defective offer loses its cost-shifting effect entirely. Timing: a 998 offer must be served at least 10 days before trial, and offers can be served at any point after the case is filed. Form: the offer must be in writing, must be served, and must allow acceptance by a signed acceptance within the statutory window, generally 30 days or before trial, whichever comes first. Certainty of terms: the offer must be definite enough for the recipient to evaluate it. Allocation: in multi-party or multi-claim cases, offers should be structured to withstand scrutiny, often by making separate offers to separate parties.
Whether a judgment is more favorable than a rejected offer is measured differently depending on which side made the offer. For a plaintiff's offer, courts compare the offer amount against the net judgment, addressing how prejudgment interest, costs, and offsets factor in. A carefully drafted offer states its terms to minimize ambiguity about how the comparison should be made.
An early 998 offer starts the clock on expert fee exposure. A 998 offer served after key depositions or expert reports carries more persuasive weight, because the carrier can no longer claim it lacked information. Within policy limits, a well-timed offer becomes documentary proof of a reasonable settlement opportunity the carrier had and rejected.
Ambiguous release language, no firm deadline consistent with the statute, an amount offered without a supporting evidentiary record, and failing to renew or adjust the offer as the case develops all weaken or eliminate its cost-shifting and bad faith value.
Under the Comunale and Crisci line of cases, an insurer that unreasonably refuses to settle a claim against its insured within policy limits can become liable for the entire judgment, including amounts above the limits. A well-documented 998 offer, or a demand structured with 998-like clarity and a firm deadline, creates the paper trail needed to prove the insurer had a genuine, quantifiable opportunity to settle within limits and chose not to take it.
The framework this fits into
How trial readiness and settlement pressure shaped a client's recovery.
Read the full caseRelated doctrine
How a rejected 998 offer becomes evidence in an excess-judgment claim.
Read the excess-exposure doctrineRelated breakdowns on insurance pressure and trial strategy.
We handle catastrophic injury and insurance bad faith cases as counsel or co-counsel on a contingency-fee basis, which means clients pay no attorney fees unless there is a recovery.
Refer a caseA CCP 998 offer is a formal written offer to compromise served under Code of Civil Procedure section 998 that shifts costs, including expert witness fees, depending on whether the final judgment is more favorable than the rejected offer.
A 998 offer must be served at least 10 days before trial, and it can be served at any point in the litigation, with many attorneys serving one early and one or more later as the evidence develops.
Yes. A rejected 998 offer within policy limits, especially one supported by a clear evidentiary record, can serve as strong evidence that the insurer had a reasonable opportunity to settle and unreasonably failed to take it.
