Accordingly, significant time and effort are often devoted to strategy underlying the familiar back-and-forth negotiation process. Most civil cases resolve by settlement, rather than trial.
#OFFER OF JUDGMENT PDF#
Read the full article as a PDF attached to this article. 4 of the Journal of Civil Litigation,a publication of the Virginia Association of Defense Attorneys. This article originally by Gentry Locke attorneys David Paxton and Michael Finney appeared in Vol. Rule 68 Offers of Judgment - a Useful Tool
#OFFER OF JUDGMENT TRIAL#
At worst, the changes may incentivize plaintiffs to demand more from defendants because the costs to plaintiffs to prepare a weak case for trial is substantially less than to the defense given that many fee agreements do not require plaintiffs to pay for their own experts. At best, plaintiffs will be disincentivized to settle as many of them have little to lose from a low or defense verdict, and the costs for their gamble will not be borne by them. Simply put, the new version of Rule 68 decreases the risk to plaintiffs in weak cases while also increasing the risk to defendants. Additionally, under this scenario, if the plaintiff made an offer of judgment for $500,000 (the reasonable full value of their damages that does not contemplate liability defenses) and then ends up with a runaway jury that awards $1,000,000, the defendant must pay $100,000 in sanctions. Under the old rule, however, the plaintiff would have been forced to think twice before rejecting an offer of judgment because the sanctions under this scenario would result in plaintiff owing the defendant tens of thousands of dollars in expert fees and taxable costs. Under the new rule, a defense verdict after a $10,000 offer of judgment would yield $2,000 in sanctions against the plaintiff. Assume that the odds of defense verdict are 85% and that the plaintiff’s damages are realistically $500,000. Plaintiff argues that the defendant, despite no correlation, is at fault because the insured was driving 8 miles per hour over the speed limit. Clearly, the plaintiff has little to lose by rejecting a reasonable offer of judgment because the sanctions will be little to nothing for trying to get lucky at trial under the new rule.Ĭases With Strong Liability Defenses / Likely Defense VerdictsĬonsider a wrongful death case arising out of a car accident where the decedent was driving and had a BAC of. Alternatively, if Plaintiff serves an offer of judgment for $50,000 and obtains a judgment of $100,000, the defendant must pay plaintiff $10,000 in Rule 68 sanctions. Under the new rule, if the plaintiff rejects a $5,000 offer of judgment and obtains $5,000 at trial, the sanctions against the plaintiff are zero because 20% of zero (the difference between the offer and the judgment) is zero. Assume a 15% chance that a jury finds it is recoverable, and awards $100,000. Assume that if the pain management treatment is not recoverable, this case is worth $5,000.
The plaintiff obtained $3,000 worth of chiropractic treatment over two months and then obtained $50,000 dollars in lien-based pain management intervention. Similarly, a plaintiff with a weak case can make unreasonable offers of judgment to defendants because of the outside risk of a runaway jury.Ĭases Involving Questionable Causation and/or DamagesĬonsider a case involving a minor rear-end car accident with little property damage to either vehicle, and proof of pre-existing conditions and/or proof that the delta-V of the plaintiff’s vehicle is incapable of causing injury. Indeed, after January 1, 2022, for a defendant to obtain sanctions, the defendant would need to make an offer of judgment significantly greater than the true value of the case. The effect of these changes is significant.
Under the old version of Rule 68(g), the sanctions were the opposing party’s reasonable expert fees and double the taxable costs incurred after service of the offer. Under the new version of Rule 68(g), the sanctions against a party who fails to obtain a more favorable judgment than the offer is “twenty percent of the difference between the amount of the offer and the amount of the final judgment.” This change applies to offers of judgment served on or after January 1, 2022.
The Arizona Supreme Court modified Rule 68(g) of the Arizona Rules of Civil Procedure by changing the amount of sanctions available when a party rejects an offer of judgment and fails to beat the offer at trial.
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