Settlement and Alternative Dispute Resolution
Settlement Fundamentals
Under Federal Rule 68 and state analogs, a party may serve a formal offer to allow judgment on specified terms. If the offer is rejected and the judgment obtained is not more favorable, the offeree must pay costs incurred after the offer.
State versions frequently go further than the federal rule, shifting attorney's fees as well as costs and allowing offers by either party.
Alternative Names:
Rule 68 Offer, Statutory Offer of Settlement
Why it Matters?
In states with robust offer statutes, a well-timed offer changes the economics of a case materially, because the plaintiff faces fee exposure for continuing. The federal rule is weaker, shifting only costs and only against plaintiffs, which limits its practical leverage. Timing matters: an offer made too early lacks credibility, and one made too late shifts fewer costs.
Frequently Confused with
Related terms
Frequently asked questions
Does Rule 68 shift attorney's fees?
Can a plaintiff make an offer of judgment?
