Code of Civil Procedure section 998 encourages parties to settle before trial by imposing certain cost consequences when a party rejects a qualifying settlement offer and then fails to obtain a more favorable judgment or award. In Gorobets v. Jaguar Land Rover North America, LLC, the California Supreme Court addressed whether a section 998 offer becomes invalid because it gives the opposing party a choice between two different sets of settlement terms. The Court held that it does not, so long as the offer makes clear what each alternative requires, requires the opposing party to choose only one alternative, and explains how to accept that choice. At least one alternative must also be sufficiently definite that the opposing party can determine its value when deciding whether to accept the offer, and that a court can later compare that value to the judgment or award ultimately obtained. The decision provides public agencies with additional flexibility when structuring section 998 offers in employment and other civil litigation.
For additional information about the decision and its implications, read LCW’s Special Bulletin.