1. USE § 998 AND WORK UP YOUR CASE EARLY FOR RESOLUTION.
The use of a strategic Code of Civil Procedure § 998 early in litigation forces attorneys from both sides to think rea- sonably about their case at an early stage. For defendants, a § 998 offer that is more than the jury award prevents the plaintiff from recovering his or her costs after the time the offer was made, and also allows the discretionary award of expert fees. This certainly helps keep down the additional litigation costs that can occur with a case that lasts longer than a year.
From the plaintiff ’s perspective, the § 998 procedure is particularly useful in personal injury actions since 10 percent interest is awarded if the result at trial exceeds the § 998 offer to settle. (See Code Civ. Proc. § 3291.) Plaintiff attorneys are concerned that insurance carriers will use the inability to obtain a courtroom to “hold on to their money” and not settle a case no matter what the liability is against them. But this matrix does not work for the carrier if the plaintiff served a timely and reasonable § 998 demand for settlement that exposes the carrier to expert costs and, most importantly, 10 percent interest per annum from the time of the demand. (See Code Civ. Proc. § 3291.) So, if the case cannot get a trial for three to five years and the verdict obtained is above the § 998, the plaintiff obtains 30 percent to 50 percent interest added to the judgment. This possible outcome will influence any carrier to rethink the “hold their money” strategy.
So, when should a party serve this demand? The answer is as soon as reasonably possible, but you have to give the other side enough time and information for them to make a considered decision. The case of Najera v. Huerta, 191 Cal.App.4th 872, that holds “[a]n important factor in deciding whether a § 998 offer is unreasonable or in bad faith is whether the offeree was given a fair oppor- tunity to intelligently evaluate the offer.” The court held that a § 998 served with the complaint in the case pre- vented the defense counsel from having “access to infor- mation or a reasonable opportunity to evaluate plaintiff ’s offer within the 30-day period.” (See also Elrod v. Oregon Cummins Diesel, Inc. (1987) 195 Cal.App.3d 692, 699.)
Since Najera holds that the issue of a § 998 being reason-
able is tied to whether the other side has sufficient in- formation to consider the claim, then what any attorney should do to assure a valid § 998 is clear: work up the case early and powerfully, and serve the § 998 with anything necessary to prove your case.
2. INCLUDE ALL DOCUMENTS AND EXHIBITS TO PROVE YOUR CASE WITH THE § 998.
If obtaining a trial court is unlikely, it becomes much more important to put all your cards on the table early and provide claim and defense evaluation information to opposing counsel. For plaintiff attorneys, one effec- tive step to increase the likelihood of a valid § 998 is to include in an offer to settle all the documents, exhibits, photographs, medical records, or anything else to support the offer of settlement with the documents specifically listed in the offer to settle itself. In essence, you are us- ing the § 998 itself to prove the other side had sufficient information to make a decision.
There is, however, no reason this method should be lim- ited to the plaintiff. If a defendant has information that goes to show plaintiffs why their case is not what they think, this should be included and mentioned in the de- fendant’s § 998 as well.
Providing documentation for either side to assure a valid § 998 in the face of a potentially long wait to obtain a trial is a key way to assure the good representation of your client.
3. PREPARE FOR MEDIATION LIKE THE TRIAL IT IS.
Under the circumstances, it’s even more important for at- torneys to prepare for mediation like trial, because it re- ally is your trial. If your well-timed § 998 does not result in the settlement of the case, and you cannot be assured you will ever get a courtroom, your handling of media- tion becomes that much more important. Will any case get settled if the other side sees a lackluster settlement brief that fails to detail the case? Unless you are OK with your case hanging around for five years, put everything you have into mediation and get it settled.
THE BAR ASSOCIATION OF SAN FRANCISCO SAN FRANCISCO ATTORNEY 27
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