In this weeks video blog we will be explaining what a 998 settlement is and what its applications in litigation are.

Hi guys. Matt here with The Clendenin Firm. Hope everyone's doing well. What I'd like to talk about today is a somewhat confusing subject and that is California civil code section nine nine eight settlement offers. So everyone knows, you can call up another lawyer and say, Hey, let's settle the case for $100,000. You can email that, you can text it, you can call, you can send a letter, anybody can make any settlement offer, but there's no strings attached. It's just a settlement offer. However, California law wants to encourage people to settle. So there's a law there and the law is California civil code section nine nine eight. If you make a special settlement offer under this law, there's penalties to the other side if it's not accepted and you later beat that offer at trial. So let's use an example. If we call up Allstate insurance and say, Hey, we're making a nine, nine, eight settlement offer for $100,000. 

And they say no. And then we go to trial a year later and we get a verdict from the jury for $150,000 the court is going to go back and look at that settlement offer and say, wait a second, Allstate, Matt Clendenin offered to settle with you with a nine nine eight offer for $100,000 way back when and you said no, so you wasted all of our time because you made Matt and his client go all the way to trial and they got 150 so obviously Allstate you should have taken the hundred way back when. So we're going to penalize you by paying expert costs by 10% interest from the date of the offer. We're going to penalize you on top of the jury verdict. That's what a section nine nine eight offer is. Of course, this works both ways. Allstate insurance could make a nine nine eight settlement offer to us, let's say for $50,000 and then we go all the way to trial and the jury says that your case is only worth 25. The judge is going to look at Allstate's nine nine eight and say, Oh my gosh, you know, Matt, what were you and your client doing? 

You know, all state offered you 50 but you went to trial and you only got 25 you know, you wasted all of our time. So now me and the client are going to have to pay All State's expert costs, interest on Allstate's judgment. And so even though we got $25,000 at trial, we're going to have to end up paying a lot of that back because Allstate's nine nine eight all right, so that's how nine nine eight offers work. But what does it practically mean? What it practically means is that early in your case, many lawyers will recommend making a nine nine eight offer at a low number, the lowest that you'd be willing to accept. And the reason that you do that is because the nine nine eight law only gives you leverage if you can actually beat it at trial. So there's no sense in making a huge nine nine eight offer that you're never going to be at trial because there's no point. 

So practically doing a lower settlement offer that puts pressure against the insurance company and down the road really gives you the upper hand in settlement negotiations because you can look back and say, look, you guys already blew our nine nine eight offer. We're going to go to trial now and beat that nine nine eight offered. And so you better pay what we want because we're just going to go to trial and beat that nine nine eight so that's how nine nine eight offers work. I always like to discuss them with clients, number one so you understand how we can use a nine nine eight offer to our advantage. And I also explained them to clients so they understand how an insurance company might use a nine nine eight offer against us. So that's how nine nine eight offers work. You're always welcome to call and ask me about, uh, about this issue because it is an important one for litigation. Thanks guys.