Moving The Goal Post: Strategies for California Code of Civil Procedure Section 998 Settlement Offers

Overview and policy purpose

California Code of Civil Procedure Section 998 (“Section 998”) is a settlement offer statute designed to push parties toward realistic compromise by attaching meaningful financial consequences to the rejection of a qualifying offer. Its mechanism is not primarily punitive. Instead, it aims to encourage reasonable settlement behavior and discourage parties from continuing litigation when an early resolution was available on fair terms.

Section 998’s leverage is often most visible in cases where litigation costs, and especially expert costs and attorneys’ fees, can quickly eclipse the underlying damages. In statutory fee‑shifting regimes (including many employment and consumer actions), § 998 can become a practical “line in the sand,” because in appropriate cases it may sharply limit the offeree’s ability to recover post‑offer costs and, where fees are treated as recoverable costs under the governing statute, potentially post‑offer attorneys’ fees as well.

Core statutory mechanics

Section 998 allows any party to serve a written offer to allow judgment to be taken, or for an award to be entered, on specified terms. The offer must be served at least 10 days before trial, or before arbitration begins in covered arbitrations.

If the offer is accepted, the accepted offer and proof of acceptance are filed and judgment is entered (or an arbitration award is issued). If the offer is not accepted within 30 days, or before trial or arbitration begins (whichever occurs first), it is deemed withdrawn and generally cannot be used as evidence at trial or arbitration.

The statute’s real force appears in its cost‑shifting provisions:

• If a defendant makes a qualifying Section 998 offer which the plaintiff does not accept and the plaintiff fails to obtain a more favorable “judgment or award,” then the plaintiff cannot recover post‑offer costs and must pay the defendant’s costs from the time of the offer.
• Courts also have discretion (outside eminent domain matters) to require the plaintiff to pay reasonable post‑offer expert witness costs that were actually incurred and reasonably necessary.

In practice, this creates a high‑stakes decision point for the offeree: rejecting a serious offer can expose the offeree to a double consequence: loss of their own post‑offer recoveries and potential liability for the other side’s post‑offer costs (including expert costs), shifting settlement leverage materially as trial approaches.

What counts as “more favorable”

Courts compare the dollar value of the final result to the value offered under Section 998. The statute directs courts to exclude post‑offer costs when evaluating whether the plaintiff obtained a more favorable result than the offer. This means the comparison centers on the substantive value of the outcome rather than litigation expenses that accrue later.

A simplified example:

• If the offer was $100,000, and the plaintiff’s judgment is $100,000 plus pre‑offer costs, the result may be treated as equal or more favorable because pre‑offer costs can be included in the valuation.
• But if the plaintiff’s judgment is $100,000 plus only post‑offer fees or costs, those post‑offer amounts are excluded from the “more favorable” comparison. In that scenario, the result is not more favorable.

This comparison framework is central to Section  998’s settlement pressure: it allocates risk to the party who refuses a valid offer by placing on that party the burden of achieving a better outcome later.

The Supreme Court’s clarification on pretrial settlements: Madrigal v. Hyundai Motor America

A major practical question had been whether Section  998 cost shifting applies only when the case ends in a judgment after trial, or whether it can apply when the parties settle later for less than an unaccepted offer. The California Supreme Court addressed this in Madrigal v. Hyundai Motor America (March 2025) and held that a plaintiff who rejects a valid  Section 998 offer may still face § Section998 consequences if the plaintiff later settles for less than the offer amount, even without a trial verdict. It is important that any settlement agreement entered into after a rejected Section 998 offer should include language that each party is to bear their own attorney fees and costs.

What Madrigal clarified (and why it matters)

1. No “trial required” rule. The Court’s analysis made clear that Section  998’s cost‑shifting framework is not limited to cases that culminate in a verdict. Put differently: Section  998 does not contain a categorical “trial requirement.” The statute can penalize the nonaccepting offeree for continuing the case after a proper offer, even if the case later resolves by settlement rather than a judgment after trial.
2. Procedural posture underscores the risk. In Madrigal, the parties reached a stipulated settlement after a jury was sworn on the first day of trial, and the settlement left issues of costs and attorneys’ fees to be decided by the court. That posture illustrates a key real‑world lesson: even when parties settle late, unresolved fee‑and‑cost allocation can spark a post‑settlement fight in which a prior §Section998 offer becomes determinative.
3. The offeree bears the risk/burden. The decision reinforces that Section 998 places the practical burden on the offeree to obtain a “more favorable” result after rejecting a valid offer. If the offeree cannot do so, the statute’s cost consequences may apply.

Why this matters in practice

Madrigal strengthens Section 998 as a leverage tool because it reduces the ability to avoid cost consequences simply by settling late for less than an earlier, reasonable offer. It also reinforces the statute’s settlement‑forcing purpose by placing the financial risk on the party who declines a valid offer and continues litigating.

This clarification is especially important in contexts like employment litigation, where statutory fee‑shifting can drive exposure. Defendants, often employers, frequently use §Section998 offers not just to encourage settlement, but to manage and cap the risk of escalating post‑offer fees and costs. After Madrigal, the strategic value of an early, well‑calibrated offer increases because a later settlement does not necessarily “wash away” Section998’s cost‑shifting potential.

Limits of Section998: post-judgment enforcement costs

Another practical boundary is whether Section 998 can bar recovery of fees and costs incurred after judgment for enforcement activity. In Elmi v. Related Management (Cal. Ct. App. Jan. 8, 2025), the Court of Appeal held that Section 998 governs only prejudgment costs and does not control post-judgment enforcement costs, which instead are addressed by the Enforcement of Judgments Law. This distinction is significant for litigants who “win” but face extended enforcement fights because Section 998 does not automatically foreclose enforcement-related recoveries that are authorized by the separate enforcement statutes.

Practical guidance for drafting and evaluating Section 998 offers

Below are practice points grounded in the statute’s structure and the post 2025 case guidance described above.

A. Build a clean record of validity

Because Section 998 consequences can be substantial, litigants should ensure strict compliance with service, timing and form requirements, including the written acceptance mechanism and the 30 day acceptance window. A technically flawed offer can forfeit the benefits, even if the number was reasonable.

B. Price the offer with realistic downside in mind

After Madrigal, parties should treat late settlements as potentially triggering the same comparison analysis as a trial outcome if the settlement ends up less favorable than the earlier offer. That increases the value of making serious offers earlier and increases the risk to an offeree who rejects a defensible number and later compromises downward. A thorough and complete settlement agreement addressing the Section 998 issues is paramount.

C. Consider expert cost exposure as a lever

Section 998 explicitly allows discretionary shifting of post-offer expert witness costs in many matters, which can be especially influential in cases where expert work drives the budget. Even the possibility of those costs can change a case’s settlement posture, particularly as trial approaches.

D. In fee‑shifting cases, evaluate attorneys’ fee exposure explicitly

In statutory fee contexts where attorneys’ fees are recoverable as costs, a valid Section 998 offer may function as a practical cutoff device for post‑offer recovery (depending on the governing fee statute and how courts treat the fee component). That makes it essential for both sides to model not only expected damages, but also expected fee growth, and to incorporate that growth into valuation and settlement strategy.

E. Draft settlements with cost allocation front and center

Because parties can agree to cost allocation terms in settlement, a settlement agreement can avoid a separate fight about who bears which costs and fees after a late compromise. This is especially important when the settlement number is near, or below, a prior Section 998 offer. If costs and fees are left open, the Section 998 comparison may drive the outcome.

Conclusion

Section 998 remains a central settlement device in California civil litigation because it ties litigation economics to settlement behavior through cost shifting and potential expert fee exposure. The California Supreme Court’s Madrigal ruling underscores that Section 998 consequences can apply even when the case resolves through a pretrial settlement that is less favorable than an earlier rejected offer, and that § 998 is not limited to cases resolved by trial verdict.

The practical guidance is clear: Section 998 offers as high‑impact decision points, evaluate them with disciplined valuation (including attorneys’ fee growth where relevant), and draft settlements with costs and fees expressly addressed, particularly when prior § 998 offers exist.

Need Legal Advice?

Contact Hoffman & Forde today at (619) 546-7880 or intake@hoffmanforde.com.

Disclaimer

The information in this post is considered attorney advertising under applicable California law. The contents of this post are for informational purposes only and do not constitute legal advice. The information may be incomplete or out of date. No representations, testimonials, or endorsements on this website constitute a guarantee, warranty, or prediction regarding the outcome of any legal matter.

Sources:

Lexology, California Supreme Court Clarifies that CCP Section 998’s Cost-Shifting Rule Applies to Pre-Trial Settlements, https://www.lexology.com/library/detail.aspx?g=58fde69d-a6c9-488b-a727-3191518b3d27 (last visited Jan. 23, 2026).

Cal. Civ. Proc. Code § 998, FindLaw, https://codes.findlaw.com/ca/code-of-civil-procedure/ccp-sect-998/ (last visited Jan. 23, 2026).

Alison L. Tsao, California Supreme Court Clarifies Cost Shifting Under CCP Section 998, CDF Labor Law LLP (Apr. 16, 2025), https://www.cdflaborlaw.com/blog/california-supreme-court-clarifies-cost-shifting-under-ccp-section-998.

Peter R. Boutin, Tara Leuenberger & Christopher A. Stecher, Section 998: The High-Stakes Settlement Strategy You Need to Know, Daily Journal (Jan. 14, 2025), https://www.dailyjournal.com/article/382847-section-998-the-high-stakes-settlement-strategy-you-need-to-know

Bad things happen to everyone. We’re involved in car accidents, get hurt at work, or are injured in some other way—often through no fault of our own—and then we’re left wondering how to pick up the pieces. A personal injury claim is something that many people end up filing in such instances.

If you’ve been injured and think you may have a claim against someone else, it’s important to understand that how you handle things (from the point of injury onwards) can have huge consequences for your case.

Here are five of the most common mistakes people make concerning personal injury claims.

1. Not Hiring an Attorney for a Personal Injury Claim

You may read this and think, “Of course, an attorney will say that,” but this is absolutely the most common and critical mistake. People who are injured and have a potential legal claim are unlikely to understand the real value or the full extent of that claim. They are also much more likely to make a huge mistake that can undercut their case.

Think of it from the defendant’s side. Insurance companies and other business entities will definitely have lawyers on their side. The standard playbook for those lawyers is to get a potential plaintiff to settle the case for little or no money before talking to an attorney.

If the defendant can’t settle the case, the next best thing is to convince the plaintiff to delay hiring an attorney as long as possible in hopes that they will trip themselves up and spoil their own case. They do this because it is in their best interest, and their interests are directly opposed to yours.

Most plaintiff’s attorneys who handle personal injury cases do so on a contingency basis. This means the client does not pay any upfront fees, and the attorney instead receives a percentage of any compensation the client collects. There is no downside to consulting with an attorney in this scenario, so don’t delay.

2. Failure to Document Evidence

A personal injury claim only has value if it can be proven, so it’s important to collect and retain evidence. The more objective the evidence, the more helpful it is (as opposed to relying solely on your own testimony).

For example, if you are in a traffic accident, call the police. They will investigate the scene and create a report. If there are witnesses, talk to them and get their contact information. Take photos of everything and if other people take photos, ask for copies. Anything that documents the event and its consequences has the potential to be helpful.

3. Making Unnecessary Statements

As a general rule, starting from the moment of the injury, it is best to make as few statements about the incident as possible. This includes statements to family, friends, and especially to potential defendants. Don’t post anything on social media. Everything you say can be used as evidence, and defendants will be searching intently for anything that weakens your case. One common issue is that some people are naturally very polite, and they end up apologizing for something that isn’t even their fault—that apology can be used as evidence of their guilt.

This rule goes hand in hand with having an attorney. If anyone wants to talk about the incident, you can (and should) simply refer them to your attorney and politely end the conversation.

4. Not Documenting the Full Extent of Your Injuries

If you don’t document your injuries, it will be more difficult to receive compensation for them later. Some people are accustomed to suffering in silence; they receive treatment for broken bones after an accident but never mention that they’ve started to have migraines or nightmares every day. If you tell a healthcare provider about any issues you are having as they arise, other people are more likely to believe they are real.

5. Settling Too Quickly

It’s natural to want to settle a case quickly. Lawsuits can take a long time to resolve, and people often just want to move on with their lives. They may also really need the money that is being offered just to pay for basic necessities or medical care. Defense attorneys know this, and they will try to take advantage of it. They will drag out the case and offer $100,000 to settle a claim that is worth a million dollars or more.

If it is at all possible, avoid falling into this trap. Holding on a little longer is usually worth the trouble.

Speak to a Personal Injury Claim Attorney

If you’ve suffered an injury and think you might have a legal claim, don’t make one of these mistakes. Contact our office to speak to an experienced personal injury claim attorney as soon as possible.

California has some of the most progressive labor laws in the United States and one of the highest minimum wages. Despite this, or perhaps partly because of it, some employers will still underpay their employees or deny them their rights under the law. Workers may suspect they have a claim against their bosses but still hold off on any legal action because they don’t have all the information they need or don’t know how to go about collecting what’s owed to them. Here’s what you need to know about unpaid wages in California.

Common Unpaid Wage Claims

An unpaid wage claim arises when an employer violates an employee’s statutory or contractual rights, resulting in the employee being paid less than they are owed. Here are some of the most common unpaid wage claims in California.

Minimum Wage

The current minimum wage in California is $15/hour or $14/hour for employers with 25 or fewer employees. If you are being paid less than that rate, you may be entitled to the difference in pay. Remember that some local minimum wages are actually higher than the state’s requirements. In San Francisco, for example, the current minimum wage is $16.32/hour.

Overtime Compensation

Most workers are entitled to overtime compensation if they work more than eight hours a day, 40 hours a week, or six days per week. Work that exceeds those limits should be compensated at 150% of the regular rate. In some cases, such as for work that exceeds 12 hours in a day, workers must be compensated at 200% of their regular rate.

Off-the-Clock Work

Employers may pressure or force employees to work before or after they’ve clocked in as a way to reduce expenses. This is often connected to overtime compensation, as employers seek to avoid going over the limits stated above.

Meal Breaks

Employees who work at least 5 hours a day are entitled to a meal break of at least 30 minutes. If the workday exceeds 10 hours, they are generally entitled to a second break.

Exempt/Contractor Classification – Some types of employees, such as white-collar workers, are exempt from many of these requirements, as are independent contractors. There may still be an unpaid wage claim, however, if the worker was improperly considered exempt or treated as a contractor.

Though these are the most common claims, this is by no means an exhaustive list. You may be owed unpaid wages if you were not paid for vacation days, reimbursed for business expenses, and more. If you suspect you are owed unpaid wages, you should contact an attorney.

Pursuing an Unpaid Wage Claim

One of the first priorities in successfully pursuing an unpaid wage claim is to ensure the case is filed before the statute of limitations expires. The statute of limitations is the maximum time allowed between when a violation occurs and when a claim can be filed. If the statute of limitation expires, you cannot collect on your claim.

The statute of limitations in unpaid wage cases depends on the type of claim involved. In most cases, such as claims arising from minimum wage, overtime, and meal break violations, the statute of limitations is three years. If the behavior is part of a regular pattern of underpayment, the statute of limitation usually starts running at the most recent violation. However, it’s very important to know that the statute of limitations may be shorter in some cases. For example, the statute of limitations for claims involving a bounced paycheck is just one year.

Because of this time limit, it’s crucial not to wait. If the statute of limitations is close to expiring, some employers may try to delay you through bad-faith negotiations. If the time limit passes, they win.

If you are still working for the employer against whom you have a claim, it’s understandable to be worried about retaliation. State law prohibits employers from retaliating against workers who file an unpaid wage claim against them. Such retaliation can take many forms, from firing the employee to reducing their hours. If your employer does something like this, you may have another legal claim against them.

Get Help with Your Unpaid Wage Claim

If you are considering pursuing an unpaid wage claim, it is highly advisable to do so with the help of an attorney. Your employer will almost certainly have a legal team, and they may try to intimidate you and make a lowball offer. Our experienced labor attorneys can evaluate your case, identify your potential claims, and help you get fair compensation. Contact us today to get started.

Adverse possession, sometimes called squatter’s rights or squatter’s law, is probably the most contentious way to acquire title to real estate. It has existed in some form or another for thousands of years, going back at least to the time of ancient Rome, eventually arriving in the United States as part of the English common law tradition.

It amounts to a kind of “hostile takeover” of someone else’s property, taking it from the original owner without payment. Though often imagined as someone acquiring a large piece of land by underhanded means, in reality adverse possession claims are far more likely to involve a border-line dispute between two neighbors.

A successful adverse possession claim in California must prove all of the following:

Hostile Claim – The occupier (the person without title) must possess the land against the interests of the owner, i.e., without their permission.

Actual Possession – The occupier must be physically present on the property, taking care of it as if they were the owner.

Open and Notorious Possession – The occupier’s possession of the property should be plain for anyone to see, serving as a kind of notice to the owner. What constitutes open and notorious possession will depend on the type of property, but common examples are enclosing it with a fence or constructing buildings.

Exclusive and Continuous Possession – The occupier must be the sole possessor of the property for at least five years, and their possession must be uninterrupted. For example, if the occupier was on the property for four years, then left for six months, and returned, the clock on the five-year period would start over again.

Payment of Taxes – The occupier must pay all state, county, and municipal taxes levied on the property. This serves as another type of notice to the owner. Payment must be made in a timely manner, meaning the occupier can’t simply pay off five years’ worth of taxes all at once.

Resolving an Adverse Possession Case

As stated above, a typical adverse possession case doesn’t involve an intentional scheme to take over someone else’s property, but rather a neighbor encroaching on the border line. Often these situations can be resolved amicably (depending on the neighbor), but other times it’s more complicated, such as when it’s the neighbor’s house that is on the wrong side of line. The parties may be able to negotiate a transfer of title, but sometimes litigation is the only option.

During the five-year period required for an adverse possession claim, the occupier is continually trespassing on the owner’s property. This means the owner can simply file for eviction. Even if the occupier had built some structure on the owner’s land, they would have to remove it.

If the five-period has already passed, either the occupier or the owner can initiate an action to quiet title, in which the court will decide who the rightful owner is. The burden is then on the occupier to prove every element of their adverse possession claim. It’s a difficult case to win, as courts don’t like taking property from the original owner. If the occupier does win, they receive title to the land and have full rights as the new owner.

The Importance of Having a Real Estate Attorney

Adverse possession cases are complex and the stakes are high for the parties involved. No matter which side of the dispute you are on, it is critical to have an attorney with expertise in real estate matters. They will be able to review deeds and other property documents, get an accurate survey of the property boundaries, and properly evaluate the adverse possession claim in light of all the facts.

If you are involved in a real estate dispute such as adverse possession, don’t hesitate to contact our experienced team of Southern California real estate attorneys.

Real estate can be tricky. Even the average home purchase can be overwhelming in the sheer number of details that must be attended to. For most people, real estate is the financial largest investment they’ll ever make. It is completely normal for something to come up that leaves you wondering whether you should hire a real estate lawyer. We’ll go over some of the common situations where it might be best to have professional legal help.

Buying or Selling a Home

One of the most frequently asked questions in this area is, “Do I need a real estate attorney to buy or sell a house?” Some states legally require that real estate transactions be reviewed by an attorney—California does not. Formal requirements aside, whether or not you need an attorney depends on the situation.

As an example, consider an ordinary house purchase. Both the buyer and seller have great real estate agents, the house is in good condition, there are no liens on the property, etc. Do you need a real estate lawyer in this situation? Probably not. Bear in mind, though, that as the value of the property goes up, or if you are from out of town/out of state, it becomes a better idea to hire an attorney just to make sure everything is in order.

It is definitely more advisable to use a real estate attorney if there are any non-standard issues surrounding the transaction. For buyers, these non-standard issues can include:

–        The home is owned by the bank

–        It’s being sold as part of an estate sale

–        There are tenants currently living on the property

–        The land is in a flood zone, tornado-prone area, etc.

For sellers, common issues include:

–        The home is part of a divorce settlement

–        It’s part of an estate of which you are the executor

–        A short sale (selling for less than you owe on the mortgage)

–        Liens on the property

–        Major physical damage to the property

The list could go on and on, but the key point is this: Anything out of the ordinary should drive you to reach out to an attorney and better understand what you’re getting into. Of course, many people would prefer to avoid the cost of hiring a lawyer, but when considered as a fraction of the total price of the home and how much trouble (and money) it can save you down the road, it’s really a minor expense.

Real Estate Disputes

Whether you are a homeowner, a renter, or an HOA director, there are a wide variety of legal disputes that can pop up and disrupt your life. These range from seller non-disclosure issues to prescriptive easements to property title claims. For anyone involved in a real estate dispute and whose home or property value is on the line, we recommend contacting an attorney immediately. Any delay could prejudice your case due to statutes of limitations and other filing deadlines.

Contact a San Diego Real Estate Attorney Today

If you’re asking yourself whether you need a real estate attorney, chances are you should at least sit down for a consultation. Contact our office today to set an appointment.