California Car Accident Statutory Offer 998: Settlement Cost Guide

Estimated reading time: 16 minutes

California Car Accident Statutory Offer 998 ExplainedKey Takeaways

• The car accident statutory offer 998 is a formal, written proposal under California Code of Civil Procedure Section 998 designed to encourage early settlement and reduce litigation costs.
• Rejecting a 998 offer and failing to get a better result at trial can result in cost shifting, including paying the other party’s costs and expert witness fees.
• Acceptance of a 998 offer must be absolute and unqualified to trigger judgment and avoid trial risks.
• Parties should carefully compare 998 offers against realistic trial outcomes, factoring in costs, fees, and potential exposure.
• Multi-plaintiff or defendant cases require separate 998 offers to trigger cost shifting; counteroffers do not revoke original 998 offers.
• Consulting experienced California injury attorneys before accepting or rejecting a 998 offer is crucial as the rules are complex and unforgiving.

Introduction

If you’re dealing with a personal injury claim after a car crash in California, understanding the car accident statutory offer 998 is essential to protect your financial interests and make smart legal decisions. The legal meaning of 998 offer is rooted in California Code of Civil Procedure Section 998, which governs these specialized settlement proposals. A 998 offer is a formal, written, time-limited proposal made after a lawsuit is filed, intended to encourage early case resolution and limit litigation costs. If the recipient rejects this offer and does worse at trial, they could face powerful cost shifting penalties.

Many claimants facing car crash litigation wonder: how should I go about responding to settlement offer California? Should I accept an accident settlement right away, or take my chances in court? It’s crucial to understand your car crash claim settlement options and how Section 998 settlements can impact your bottom line. This blog will demystify the legal meaning of a 998 offer, clarify how to respond to settlement offers in California, and outline what you should weigh before accepting or rejecting a settlement—including the often-significant consequences that can follow from 998 offers on court awards and recovery.

Why is this knowledge vital? Strategic use of Section 998 can drive negotiations, save parties thousands in costs (or saddle them with unexpected bills), and ultimately shift liability in ways that surprise many unprepared claimants and attorneys alike.

Sources:
Stimmel Law – 998 Offers in California Litigation: The Basics
Berliner Cohen – The What, How and Why of 998 Offers
Shirvanian Law – California Code of Civil Procedure 988

What is a Car Accident Statutory Offer 998?

Statutory Basis and Timing: The Mechanics of Section 998

• Section 998 of the California Code of Civil Procedure allows any party (plaintiff or defendant) in a lawsuit to make a written offer to compromise.
• The offer must:
  • Be in writing.
  • Explicitly reference CCP 998.
  • Set clear settlement terms.
  • Be made in good faith.
• Timing rules:
  • Can only be served at least 10 days before trial.
  • It remains open for 30 days, unless trial begins sooner. After that, if not accepted, it automatically expires and is withdrawn by law.
• Acceptance:
  • Must be absolute and unqualified (no conditions or changes, or it’s a counteroffer).
  • If accepted, a judgment is entered on those terms, ending the dispute on those terms immediately.

Sources:
Stimmel Law
Berliner Cohen

Legal Meaning and Purpose: Using 998 as a Cost-Shifting Settlement Tool

• The legal meaning of 998 offer is as a settlement mechanism built to promote early compromise by leveraging cost shifting.
• If you reject a fair 998 offer and don’t achieve a better result at trial, you face cost shifting: you could lose your right to post-offer litigation costs, and might have to pay the other party’s costs, including expert witness fees, further eating into your eventual recovery.
• Compliance is strict: Offers that don’t follow the rules (e.g., not in writing or lacking CCP 998 citation) do not trigger these penalties.

Sources:
Stimmel Law
Shirvanian Law

Who Can Make a 998 Offer and How Are They Served?

• Plaintiffs and defendants can each serve a 998 offer.
• In multi-plaintiff or multi-defendant cases, offers usually must be served individually for each party; otherwise, cost shifting may not apply.
• Only a total, unqualified acceptance counts; a “yes, but with changes…” is treated as a counteroffer, but the original 998 remains in effect unless withdrawn by the offeror.

Sources:
Stimmel Law
Daily Journal

Keywords for this section: car accident statutory offer 998, legal meaning of 998 offer, car crash claim settlement options

How Does the 998 Offer Affect Car Crash Claim Settlement Options?

Negotiation Dynamics: Why Section 998 Raises the Stakes

• The car accident statutory offer 998 changes how both sides approach a case. With cost shifting on the line, parties are more motivated to reach reasonable settlement terms before trial.
• Both plaintiffs and defendants often set their car crash claim settlement options using the risk/reward of a trial outcome, minus or plus the costs that could be assigned due to a 998 rejection.

Sources:
Shirvanian Law
Berliner Cohen

Settlement Options Under Section 998

1. Accept the 998 offer

• Serve a signed acceptance of the offer and file it with the court.
• The case concludes, judgment is entered, and all further risks of trial and post-offer costs are eliminated.

2. Negotiate or Counteroffer

• You can seek better terms while the 998 remains open.
• Note: Only a formal acceptance triggers the statute’s cost consequences; all counters are negotiations unless the original 998 offer is withdrawn.

3. Proceed to Trial

• If you reject or let lapse the 998, you risk severe cost shifting if you don’t do better at trial.

Sources:
Daily Journal
Berliner Cohen

Cost Implications, Attorney Fees & Example

• If a plaintiff rejects a defendant’s 998 offer and then wins less at trial:
  • Plaintiff loses the right to collect any post-offer costs (e.g., court fees, deposition costs, etc.).
  • Plaintiff may even owe the defendant’s expert witness fees and post-offer costs, which can substantially reduce or eliminate a plaintiff’s net recovery.
  • Attorney fees: Section 998 treats them as costs only if authorized by another law or contract—so check whether your case qualifies.
• Example:
  • Plaintiff rejects a $50,000 998 offer, wins $45,000 at trial: Plaintiff recovers $45,000, but must pay their own post-offer costs and, often, the defendant’s expert witness fees. Net result could end up being much less than $45,000, even less than the earlier $50,000 offer.

Sources:
Stimmel Law
AALRR

Keywords: car accident statutory offer 998, car crash claim settlement options, legal meaning of 998 offer

Responding to a Settlement Offer in California

Step-by-Step: Responding to Settlement Offer California

Step-by-step guide to successfully filing an auto accident claim

1. Check Offer Validity

• Is it in writing?
• Does it specifically reference CCP 998?
• Does it set clear settlement terms, and allow for simple, written acceptance?
• If it fails any of these, the Section 998 cost shifting rules likely do not apply.

Sources:
Berliner Cohen

2. Calendar the 30-Day Response Window

• You have 30 days to accept, or until trial starts, whichever comes first.
• Learn more about how long a personal injury claim takes
• If you do nothing after this period, the offer is automatically withdrawn.

Sources:
Stimmel Law
Berliner Cohen

3. Weigh Exposure and Compare Outcomes

• Compare the settlement offer’s value to possible trial outcomes.
• Factor in risk:
  • What if the verdict is less than the 998?
  • Could you be on the hook for expert witness fees and your own costs if you lose?

Sources:
Stimmel Law

4. Choose a Response

Accept

• Serve written acceptance (usually by form or letter).
• File it in court; the judge enters judgment on those precise terms.

Reject or Let Lapse

• If you believe you can do better, you can let the offer expire.
• You risk serious cost shifting and financial exposure if you don’t exceed the offer at trial.

Counteroffer or Negotiate

• You can send your own formal 998 offer.
• A “conditional acceptance” counts as a counteroffer—but the original 998 remains live and can still be accepted within the period, unless expressly withdrawn by the other side.

Sources:
Daily Journal

Risks and Benefits Summary

• Acceptance:
  • Provides certainty.
  • Avoids the financial risk and stress of trial.
• Rejection:
  • Keeps the option to go to trial, but puts you at risk for cost penalties if you don’t do better.

Litigation Consequences

• If you reject a defendant’s 998 and don’t win more at trial, you can lose more than you gain.
• If the defendant rejects your plaintiff 998 and you win more at trial, the court has the option to award you post-offer costs and expert witness fees.

Sources:
Stimmel Law
Shirvanian Law

Keywords: responding to settlement offer California, car accident statutory offer 998, car crash claim settlement options

Should I Accept an Accident Settlement? Key Considerations

Weighing the Pros and Cons: Should I Accept Accident Settlement?

Core Considerations:

• How does the 998 (or any offer) stack up against a realistic trial value?
  Use models: What’s the best, worst, and most likely scenario if you proceed to verdict?
  Deduct probable costs, fees, and medical liens to estimate your net recovery, not just the gross figure. Learn more here.
• Personal Risk Tolerance:
  • Are you comfortable waiting for a trial?
  • Do you want the guarantee of a settlement, or are you willing to risk delay, potential appeals, and further legal expenses for a higher possible result?

Sources:
Shirvanian Law
Berliner Cohen

• Medical Expenses and Liens:
  • Any award or settlement must cover past and future healthcare costs.
  • Medical liens (from health providers or insurers) may reduce what you receive.
• Long-Term Damages:
  • If your injuries involve lifelong care costs or lost earning power, robust documentation can support a higher settlement or trial award.

Using Section 998 Strategically

• Plaintiffs:
  Can serve a strong, evidence-backed 998 offer to put pressure on the defense by adding cost shifting incentive.
• Defendants:
  Using a reasonable 998 offer early can cap cost exposure and force plaintiffs to reevaluate trial risk.

Sources:
Stimmel Law
Berliner Cohen

Keywords: should I accept accident settlement, car accident statutory offer 998, car crash claim settlement options

Potential Impact on Court Awards

Section 998’s Cost Shifting Can Radically Alter Final Outcomes

• Rejecting a defendant’s 998 and failing to “beat it” at trial:
  • You’re barred from collecting post-offer costs.
  • The court can (and often does) order you to pay the other side’s expert witness fees and possibly more costs, slashing your recovery.
  • This often reduces the plaintiff’s net award to less than the original settlement offer, sometimes even to zero.
• Accepting a Section 998:
  Locks in the specified amount, shields you from cost shifting and trial risks.
• Plaintiff’s 998 Rejected by Defendant:
  If the plaintiff wins a greater sum than the offer, the court can grant the plaintiff post-offer costs and expert witness fees, increasing final recovery.

Sources:
Stimmel Law
Berliner Cohen

Multi-Plaintiff Scenarios (Special Caution Box)

• Each plaintiff must receive a separate 998 offer for cost shifting to apply.
• Acceptance must be absolute; a counteroffer doesn’t cancel the initial 998 unless it’s withdrawn. This can create traps in multi-party cases.

Sources:
Daily Journal

Keywords: car accident statutory offer 998, car crash claim settlement options, legal meaning of 998 offer

Conclusion

Understanding the car accident statutory offer 998 is not merely technical—it’s central to securing the best outcome in a California car crash lawsuit. These formal offers place significant legal and financial consequences on how car accident claims are negotiated and resolved. Recognizing the power of cost shifting, being alert to Section 998’s rules, and evaluating offers through the lens of net recovery—not just big round numbers—are crucial.

The best approach: Rely on hard evidence, realistic valuations, and professional legal guidance before responding to settlement offer California. That will put you in the strongest position to maximize your car crash claim settlement options and minimize any unpleasant surprises after trial.

Strongly consider consulting with an experienced California injury attorney before accepting or rejecting any Section 998 offer. This complex area of law is unforgiving—even for small technical missteps.

Sources:
Stimmel Law
Shirvanian Law

Additional Resources / FAQs

When does a 998 offer expire?

After 30 days or immediately when trial begins, whichever is sooner. Stimmel Law | Berliner Cohen

Must a 998 offer cite the statute?

Yes, it must clearly reference CCP 998 to invoke cost-shifting power. Shirvanian Law

Can I counteroffer and still accept the original 998?

Yes. A counter or negotiation does not revoke the original. You may still accept it (in writing) if within the statutory window unless the offer is withdrawn. Daily Journal

Who can make a 998 offer?

Any party in a civil action (plaintiff or defendant) can use a car accident statutory offer 998. Stimmel Law | Berliner Cohen

Where can I read the official statute?

California Code of Civil Procedure Section 998 – Official Text

Keywords: car accident statutory offer 998, legal meaning of 998 offer, car crash claim settlement options

Ready for Guidance? Get Your Free Instant Case Evaluation

Don’t risk your hard-earned recovery to the technicalities of the car accident statutory offer 998 and the unforgiving world of cost shifting. Get clarity about your options and protection for your claim: Get a free, instant case evaluation by Visionary Law Group now. See if your case qualifies in just 30 seconds at https://eval.visionarylawgroup.com/auto-accident.