we are giving the other side a chance to settle for a reasonable amount, before large amounts of money are spent on expert witnesses, exhibits, depositions, subpoenas and other trial preparations. The Offer of Judgment is not available in every state, each state has different rules as to its applicability.
For example, under Connecticut law, if a defendant in a civil case rejects an offer of judgment and subsequently recovers a larger sum, the court must add 12% interest to the amount recovered. The period of time that the award is subject to interest depends on when the offer was made.
In New Jersey, in injured plaintiff is entitled to interest if (1) she makes a settlement offer that is not accepted and (2) the final judgment is at least as favorable for her as the offer.
The Sunshine state even has a statute for Offers of Judgment and Demand for Judgment. The Florida law even provide the mechanism for obtaining legal fees and costs when a party rejects a formal offer to settle a case. Florida Statute §768.79 provides in pertinent part:
If a plaintiff files a demand for judgment which is not accepted by the defendant within 30 days and the plaintiff recovers a judgment in an amount at least 25 percent greater than the offer, she or he shall be entitled to recover reasonable costs and attorney’s fees incurred from the date of the filing of the demand. If rejected, neither an offer nor demand is admissible in subsequent litigation, except for pursuing the penalties of this section.
These state laws allow innocent plaintiffs, who have made a good faith, reasonable “Offer of Judgment,” to recover costs, interest, attorney’s fees and other relief in appropriate circumstances.