§ 998.Offer Served Prior to Resolution of Dispute By Arbitration
Title 14. Of Miscellaneous Provisions · Chapter 3. Offers by a Party to Compromise · Last amended 2025 · Last verified July 28, 2026
In one sentenceSection 998 lets any party serve a formal written offer to settle at least ten days before trial or arbitration, and punishes a side that rejects a reasonable offer and then fails to beat it at trial with cost-shifting and, in some cases, liability for the other side's expert witness fees.
(a)The costs allowed under Sections 1031 and 1032 shall be withheld or augmented as provided in this section.
(b)Not less than 10 days prior to commencement of trial or arbitration (as provided in Section 1281 or 1295) of a dispute to be resolved by arbitration, any party may serve an offer in writing upon any other party to the action to allow judgment to be taken or an award to be entered in accordance with the terms and conditions stated at that time. The written offer shall include a statement of the offer, containing the terms and conditions of the judgment or award, and a provision that allows the accepting party to indicate acceptance of the offer by signing a statement that the offer is accepted. Any acceptance of the offer, whether made on the document containing the offer or on a separate document of acceptance, shall be in writing and shall be signed by counsel for the accepting party or, if not represented by counsel, by the accepting party.
(1)If the offer is accepted, the offer with proof of acceptance shall be filed and the clerk or the judge shall enter judgment accordingly. In the case of an arbitration, the offer with proof of acceptance shall be filed with the arbitrator or arbitrators who shall promptly render an award accordingly.
(2)If the offer is not accepted prior to trial or arbitration or within 30 days after it is made, whichever occurs first, it shall be deemed withdrawn, and cannot be given in evidence upon the trial or arbitration.
(3)For purposes of this subdivision, a trial or arbitration shall be deemed to be actually commenced at the beginning of the opening statement of the plaintiff or counsel, or, if there is no opening statement, at the time of the administering of the oath or affirmation to the first witness, or the introduction of any evidence.
(1)If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the plaintiff shall not recover their postoffer costs and shall pay the defendant's costs from the time of the offer. In addition, in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the plaintiff to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the defendant.
(2)
(A)In determining whether the plaintiff obtains a more favorable judgment, the court or arbitrator shall exclude the postoffer costs.
(B)It is the intent of the Legislature in enacting subparagraph (A) to supersede the holding in Encinitas Plaza Real v. Knight, 209 Cal.App.3d 996, that attorney's fees awarded to the prevailing party were not costs for purposes of this section but were part of the judgment.
(d)If an offer made by a plaintiff is not accepted and the defendant fails to obtain a more favorable judgment or award in any action or proceeding other than an eminent domain action, the court or arbitrator, in its discretion, may require the defendant to pay a reasonable sum to cover postoffer costs of the services of expert witnesses, who are not regular employees of any party, actually incurred and reasonably necessary in either, or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the plaintiff, in addition to plaintiff's costs.
(e)If an offer made by a defendant is not accepted and the plaintiff fails to obtain a more favorable judgment or award, the costs under this section, from the time of the offer, shall be deducted from any damages awarded in favor of the plaintiff. If the costs awarded under this section exceed the amount of the damages awarded to the plaintiff the net amount shall be awarded to the defendant and judgment or award shall be entered accordingly.
(f)Police officers shall be deemed to be expert witnesses for the purposes of this section. For purposes of this section, "plaintiff" includes a cross-complainant and "defendant" includes a cross-defendant. Any judgment or award entered pursuant to this section shall be deemed to be a compromise settlement.
(g)This chapter does not apply to either of the following:
(1)An offer that is made by a plaintiff in an eminent domain action.
(2)Any enforcement action brought in the name of the people of the State of California by the Attorney General, the Insurance Commissioner, a district attorney, or a city attorney, acting as a public prosecutor.
(h)The costs for services of expert witnesses for trial under subdivisions (c) and (d) shall not exceed those specified in Section 68092.5 of the Government Code.
(i)This section shall not apply to labor arbitrations filed pursuant to memoranda of understanding under the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1 of the Government Code).
Plain-English Summary
Section 998 is the engine behind the statutory offer to compromise, one of the most consequential settlement tools in California civil practice. Either side may serve a written offer at any point up to ten days before trial or arbitration begins. The offer has to spell out the terms of the judgment or award and include a way for the other side to accept it in writing. If the offeree accepts, the offer is filed and judgment or an award follows automatically — no further negotiation needed. If nobody accepts within thirty days, or before trial starts, whichever comes first, the offer disappears and can't be mentioned at trial.
The real force of § 998 shows up after trial, when the court compares the judgment to the unaccepted offer. A plaintiff who turns down a defendant's offer and then wins less than the offer amount loses the right to recover costs incurred after the offer, has to pay the defendant's costs from that point forward, and may also be ordered to cover the defendant's reasonable expert witness fees. A defendant who turns down a plaintiff's offer and then does worse than the offer at trial can be ordered to pay the plaintiff's postoffer expert witness costs on top of ordinary costs. These consequences apply whether the party is styled as a plaintiff, cross-complainant, defendant, or cross-defendant.
A few carve-outs matter. The statute doesn't apply to an offer a plaintiff makes in an eminent domain action, or to enforcement actions brought by the Attorney General or other public prosecutors. Expert witness cost awards are capped by reference to Government Code § 68092.5, and police officers count as expert witnesses for these purposes. Section 999.1's time-limited demands operate on a different track entirely, tied to insurance policy limits rather than trial costs.
Frequently Asked Questions
How long before trial can a § 998 offer be served?
It must be served not less than ten days before trial or arbitration commences. A trial or arbitration is deemed to commence at the opening statement, or, if there's none, when the first witness is sworn or the first evidence is introduced.
What happens if the offer isn't accepted?
If it isn't accepted before trial or arbitration begins, or within thirty days of being made, whichever happens first, it is deemed withdrawn and can't be introduced as evidence at trial.
What penalty does a plaintiff face for rejecting a defendant's offer and doing worse at trial?
The plaintiff loses the right to recover costs incurred after the offer, must pay the defendant's costs from the time of the offer, and may be ordered to pay the defendant's reasonable postoffer expert witness fees.
Can a defendant who rejects a plaintiff's offer be ordered to pay expert fees too?
Yes. If the defendant fails to obtain a more favorable judgment than the plaintiff's offer, the court or arbitrator may order the defendant to pay the plaintiff's reasonable postoffer expert witness costs, in addition to the plaintiff's ordinary costs.
Does § 998 apply to eminent domain cases or government enforcement actions?
No, not to an offer made by a plaintiff in an eminent domain action, and not to enforcement actions brought in the name of the People by the Attorney General or another public prosecutor.
Amendment History
Amended by Stats 2024 ch 444 (SB 577),s 2, eff. 1/1/2025. Amended by Stats 2015 ch 345 (AB 1141),s 2, eff. 1/1/2016. Amended by Stats 2005 ch 706 (AB 1742),s 13, eff. 1/1/2006 Amended by Stats 2001 ch 153 (AB 732), s 1, eff. 1/1/2002. Previously Amended September 7, 1999 (Bill Number: SB 1161) (Chapter 353).
Source & verification. Section text is reproduced verbatim from
the Deering's California Codes Annotated / vLex. Enacted by the California Legislature.
Last verified July 28, 2026.
· Official source
Also known as:ccp 998 offer998 offer to compromise californiastatutory offer to compromise californiaoffer of judgment california