Wisconsin's offer of settlement: double costs and prime-plus-one interest — but not attorney's fees

Wisconsin gives both sides an offer device, and it is worth understanding what it does and does not shift. It shifts costs — doubled, for a plaintiff who beats its own offer — and it shifts interest, at a rate set above market. It does not shift attorney's fees, and a page that suggests otherwise is setting up a disappointment.

There are actually three offers in § 807.01, not one, and they do different jobs.

The defendant's offer of judgment

Wis. Stat. § 807.01(1):

After issue is joined but at least 20 days before the trial, the defendant may serve upon the plaintiff a written offer to allow judgment to be taken against the defendant for the sum, or property, or to the effect therein specified, with costs. If the plaintiff accepts the offer and serves notice thereof in writing, before trial and within 10 days after receipt of the offer, the plaintiff may file the offer, with proof of service of the notice of acceptance, and the clerk must thereupon enter judgment accordingly. If notice of acceptance is not given, the offer cannot be given as evidence nor mentioned on the trial. If the offer of judgment is not accepted and the plaintiff fails to recover a more favorable judgment, the plaintiff shall not recover costs but defendant shall recover costs to be computed on the demand of the complaint.

Three timing rules in one subsection: the offer comes after issue is joined, at least 20 days before trial, and acceptance must be before trial and within 10 days of receipt. Both conditions on acceptance apply — an offer received 15 days before trial must still be accepted within 10 days.

The consequence for a plaintiff who does not do better is two-sided: no costs for the plaintiff, and costs to the defendant, computed on the demand of the complaint rather than on the judgment.

The defendant's offer to fix damages

§ 807.01(2) is a different animal and is easy to overlook:

After issue is joined but at least 20 days before trial, the defendant may serve upon the plaintiff a written offer that if the defendant fails in the defense the damages be assessed at a specified sum. If the plaintiff accepts the offer and serves notice thereof in writing before trial and within 10 days after receipt of the offer and prevails upon the trial, either party may file proof of service of the offer and acceptance and the damages will be assessed accordingly. If notice of acceptance is not given, the offer cannot be given as evidence nor mentioned on the trial. If the offer is not accepted and if damages assessed in favor of the plaintiff do not exceed the damages offered, neither party shall recover costs.

This is not an offer to settle. It is an offer to stipulate the damages number if liability is found, leaving liability to be tried. The sanction is milder and symmetrical: if the plaintiff wins but does not beat the damages figure, neither party recovers costs.

The plaintiff's offer of settlement

§ 807.01(3) is the subsection that gives this page its name:

After issue is joined but at least 20 days before trial, the plaintiff may serve upon the defendant a written offer of settlement for the sum, or property, or to the effect therein specified, with costs. If the defendant accepts the offer and serves notice thereof in writing, before trial and within 10 days after receipt of the offer, the defendant may file the offer, with proof of service of the notice of acceptance, with the clerk of court. If notice of acceptance is not given, the offer cannot be given as evidence nor mentioned on the trial. If the offer of settlement is not accepted and the plaintiff recovers a more favorable judgment, the plaintiff shall recover double the amount of the taxable costs.

Double the taxable costs. That is the whole penalty on this side — a multiplier on costs, not a fee award.

The interest, and how the rate is set

§ 807.01(4) applies to any party's offer and is often worth more than the costs:

If there is an offer of settlement by a party under this section which is not accepted and the party recovers a judgment which is greater than or equal to the amount specified in the offer of settlement, the party is entitled to interest at an annual rate equal to 1 percent plus the prime rate in effect on January 1 of the year in which the judgment is entered if the judgment is entered on or before June 30 of that year or in effect on July 1 of the year in which the judgment is entered if the judgment is entered after June 30 of that year, as reported by the federal reserve board in federal reserve statistical release H. 15, on the amount recovered from the date of the offer of settlement until the amount is paid. Interest under this section is in lieu of interest computed under ss. 814.04(4) and 815.05(8).

Four things to take from that long sentence.

The threshold is "greater than or equal to." Matching your own offer is enough; you do not have to beat it.

The rate is prime plus one, fixed by reference to a specific date — 1 January if judgment is entered by 30 June, 1 July if it is entered later — and by reference to a named Federal Reserve release.

Interest runs from the date of the offer until the amount is paid, not merely until judgment.

It replaces ordinary judgment interest, rather than adding to it.

It works for every party

§ 807.01(5) generalises the whole section:

Subsections (1) to (4) apply to offers which may be made by any party to any other party who demands a judgment or setoff against the offering party.

So a third-party defendant, a counterclaim defendant, or a party facing a setoff demand can all use it.

What this rule does not do

It does not shift attorney's fees. The penalties in § 807.01 are costs — doubled in subsection (3), or awarded on the complaint's demand in subsection (1) — plus the subsection (4) interest. States such as Nevada, Michigan and New Jersey shift a reasonable attorney fee under their equivalent rules; Wisconsin does not, and an offer drafted on the assumption that it will is mispriced.

That comparison is the honest way to value a Wisconsin offer: it changes the cost and interest arithmetic meaningfully in a long case with a large recovery, and much less in a short one.

How Wisconsin compares to the federal rules

Federal Rule 68 shifts post-offer costs against a plaintiff only. Wisconsin runs in both directions, adds an interest remedy that federal practice has no equivalent to, and offers a damages-only variant that nobody else does.

A short checklist

• Wait until issue is joined, then count back 20 days from trial.
• Diary 10 days on receipt — and check the trial date, because acceptance must also be before trial.
• Decide which of the three offers you want. A § 807.01(2) offer fixes damages without conceding liability.
• As a plaintiff, remember the reward is double taxable costs, not fees.
• As a defendant, remember your costs are computed on the demand of the complaint if the plaintiff fails to beat your offer.
• Do not overlook subsection (4). Prime plus one, from the offer until payment, is frequently the largest number in the calculation.
• Note that matching your offer is enough for interest — the test is "greater than or equal to."
• Do not mention an unaccepted offer at trial. The statute forbids it in terms.
• Check the prime rate as of the correct date, 1 January or 1 July depending on when judgment is entered.

Where these rules live

• Wis. Stat. § 807.01 — Settlement offers
• Wis. Stat. § 814.04 — Items of costs

This page explains what the statute says; it is not legal advice. Whether a particular judgment is "more favorable" than an offer, and how offers to multiple parties are treated, are questions the statute leaves to case law that this site does not cover.