(a) In cases other than actions against an automobile insurance carrier for uninsured motorist/underinsured motorist benefits, if the offer of a claimant is not accepted and the claimant obtains a money judgment, in an amount that is 120% of the offer or more, excluding allowable prejudgment interest and counsel fees, the claimant shall be allowed, in addition to costs of suit: (1) all reasonable litigation expenses incurred following non-acceptance; (2) prejudgment interest of eight percent on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later, but only to the extent that such prejudgment interest exceeds the interest prescribed by R. 4:42-11(b), which also shall be allowable; and (3) a reasonable attorney’s fee for such subsequent services as are compelled by the non-acceptance.
Rule 4:58-2.Consequences of Non-Acceptance of Claimant’s Offer
Last amended September 1, 2022 · Current through June 18, 2026 · Last verified July 7, 2026
In one sentenceRule 4:58-2 penalizes a party who rejects a claimant's offer of judgment and then loses by at least 20%, awarding the claimant litigation expenses, enhanced prejudgment interest, and attorney's fees for the work the rejection made necessary, unless that would cause undue hardship.
Full Text of Rule 4:58-2
(b) In cases involving actions against automobile carriers for uninsured/underinsured motorist benefits, if the offer of a claimant is not accepted and the claimant obtains a monetary award by jury or non-jury verdict (adjusted to reflect comparative negligence, if any) in an amount that is 120% of the offer or more, excluding allowable prejudgment interest and counsel fees, the claimant shall be allowed, in addition to costs of suit: (1) all reasonable litigation expenses incurred following non-acceptance; (2) prejudgment interest of eight percent on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later, but only to the extent that such prejudgment interest exceeds the interest prescribed by R. 4:42-11(b), which also shall be allowable; and (3) a reasonable attorney’s fee for such subsequent services as are compelled by the non-acceptance.
(c) No allowances shall be granted pursuant to paragraphs (a) or (b) if they would impose undue hardship or otherwise result in unfairness to the offeree. If undue hardship can be eliminated by reducing the allowance to a lower sum, the court shall reduce the amount of the allowance accordingly. The burden is on the offeree to establish the offeree’s claim of undue hardship or lack of fairness.
Amendment History
New Jersey publishes each rule’s amendment record in a “History” note beneath the rule. It is reproduced verbatim below; the “R.R.” citations refer to the former Revised Rules numbering the current rules replaced.
Amended July 7, 1971 to be effective September 13, 1971; amended July 14, 1972 to be effective September 5, 1972; amended July 17, 1975 to be effective September 8, 1975; amended July 13, 1994 to be effective September 1, 1994; amended July 5, 2000 to be effective September 5, 2000; amended July 28, 2004 to be effective September 1, 2004; text; amended and designated as paragraph (a), new paragraph (b) adopted July 27, 2006 to be effective September 1, 2006; paragraph (a); amended July 23, 2010 to be effective September 1, 2010; paragraph (a); amended, new paragraph (b) added, and previous paragraph (b) redesignated as paragraph (c) August 1, 2016 to be effective September 1, 2016; paragraph (c) amended August 5, 2022 to be effective September 1, 2022.
Plain-English Summary
Rejecting a reasonable settlement offer carries a real cost if it turns out to be the wrong call. When a claimant's offer goes unaccepted and the claimant then recovers a judgment or verdict at least 120% of that offer — excluding prejudgment interest and fees — the claimant is entitled, beyond ordinary costs, to the litigation expenses incurred after the rejection, 8% prejudgment interest (to the extent it exceeds what Rule 4:42-11 already allows), and a reasonable attorney's fee for the work the rejection compelled. The same consequences apply in uninsured and underinsured motorist cases, measured against the jury or non-jury verdict.
The one safety valve is fairness: none of these allowances is granted if it would impose undue hardship or otherwise be unfair to the offeree, and the court reduces rather than denies the award if a smaller sum would solve the hardship — though it's the offeree's burden to prove that hardship exists.
Frequently Asked Questions
What happens if a claimant's offer of judgment is rejected and the claimant then wins more?
If the claimant recovers a judgment or verdict at least 120% of the rejected offer, the claimant is entitled to litigation expenses, enhanced prejudgment interest, and reasonable attorney's fees for the post-rejection work.
Can a court deny these allowances even if the 120% threshold is met?
Yes, if granting them would impose undue hardship or unfairness on the offeree, and the offeree bears the burden of proving that.
Source & verification. The rule text and amendment history are reproduced verbatim from the
official New Jersey Rules of Court (N.J. Ct. R. 4:58-2). Prescribed by the Supreme Court of New Jersey (N.J. Const. art. VI, § 2, ¶ 3). The plain-English summary is original and written by us. Last verified July 7, 2026. ·
Official source
Also known as: offer of judgment sanctions120 percent rule