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Offer Of Judgment

Offer of Judgment

Definition

A legal strategy sometimes used in managing and settling employment-related litigation. An offer of judgment applies in the following manner: if a specific settlement made by a defendant (deemed an "offer of judgment") is rejected by the plaintiff, but the jury's verdict is lower than the defendant's offer of judgment, then the plaintiff who rejected the offer of judgment will be subject to specific penalties that are paid to the defendant who made the offer of judgment. Although the amounts of such penalties vary by state, they include certain legal fees, other litigation costs, and prejudgment interest. In addition, the party that rejected the offer may lose its right to collect attorneys' fees, compensable litigation costs, and prejudgment interest. An offer of judgment therefore puts pressure on plaintiffs to accept reasonable offers.

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