California CCP §998 Offer Checklist: What Every Litigator Must Do Before Sending One

A §998 offer is one of California civil litigation’s most effective and most frequently misused pre-trial tools. The Code of Civil Procedure §998 is an offer through which either side can make a settlement offer that carries real financial consequences. If you reject it and perform worse at trial, the cost-shifting kicks in. For plaintiffs, that means recovering post-offer expert witness fees and costs. For defendants, it stops the accrual of the plaintiff’s costs from the offer date forward.

The problem is that §998 offers are invalidated more often than most litigators realize, by courts, opposing counsel, and appeals panels. This checklist covers every requirement a California litigator must satisfy before sending a §998 offer to ensure it is valid, strategic, and capable of shifting costs.

The Legal Requirements for a Valid California §998 Offer

Before any strategic analysis begins, a §998 offer must satisfy a baseline set of legal requirements. Failing even one of these elements can void cost-shifting entirely, regardless of how favorable the trial outcome is.

The offer must be in writing. 

Oral §998 offers carry no legal weight under California law. The statute requires a written instrument, signed by the offeror or their counsel, and formally served on the opposing party. An email exchange, a phone call, or a verbal offer at a deposition does not satisfy this requirement.

It must be served at least 10 days before the trial commences. 

This is not 10 days before the trial date is calendared or confirmed. It is 10 days before the trial actually begins. If you serve the offer on day 9, cost-shifting is lost. Litigators routinely miscalculate this deadline; confirm the trial commencement date and work backward before serving.

The offer must be served on the party, not just counsel. 

CCP §998(b) specifies service requirements carefully. In certain circumstances, service only on opposing counsel, without serving the party itself, can render the offer defective. Confirm the precise service requirements applicable to your offer type before sending.

It must state a sum certain. 

A range is not sufficient. Courts have invalidated §998 offers phrased as “between $X and $Y” or “approximately $X.” The offer must name a single, specific dollar figure. The sum certain requirement has been applied strictly by California courts, and there is no remedial argument once the offer is served.

Conditions must be standard and not designed to make acceptance impractical.

A §998 offer can include conditions such as dismissal terms, release scope, and payment timing, but those conditions must not be structured to make acceptance commercially unreasonable or practically impossible. Courts look past the form to the substance: an offer loaded with onerous conditions that no rational party would accept may be treated as no offer at all.

The offer must be made in good faith. 

This is the most commonly overlooked requirement. California courts apply a “reasonable estimate of the case’s value” test when evaluating whether a §998 offer was genuine. A nominal offer of $1 in a serious injury case, or an inflated demand in a weak liability case, can result in cost-shifting being denied even after a favorable verdict.

The offer expires after 30 days by default. 

Under CCP §998(b)(2), unless the offer specifies a different period, it lapses after 30 days without acceptance. If you specify a shorter period, make sure that the choice is deliberate and documented. A lapsed offer is a deemed rejection; your file should reflect that clearly.

Step 1 — Has the Case Been Accurately Valued Before You Offer?

The most common reason §998 offers fail strategically — not legally — is that they are made before the case has been properly valued. An offer that is too low fails the good faith test and exposes you to a post-trial challenge. An offer that is too high surrenders negotiating leverage for nothing.

Before setting your §998 offer amount, work through each of the following:

Liability confirmed: Making a §998 offer before liability is clear signals uncertainty, not confidence. Courts and opposing counsel alike will scrutinize an early offer as evidence that you doubt your own case. 

All damages calculated: The offer must reflect a realistic total case value. That means accounting for past and future medical expenses, lost earnings, non-economic damages, and any punitive damages exposure. An offer that demonstrably undervalues the claim will not survive a good-faith challenge.

Comparable verdicts researched: Before setting the number, consult California verdict databases such as VerdictSearch, JVR, and Westlaw Verdict Analyzer to identify comparable results in the same jurisdiction. 

Coverage confirmed: For plaintiff counsel, an offer above policy limits may be uncollectible even if accepted. Confirm the defendant’s insurance coverage before setting the offer amount. An offer the defendant structurally cannot accept is not a good-faith compromise.

Lien exposure assessed: Medical liens, ERISA liens, and Medicare/Medi-Cal interests also significantly affect a plaintiff’s net recovery. Plaintiff counsel must account for these obligations before making the offer. 

Step 2 — Is the Timing of Your §998 Offer Strategically Correct?

The statutory minimum (10 days before trial) is almost never the right time to send a §998 offer. Timing is the most underestimated element of the §998 strategy. 

For plaintiff counsel, the optimal moment is after liability-supporting depositions have been taken, after IME results are in, and after the defendant has been exposed to its most damaging evidence. Send the offer when the defendant’s counsel knows the exposure is real.

For defendant counsel, the optimal moment is after the plaintiff’s expert witnesses have been deposed and their damages theory has been stress-tested. When plaintiff’s counsel can see the weakness in their own damages case, a §998 offer crystallizes the trial risk most effectively.

Successive offers are permitted. A defendant can send one offer after initial discovery, another after key depositions, and a final one closer to trial. Each creates its own cost-shifting period from the date it is served. Document each with a separate good-faith analysis.

The expiration trap. If you specify a period shorter than 30 days, confirm this is intentional. Calendar the expiration date immediately after service using a reliable docketing process or legal calendaring software so the deemed rejection date is not missed. When the period lapses without response, document the deemed rejection in your file on that date.

Step 3 — Does Your §998 Offer Cover Every Required Element?

This is the most operationally important section for working litigators. Each item below must be confirmed before the offer leaves your office. A defect in any one of them can void cost-shifting after a favorable trial outcome.

1. Written format confirmed: The offer is a signed, formal written document and not an email without an attachment, or a verbal communication, or a term sheet unsigned by counsel. If transmitting electronically, the signed document must be attached, not paraphrased in the body of the message.
2. Parties correctly identified:  The exact legal names of the offeror and offeree match the caption of the operative complaint. A mismatch between the offer and the pleading creates a colorable argument that the offer was not properly directed to the correct party.
3. Case number referenced: The correct superior court case number appears on the face of the document. Without it, the offer’s connection to the pending action is facially ambiguous.
4. Sum certain stated: A single, specific dollar amount without any ranges or approximations should be mentioned. If the offer covers multiple claims or multiple parties, the allocation must be clearly specified.
5. Payment terms specified: State when and how the sum will be paid, whether it is going to be a lump sum, structured payments, or within a specified number of days of acceptance and execution of the release.
6. Conditions reviewed for enforceability: Any conditions attached to acceptance, such as dismissal, release, or cooperation on related matters, are standard and not structured to make acceptance commercially unreasonable.
7. Dismissal terms included: Specify whether acceptance results in dismissal with or without prejudice, and of which claims. An offer that would produce a dismissal of fewer than all pending claims must say so explicitly.
8. Release scope defined: Confirm whether the release covers only the claims in the operative complaint or extends to related matters, unknown claims, or third parties. An overly broad release may be the condition that renders the offer commercially unreasonable and therefore invalid.
9. Expiration period stated: If using the 30-day statutory default, confirm that trial timing makes this appropriate. If specifying a shorter period, record the strategic rationale in your file.
10. Service method confirmed: The offer is served pursuant to CCP §1013 (through personal service, mail, overnight delivery, or authorized electronic service), and a proof of service is prepared at the time of serving, not reconstructed afterward.
11. Service on the correct party confirmed: Depending on the offer type, the offer may need to be served on the party directly, not only on their counsel of record. Verify this before serving.
12. Copy retained and date-stamped: Your file copy should be preserved in the matter file with the exact date, method of service, proof of service, and supporting correspondence stored in one place through legal case management software. This record must survive through trial and any post-trial cost proceedings.

Step 4 — Will Your Offer Survive a Good Faith Challenge?

This is the section most litigators skip and the one most likely to result in cost-shifting being denied after trial. A §998 offer that is legally valid in form can still be defeated if the opposing party successfully argues it was not made in good faith.

The token offer problem: A defendant’s §998 offer of $1 in a case involving serious and documented injuries is not a good-faith offer. Courts have consistently denied cost-shifting on these facts, regardless of how the trial resolves. The offer must reflect something closer to the realistic value of the claim, even if that value is genuinely low.

The excessive offer problem: On the plaintiff’s side, an offer so inflated relative to the actual case value that no reasonable defendant would accept it may also fail the good faith analysis in some courts. The test cuts both ways.

Document your basis before you send:  Before the offer goes out, create a memo to file or a written communication to the client that explains how the offer amount was calculated, then store it inside your law practice management software with the valuation notes, settlement history, and supporting documents. Reference the damages analysis, the comparable verdicts reviewed, and any expert opinions on value that were considered. This documentation becomes critical evidence if cost-shifting is contested after trial.

• Offer amount reflects a reasonable estimate of case value, not a tactical extreme
• The basis for the offer amount is documented in the file before the offer is served
• Prior settlement discussions have been reviewed to ensure consistency with prior positions
• Expert opinions on damages have been reviewed and factored into the offer amount

Step 5 — What to Do After the §998 Offer Is Sent

Most checklists end at drafting. The period between service and trial is where many litigators lose the cost-shifting they worked to create.

• Calendar the expiration date immediately: Do not rely on memory. If the period lapses without a response, record the deemed rejection in your file on that date.
• Understand revocation: A §998 offer can be revoked before acceptance, but the revocation must reach the opposing party before their acceptance does. Any revocation must be in writing. If you revoke and reissue at a different amount, maintain a clear chronological record of every offer, revocation, and reissuance.
• Preserve all service documentation: The proof of service, any acknowledgment of receipt, and any written rejection must be maintained through final judgment. These are the evidentiary foundations for your post-trial cost memorandum.
• Update your cost memorandum: Flag the matter to capture all post-offer expert witness fees, litigation expenses, and attorney time through accurate legal billing software or time and expense tracking. These fees are frequently the largest component of a §998 cost award and the most commonly omitted.
• Notify your client in writing: Document that the client was informed of the offer, the potential cost consequences of rejection, and their decision.

The §998 Mistakes That Void Cost-Shifting and How to Avoid Every One

The following are the eight most common defects that result in §998 cost-shifting being denied. Each one is avoidable with proper pre-offer practice.

Stating a range instead of a sum certain: Offers framed as “between $X and $Y” or “up to $X” are invalidated entirely. The fix is simple: always state a single specific dollar amount.

Serving only on counsel, not the party: Depending on the offer type and circumstances, service only on opposing counsel may render the offer defective. Confirm the correct service requirements before sending.

Making the offer too close to trial: An offer served only days before trial may give the opposing party insufficient time to meaningfully evaluate it, and courts have used this reasoning to find offers were not made in good faith. Aim for at least 30 days before trial when the case and timing allow.

Attaching unreasonable conditions: Conditions that make acceptance commercially impractical, excessive confidentiality terms, unusually broad releases, and non-standard cooperation obligations can invalidate the offer even if it is otherwise properly formed. Have a neutral colleague review any non-standard conditions before including them.

Making a token offer without a good faith basis: A nominal offer in a serious case will result in cost-shifting being denied post-trial, regardless of the verdict. Document the good-faith basis for every offer amount before it is served.

Failing to calendar the expiration date: If the expiration passes without documentation of the deemed rejection, the cost memorandum is incomplete, and the cost-shifting argument is weakened. Calendar this date immediately after service, every time.

Failing to preserve service documentation: Without a proof of service and supporting records, you cannot prove the offer was properly made at the post-trial cost hearing. Maintain a dedicated §998 file through final judgment.

Revoking and remaking without clear documentation: When multiple offers are made in the same case, confusion about which offer controls for cost-shifting can undermine the entire strategy. Keep a written chronological log of every offer, revocation, and reissuance with dates and amounts.

How §998 Offers Play Out in the Real World

Here are two scenarios to help you understand how §998 works from both sides of the case.

Scenario 1: The Plaintiff Makes the Move

A warehouse worker named James tears his rotator cuff after slipping on an unmarked wet floor at work. He sues his employer for negligence. After depositions are done and his medical prognosis is clear, James’s attorney puts a §998 offer on the table for $95,000, calculated from surgery costs, eight months of lost wages, and ongoing physical therapy.

The employer’s defense team looks at the offer and decides to roll the dice. They believe the jury won’t sympathize and let the offer expire without responding.

Trial goes ahead. The jury disagrees with the defense’s reading and returns a verdict of $130,000 in James’s favor.

Here is where §998 changes the math. Because James made a valid offer and the employer failed to beat it at trial, the cost consequences now stack up against the employer:

• The employer may be on the hook for every expert witness fee James incurred after the offer date, such as his medical expert, his vocational rehabilitation specialist, and his economist
• Pre-judgment interest may begin accruing from the date the offer expired, not the date of the verdict
• What the employer gambled to avoid paying $95,000 could end up costing them $150,000 or more by the time costs are totaled

Scenario 2: The Defendant Makes the Move

Same type of case, but this time the defense team takes the initiative. Before trial, the employer’s attorney sends James a §998 offer of $45,000 to put the matter to rest.

James’s attorney advises him that the offer is too low given his injuries. James rejects it, and the case goes to trial.

The jury, however, finds that James contributed to the accident by ignoring posted safety warnings. They awarded him only $30,000.

Because James failed to beat the defendant’s §998 offer, the financial picture flips entirely:

• James cannot recover any of his own litigation costs or expert fees from after the offer date
• The employer can now seek recovery of its own post-offer expert costs directly from James’s judgment
• If those costs amount to $18,000, James’s $30,000 award shrinks to $12,000 after the deduction, and in some cases, the math can leave a plaintiff owing money to the defendant rather than collecting anything

Final Thoughts

It’s time we stopped treating §998 offer as a formality and started thinking of it like a calculated litigation decision that can reshape the financial outcome of a case. A number that feels reasonable right now might become an expensive decision later, if the offer is defective, mistimed, or stripped of its cost-shifting power by a good-faith challenge. 

That is why it becomes important to have a checklist in place, because the margin for error here is zero. Any drafting mistake or missed service requirement can cause real and avoidable damage. Work through every step before the offer goes out.

The verdict determines who wins the case. The §998 offer determines what winning actually costs the other side. One deserves as much attention as the other.