Most people think a lawsuit is about winning or losing. In reality, it is also about who pays when the case is over. In California civil cases, especially personal injury lawsuits, California Code of Civil Procedure §998 can quietly determine whether one side walks away protected or buried under costs. A rejected §998 offer does not just affect settlement talks. It can dramatically shift financial responsibility after trial.
Here is what injured plaintiffs and defendants alike need to understand about what costs are recoverable under CCP §998 and why this statute carries real consequences.
What is CCP §998?
CCP §998 is a settlement statute designed to encourage early, reasonable resolutions. It allows either side to make a formal settlement offer before trial. If that offer is rejected and the rejecting party fails to obtain a better result at trial or arbitration, cost shifting applies. In plain terms, the law penalizes parties who gamble on trial and lose. The message behind the statute is simple: if you roll the dice and lose, you may pay for it.
Why §998 offers matter in personal injury cases
Personal injury litigation is expensive. Medical experts, accident reconstruction specialists, economists, and life care planners can drive costs into the tens of thousands of dollars. A §998 offer forces both sides to confront those risks early.
For insurance companies, rejecting a reasonable §998 offer can mean paying not only the verdict but also expert witness fees and post-offer costs.
For injured plaintiffs, rejecting the wrong offer can mean losing cost recovery or even owing money after “winning” a case. That is why §998 is often where leverage shifts.
Recoverable costs when a defendant rejects a plaintiff’s CCP 998 offer
When a defendant rejects a valid CCP §998 offer and the plaintiff later obtains a more favorable judgment or award, the plaintiff may recover enhanced costs.
A prevailing plaintiff may recover allowable costs under California law, including:
- Court filing and motion fees
- Service of process costs
- Deposition and transcript expenses
- Court reporter fees
- Statutory witness fees
- Subpoenas and records retrieval
- Trial exhibits and demonstrative evidence
These are the ordinary costs of litigation that are typically recoverable by a prevailing party.
Expert witness fees under CCP 998
This is where CCP §998 has its greatest impact. If the defendant rejected the plaintiff’s offer and failed to beat it at trial, the court may award the plaintiff reasonable expert witness fees incurred after the offer was made.
These may include:
- Expert preparation and analysis
- Trial testimony
- Deposition-related expert work
- Reasonable travel and appearance expenses
In most California personal injury cases, expert witness fees are not recoverable. CCP §998 creates a limited but powerful exception that can significantly increase the value of a trial outcome. Courts retain discretion and will review expert fees for reasonableness and necessity.
What happens if a plaintiff rejects a defendant’s §998 offer
This is where the statute becomes dangerous if misjudged. If a plaintiff rejects a defendant’s §998 offer and then fails to obtain a more favorable result, the consequences can be severe:
- The plaintiff may lose the right to recover post-offer costs
- The plaintiff may be ordered to pay the defendant’s post-offer costs
- The court may require the plaintiff to pay the defendant’s expert witness fees
In some cases, an injured plaintiff can technically prevail at trial and still walk away owing money because of §998 cost shifting. That outcome surprises many people who assume “winning is winning.” Under §998, it is not.
Costs that are not automatically recoverable under CCP 998
Even after a rejected offer, CCP §998 does not make every expense recoverable.
Generally excluded are:
- Attorney’s fees, unless authorized by a separate statute or contract
- Expert witness fees incurred before the offer
- Mediation costs, unless independently authorized
- Unreasonable, excessive, or unnecessary expenses
The court maintains discretion and will scrutinize cost requests carefully.
Timing matters for cost recovery
Only costs incurred after a valid CCP §998 offer are subject to enhanced recovery or penalties. This makes timing critical. Courts also require that §998 offers be made in good faith. Offers that are unreasonably low or served before the opposing party can fairly evaluate the case may be deemed invalid. A properly timed, evidence-based offer carries far more weight than a symbolic one.
CCP §998 does not determine who is right. It determines who pays for being wrong about settlement value. Recoverable costs under §998 may include standard litigation expenses and, in certain situations, post-offer expert witness fees. A rejected offer can also eliminate cost recovery entirely or shift substantial expenses to the party who misjudged the risk. In high-stakes personal injury cases, those costs can be significant.
If you are facing a CCP §998 offer or considering making one in a personal injury case, speaking with an experienced personal injury lawyer before responding can protect you from costly mistakes. Our team reviews settlement offers with a clear focus on risk, evidence, and long-term financial impact. To discuss your situation, contact Bojat Law Group for a confidential consultation.
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