What is an offer of judgment / demand for judgment?
Florida Statutes, §768.79, provides those who litigate personal-injury actions an interesting tool to help promote cases settling. The strategy is referred to as a demand for judgment or offer of judgment. Technically, it is the defense attorey who submits an “offer of judgment,” while the personal injury plaintiff’s counsel will submit a “demand for judgment.” But the terms refer to the same principle and are often used interchangeably (lawyers on either side will refer to it as an “OJ” for short) and it can help or hurt either plaintiff or defendant. Here’s how it works:
The defense counsel, who represents the accident-causing party/insurance company, will file an “offer of judgment” with the court, which essentially says, for example: “The defendant is willing to settle this spinal cord injury case (for example) for $100,000; this offer is good for 30 days.”
The plaintiff then has 30 days in which to accept or reject the OJ. If the plaintiff accepts, the spinal cord injury case is over and plaintiff makes a gross recovery of $100,000 (but will still have to pay the personal-injury attorney his/her costs and fees).
If the plaintiff rejects the OJ, the litigation continues. But, at the end of the trial, should the jury assigns no liability (fault) to the defendant or if the judgment obtained by the plaintiff is at least 25% less than the Offer of Judgment (i.e. if the judgment in favor of the plaintiff is $75,000 or less, per the example OJ of $100,000 given above), then the defendant will be entitled to have its reasonable costs and attorney’s fees reimbursed by the plaintiff (the client!).
On the other hand, if the plaintiff’s attorney files a demand for judgment of $100,000, and the defendant does not accept the demand for judgment within 30 days, the case will similarly continue. But, at the end of the trial, if the plaintiff obtains a judgment at least 25% greater than the filed amount, then then plaintiff will be able to recover its attorney’s reasonable costs and fees from the defendant (i.e. the client would walk away with about $100,000, because it would not have to pay its attorney’s costs and fees).
This strategy puts pressure and encourages the parties to settle for an amount close to the case’s true value.
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