The New Jersey offer of judgment rule (New Jersey Court Rule 4:58) is a powerful tool that can incentivize litigants to resolve civil cases before trial. If successful, it saves both sides from expending further time, litigation costs, and attorneys’ fees. Additionally, it can compel plaintiffs to take a hard look at the value of their case or for defendants, the amount of exposure they could potentially face.
How Does the New Jersey Offer of Judgement Rule Work?
Under R.4:58, a party can serve on her adversary an offer of judgment anytime prior to 20 days before the first trial date. If the offer is not accepted within 10 days of the trial date or 90 days of service, it is deemed rejected.
If the offering party is the plaintiff, and the defense attorney rejects the offer, the plaintiff may recover the attorneys’ fees, costs, and interest if she later gets an award of 120% or more of her offer.
Conversely, if the defendant’s offer of judgment is rejected, and the jury awards 80% or less of the defendant’s earlier offer, then the defense can seek attorney’s fees, costs, and interest from the plaintiff.
Certainly, the potential for an award of attorneys’ fees and costs makes parties to a suit think long and hard about rejecting a reasonable offer of judgment from the other side.
Can Litigants Use an Offer of Judgement in Any Type of Case?
R.4:58 specifically states that parties cannot use offers of judgment in matrimonial cases. Additionally, the Rule states that it can only be used where a party is seeking only monetary damages.
In Casino Reinvestment Dev. Authority v. Marks, 332 N.J. Super. 509 (App. Div.), certif. denied 165 N.J. 607 (2000), the Appellate Division held that parties could not use the Rule in condemnation cases. In another (City of Atl. City v. Boardwalk Regency Corp., 20 N.J. Tax 21, (2002)), the court ruled litigants could not use it in tax court matters.
Employment and Civil Rights Cases
In addition, in 2006 the New Jersey Supreme Court amended the rule regarding fee-shifting in employment rights and civil rights cases.
The Court determined in these types of cases fee-shifting is not available to a defendant employer who files an otherwise successful offer of judgment. Therefore, R. 4:58 (c) (4) prohibits courts from awarding attorneys’ fees and costs to defendant employers in cases involving laws such as the New Jersey’s Conscientious Employee Act (CEPA) and the Law Against Discrimination (LAD).
In the Court’s view, making the plaintiff pay the employer’s court costs and fees is contrary to the public interest purpose of laws like CEPA and LAD.
This does not mean that defendant employers should be reluctant to make offers of judgment in appropriate cases. In Best v. C&M Door Controls, Inc., 200 N.J. 348 (2009), the Court confirmed that an employer in a New Jersey Prevailing Wage Act (PWA) case could not seek payment of attorneys’ fees and interest when the employer successfully used an offer of judgment (the plaintiff got an award, but the award was less than 80% of the defendant employer’s offer of judgment). Under the PWA, the plaintiff could still seek costs from the defendant.
However, the Court noted that if the plaintiff’s rejection of the defendant’s offer of judgment was unreasonable, the trial court could take that into account in deciding whether to award the plaintiff’s attorneys’ fees and costs and the amount of that award under the PWA.
Experienced New Jersey Civil Trial Attorneys Can Use an Offer of Judgement to Great Success
The attorney team at Schiller, Pittenger & Galvin, P.C., has had outstanding success with offers of judgment over the years. We have experience with them both as plaintiff and defense counsel. In the appropriate case, we sit down with clients and discuss the benefits (or perils) of using an offer of judgment. We also counsel clients on how to respond if an adversary files an offer of judgment.
If you have a personal injury, estate, real estate or business-related matter for which you think you need legal help, contact the experienced litigators at Schiller, Pittenger & Galvin, P.C. at 908-490-0444 in their Scotch Plains office or email them here.