Thursday, June 17, 2010

Statutory Offer of Settlement (Litigation Checklist)

This statutory offer of settlement checklist and list of best practices is part of my Colorado Litigation Checklist approach to litigation knowledge management and litigation strategy.  The statutory offer of settlement, a tort reform measure passed in Colorado, is governed by C.R.S. Section 13-17-202.  It is very similar to the offer of judgment procedure governed in federal court by F.R.C.P. 68.  If an offer of settlement is rejected and the rejecting plaintiff ultimately recovers less than the offer of settlement, then the defendant can recover costs (but not attorneys' fees) incurred after the offer was made.
- Offers of settlement may be served by either the plaintiff or defendant, but must be served more than 14 days before the start of trial (or before the start of a hearing on damages if that issue is reserved for after trial on the issue of liability).
- State that, unless accepted, this offer constitutes a confidential communication made in the context of settlement negotiations pursuant to either C.R.E. 408 or F.R.E. 408.  Making confidentiality a condition of acceptance may invalidate the statutory nature of the offer.  Martin v. Minnard, 862 P.2d 1014 (Colo. App. 1993).
- State terms of offer of settlement:  [offeror] offers to settle this lawsuit on the following terms in exchange for a dismissal with prejudice of all claims asserted by plaintiff against defendant:  [payment amount and/or other terms].
- Do not include non-monetary terms in the offer.  URS Group, Inc. v. Tetra Tech FW, Inc., 181 P.3d 380 (Colo. App. 2008).  Non-monetary terms include the requirement that a party release "all future claims related to the subject of the litigation."  Id.
- Make sure the terms of the offer are unambiguous.
- State that this offer of settlement will be deemed rejected if not accepted within 14 days after service of the offer.
Thoughts & Best Practices:
- Calendar key times to reconsider making an offer of settlement, e.g. immediately upon answering a claim, before hiring experts or other significant recoverable costs, before filing a dispositive motion, etc.
- Be clear which claims, and which parties, are covered by the offer of settlement (e.g. "offers to settle all claims by plaintiff X against defendant Y").
- Offers of settlement can be withdrawn during the 14 day statutory period by service of a written withdrawal of offer.  C.R.S. Section 13-17-202(1)(a)(V).  Be prepared to withdraw an offer quickly when applicable (e.g. after grant of partial motion for summary judgment in your favor, etc.).
Jeff Vail is a business litigation attorney in Denver, Colorado.  Visit for more information.
This statutory offer of settlement checklist and list of best practices is part of my Colorado Litigation Checklist approach to litigation knowledge management and litigation strategy.

No comments: