Playing With House Money: A Guide to Navigating New Jersey’s Amended Offer of Judgment Rule

Let’s face it:  New Jersey’s Offer of Judgment Rule 4:58 can be a bit convoluted, even after its September 2022 amendment.  So, let’s break down the instructions of this litigation “game” and consequences of non-acceptance step-by-step.

NUMBER OF PLAYERS:

• If an offer is made by a single plaintiff to a single defendant:
  • If judgment is 120% of the offer or more, the plaintiff is entitled to costs of suit, reasonable litigation expenses following non-acceptance, reasonable attorney’s fees incurred after non-acceptance, and prejudgment interest of 8% from the offer date or discovery end date, whichever is later.
• If an offer is made by a single plaintiff to multiple defendants:
  • If no-counteroffer is made and judgment is 120% or more of the global offer, fees and costs are recoverable on a joint and several basis (each defendant is responsible for the entire amount).
  • If a global counteroffer is made and judgment is 120% or more of the global offer, each defendant is only responsible for the portion of fees and costs equal to the percentage of liability adjudicated.
  • If a global counteroffer is made and judgment is 80% or less of the counteroffer, the plaintiff is responsible for the pro rata amount of fees and expenses to each defendant in accordance to that defendant’s proportionate share of the offer.
  • If a defendant makes an individual counteroffer and judgment is 120% or more of the offer, the defendant’s fees and costs are limited to the defendant’s percentage of liability while the non-responsive defendants are jointly and severally responsible for the balance.
  • If a defendant makes an individual counteroffer and judgment is 80% or less of the offer, no assessment is made against the defendant, while the remaining non-responsive defendants remain jointly and severally responsible.
• If an offer is made by multiple plaintiffs:
  • If one or more of the plaintiffs’ claims are derivative of another plaintiff’s (such as for loss of consortium), a single, unallocated offer can be made.
  • If there are multiple plaintiffs and no causes of action are derivative, each plaintiff may file and serve an individual offer.
• If an offer is made by a defendant(s):
  • If judgment is 80% of the offer or less, the offeror is entitled to attorney’s fees and litigation expenses incurred, equivalent to as detailed above for a plaintiff.

TIME LIMITS:

• An offer of judgment must be accepted within ninety (90) days of service or the tenth day before the actual trial date, whichever period comes first. Otherwise, it is deemed withdrawn/rejected. 
• An offer must be made at least twenty (20) days before the actual trial date.
• An application for fees and costs has to be filed within twenty (20) days after entry of final judgment.

TRY AGAIN:

• A subsequent offer by the same party results in withdrawal of all previous offers made by a party; however, if a counter-offer is made by an adverse party before withdrawal, the offer remains open until accepted or withdrawn, as discussed below.
• If a matter is being retried, the offeror may, within ten (10) days after the fixing of the first date for retrial, serve the actual notice on the offeree that the offer of judgment is renewed, such that the renewed offer is effective as of the date of the original offer.
• If the offeror does not renew the original offer at the time of retrial, a new offer may be made, effective on the date made.

DO NOT PASS GO, DO NOT COLLECT $200.00:

• Acceptance and payment of an offer does not constitute a judgment against the offeree.
• A party who is awarded fees and costs pursuant to a fee-shifting statute, rule of court, contractual provision, or decisional law cannot recover duplicative fees and costs.
• If a claim is dismissed, a no-cause verdict is returned, nominal damages are awarded, shifting of fees would conflict with a fee-shifting stature or rule of Court, fee allowance would impose an undue hardship, and/or fee reimbursement would result in unfairness to the offeree, the Rule does not apply and the burden falls upon the offeree to establish undue hardship or unfairness.

TAKE BACKS:

• The modified Rule now permits an offeror to revoke any offer by serving the offeree and filing a notice of withdrawal with the Court prior to service or filing of acceptance by a party. In turn, any such voluntary withdrawal is not subject to the below consequences of Rule 4:58.

A GAME OF CHANCE:

Revised Rule 4:58 incentivizes defendants in multi-defendant cases to least make an individual counteroffer, so as to avoid paying the penalty of fees and costs on a joint and several basis in the event that plaintiff obtains a favorable outcome.  Therefore, defendants who are presented with an offer should strongly consider playing the Offer of Judgment “game” to both facilitate resolution and mitigate the penalties created by non-acceptance.