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Publication Date

2010

Abstract

In the United States' health-care-conscious climate of the past few years, tort reform has been a popular topic for state and federal legislators. Two reform devices that most states have adopted are offer-of-judgment and offer-of-settlement rules. Modeled after Federal Rule of Civil Procedure 68, these rules enable parties to issue offers either entitling or subjecting the parties to penalties ranging from the less impressive costs of litigation to severe awards of attorney's fees and interest on the judgment. These rules were enacted to curb litigation and to reduce the strain such litigation places on state budgets. Some states set out to fix the major deficiencies of Rule 68; unfortunately, these rules may be too effective, causing problems of their own. This Note examines the state rules that impose greater sanctions than the costs allowed under Rule 68, particularly those that allow recovery of attorney's fees. While many variations of these rules exist, some states have adopted rules that allow recovery of these more exacting sanctions. Although these rules almost categorically survive state constitutional challenges, they encourage hard bargaining by large, institutional defendants and create a scheme that is unlikely to produce informed, effective offers. As a result, settlements achieved under these rules may not accurately reflect the merits of the cases. An offer-of-settlement rule that combines the bite of existing state rules with a more transparent recovery scheme based on the amount a plaintiff seeks to recover would serve as a more effective, and hopefully fairer, alternative to the current rules.

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