AN ACT Relating to offers of settlement; amending RCW 4.84.030 and 12.20.060; adding new sections to chapter 4.84 RCW; creating a new section; and repealing RCW 4.84.250, 4.84.260, 4.84.270, 4.84.280, 4.84.290, and 4.84.300.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Sections 368 and 369, page 201, Laws of 1854 as last amended by section 1, page 337, Laws of 1890 and RCW 4.84.030 are each amended to read as follows:

In any action in the superior court of Washington, the prevailing party shall be entitled to his costs and disbursements((~~; but the plaintiff shall in no case be entitled to costs taxed as attorneys' fees in actions within the jurisdiction of a justice of the peace when commenced in the superior court~~)).

Sec. 2. Section 85, page 237, Laws of 1854 as last amended by section 2, chapter 240, Laws of 1985 and RCW 12.20.060 are each amended to read as follows:

When the prevailing party in district court is entitled to recover costs as authorized in RCW 4.84.010 in a civil action, the judge shall add the amount thereof to the judgment; in case of failure of the plaintiff to recover or of dismissal of the action, the judge shall enter up a judgment in favor of the defendant for the amount of his costs((; and in case any party so entitled to costs is represented in the action by an attorney, the judge shall include attorney's fees of fifty dollars as part of the costs: PROVIDED, HOWEVER, That the plaintiff shall not be entitled to such attorney fee unless he obtains, exclusive of costs, a judgment in the sum of twenty-five dollars or more)).

NEW SECTION. Sec. 3. A new section is added to chapter 4.84 RCW to read as follows:

(1) In any civil cause of action, if a defendant serves on the plaintiff a written offer of settlement which is rejected or which is not accepted by the plaintiff within thirty days and the judgment obtained by the plaintiff is at least twenty-five percent less than this offer, the defendant shall be entitled to recover statutory costs and reasonable attorneys' fees, including interest thereon, incurred from the date of service of the offer and the court shall set off such costs and attorneys' fees against the judgment. If the costs and attorneys' fees total more than the judgment, the court shall enter judgment for the defendant against the plaintiff for the amount of the costs and fees, less the amount of the plaintiff's award.

(2) In any civil cause of action, if a plaintiff serves on the defendant a written offer of settlement which is rejected or which is not accepted by the defendant within thirty days and the plaintiff recovers a judgment in an amount at least twenty-five percent greater than the offer, the plaintiff shall be entitled to recover statutory costs, interest on the judgment from the date of service of process, and reasonable attorneys' fees incurred from the date of the service of the offer and the court shall enter judgment for the plaintiff against the defendant for the amount of the costs, interest, and fees so awarded.

(3) Service of an offer of settlement shall be made in the manner provided by superior court Civil Rule 5.

(4) An offer shall not be filed with the court or be made known in any way to the trier of fact until the judgment is presented to the court.

(5) Unless otherwise agreed to by the parties, any offer made pursuant to this section shall not be made prior to ninety days after filing of the suit, nor later than sixty days prior to the scheduled trial date, and shall not be accepted later than thirty days before the scheduled trial date.

(6) The payment of attorneys' fees and statutory costs under this section shall not be excused or modified unless the court finds that one or more of the following factors so require:

(a) The closeness of questions of fact and law at issue;

(b) Whether the cause of action was in the nature of a test case, presenting questions of far-reaching importance affecting nonparties; or

If payment is excused or modified, the court shall enter written findings setting forth in detail the basis for the decision to excuse payment.

(7) Interest shall accrue on any award under this section at the rate of interest for judgments under RCW 4.56.110 or 4.56.115.

(8) An attorney shall not receive as compensation any portion of the interest awarded pursuant to this section.

(9) In no event may any judgment for attorneys' fees and costs entered pursuant to this section for the rejection or failure to accept an offer become a lien against or in any manner enforceable against the primary residence of the party to whom the offer was directed or against any other property otherwise exempt by law.

NEW SECTION. Sec. 4. A new section is added to chapter 4.84 RCW to read as follows:

(1) For purposes of section 3 of this act, "judgment" does not include awards rendered in proceedings pursuant to chapters 26.09, 48.22, and 7.06 RCW and Mandatory Arbitration Rule 1.1 et seq.

(2) For purposes of calculating the twenty-five percent margin under section 3 of this act, "judgment" shall be the sum of all damages found and interest awarded, less all set-offs allowed on affirmative defenses and counterclaims, except for the set-off contemplated in section 3(1) of this act, all as calculated before any statutorily required limitation on damages, periodic payment adjustments, or cost award.

(3) In the event of a partial settlement involving some, but not all defendants, the sum paid in settlement by each defendant shall be deemed to be allocated between that defendant's total contribution to the plaintiff's ultimate damages found and interest awarded, and to the plaintiff's statutory costs and attorneys' fees incurred to date of that partial settlement.

(4) All amounts awarded for statutory costs and attorneys' fees under section 3 of this act shall be payable in a lump sum and shall not be subject to periodic payment.

(5) If a party is entitled to statutory costs and attorneys' fees pursuant to section 3 of this act, that party's attorney shall file and serve on all parties an affidavit setting forth with reasonable specificity the nature and amount of legal services rendered and costs incurred since the date the offer of settlement was served, in addition to a cost bill required by RCW 4.84.090.

NEW SECTION. Sec. 5. The following acts or parts of acts are each repealed:

(1) Section 1, chapter 84, Laws of 1973, section 1, chapter 94, Laws of 1980, section 88, chapter 258, Laws of 1984 and RCW 4.84.250;

(2) Section 2, chapter 84, Laws of 1973 and RCW 4.84.260;

(3) Section 3, chapter 84, Laws of 1973, section 2, chapter 94, Laws of 1980 and RCW 4.84.270;

(4) Section 4, chapter 84, Laws of 1973, section 3, chapter 94, Laws of 1980, section 1, chapter 282, Laws of 1983 and RCW 4.84.280;

(5) Section 5, chapter 84, Laws of 1973 and RCW 4.84.290; and

(6) Section 6, chapter 84, Laws of 1973, section 4, chapter 94, Laws of 1980 and RCW 4.84.300.

NEW SECTION. Sec. 6. This act applies to offers of settlement made after the effective date of this section.

NEW SECTION. Sec. 7. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is likewise invalid.