SENATE BILL REPORT

SB 6015

BYSenator Talmadge

Revising provisions on offers of settlement.

Senate Committee on Judiciary

Senate Hearing Date(s):March 4, 1987

Senate Staff:Dick Armstrong (786-7460)

AS OF MARCH 2, 1987

BACKGROUND:

An "offer of settlement" statute is a mechanism to encourage the parties to a lawsuit to reach a settlement and avoid a lengthy and costly trial. Offer of settlement statutes provide that the prevailing party who has made an offer of settlement is entitled to payment of attorney's fees incurred subsequent to the offer.

The existing offer of settlement statute only applies to cases where the amount pleaded is $10,000 or less.

SUMMARY:

The "offer of settlement" statute is expanded to cover all cases, regardless of the dollar amount of the damages.  The prevailing party is to be awarded statutory costs, reasonable attorney's fees, and interest incurred subsequent to the offer of settlement.  Payment may be excused or modified only under certain specified circumstances.

The defendant is the prevailing party when the judgment obtained by the plaintiff is at least 25 percent less than the offer made by the defendant.  The plaintiff is the prevailing party when the judgment obtained by the plaintiff is at least 25 percent greater than the offer made by the plaintiff.

The judgment for attorneys' fees and costs can not become a lien against the primary residence of the nonprevailing party.

Judgment does not include awards in dissolution actions, underinsured vehicle coverage, and arbitration.

Fiscal Note:      none requested