How are Expert Fees Paid in a § 998 Offer in California?

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A law firm brought suit against a client to recover unpaid legal fees and costs. The client eventually served the law firm with an offer to compromise pursuant to California Code of Civil Procedure § 998. The Client offered a waiver of its recovery of costs in exchange for the law firm’s dismissal of all claims against the client. Law Firm didn’t accept the offer, but more than a year later it dismissed its complaint against Client without prejudice. Because Law Firm didn’t accept the § 998 offer, Client obtained an award of expert witness fees pursuant to § 998(c). 

In California, the “prevailing party” in litigation is usually allowed to recover its costs pursuant to § 1032; however, under California Code of Civil Procedure § 998, a party can make an offer to compromise. This will reverse the parties’ entitlement to costs after the date of the offer, depending on the outcome of the litigation.  

Client moved for an award of $21,000 in expert witness fees pursuant to § 998. Law Firm opposed the motion, arguing Client had made a “token” § 998 offer with no reasonable prospect of acceptance. The trial court granted Client‘s motion for expert fees. 

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