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California Courts of Appeal,
Alternative Dispute Resolution

May 19, 2023

Settlements must now address Section 998 costs and fees

This is likely not the final word on cost-shifting of 998 costs and expert fees. Given the clear divide among the appellate justices, there is a reasonable chance the matter will be appealed to the state Supreme Court or that the legislature will take the opportunity to redraft the law to clarify the meaning of “judgment.”

Parties aiming to settle their disputes outside the courtroom are always advised to tie up all loose ends. If they fail to do so, they could find themselves paying unexpected expert fees and costs. This basic rule of thumb was highlighted in a recent case regarding the effect of 998 offers to compromise on settlement agreements.

It happened in a lemon law dispute. A divided three-judge panel of the California Court of Appeals for the Thir...

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