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Georgia Offer of Settlement Law: Fee Shifting Rules

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Once a Georgia injury lawsuit is filed, either side can make a formal “offer of settlement” under O.C.G.A. § 9-11-68. If the other side rejects it and then does much worse at trial, they may have to pay the offering party’s attorney fees. This is called “fee shifting.” It raises the stakes for turning down a fair offer.

What the Law Says

O.C.G.A. § 9-11-68, Written offers to settle tort claims; attorney’s fees and expenses, states in part:

(a) At any time more than 30 days after the service of a summons and complaint on a party but not less than 30 days (or 20 days if it is a counteroffer) before trial, either party may serve upon the other party, but shall not file with the court, a written offer, denominated as an offer under this Code section, to settle a tort claim for the money specified in the offer and to enter into an agreement dismissing the claim or to allow judgment to be entered accordingly.

(b)(1) If a defendant makes an offer of settlement which is rejected by the plaintiff, the defendant shall be entitled to recover reasonable attorney’s fees and expenses of litigation incurred by the defendant or on the defendant’s behalf from the date of the rejection of the offer of settlement through the entry of judgment if the final judgment is one of no liability or the final judgment obtained by the plaintiff is less than 75 percent of such offer of settlement.

(2) If a plaintiff makes an offer of settlement which is rejected by the defendant and the plaintiff recovers a final judgment in an amount greater than 125 percent of such offer of settlement, the plaintiff shall be entitled to recover reasonable attorney’s fees and expenses of litigation incurred by the plaintiff or on the plaintiff’s behalf from the date of the rejection of the offer of settlement through the entry of judgment.

(c) Any offer made under this Code section shall remain open for 30 days unless sooner withdrawn by a writing served on the offeree prior to acceptance by the offeree, but an offeror shall not be entitled to attorney’s fees and costs under subsection (b) of this Code section to the extent an offer is not open for at least 30 days (unless it is rejected during that 30 day period). A counteroffer shall be deemed a rejection but may serve as an offer under this Code section if it is specifically denominated as an offer under this Code section. Acceptance or rejection of the offer by the offeree must be in writing and served upon the offeror. An offer that is neither withdrawn nor accepted within 30 days shall be deemed rejected. The fact that an offer is made but not accepted does not preclude a subsequent offer. Evidence of an offer is not admissible except in proceedings to enforce a settlement or to determine reasonable attorney’s fees and costs under this Code section.

You can read the full statute on the Georgia General Assembly’s official code site.

In Plain English

In most American lawsuits, each side pays its own lawyer, win or lose. This statute is an exception. It lets one side make a formal offer that puts the other side at risk of paying fees.

The offer must follow strict rules. It can only be made after a lawsuit is filed, at least 30 days after the complaint is served. It must be made at least 30 days before trial, or 20 days for a counteroffer. It must be in writing. It must say it is made under this Code section. Under subsection (a), it must also list the parties, describe the claims, state any conditions, state the total amount, address punitive damages, and say whether fees are included. It must be served by certified mail or statutory overnight delivery. It is served on the other side, not filed with the court.

Under subsection (c), the offer stays open for 30 days. If it is not accepted in that time, it is treated as rejected. A counteroffer counts as a rejection. Rejecting an offer does not stop anyone from making another one later.

Here is where fee shifting kicks in. If the defendant makes an offer and the plaintiff rejects it, there are two ways the plaintiff can end up paying. First, if the plaintiff loses at trial. Second, if the plaintiff wins less than 75 percent of the offer. In either case, the defendant can recover its attorney fees and costs from the date of rejection through judgment.

If the plaintiff makes the offer and the defendant rejects it, the test is 125 percent. If the plaintiff wins more than 125 percent of the offer, the defendant pays the plaintiff’s fees and costs from the date of rejection.

Under subsection (d), the court can refuse to award fees if it finds the offer was not made in good faith. For example, an offer of $1 in a serious case may not count. If the losing side appeals, fees are only awarded after the appeals court affirms the judgment.

The statute applies to “tort claims.” That includes car wrecks, slip and falls, and other injury cases. It does not apply to contract disputes. An offer under this statute is different from a pre-suit demand letter. Pre-suit demands in car crash cases follow a separate law, O.C.G.A. § 9-11-67.1.

Example

Angela sued a grocery store after she slipped on a spill in Marietta. She sought $200,000. Six months into the case, the store served an offer of settlement for $80,000 under this statute. Angela rejected it.

At trial, the jury found the store liable but awarded Angela only $50,000. That is less than 75 percent of the $80,000 offer, which would be $60,000. The store can now ask the court for its attorney fees and costs from the date Angela rejected the offer. Suppose those fees total $45,000. Angela’s net recovery could drop to $5,000.

Now flip it. Suppose Angela had served an offer for $80,000 and the store rejected it. If the jury awarded her $110,000, that is more than 125 percent of $80,000, which is $100,000. The store would owe Angela’s attorney fees on top of the verdict.

This is why lawyers on both sides think hard before rejecting an offer under this statute.

Key Points to Remember

  • Either side can make a formal offer of settlement after a tort lawsuit is filed.
  • The offer must be in writing, cite this statute, meet eight content rules, and be served by certified mail or statutory overnight delivery.
  • The offer stays open for 30 days. Silence counts as rejection.
  • If the plaintiff rejects a defense offer and wins nothing or less than 75 percent of it, the plaintiff may owe the defendant’s fees.
  • If the defendant rejects a plaintiff’s offer and the plaintiff wins more than 125 percent of it, the defendant may owe the plaintiff’s fees.
  • Fees run only from the date of rejection through judgment.
  • A court can deny fees if the offer was not made in good faith.

Related Georgia Laws

Official Sources

This page is general legal information, not legal advice. Laws change and every case is different. Talk to a licensed Georgia attorney about your situation.