July 09, 2013 Articles

Employer Botches Offer of Judgment

Inartful drafting required an employer to pay the plaintiff's attorney fees, too

By Michael R. Lied

Federal Rule of Civil Procedure 68 allows for a defending party to make an "offer of judgment" to an opposing party as one tool in alternative dispute resolution. Rule 68 works to encourage private settlement agreements by increasing the overall costs on a party who rejects an offer of judgment but later obtains a judgment that is less favorable that what was previously offered. See Fed. R. Civ. P. 68(d). But what about attorney fees? Are these considered part of the "costs" under Rule 68?  A recent opinion by the Seventh Circuit answers this question in the affirmative and concludes that where a fee-shifting statute is involved, an offer of judgment must be sure that attorneys’ fees are included in the calculation.

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