In federal court—under Rule 68 of the Federal Rules of Civil Procedure—and in many states, there is an offer of judgment or offer of settlement procedure in which a party defending against a claim (defendant) may make an offer of judgment, or either party may make an offer of settlement.

If the party that receives the offer rejects it and does not win a better result at trial, the party who rejected the offer may be required to pay the offering party’s attorney fees and costs incurred after the offer was made.

An offer of judgment is an offer to allow a judgment to be taken against the party offering the judgment. An offer of judgment admits to liability and damages for a specific amount. An offer of settlement is similar but is in the form of an agreement or contract for settlement rather than a judgment from the court for the offered amount.

Laws vary from state to state and a state’s offer of judgment or offer of settlement procedure is usually located in its rules of civil procedure of code of civil procedure (statutes).

In Missouri, the offer of judgment or offer of settlement procedure is governed by Missouri Revised Statutes and the Missouri Rules of Civil Procedure. Under Rule 68 of the Federal Rules of Civil Procedure, which also applies in federal courts in Missouri, a defendant can make an offer of judgment, and either party can make an offer of settlement. If the offeree rejects the offer and fails to obtain a more favorable judgment, they may be required to pay the offeror's post-offer attorney fees and costs. Missouri's specific rules regarding offers of judgment or settlement may have unique provisions and should be consulted for state-level civil proceedings. It is important for parties involved in litigation to understand these rules, as they can have significant implications for the costs associated with a case. An attorney can provide guidance on the strategic use of these offers in the context of Missouri law.