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 Nevada, the offer of judgment rule is governed by Nevada Rules of Civil Procedure (NRCP) Rule 68, which mirrors the federal Rule 68 to some extent. Under this rule, a defendant can make a formal offer to settle the claim for a specified sum. If the plaintiff rejects the offer and fails to obtain a more favorable judgment at trial, the plaintiff may be required to pay the defendant's post-offer costs and attorney fees. This rule is designed to encourage settlement and avoid unnecessary litigation by penalizing a party who refuses a reasonable offer and then fares worse at trial. It's important to note that the specifics of how Rule 68 is applied can vary, and there may be exceptions and specific requirements regarding the timing and content of the offer, as well as the calculation of costs and fees. An attorney can provide detailed guidance on how Rule 68 would apply to a particular case in Nevada.