New Jersey’s Offer of Judgment Rule (R. 4:58) was “designed to produce early out-of-court settlements.” Crudup v. Marrero, 57 N.J. 353, 361 (1971). To achieve that laudable goal, if a plaintiff makes an Offer of Judgment, which is not accepted and the plaintiff thereafter obtains a money judgment in an amount that is 120 percent or more than the offer, the plaintiff “shall be allowed” to recover: (1) reasonable litigation expenses following non-acceptance, (2) prejudgment interest of 8 percent from the date of the offer or date of completion of discovery, whichever is later, and (3) a reasonable attorney’s fee for services compelled by the non-acceptance. Similarly, the rule affords defendants allowances should the plaintiff fail to accept a defense Offer of Judgment, and the money judgment is 80 percent or less than the defendant’s offer. While the plain language is rather straightforward, in practice, lawyers and judges have wrestled with the application of the rule in cases involving multiple defendants.

Of course, one could envision a number of scenarios wherein the difficulties of applying the Offer of Judgment can arise in multi-defendant actions. Defendants in multi-defendant actions may file answers at differing times. If an early Offer of Judgment is made by the plaintiff, what should the consequence be on a defendant joined near the end or after the expiration of the Offer of Judgment period? Moreover, how are the allowances of the rule appropriately attributed to each defendant if they have varying degrees of fault, if some but not all respond to the offer? How, if at all, is the Offer of Judgment and the rule’s allowances as to a non-settling defendant impacted by the settlement of some defendants during the offer period?