Offer of Judgment Rule: A One-Way Street

Insurance companies try at every turn to discourage injury victims from seeking justice. In Arkansas, one example of this is found in Rule 68 of the Arkansas Rules of Civil Procedure. Rule 68 allows a defendant's lawyer (who is usually hired by an insurance company) to make an offer of judgment to the injury victim. If the injury victim accepts, the case is over. If the offer is refused, and a jury doesn't award more than the offer, then the injury victim must pay the insurance company's costs.

The stated purpose of Rule 68 is to encourage settlement and discourage frivolous lawsuits. Both of these goals are reasonable, and the rule is a reasonable way to accomplish those goals. However, the rule could be better. Right now, it only allows defendants to make offers of judgment, but not injury victims themselves. While the rule as it stands may discourage frivolous claims, it does nothing to discourage frivolous defenses.

Several states have laws that make an offer of judgment a two-way street. Those rules more fairly meet their stated goals than the current Rule 68 in Arkansas, and we believe the Arkansas Supreme Court should follow those other states and adopt a rule that allows both sides to make offers of judgment.