Rule 68 offers of judgment: 14 days to accept, and what happens if you refuse and win less

Rule 68 is four subdivisions long and creates one of the sharpest cost consequences in federal practice. It is also asymmetric in a way that catches people out: only a party defending against a claim can use it.

Making an offer

Rule 68(a):

At least 14 days before the date set for trial, a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued. If, within 14 days after being served, the opposing party serves written notice accepting the offer, either party may then file the offer and notice of acceptance, plus proof of service. The clerk must then enter judgment.

Five mechanics sit in that paragraph.

Only a defending party may offer. A plaintiff cannot make a Rule 68 offer against a defendant. The rule is one-directional.

At least 14 days before trial. An offer served inside that window doesn't comply.

14 days to accept, running from service.

"With the costs then accrued." An offer is deemed to include costs accrued to that point. This is the provision that makes drafting matter — an offer silent on costs is not an offer excluding them.

Acceptance is self-executing. On filing the offer, the acceptance and proof of service, "the clerk must then enter judgment." No motion, no judicial discretion, no opportunity to reconsider.

Refusing one

Rule 68(b):

An unaccepted offer is considered withdrawn, but it does not preclude a later offer. Evidence of an unaccepted offer is not admissible except in a proceeding to determine costs.

Two consequences. An offer left unaccepted for 14 days is gone — it cannot be accepted late. And it stays out of evidence entirely except when costs are being decided, so a jury never learns of it.

Successive offers are permitted, which is why a defendant's Rule 68 exposure can be built up in stages.

The cost consequence

Rule 68(d):

If the judgment that the offeree finally obtains is not more favorable than the unaccepted offer, the offeree must pay the costs incurred after the offer was made.

The verb is must. Where the rule applies, the shift is mandatory, not discretionary.

Three points about its scope:

"Not more favorable" includes a tie. Winning exactly the offered amount triggers the rule.

It only bites where the plaintiff wins something. By its terms Rule 68(d) applies to "the judgment that the offeree finally obtains." A plaintiff who takes nothing at all has obtained no judgment, and the ordinary costs rules in Rule 54(d) apply instead.

"Costs" is narrower than "expenses." What counts as costs is defined by 28 U.S.C. § 1920 and by the statute underlying the claim. Whether attorney's fees are included depends on whether the substantive statute defines fees as part of costs — which is why Rule 68's practical weight varies enormously between claim types. That question is decided by case law and by the fee statute at issue, not by Rule 68 itself.

Offers after liability is decided

Rule 68(c) covers bifurcated cases:

When one party's liability to another has been determined but the extent of liability remains to be determined by further proceedings, the party held liable may make an offer of judgment. It must be served within a reasonable time — but at least 14 days — before the date set for a hearing to determine the extent of liability.

Losing on liability doesn't take Rule 68 away; it moves the deadline to the damages hearing.

Why the timing is unforgiving

Rule 68 has no provision for extending either period, and Rule 6(b)'s general extension power does not obviously reach a period that runs between parties rather than for filing with the court. An offeree who wants more time is negotiating, not applying.

Fourteen days is also short relative to the decision being made, which is the point. The rule is designed to force an early, concrete valuation of the case.

What it does not do

• It does not end the case unless accepted.
• It does not cap the plaintiff's recovery.
• It does not shift costs incurred before the offer.
• It does not apply to a plaintiff's offer, or to a defendant who prevails outright.

The state analogues are broader

Several states have offer-of-judgment provisions that go further than Rule 68, and the differences matter if you practise in both systems.

Texas — Rule 167 requires a defendant to file a declaration invoking the rule before any offer may be made, no later than 45 days before trial. It permits offers by either side, defines "significantly less favorable" numerically — a claimant-offeree's judgment below 80% of the offer, or a defendant-offeree's above 120% — and expressly includes reasonable attorney fees and up to two expert witnesses within recoverable "litigation costs," subject to caps.

California — CCP 998 likewise allows offers from either side and can shift expert witness fees.

Rule 68's federal version is the narrowest of the three: one direction, costs only, and no percentage threshold.

The sequence

1. Confirm you are a defending party. Rule 68 is not available to a claimant.
2. Calendar 14 days before trial as the last day to serve an offer.
3. Draft with costs in mind — the offer is "with the costs then accrued" whether or not you say so.
4. On receipt, calendar 14 days. Silence is refusal, and the offer cannot be revived.
5. If refused, keep it. It is inadmissible except in a costs proceeding — where it becomes the benchmark the final judgment is measured against.

Where these rules live

• Rule 6 — Computing and Extending Time
• Rule 54 — Judgment; Costs
• Rule 56 — Summary Judgment
• Rule 68 — Offer of Judgment
• Tex. R. Civ. P. 167 — Offer of Settlement
• CCP 998 — Offer to Compromise

This page explains what the rules say. It isn't legal advice, and whether attorney's fees count as "costs" under Rule 68 for a particular claim is a question worth advice.