The Underused Potential of the Offer to Compromise in New York

Media Articles > Insurance Back to all articles

Dec 9, 2025

Insurance

The Underused Potential of the Offer to Compromise in New York

By: Lucosky Brookman

In litigation, settlement tools are as essential as trial strategies. One of those tools includes the Offer to Compromise, which is widely used in certain jurisdictions, most notably by plaintiffs’ counsel in states like California, Connecticut, and Massachusetts. Yet, it remains a rarity in New York. When it is used here, it is typically deployed by defendants. The underutilization of an Offer to Compromise is striking because when used thoughtfully, it can fundamentally alter the negotiation dynamic and push both sides towards a resolution.

Recently, when determining if an Offer to Compromise would be appropriate in one of our cases, we were reminded of its strategic value. After careful consideration, we concluded that making an Offer to Compromise was the right decision. That process reinforced a broader point: New York litigators should consider this tool. In the right circumstances, it can be not only appropriate but decisive.

What Is an Offer to Compromise?

An Offer to Compromise is a procedural method that allows either party, plaintiff or defendant, to make a formal written settlement proposal before trial. If the offer is rejected and the rejecting party fails to obtain a more favorable outcome at trial, the rules governing this procedure may impose financial consequences. In effect, it transforms a standard settlement proposal into a rule-driven process with real monetary implications.

When it comes to cost-shifting and fee recovery, the specifics vary by jurisdiction. In some states, the offering party may recover taxable costs, such as filing fees, deposition expenses, and expert witness fees, and in limited instances, post-offer attorneys’ fees. New York’s framework is narrower; attorneys’ fees are generally not recoverable unless a statute or contract expressly allows it. However, New York law permits the recovery of certain litigation costs and statutory interest from the date the offer was made, which can still create financial pressure and encourage a timely settlement.

Ultimately, understanding the mechanics of the Offer to Compromise allows New York practitioners to use it more confidently and strategically. Even within New York’s narrower cost-shifting rules, it can serve as a practical tool to control litigation expenses, promote fairness, and nudge parties toward resolution before trial.

How Other Jurisdictions Use Offer to Compromise

Offer to Compromise is a well-established settlement method used across multiple jurisdictions, but its frequency and strategic application vary significantly from state to state. In places like California, Connecticut, and Massachusetts, it is a familiar and frequently used tool, most often by plaintiffs’ counsel seeking to apply pressure on defendants. However, the logic is simple: accept a reasonable settlement now, or risk facing cost-shifting consequences if the verdict equals or exceeds the offer.

But in New York, the picture is very different. Offer to Compromise exists, but it’s often not used, and when it is, it’s typically employed by defendants rather than plaintiffs. This contrast raises important questions about practice and perception. Why do New York litigators hesitate to use a tool that their counterparts elsewhere have embraced? Are they overlooking a valuable strategic opportunity as a result?

Why is an Offer to Compromise Underutilized in New York

Several reasons contribute to why an Offer to Compromise remains underutilized in New York:

• Lack of awareness or familiarity, as many practitioners do not consider it part of their standard settlement toolbox.

• Perception of limited effectiveness because some assume that judges or opposing counsel will view the tactic as hollow or unlikely to shift settlement dynamics.

• In New York litigation culture, there is often a reluctance to deploy methods that appear unconventional, even when the law provides for them.

These factors combined create a self-reinforcing cycle: because Offers to Compromise are not often used, they are not often considered and therefore remain overlooked.

A Practical Example in Action

In a recent matter, our team carefully evaluated whether an Offer to Compromise would be an effective settlement method. The case involved a damages claim where the plaintiff firmly maintained a demand of $300,000, showing minimal willingness to negotiate downward despite ongoing discussions. After assessing the facts, the litigation posture, and the potential trial exposure, we elected to make a formal Offer to Compromise at $180,000.

While the case ultimately settled for $250,000, an amount higher than the offer, we believe that making the offer was a decisive turning point in the negotiations. It helped reset expectations, signaled confidence in our position, and made the plaintiff more flexible in settlement discussions. In short, even though the settlement did not land precisely at the offered amount, the Offer to Compromise served its intended purpose: it catalyzed productive dialogue and led to resolution.

Strategic Advantages and Practical Applications in New York

Despite being underutilized, the Offer to Compromise provides several meaningful advantages when deployed thoughtfully in New York litigation. It can shorten the lifespan and cost of protracted disputes, bringing parties to the table sooner and creating the right kind of pressure for resolution. By formally presenting a reasonable settlement number, counsel signals confidence in their position and forces the opposition to evaluate trial exposure more realistically.

Beyond negotiation dynamics, the method also aligns judicial goals by encouraging settlement and reducing docket congestion, something courts universally value.

That said, not every case is suited to this approach. The Offer to Compromise is particularly effective in matters with clear liability but disputed damages, or where opposing counsel has been unwilling to engage meaningfully in settlement discussions. It’s also a thoughtful consideration when the projected cost of litigation outweighs the potential benefit of trial.

Timing and precision are crucial. An offer that is carefully calibrated, neither too low to be dismissed nor so high as to seem unrealistic, can maximize impact. Likewise, introducing it at the right stage, once both sides have a more accurate sense of risk and exposure, can make it a decisive factor in achieving resolution.

Conclusion

The Offer to Compromise is not a new concept, but in New York, it is a largely untapped one. As other jurisdictions have shown, it can be an effective and efficient settlement tool, changing the trajectory of litigation and minimizing unnecessary costs.

New York practitioners should reconsider this underused mechanism and recognize it for what it is: a powerful tool that, when used strategically, can deliver meaningful results. By embracing the Offer to Compromise more frequently, litigators can sharpen their settlement strategies and better serve their clients’ interests.

Sign Up for Updates

Never miss a beat with the latest insights, stories, and news from our blog. By providing your email address, you'll receive a notification each time we publish a new blog post.

The Underused Potential of the Offer to Compromise in New York

Related Articles

Sign Up for Updates