What is a "formal offer of judgment" used for in civil litigation?

A "formal offer of judgment" is primarily used to encourage the settlement of a dispute before the case proceeds to trial. This legal tool allows a party to propose a specific monetary amount or other terms to the opposing party, with the intention of resolving the conflict without the need for prolonged litigation. If the offeree rejects the offer and subsequently fails to obtain a more favorable outcome at trial, they may face penalties such as having to pay costs incurred after the offer was made.

This mechanism is designed to promote negotiation and compromise, as it provides a structured way for parties to consider settling their disputes. In the context of civil litigation, this offer acts as an incentive for both sides to weigh the benefits of settlement against the risks and uncertainties associated with going to trial.

Other choices, such as initiating a trial, filing an appeal, or requesting class action certification, do not align with the purpose of a formal offer of judgment. Each of those actions serves different objectives within the litigation process, but none focus on settlement before trial like a formal offer of judgment does.