Under an "offer-of-settlement" rule, a party to a lawsuit may make a special offer to settle with the other party, such that if the other party rejects this offer, then this offer becomes part of the record in the case and may affect the allocation of litigation costs. Specifically, if the...

When plaintiffs cannot predict the outcome of litigation with certainty, neither the American rule (each litigant bears its own litigation expenses) nor the British rule (the losing litigant pays the attorneys' fees of the winning litigant) would induce optimal decisions to bring suit....