Code of Civil Procedure section 998 creates an incentive for settlement. It authorizes an award of costs to a party that makes a pretrial settlement offer when the opponent rejects the offer and obtains a lesser result at trial. (Martinez v. Brownco Construction Co. (2013) 56 Cal.4th 1014, 1019.) In 1997, the Legislature amended the statute to make the same incentive available in arbitrations. (Stats. 1997, ch. 892, § 1, p. 6390; Pilimai v. Farmers Ins. Exchange Co. (2006) 39 Cal.4th 133, 139, 149.) This case involves the procedures for seeking these costs in arbitration.
We hold a request for costs under section 998 is timely if filed with the arbitrator within 15 days of a final award. In response to such a request, an arbitrator has authority to award costs to the offering party. However, if an arbitrator refuses to award costs, judicial review is limited. The Court of Appeal erred in relying on a narrow exception to those limits, for failure to consider evidence. We reverse.
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