Which statement about the ability to offset costs is correct?

Which statement about the ability to offset costs is correct?

• A. A defendant can offset their costs against damages and the claimant's costs, even if the case settles without a formal judgment.
• B. A defendant cannot offset costs unless there is a court judgment.
• C. Offset is allowed only for court fees.
• D. Offsets are prohibited in all circumstances.

Answer: (A)

Offsetting costs, or set-off, is a way of balancing what one party owes to the other by reducing the amount payable by deducting the other side’s costs from damages or from sums due to the other party. The important point is this can be done even when a case ends without a formal judgment, because the settlement can include a consent order that records the offset of costs against damages or against the claimant’s own costs. This mechanism isn’t limited to court fees; it covers the costs incurred in defending or pursuing the claim. It also isn’t prohibited in all circumstances—there are practical, contractual, and court-ordered ways to implement it. So the statement reflecting this flexible, broader ability to offset costs is the best fit.

Offsetting costs, or set-off, is a way of balancing what one party owes to the other by reducing the amount payable by deducting the other side’s costs from damages or from sums due to the other party. The important point is this can be done even when a case ends without a formal judgment, because the settlement can include a consent order that records the offset of costs against damages or against the claimant’s own costs. This mechanism isn’t limited to court fees; it covers the costs incurred in defending or pursuing the claim. It also isn’t prohibited in all circumstances—there are practical, contractual, and court-ordered ways to implement it. So the statement reflecting this flexible, broader ability to offset costs is the best fit.