Short answer. Yes, it can. Article 2031 allows the courts to mitigate the damages to be paid by a losing party who has shown a sincere desire for a compromise. It is discretionary, not automatic, and it rewards genuine efforts to settle — not a token or tactical offer made only once litigation was already lost.
What the law says
The courts may mitigate the damages to be paid by the losing party who has shown a sincere desire for a compromise
Civil Code, Article 2031 — Mitigation of Damages. Read the full provision →
The court may reward genuine settlement efforts
The law prefers disputes settled to disputes fought to the end, and Article 2031 puts a modest incentive behind that preference: The courts may mitigate the damages to be paid by the losing party who has shown a sincere desire for a compromise. A defendant who tried in good faith to resolve the matter, and lost anyway, may have the damages awarded against him trimmed. The word is may — the court is permitted to reduce, not required to — so this is a matter left to judicial discretion, applied to the facts of the particular case rather than granted for the asking.
"Sincere" is the operative word
What the article rewards is a sincere desire for a compromise, and sincerity is judged by conduct, not by a single line in a pleading. A real, timely and reasonable attempt to settle — an offer with substance behind it, made when it could still have ended the case — is the sort of thing the provision is written for. A hollow gesture, a lowball floated only to build a record, or a willingness that appeared for the first time once defeat looked certain, is a different matter. The court is being asked to distinguish the party who genuinely sought peace from the one performing the appearance of it.
What it does not do
This is a reduction of damages, not an escape from liability. Article 2031 does not decide whether you lose — it softens the figure once you have. Nor does it wipe the award out; it lets the court lower it, and by how much is again for the court. Just as importantly, it cannot be used to force the other side to settle or to punish them for refusing a fair offer. It operates only on the damages payable by the losing party, and only where that party's own effort to compromise was real.
How to be in a position to invoke it
Because sincerity is proved rather than asserted, the useful step is contemporaneous and concrete: a settlement proposal in writing, made early, on terms a reasonable person could have accepted, and a record of having pursued it rather than merely mentioned it. The stronger and earlier the documented attempt, the more there is for a court to weigh under Article 2031 at the end. Left to the closing stages of trial, a claim to have wanted compromise all along is exactly the kind the article treats with suspicion.