Short answer. Possibly yes. Article 2031 of the Civil Code gives courts the discretion to mitigate the damages a losing party must pay when that party has shown a sincere desire to settle. The reduction is not automatic, but a genuine settlement offer made in good faith before or during trial can influence the final award.
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 →
What Article 2031 actually says
The provision is brief but meaningful: the courts may mitigate the damages to be paid by the losing party who has shown a sincere desire for a compromise. The operative word is may — this is a discretionary power, not a mandatory deduction. The court weighs whether your attempt to settle was genuine and whether reducing the award is equitable in light of all the circumstances. It is not a loophole to pay less simply by sending a low-ball offer; the desire for compromise must be sincere.
What makes a settlement offer look sincere
A sincere offer is one that shows you genuinely intended to resolve the dispute rather than merely preserve a legal argument for trial. Relevant factors include: how early the offer was made, how close the amount was to what the claim was realistically worth, whether you followed up after a rejection, and whether your conduct during the proceedings was consistent with someone trying to make the other party whole. A written offer made through counsel and placed on record will carry more weight than an informal verbal mention.
How this interacts with the rest of the case
Article 2031 does not change who is liable or whether liability exists. If you are found to have breached a contract or committed a wrong, damages are still due. The provision only affects their amount. The court may take the settlement attempt into account alongside other equitable considerations — such as whether the other party's refusal was itself unreasonable — but the core finding of liability stands independently. There is also no guarantee that the reduction will be substantial; the court may reduce the award by a modest amount or not at all.
Documenting your offer properly
If you want this provision to help you, document your settlement offer clearly and keep evidence of it. A formal compromise proposal under Rule 17 of the Rules of Court, or a written offer to compromise served on opposing counsel and filed with the court, creates a clear paper trail. Verbal or informal overtures are harder to prove. Note, however, that compromise offers are generally inadmissible as evidence of liability — they go to the question of damages only, and courts apply Article 2031 at the damages stage, not to resolve who was at fault.