By Corte                                                H.B. No. 37
         76R1655 DLF-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to protection of injured parties by certain limitations on
 1-3     the amount of attorney's contingency fees after a settlement or
 1-4     settlement offer.
 1-6           SECTION 1.  Subtitle C, Title 2, Civil Practice and Remedies
 1-7     Code, is amended by adding Chapter 44 to read as follows:
 1-9                             OR SETTLEMENT OFFER
1-10                      SUBCHAPTER A.  GENERAL PROVISIONS
1-11           Sec. 44.001.  DEFINITIONS.  In this chapter:
1-12                 (1)  "Allegedly responsible party" means a person
1-13     alleged by the claimant to be responsible for at least some portion
1-14     of the injury, death, or loss alleged by the claimant.
1-15                 (2)  "Claimant" means an individual, including a
1-16     plaintiff, counterclaimant, cross-claimant, or third-party
1-17     claimant, seeking compensation for damages in a tort claim,
1-18     including damages for personal injury or death.
1-19                 (3)  "Contingent fee" means a fee that is payable from
1-20     the proceeds of a claimant's recovery without regard to the manner
1-21     in which the fee is calculated.
1-22                 (4)  "Qualified settlement offer" means a settlement
1-23     offer made in accordance with Subchapter C.
1-24                 (5)  "Recovery" means the total compensation, including
 2-1     the total value of compensation other than money, obtained through
 2-2     the efforts of an attorney on behalf of a claimant through
 2-3     settlement, arbitration, or judgment, less the reasonable costs and
 2-4     expenses incurred by the attorney in prosecuting or settling the
 2-5     claim.
 2-6           Sec. 44.002.  SCOPE OF CHAPTER.  (a)  This chapter does not
 2-7     apply to a claim for which an attorney is not retained or for which
 2-8     a contingent fee is not charged.
 2-9           (b)  This chapter does not apply to a claim for workers'
2-10     compensation benefits.
2-11           Sec. 44.003.  WRITTEN COMMUNICATION.  A person required by
2-12     this chapter to mail a written communication must send the
2-13     communication by United States certified mail.
2-14           Sec. 44.004.  CERTAIN EVIDENCE INADMISSIBLE.  The fact that a
2-15     demand for compensation was or was not made, the fact that a
2-16     qualified settlement offer was or was not made, or the amount of a
2-17     demand or settlement offer is not admissible for any purpose in an
2-18     arbitration or judicial or other proceeding between a claimant and
2-19     an allegedly responsible party.
2-20               (Sections 44.005-44.020 reserved for expansion
2-22           Sec. 44.021.  DEMAND FOR COMPENSATION.  An attorney
2-23     representing a client for a contingent fee shall mail a written
2-24     demand for compensation to each allegedly responsible party known
2-25     to the attorney. The attorney shall simultaneously mail all the
2-26     demands.
2-27           Sec. 44.022.  CONTENTS OF DEMAND.  The demand for
 3-1     compensation must specify the amount of compensation sought and
 3-2     must include the material facts, documentary evidence, and other
 3-3     information relevant to the claim, including:
 3-4                 (1)  the name and address of the claimant or of the
 3-5     injured or deceased person, as appropriate;
 3-6                 (2)  a brief description of how the injury, death, or
 3-7     other loss occurred;
 3-8                 (3)  the name and, if known, the address and telephone
 3-9     number of each known witness to the injury, death, or other loss;
3-10                 (4)  copies of photographs in the claimant's possession
3-11     that relate to the injury, death, or other loss;
3-12                 (5)  the basis for alleging that the party to whom the
3-13     demand is addressed is responsible or partially responsible for the
3-14     injury, death, or other loss;
3-15                 (6)  a description of the nature of the injury, death,
3-16     or other loss;
3-17                 (7)  the dates and nature of care or services provided
3-18     as a result of the injury, death, or other loss;
3-19                 (8)  the name and address of any health care provider
3-20     who provided care or services as a result of the injury, death, or
3-21     other loss;
3-22                 (9)  medical records relating to the injury, death, or
3-23     other loss, including records involving a prior injury or
3-24     preexisting medical condition that an allegedly responsible party
3-25     would be entitled to obtain in discovery during the course of
3-26     litigation, or executed releases authorizing the allegedly
3-27     responsible party to obtain the medical records directly from each
 4-1     health care provider that provided care; and
 4-2                 (10)  documentation of economic or noneconomic damages
 4-3     suffered as a result of the injury, death, or other loss, including
 4-4     documentation of any amount included in the demand for  medical
 4-5     expenses, lost wages, or personal losses.
 4-6           Sec. 44.023.  LATER-DISCOVERED PARTY.  (a)  A claimant's
 4-7     attorney who learns of an additional allegedly responsible party on
 4-8     or before the 90th day after the date a demand for compensation
 4-9     under Section 44.021 is mailed shall mail a written demand for
4-10     compensation to the later-discovered allegedly responsible party.
4-11           (b)  At the same time the demand is mailed to the
4-12     later-discovered allegedly responsible party, the claimant's
4-13     attorney shall mail a copy of the demand addressed to that party to
4-14     each other allegedly responsible party and the claimant.
4-15           (c)  A claimant's attorney who learns of an additional
4-16     allegedly responsible party after the 90th day after the date a
4-17     demand for compensation under Section 44.021 is mailed:
4-18                 (1)  is not required to send a demand to that party;
4-19     and
4-20                 (2)  except as provided by Subsection (d), is not
4-21     subject to the fee limitations of this chapter with respect to any
4-22     amount recovered from that later-discovered party.
4-23           (d)  A claimant's attorney who, as a result of a breach of
4-24     the applicable standard of care, fails to learn of an allegedly
4-25     responsible party before the 90th day after the date the written
4-26     demand is mailed under Section 44.021 may not collect a fee that
4-27     exceeds the amounts provided by Section 44.061 with respect to an
 5-1     amount recovered from that allegedly responsible party.
 5-2               (Sections 44.024-44.040 reserved for expansion
 5-4           Sec. 44.041.  QUALIFIED SETTLEMENT OFFER.  (a) An offer by an
 5-5     allegedly responsible party to settle a claim is a qualified
 5-6     settlement offer if the offer:
 5-7                 (1)  is made:
 5-8                             (A)  before the allegedly responsible party
 5-9     receives a demand for compensation; or
5-10                             (B)  not later than the 60th day after the
5-11     date the allegedly responsible party receives a demand for
5-12     compensation;
5-13                 (2)  is made in writing and sent to the claimant's
5-14     attorney;
5-15                 (3)  provides that it may be accepted by the claimant
5-16     at least until the 30th day after the date the claimant's attorney
5-17     receives the offer; and
5-18                 (4)  is accompanied by the material described by
5-19     Section 44.042.
5-20           (b)  An allegedly responsible party may amend a qualified
5-21     settlement offer or may make an additional qualified settlement
5-22     offer before any settlement offer is accepted and before the
5-23     expiration of the 60-day period established by Section
5-24     44.041(1)(B).  This additional offer is subject to the requirements
5-25     of this section and Section 44.042.
5-27     OFFER.  An allegedly responsible party must include with a
 6-1     qualified settlement offer any material information and documentary
 6-2     evidence in the party's possession relating to the alleged injury,
 6-3     death, or loss that the party relied on in making the offer,
 6-4     including:
 6-5                 (1)  copies of photographs that relate to the injury,
 6-6     death, or other loss;
 6-7                 (2)  the basis for making any claim that the allegedly
 6-8     responsible party is not responsible for the injury, death, or
 6-9     loss, if applicable; and
6-10                 (3)  other information relating to the injury, death,
6-11     or loss suffered.
6-12           Sec. 44.043.  SETTLEMENT OFFER NOT REQUIRED.  An allegedly
6-13     responsible party is not required to respond to a demand for
6-14     compensation or to make a qualified settlement offer.
6-15           Sec. 44.044.  COMMUNICATION OF OFFER TO CLIENT.  A claimant's
6-16     attorney who receives a qualified settlement offer shall provide a
6-17     copy of the offer to the claimant.
6-18               (Sections 44.045-44.060 reserved for expansion
6-20           Sec. 44.061.  SETTLEMENT OFFER ACCEPTED.  (a) An attorney who
6-21     represents a claimant who has accepted a qualified settlement offer
6-22     may not collect a contingent fee that exceeds 15 percent of the
6-23     qualified settlement offer.
6-24           (b)  For purposes of computing the maximum permissible
6-25     contingent fee under this section, the reasonable costs and
6-26     expenses incurred by the attorney before the date of acceptance of
6-27     the qualified settlement offer are deducted from the amount of the
 7-1     offer.
 7-2           Sec. 44.062.  SETTLEMENT OFFER NOT ACCEPTED.  (a)  An
 7-3     attorney who represents a claimant who receives a qualified
 7-4     settlement offer but who does not accept that offer may not collect
 7-5     a contingent fee that exceeds the total of:
 7-6                 (1)  15 percent of the qualified settlement offer; and
 7-7                 (2)  a percentage of that portion of the claimant's
 7-8     recovery that exceeds the amount of the qualified settlement offer.
 7-9           (b)  The percentage referred to in Subsection (a)(2) may not
7-10     exceed the percentage agreed to in writing by the claimant and the
7-11     claimant's attorney.
7-12           (c)  For purposes of computing the maximum permissible
7-13     contingent fee under this section, the reasonable costs and
7-14     expenses incurred by the attorney before the last date the
7-15     qualified settlement offer could be accepted are deducted from the
7-16     amount of the offer.
7-17           Sec. 44.063.  ADDITIONAL FEE LIMITATIONS.  Notwithstanding
7-18     any other provision of this chapter, a claimant's attorney may not
7-19     receive a fee greater than 15 percent of the claimant's recovery,
7-20     if the attorney:
7-21                 (1)  does not make a demand for compensation under this
7-22     chapter;
7-23                 (2)  omits from the demand material information
7-24     required by Section 44.022 that is:
7-25                       (A)  in the possession of the attorney; or
7-26                       (B)  readily available to the attorney; or
7-27                 (3)  fails to communicate a qualified settlement offer
 8-1     as required by Section 44.044.
 8-2           SECTION 2.  (a)  This Act takes effect September 1, 1999, and
 8-3     applies only to a claim for which a claimant retains an attorney on
 8-4     or after that date.   A claim for which a claimant has retained an
 8-5     attorney before the effective date of this Act is governed by the
 8-6     law in effect at the time the attorney was retained, and that law
 8-7     is continued in effect for that purpose.
 8-8           (b)  An attorney is retained before the effective date of
 8-9     this Act for purposes of this section if any attorney, including an
8-10     attorney who has withdrawn, is retained by the claimant to handle
8-11     the claim.
8-12           SECTION 3.  The importance of this legislation and the
8-13     crowded condition of the calendars in both houses create an
8-14     emergency and an imperative public necessity that the
8-15     constitutional rule requiring bills to be read on three several
8-16     days in each house be suspended, and this rule is hereby suspended.