HBA-CMT H.B. 61 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 61
By: Clark
Civil Practices
3/27/2001
Introduced



BACKGROUND AND PURPOSE 

Many lawsuits endure lengthy discovery and pretrial maneuvering because one
or both parties have failed to realistically evaluate the case early in the
litigation process and determine if it should be settled.  This practice
leads to many settlements in the courthouse that wastes time and money for
the parties and clogs court dockets.  House Bill 61 encourages early
lawsuit settlements by providing incentives for both defendants and
plaintiffs to analyze their cases early and make realistic offers to
settle. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

House Bill 61 amends the Civil Practice and Remedies Code to add a chapter
relating to offers to settle and the award of litigation costs in certain
civil law suits.  H.B. 61 authorizes a party to serve an offer to settle a
claim on an opposing party and provides that the offer comply with certain
terms set forth in the bill. The bill prohibits a party from making an
offer to settle before the 45th day after the date the defendant filed the
first responsive pleading and not after the 10th day before the date set
for trial.  Counteroffers are authorized to be made on or before the
seventh day before the trial date.  A party is not required to file an
offer to settle with the court.  The bill authorizes the court to modify
time limits in a pretrial order (Sec. 42.021). 

H.B. 61 authorizes and sets forth certain requirements for the acceptance,
withdrawal, and rejection of offers to settle. If a party withdraws an
offer to settle, the party is not entitled to recover litigation costs
(Sec. 42.022 and 42.023).  A rejection of an offer to settle entitles an
offering party to litigation costs subject to certain conditions (Sec.
42.024).  The bill authorizes recovery of attorney's fees as litigation
costs only when a party is represented by an attorney (Sec. 42.025).  If
awarded, attorney's fees are required to be limited by the court (Sec.
42.026).  The bill prohibits litigation costs awarded against a claimant in
an action for personal injury or death from exceeding the amount of damages
recovered by the claimant.  The bill requires litigation costs to be both
reasonable and necessary to the prosecution or defense of an action and
authorizes a court to review and reduce an award of litigation costs as
justice requires (Sec. 42.027).  Evidence relating to offers to settle is
inadmissible and prohibited from being made known to a jury except in an
action to enforce the settlement or to obtain litigation costs (Sec.
42.028). 

H.B. 61 does not apply to class actions, shareholder's derivative lawsuits,
actions brought under the Deceptive Trade Practices-Consumer Protection
Act, Family Code, and Labor Code, or actions for which another statute
specifically authorizes recovery of attorney's fees and litigation costs by
the prevailing party (Sec. 42.002). 

EFFECTIVE DATE

September 1, 2001.