By Lindsay S.B. No. 1765
77R8954 AJA-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to an award of litigation costs in certain judgments
1-3 following an offer of settlement.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle C, Title 2, Civil Practice and Remedies
1-6 Code, is amended by adding Chapter 42 to read as follows:
1-7 CHAPTER 42. AWARD OF LITIGATION COSTS FOLLOWING CERTAIN
1-8 SETTLEMENT OFFERS
1-9 Sec. 42.001. DEFINITION. In this chapter, "claim" means any
1-10 claim brought in a court of this state to recover damages to
1-11 property and any related incidental costs. The term includes a
1-12 counterclaim, cross-claim, or third-party claim.
1-13 Sec. 42.002. SERVICE. When this chapter requires a writing
1-14 to be served on another party, service is adequate if performed in
1-15 a manner described by Rule 21a, Texas Rules of Civil Procedure.
1-16 Sec. 42.003. OFFER TO SETTLE. (a) A party to a civil
1-17 action may serve on another party or on another party's attorney an
1-18 offer to settle a claim.
1-19 (b) The offer to settle the claim must:
1-20 (1) be in writing;
1-21 (2) allow judgment to be entered in accordance with
1-22 the terms of the offer;
1-23 (3) state that the offer must be accepted on or before
1-24 the fifth day after the date the offer is served; and
2-1 (4) be served on or before the 10th day after the date
2-2 the process is served on the person who makes the offer to settle.
2-3 Sec. 42.004. ACCEPTANCE OF OFFER. (a) A party may accept
2-4 an offer to settle on or before the fifth day after the date the
2-5 party receives the offer.
2-6 (b) Acceptance of an offer to settle must be:
2-7 (1) made in writing; and
2-8 (2) served on the party who made the offer.
2-9 Sec. 42.005. REJECTION OF OFFER. (a) An offer to settle is
2-10 considered rejected on the sixth day after the date the offer is
2-11 served if it is not accepted under Section 42.004 on or before that
2-12 date.
2-13 (b) Except for the purpose of awarding litigation costs
2-14 under Section 42.007, an offer to settle a claim that is not
2-15 accepted is not admissible at the trial of the claim and may not be
2-16 mentioned at the trial.
2-17 Sec. 42.006. FILING OF ACCEPTED OFFER; ENTRY OF JUDGMENT.
2-18 (a) If an offer of settlement is accepted under Section 42.004,
2-19 the person who made the offer or the person who accepted the offer
2-20 may file with the clerk of the court in which the action was filed
2-21 a copy of the offer and an affidavit stating that the offer has
2-22 been accepted.
2-23 (b) The court shall enter a judgment in accordance with an
2-24 offer of settlement filed under Subsection (a).
2-25 Sec. 42.007. AWARD OF LITIGATION COSTS AFTER REJECTION OF
2-26 OFFER. (a) A court shall award litigation costs to a party who
2-27 made an offer to settle if the offer is rejected and:
3-1 (1) the person to whom the offer was made is finally
3-2 awarded a judgment in an amount that is less than the amount of the
3-3 offer; or
3-4 (2) judgment is for the person who made the offer.
3-5 (b) The court shall award litigation costs to a party who
3-6 received an offer to settle if the person is finally awarded a
3-7 judgment in an amount that is more than the amount of the offer.
3-8 (c) Litigation costs under this section are those costs that
3-9 are directly related to preparing the claim for trial and actual
3-10 trial expenses, including reasonable attorney's fees, deposition
3-11 costs, and fees for expert witnesses.
3-12 Sec. 42.008. APPLICATION TO GOVERNMENTAL UNIT. This chapter
3-13 applies to a governmental unit, as defined by Section 101.001, only
3-14 if the unit consents.
3-15 SECTION 2. (a) This Act takes effect September 1, 2001.
3-16 (b) Chapter 42, Civil Practice and Remedies Code, as added
3-17 by this Act, applies only to a suit that is commenced on or after
3-18 the effective date of this Act. A suit that is commenced before
3-19 the effective date of this Act is governed by the law in effect at
3-20 the time the suit is commenced, and that law is continued in effect
3-21 for that purpose.