82R19586 YDB-F

By: Fletcher H.B. No. 1890

Substitute the following for H.B. No. 1890:

By: Scott C.S.H.B. No. 1890

A BILL TO BE ENTITLED

AN ACT

relating to voidability of contracts procured through barratry and civil liability arising from conduct constituting barratry.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 82.065, Government Code, is amended to read as follows:

Sec. 82.065. [CONTINGENT FEE] CONTRACT FOR LEGAL SERVICES. (a) A contingent fee contract for legal services must be in writing and signed by the attorney and client.

(b) Any [A contingent fee] contract for legal services is voidable by the client if it is procured as a result of conduct violating the laws of this state or the Texas Disciplinary Rules of Professional Conduct [the State Bar of Texas] regarding barratry by attorneys or other persons.

(c) A lawyer who was paid or owed fees or expenses under a voided contract may recover in quantum meruit if the client does not prove the lawyer committed barratry or had actual knowledge, prior to undertaking the representation, that the contract was procured as a result of barratry by another person. To recover in quantum meruit, the lawyer must have reported the misconduct as required by Rule 8.03(a), Texas Disciplinary Rules of Professional Conduct, unless:

(1) another person previously reported the conduct; or

(2) the lawyer reasonably believed that reporting the conduct would substantially prejudice the client's interests.

SECTION 2. Subchapter C, Chapter 82, Government Code, is amended by adding Section 82.067 to read as follows:

Sec. 82.067. CIVIL LIABILITY FOR PROHIBITED BARRATRY. (a) A client may bring an action to void any contract for legal services that was procured as a result of conduct violating the laws of this state or the Texas Disciplinary Rules of Professional Conduct regarding barratry by attorneys or other persons.

(b) A client who prevails in an action under Subsection (a) shall recover from any person who committed barratry:

(1) all fees and expenses paid to that person under any voided contract;

(2) the balance of any fees and expenses paid to another person under the voided contract less any quantum meruit fees and expenses awarded under Section 82.065(c);

(3) actual damages caused by the prohibited conduct; and

(4) reasonable and necessary attorney's fees.

(c) A person who was solicited by conduct violating the laws of this state or the Texas Disciplinary Rules of Professional Conduct regarding barratry by attorneys or other persons, but who did not enter into a contract as a result of that conduct, may file a civil action against any person who committed barratry.

(d) A person who prevails in an action under Subsection (c) shall recover from each person who engaged in barratry:

(1) a penalty in the amount of $10,000;

(2) actual damages caused by the prohibited conduct; and

(3) reasonable and necessary attorney's fees.

(e) This section shall be liberally construed and applied to promote its underlying purposes, which are to protect those in need of legal services against unethical, unlawful solicitation and to provide efficient and economical procedures to secure such protection.

(f) The provisions of this subchapter are not exclusive. The remedies provided in this subchapter are in addition to any other procedures or remedies provided in any other law, except that recovery is not permitted under both this subchapter and another law of both damages and penalties for the same act or practice.

SECTION 3. (a) Section 82.065, Government Code, as amended by this Act, applies only to a contract entered into on or after the effective date of this Act. A contract entered into before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(b) Section 82.067, Government Code, as added by this Act, does not apply to prohibited conduct, as defined by that section, that occurred before the effective date of this Act. Prohibited conduct that occurred before the effective date of this Act is governed by the law that applied to the conduct immediately before the effective date of this Act, and that law is continued in effect for that purpose.

SECTION 4. This Act takes effect September 1, 2011.