Office of House Bill AnalysisH.B. 24
By: Corte
Civil Practices


Over the past several years, the Texas Legislature has shown a willingness
to pursue tort reform issues. Trial lawyers generally work for contingency
fees that are based on a certain percentage of winnings or settlements of
cases.  Often these fees can be more than 30 percent of the money offered
or received in the suit.  This causes some lawyers to pursue large sums of
money by convincing their clients to sue for every possible damage that can
be brought in the case.  Reducing the number of these lawsuits could result
in lower rates for goods and services by reducing some of the liability
insurance burden that companies feel they have to carry to settle suits
with lawyers.  House Bill 24 caps an attorney's contingency fees to no more
than 15 percent of a client's compensation. 


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. 


House Bill 24 amends the Civil Practice and Remedies Code to limit the
amount of contingency fees an attorney is authorized to collect after a
settlement or settlement offer is accepted.  The bill requires an attorney
representing a client for a contingent fee to send by United States
certified mail a written demand for compensation to each allegedly
responsible party known to the attorney.  All demands are required to be
mailed simultaneously.  The bill establishes the  information to be
included in the demand. 

The bill requires a claimant's attorney who discovers additional parties on
or before the 90th day after the demand for compensation has been mailed to
mail simultaneously a written demand to the additional parties, as well as
each allegedly responsible party and claimant.  If an attorney discovers
after the 90th day any additional alleged responsible parties, an attorney
is not required to send a demand, nor will the attorney be subject to the
fee limitations unless the failure to discover additional parties was a
result of a breach of the applicable standard of care. 

H.B. 24 sets forth provisions stating when a settlement offer becomes a
qualified settlement offer.  
The bill authorizes an allegedly responsible party to amend a qualified
settlement offer or make an additional qualified settlement offer before
any offer is accepted and before the expiration of the stipulated 60-day
period.  The amended or additional settlement offer is required to include
certain material evidence, basis for claims, and other applicable
information.  The bill provides that an allegedly responsible party is not
required to respond to a demand for compensation or to make a qualified
settlement offer.   

H.B. 24 limits the amount of contingent fees a claimant's attorney is
allowed to collect from a claimant who does or does not accept a qualified
settlement offer.  H.B.24 prohibits a claimant's attorney from receiving a
fee greater than 15 percent of the claimant's recovery if the attorney does
not make a demand for compensation, omits from the demand material required
information that is in the possession of the attorney or readily available
to the attorney, or fails to communicate a qualified settlement offer. 

 This bill does not apply to a claim for which an attorney is not retained
or for which a contingent fee is not charged, or to a claim for workers'
compensation benefits.   

The fact that a demand for compensation was or was not made, the fact that
a qualified settlement offer was or was not made, or the amount of a demand
or settlement offer is not admissible for any purpose in an arbitration or
judicial or other proceeding between a claimant and an allegedly
responsible party.  


September 1, 2001.