By: Sheets H.B. No. 2437
A BILL TO BE ENTITLED
AN ACT
relating to an award of litigation costs after the rejection of
certain settlement offers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 42.004, Civil Practice and Remedies
Code, is amended by amending Subsections (a) and (d) and adding
Subsection (d-1) to read as follows:
(a) If a settlement offer is made and rejected and the
judgment to be rendered will be significantly less favorable to the
rejecting party than was the settlement offer, the offering party
shall recover litigation costs from the rejecting party. Subject
to Subsections (d) and (d-1), the amount of litigation costs
awarded under this chapter shall be determined by the court prior to
the entry of judgment. The court must, upon request, conduct a
hearing on a request for an award of litigation costs, at which the
affected parties may present evidence.
(d) If damages are awarded to the claimant, the [The]
litigation costs that may be awarded under this chapter may not be
greater than an amount computed by:
(1) determining the sum of:
(A) 50 percent of the economic damages to be
awarded to the claimant in the judgment;
(B) 100 percent of the noneconomic damages to be
awarded to the claimant in the judgment; and
(C) 100 percent of the exemplary or additional
damages to be awarded to the claimant in the judgment; and
(2) subtracting from the amount determined under
Subdivision (1) the amount of any statutory or contractual liens in
connection with the occurrences or incidents giving rise to the
claim.
(d-1) If damages are not awarded to the claimant, the
litigation costs that may be awarded under this chapter to the
defendant may not be greater than the amount of the defendant's most
recent settlement offer.
(e) If a claimant or defendant is entitled to recover fees
and costs under another law, that claimant or defendant may not
recover litigation costs in addition to the fees and costs
recoverable under the other law.
(f) If a claimant or defendant is entitled to recover fees
and costs under another law, the court must not include fees and
costs incurred by that claimant or defendant after the date of
rejection of the settlement offer when calculating the amount of
the judgment to be rendered under Subsection (a).
(g) If litigation costs are to be awarded against a
claimant, those litigation costs shall be awarded to the defendant
in the judgment as an offset against the claimant's recovery from
that defendant, or if damages are not awarded to the claimant, as a
judgment against the claimant.
SECTION 2. The change in law made by this Act applies only
to an action commenced on or after the effective date of this Act.
An action commenced before the effective date of this Act is
governed by the law in effect immediately before that date, and that
law is continued in effect for that purpose.
SECTION 3. This Act takes effect September 1, 2011.