Texas 2011 - 82nd Regular

Texas Senate Bill SB1716 Compare Versions

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1	1	By: Duncan S.B. No. 1716
2	2	(Fletcher)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to voidability of contracts procured through and liability
8	8	arising from conduct constituting barratry; providing a civil
9	9	penalty.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 82.065, Government Code, is amended to
12	12	read as follows:
13	13	Sec. 82.065. [CONTINGENT FEE] CONTRACT FOR LEGAL SERVICES.
14	14	(a) A contingent fee contract for legal services must be in
15	15	writing and signed by the attorney and client.
16	16	(b) Any [A contingent fee] contract for legal services is
17	17	voidable by the client if it is procured as a result of conduct
18	18	violating the laws of this state or the Texas Disciplinary Rules of
19	19	Professional Conduct of the State Bar of Texas regarding barratry
20	20	by attorneys or other persons.
21	21	(c) An attorney who was paid or owed fees or expenses under a
22	22	contract that is voided under this section may recover fees and
23	23	expenses based on a quantum meruit theory if the client does not
24	24	prove that the attorney committed barratry or had actual knowledge,
25	25	before undertaking the representation, that the contract was
26	26	procured as a result of barratry by another person. To recover fees
27	27	or expenses under this subsection, the attorney must have reported
28	28	the misconduct as required by the Texas Disciplinary Rules of
29	29	Professional Conduct of the State Bar of Texas, unless:
30	30	(1) another person has already reported the
31	31	misconduct; or
32	32	(2) the attorney reasonably believed that reporting
33	33	the misconduct would substantially prejudice the client's
34	34	interests.
35	35	SECTION 2. Subchapter C, Chapter 82, Government Code, is
36	36	amended by adding Section 82.0651 to read as follows:
37	37	Sec. 82.0651. CIVIL LIABILITY FOR PROHIBITED BARRATRY.
38	38	(a) A client may bring an action to void a contract for legal
39	39	services that was procured as a result of conduct violating the laws
40	40	of this state or the Texas Disciplinary Rules of Professional
41	41	Conduct of the State Bar of Texas regarding barratry by attorneys or
42	42	other persons.
43	43	(b) A client who prevails in an action under Subsection (a)
44	44	shall recover from any person who committed barratry:
45	45	(1) all fees and expenses paid to that person under the
46	46	contract;
47	47	(2) the balance of any fees and expenses paid to any
48	48	other person under the contract, after deducting fees and expenses
49	49	awarded based on a quantum meruit theory as provided by Section
50	50	82.065(c);
51	51	(3) actual damages caused by the prohibited conduct;
52	52	and
53	53	(4) reasonable and necessary attorney's fees.
54	54	(c) A person who was solicited by conduct violating the laws
55	55	of this state or the Texas Disciplinary Rules of Professional
56	56	Conduct of the State Bar of Texas regarding barratry by attorneys or
57	57	other persons, but who did not enter into a contract as a result of
58	58	that conduct, may file a civil action against any person who
59	59	committed barratry.
60	60	(d) A person who prevails in an action under Subsection (c)
61	61	shall recover from each person who engaged in barratry:
62	62	(1) a penalty in the amount of $10,000;
63	63	(2) actual damages caused by the prohibited conduct;
64	64	and
65	65	(3) reasonable and necessary attorney's fees.
66	66	(e) This section shall be liberally construed and applied to
67	67	promote its underlying purposes, which are to protect those in need
68	68	of legal services against unethical, unlawful solicitation and to
69	69	provide efficient and economical procedures to secure that
70	70	protection.
71	71	(f) The provisions of this subchapter are not exclusive.
72	72	The remedies provided in this subchapter are in addition to any
73	73	other procedures or remedies provided by any other law, except that
74	74	a person may not recover damages and penalties under both this
75	75	subchapter and another law for the same act or practice.
76	76	SECTION 3. (a) Section 82.065, Government Code, as amended
77	77	by this Act, applies only to a contract entered into on or after the
78	78	effective date of this Act. A contract entered into before the
79	79	effective date of this Act is governed by the law in effect
80	80	immediately before the effective date of this Act, and that law is
81	81	continued in effect for that purpose.
82	82	(b) Section 82.0651, Government Code, as added by this Act,
83	83	does not apply to prohibited conduct that occurred before the
84	84	effective date of this Act. Prohibited conduct that occurred
85	85	before the effective date of this Act is governed by the law that
86	86	applied to the conduct immediately before the effective date of
87	87	this Act, and that law is continued in effect for that purpose.
88	88	SECTION 4. This Act takes effect September 1, 2011.