By: Duncan S.B. No. 1716
(Fletcher)
A BILL TO BE ENTITLED
AN ACT
relating to voidability of contracts procured through and liability
arising from conduct constituting barratry; providing a civil
penalty.
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 of the State Bar of Texas regarding barratry
by attorneys or other persons.
(c) An attorney who was paid or owed fees or expenses under a
contract that is voided under this section may recover fees and
expenses based on a quantum meruit theory if the client does not
prove that the attorney committed barratry or had actual knowledge,
before undertaking the representation, that the contract was
procured as a result of barratry by another person. To recover fees
or expenses under this subsection, the attorney must have reported
the misconduct as required by the Texas Disciplinary Rules of
Professional Conduct of the State Bar of Texas, unless:
(1) another person has already reported the
misconduct; or
(2) the attorney reasonably believed that reporting
the misconduct would substantially prejudice the client's
interests.
SECTION 2. Subchapter C, Chapter 82, Government Code, is
amended by adding Section 82.0651 to read as follows:
Sec. 82.0651. CIVIL LIABILITY FOR PROHIBITED BARRATRY.
(a) A client may bring an action to void a 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 of the State Bar of Texas 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 the
contract;
(2) the balance of any fees and expenses paid to any
other person under the contract, after deducting fees and expenses
awarded based on a quantum meruit theory as provided by 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 of the State Bar of Texas 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 that
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 by any other law, except that
a person may not recover damages and penalties under both this
subchapter and another law 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 82.0651, Government Code, as added by this Act,
does not apply to prohibited conduct 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.