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AN ACT
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relating to voidability of contracts procured through and liability |
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arising from conduct constituting barratry; providing a civil |
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penalty. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 82.065, Government Code, is amended to |
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read as follows: |
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Sec. 82.065. [CONTINGENT FEE] CONTRACT FOR LEGAL SERVICES. |
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(a) A contingent fee contract for legal services must be in |
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writing and signed by the attorney and client. |
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(b) Any [A contingent fee] contract for legal services is |
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voidable by the client if it is procured as a result of conduct |
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violating the laws of this state or the Texas Disciplinary Rules of |
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Professional Conduct of the State Bar of Texas regarding barratry |
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by attorneys or other persons. |
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(c) An attorney who was paid or owed fees or expenses under a |
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contract that is voided under this section may recover fees and |
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expenses based on a quantum meruit theory if the client does not |
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prove that the attorney committed barratry or had actual knowledge, |
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before undertaking the representation, that the contract was |
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procured as a result of barratry by another person. To recover fees |
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or expenses under this subsection, the attorney must have reported |
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the misconduct as required by the Texas Disciplinary Rules of |
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Professional Conduct of the State Bar of Texas, unless: |
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(1) another person has already reported the |
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misconduct; or |
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(2) the attorney reasonably believed that reporting |
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the misconduct would substantially prejudice the client's |
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interests. |
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SECTION 2. Subchapter C, Chapter 82, Government Code, is |
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amended by adding Section 82.0651 to read as follows: |
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Sec. 82.0651. CIVIL LIABILITY FOR PROHIBITED BARRATRY. |
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(a) A client may bring an action to void a contract for legal |
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services that was procured as a result of conduct violating the laws |
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of this state or the Texas Disciplinary Rules of Professional |
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Conduct of the State Bar of Texas regarding barratry by attorneys or |
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other persons. |
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(b) A client who prevails in an action under Subsection (a) |
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shall recover from any person who committed barratry: |
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(1) all fees and expenses paid to that person under the |
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contract; |
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(2) the balance of any fees and expenses paid to any |
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other person under the contract, after deducting fees and expenses |
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awarded based on a quantum meruit theory as provided by Section |
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82.065(c); |
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(3) actual damages caused by the prohibited conduct; |
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and |
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(4) reasonable and necessary attorney's fees. |
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(c) A person who was solicited by conduct violating the laws |
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of this state or the Texas Disciplinary Rules of Professional |
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Conduct of the State Bar of Texas regarding barratry by attorneys or |
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other persons, but who did not enter into a contract as a result of |
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that conduct, may file a civil action against any person who |
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committed barratry. |
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(d) A person who prevails in an action under Subsection (c) |
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shall recover from each person who engaged in barratry: |
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(1) a penalty in the amount of $10,000; |
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(2) actual damages caused by the prohibited conduct; |
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and |
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(3) reasonable and necessary attorney's fees. |
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(e) This section shall be liberally construed and applied to |
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promote its underlying purposes, which are to protect those in need |
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of legal services against unethical, unlawful solicitation and to |
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provide efficient and economical procedures to secure that |
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protection. |
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(f) The provisions of this subchapter are not exclusive. |
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The remedies provided in this subchapter are in addition to any |
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other procedures or remedies provided by any other law, except that |
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a person may not recover damages and penalties under both this |
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subchapter and another law for the same act or practice. |
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SECTION 3. (a) Section 82.065, Government Code, as amended |
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by this Act, applies only to a contract entered into on or after the |
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effective date of this Act. A contract entered into before the |
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effective date of this Act is governed by the law in effect |
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immediately before the effective date of this Act, and that law is |
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continued in effect for that purpose. |
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(b) Section 82.0651, Government Code, as added by this Act, |
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does not apply to prohibited conduct that occurred before the |
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effective date of this Act. Prohibited conduct that occurred |
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before the effective date of this Act is governed by the law that |
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applied to the conduct immediately before the effective date of |
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this Act, and that law is continued in effect for that purpose. |
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SECTION 4. This Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 1716 passed the Senate on |
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April 7, 2011, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1716 passed the House on |
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May 5, 2011, by the following vote: Yeas 142, Nays 0, two present |
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not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |