Texas House bill aims to change how state entities procure contingency fee contracts

By David Yates | Mar 4, 2019

AUSTIN – A new piece of legislation is on the table, a bill aiming to change how state agencies procure contingent fee contracts for legal services.

From opioid litigation to construction defect claims, there never seems to be a shortage of issues for trial lawyers to latch on to and pitch as potential lawsuits to Texas counties and cities.

And unlike the state, contingency fee agreements with local governments aren’t necessarily based on “reasonable” hourly rates but rather a significant percentage cut of the award or settlement.  

On Friday, Rep. Greg Bonnen, a Republican out of Friendswood, introduced House Bill 2826, seeking to facilitate more transparency and consistency in the awarding of contingency fee contracts.


Bonnen  

If enacted, the bill would require state entities to negotiate a contract with the “most highly qualified” attorney, not just the firms that solicit them, for a “fair and reasonable price” or move on to the “next.”

Texans for Lawsuit Reform has come out in support of the bill and says currently nothing is stopping plaintiff lawyers from “brokering a sweetheart deal behind closed doors” to take home 30 percent or more in fees.

“Nothing stops those attorneys from inflating their rates to drive up their award if a case is resolved,” TLR states on its website. “That’s because contracts with local governments don’t have to follow the same statutes and procedures as contracts with state government.”

TLR argues the statutes and regulations in place for state contracts have successfully allowed the state to hire private attorneys when necessary, to keep more of the money from these legal awards and to bring more transparency to the process.

“What has worked for the state will work for its political subdivisions.”

The legislation also requires local governments to publicly post that they are hiring a private attorney and gives the Texas attorney general the authority to review and reject contracts that don’t comply with the statutes, or that interfere with the state’s interest in similar litigation.

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Texans for Lawsuit Reform Texas Texas House of Representatives

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