In 2011 the Texas Legislature amended Tex. Gov’t Code § 82.065 and added § 82.0651. The statutory changes strengthened civil remedies for clients and created a new civil remedy for nonclients who are subjected to solicitation that violates laws or disciplinary rules regarding barratry.
As this area of the law grows, barratry issues can come up in a variety of legal settings, including fees disputes, association of counsel, motions to disqualify, and lawyer discipline cases. Herring & Panzer counsels clients regarding barratry issues in each of these types of matters. The firm can provide advice to clients who have been a victim of barratry, as well as lawyers who may face their own allegations of barratry.
What is Barratry?
Texas has criminalized barratry since 1876. Citing legal dictionary definitions, courts in Texas have stated generally that barratry is the “vexatious incitement to litigation, especially by soliciting potential legal clients,” or “the offense of . . . exciting and stirring up quarrels and suits, either at law or otherwise.” Those vague descriptions say little and could apply to most forms of permissible lawyer advertising, solicitation, and marketing.
In Texas, at least, the better approach to ascertain the meaning of barratry is probably to examine the “functional definitions” in the Texas Penal Code.
Two principal Texas Penal Code sections address barratrous conduct: § 38.12 and § 38.18.
Section 38.12 of the Texas Penal Code is the key barratry prohibition. It is entitled “Barratry and the Solicitation of Professional Employment” and defines three categories of criminal offenses, each of which has multiple subcategories.
Penal Code § 38.12: First Category
The first category of offenses has subcategories that focus on (a) unauthorized claims; (b) solicitation; and (c) paying or transferring value to obtain employment. Specifically, the first prohibition provides that a person commits an offense if, with “intent to obtain economic benefit,” the person:
Penal Code § 38.12: Second Category
The second category of offenses focuses on financing the foregoing activities, or knowingly accepting employment based on such prohibited solicitation. Specifically, it creates criminal liability for a person who:
Penal Code § 38.12: Exceptions to the First and Second Categories
An exception to § 38.12(a) or (b) exists if the “conduct is authorized by the Texas Disciplinary Rules of Professional Conduct or any rule of court.” That exception is somewhat ambiguous. Although it says “authorized by,” it presumably also means “not prohibited by,” at least in some instances. At a minimum, the exception must include certain implicitly authorized solicitations.
For example, Penal Code § 38.12(a)(2) prohibits, in very broad terms, a person from “solicit[ing] employment … in person ….” Disciplinary Rule 7.03(a), in turn, prohibits, among other things, “in-person contact” to seek professional employment “concerning a matter arising out of a particular occurrence or event … from a prospective client … with whom the lawyer has no family or past or present attorney-client relationship ….” (Emphasis added) Thus, by negative implication, Rule 7.03 permits such in-person contact if the contact concerns a matter that does not arise from a “particular occurrence or event” or if the lawyer solicits a family member or current or former client.
Penal Code § 38.12: Third Category
The third category of offenses addresses several general subcategories:
This third category also includes a false, fraudulent, misleading, deceptive, or unfair statement or claim. Compare that category with Disciplinary Rule 7.02(a), which prohibits seven categories of “false or misleading” communications—for instance, communications that contain a “material misrepresentation of fact or law” or are likely to create an “unjustified expectation” about the results the lawyer can obtain.
Texas Government Code § 82.065 and § 82.0651 create new civil remedies against barratry. For attorney-client contracts, the amended statute applies only to those contracts entered into on or after September 1, 2011.
Remedies for Clients
Section 82.0651 provides that a 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.”Under the statute, the contract is not automatically void—it is merely voidable by the client. In theory, a client might choose not to void the contract, even if the client learned that the contract had been procured by barratry.
Under the statute, even if a contract is declared void for barratry, an “innocent” lawyer may still obtain a quantum meruit recovery. Section 82.065(c) allows the quantum meruit recovery of fees and expenses paid or owed under the contract when two requirements are met:
However, note the possible conflict between the statute and Disciplinary Rule 7.03(d). That rule provides that “[a] lawyer shall not . . . collect a fee for professional employment obtained in violation of Rule 7.03(a), (b), or (c).” (Rules 7.03(b) and (c) prohibit certain payments to prospective clients or other persons to solicit employment.) Rule 7.03(d) does not expressly draw the culpability distinction in § 82.065. The rule lacks the “innocent lawyer” safe harbor of the statute.
In addition to providing that the contract is voidable by the client, the statute allows a client to recover the following from any person who has committed barratry:
Remedies for Nonclients
Section 82.0651 further provides a civil remedy for “[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.”
The person solicited may recover a $10,000 penalty, actual damages, and attorney’s fees in addition to any other remedies provided by law
Other Disciplinary Rules
Rule 8.04(a)(9) expressly prohibits “barratry as defined by the law of this state.” While no Texas statute contains an express “definition” of barratry, clearly Penal Code § 38.12 is the central statute setting out a functional definition of barratry.
Rule 7.03, discussed above, directly addresses prohibited solicitations and payments. Specifically, Rule 7.03(b) and (c) can apply directly to the case-runner scenario.
Rule 7.06 generally prohibits accepting or continuing employment in a case procured in violation of Rules 7.01-7.05 and 8.04(a)(9), potentially creating multiple problems for a lawyer who knowingly accepts a case from another lawyer who has used barratrous means to obtain the case.