Section 167 is cumbersome as drafted. The simplest is to understand the application of the settlement offer by means of examples. Two common factual patterns are discussed below: For nearly 20 years, Texas has had a “comparison offer rule” of fee passing. However, as the legislator has made the procedure cumbersome, it is still rarely used and often misunderstood. The rule applies to almost all cases where monetary damages are claimed; with the exception of certain limited types of cases, such as class actions and family code actions. The rejection of a “reasonable” settlement offer will result in the dismissing party paying the opponent`s legal costs. Rule 167 defines “court costs” as court costs, witness costs, fees for two experts and lawyers` fees. The period for calculating court fees begins with the rejection of the settlement offer and ends with the signing of the final judgment. According to Rule 167, a “reasonable” settlement offer is not “significantly less favourable” to the target beneficiary than the actual judgment at trial. This means that for offers made by a defendant to a plaintiff, an offer to settle is appropriate if the judgment is less than 80% of the amount of the offer. For offers made by a plaintiff to a defendant, an offer to settle is appropriate if the final judgment is greater than 120% of the amount of the offer. Court costs are awarded to the defendant only as compensation against the recovery of the plaintiff. This restriction prevents a plaintiff from paying more than the judgment rendered.
Thus, if the plaintiff does not recover anything, the defendant receives nothing. On the other hand, the plaintiff`s legal costs are subject to additional funds for a defendant beyond the judgment. Since expert and attorneys` fees in tort cases are generally not recoverable, aggressive application of Rule 167 has the potential to significantly shift risk between the parties if an appropriate offer is unfairly rejected. Under Texas Rule of Civil Procedure 167, certain court costs may be awarded against a party who wrongfully declines the offer if an offer to settle is made in accordance with the rule. First, only a defendant or party against whom a claim for damages is brought, including cross-respondents, counter-defendants and third-party defendants, may make a declaration under Rule 167. However, once a defendant has filed their statement, a plaintiff may make an offer to settle. To invoke rule 167, an accused must submit a statement to the court at least 45 days before trial. In addition, the offer must: 1) be made in writing; (2) declare that it is carried out in accordance with section 167 of the Regulation; (3) specify the conditions under which all pecuniary claims, including lawyers` fees, interest and costs, may be settled; 4) indicate the period – at the earliest 14 days after delivery of the offer – within which the offer must be accepted; and (5) be served on all parties to whom the offer is made. Rule 167 specifies which conditions may be placed in the tender.
An Offer may be subject to reasonable terms, including the performance of reasonable indemnities, indemnities and the satisfaction of privileges. If a bid is accepted, the bidder or beneficiary may submit the bid and persuade the court to enforce the settlement. Mayer LLP`s litigators have extensive experience in assisting clients in managing the complexities of Rule 167. When used correctly, it can be an effective tool for solving difficult cases. Let us know if we can help you with your dispute questions.