House Bill 1774 Amended on House Floor, Discussed in Hearing

A bill that could reform litigation practices between policyholders and insurers was debated on the floor of the Texas House of Representatives over two days last week before it was addressed in a Senate committee hearing.

House Bill 1774 was voted on by the House on Friday, May 5, 2017, and passed with 92 yeas, 55 nays, and 2 members present, not voting. One member was absent.

Representatives offered more than 20 different amendments to the bill, but many were struck down. Only 4 amendments, which provided for minor clean-up of the language and specific time limits for litigative actions, were adopted before the bill was passed.

On Thursday, May 11, 2017, the Senate Business and Commerce Committee debated the bill in a public hearing.

Attorney and former Rep. Craig Eiland testified on behalf of himself and the Texas Trial Lawyers Association. Eiland stated that a clause requiring attorneys to submit a demand letter prior to litigation that is within 80 percent of the final value of the claim is not cohesive with the goal of settling a claim. The attorney would not have access to the claim file before the demand, which cannot be amended, is made. Rep. Eiland said that if the fact finder in a case determines that the claim amount is not within this 80 percent window, the policyholder may not be made whole, as the attorney’s fees will not be completely covered.

In response, Sen. Kelly Hancock, sponsor of the bill in the Senate, stated that the bill was designed so that the property owner will always be protected, even if the attorney is not. Sen. Hancock said that the goal of this legislation is to filter out “bad actors” in the system by encouraging claimants to hire competent attorneys who can meet the requirements in the bill.

After hearing testimony, the committee voted 6-0 to pass the bill, which will now be sent to the Senate floor. Sens. Schwertner, Whitmire, and Zaffirini were absent during the vote.