Texas — Contingency Fee Rules

How Are Contingency Fees Regulated in This State?

Direct Answer: Texas allows contingency fees up to 40% in most personal injury cases under Disciplinary Rule 1.04. Medical malpractice damages are capped under the 2003 reforms (Civ. Prac. & Rem. Code §74.301), which indirectly limits contingency recovery. No state cap on the percentage itself for PI cases.

Texas does not impose a general statutory cap on contingency fees. Under Texas Disciplinary Rule of Professional Conduct 1.04, fees must not be "unconscionable." The rule lists factors for evaluating reasonableness, including the time and labour required, the complexity of the matter, and the amount involved.

The market standard in Texas personal injury cases is 33⅓% if the case settles before a lawsuit is filed or before trial, escalating to 40% if the case goes to trial. Some attorneys use a three-tier structure: 33⅓% pre-litigation, 40% post-filing, and 45% on appeal.

All contingency fee agreements must be in writing under Texas Government Code § 82.065, signed by both attorney and client, specifying the fee percentage, how costs and expenses are handled, and the scope of representation.

Statute of Limitations

Texas-Specific Considerations

Proportionate responsibility (51% bar): Under CPRC Chapter 33, Texas follows a modified comparative fault system. If the claimant's percentage of responsibility is greater than 50%, they recover nothing. If 50% or less, their recovery is reduced proportionally.

Medical malpractice caps: HB 4 (2003) caps non-economic damages at $250,000 per individual healthcare provider and $250,000 per healthcare institution (maximum $500,000 total institutional liability). There is no cap on economic damages.

Texas Tort Claims Act: Sovereign immunity limits claims against government entities. Damages are capped at $250,000 per person and $500,000 per occurrence for bodily injury/death, and $100,000 for property damage.