I
107TH CONGRESS
1ST SESSION
H. R. 2463
To provide limits on contingency fees in health care liability actions.
IN THE HOUSE OF REPRESENTATIVES
JULY 11, 2001
Mr. BRADY of Texas introduced the following bill; which was referred to the
Committee on the Judiciary
A BILL
To provide limits on contingency fees in health care liability
actions.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Patients’ Right to Fair
Compensation and Protection Against Predatory Contin-
gency Fee Practices Act’’.
SEC. 2. ASSURING PATIENTS FAIR COMPENSATION AND
PROTECTION AGAINST PREDATORY CONTIN-
GENCY FEE PRACTICES.
(a) IN GENERAL.—An attorney may not enter into
or enforce a contract, whether express or implied, for at-
torney fees in connection with a health care liability action
to the extent that the amount or payment of such fees
is—
(1) contingent upon the resolution of the action;
and
(2) in excess of the maximum allowed percent-
age specified in subsection (b).
(b) MAXIMUM ALLOWED PERCENTAGE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the maximum allowed percentage referred
to in subsection (a) shall be 10 percent of the
amount recovered by the claimant in connection with
the action.
(2) UNREASONABLE PROTRACTION.—If the op-
posing party during the course of the action so un-
reasonably protracts the final resolution of the con-
troversy that the claimant’s attorney is required to
render additional services of a degree not reasonably
contemplated at the time the contract was made, the
maximum allowed percentage referred to in sub-
section (a) shall be the amount specified in para-
graph (1), plus any additional amount necessary and
appropriate to adequately account for the additional
services.
(c) CIVIL ACTION.—
(1) IN GENERAL.—Any person aggrieved by the
act of an attorney in violation of subsection (a) may
bring a civil action in a United States district court
or other appropriate court to rescind the contract to
the extent it violates such subsection and to compel
the disgorgement of any fees paid in violation of
such subsection.
(2) REMEDIES NOT EXCLUSIVE.—The remedies
provided in paragraph (1) are in addition to any
other remedies that may be available.
(d) SANCTIONS.—
(1) IN
GENERAL.—A court with jurisdiction
over the health care liability action referred to in
subsection (a) shall sanction an attorney who vio-
lates such subsection.
(2) MAXIMUM.—The amount of the sanction
shall not exceed the amount by which the fee sought
under the contract exceeds the maximum fee per-
mitted by subsection (a).
(3) 
MINIMUM.—Notwithstanding 
paragraph
(2), the amount of the sanction shall be not less
than $2,000.
(e) DEFINITIONS.—For purposes of this section:
(1) CLAIMANT.—The term ‘‘claimant’’ means
any person who brings a health care liability action
and any person on whose behalf such an action is
brought. If such action is brought through or on be-
half of an estate, the term includes the claimant’s
decedent. If such action is brought through or on be-
half of a minor or incompetent, the term includes
the claimant’s legal guardian.
(2) 
HEALTH
BENEFIT
PLAN.—The 
term
‘‘health benefit plan’’ means—
(A) a hospital or medical expense incurred
policy or certificate,
(B) a hospital or medical service plan con-
tract,
(C) a health maintenance subscriber con-
tract, or
(D) a MedicarePlus product (offered under
part C of title XVIII of the Social Security
Act), that provides benefits with respect to
health care services.
(3) HEALTH
CARE
LIABILITY
ACTION.—The
term ‘‘health care liability action’’ means a civil ac-
tion brought in a State or Federal court or pursuant
to alternative dispute resolution against a health
care provider, health insurance issuer, plan sponsor,
or any other entity which is obligated to provide or
pay for health benefits under any health benefit plan
(including any person or entity acting under a con-
tract or arrangement to provide or administer any
health benefit), based upon the provision of (or the
failure to provide or pay for) health care services or
the use of a medical product, regardless of the the-
ory of liability on which the claim is based or the
number of plaintiffs, defendants, or causes of action.
(4) HEALTH
CARE
PROVIDER.—The term
‘‘health care provider’’ means any person that is en-
gaged in the delivery of health care services in a
State and that is required by the laws or regulations
of the State to be licensed or certified by the State
to engage in the delivery of such services in the
State.
(5) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, Puerto
Rico, the Virgin Islands, Guam, American Samoa,
the Northern Mariana Islands, and any other terri-
tory or possession of the United States.
(f) PREEMPTION.—
(1) IN GENERAL.—Subject to paragraph (2),
this section shall preempt any State law to the ex-
tent such law is inconsistent with this section.
(2) ADDITIONAL
LIMITATIONS.—This section
shall not preempt any State law to the extent such