House Bill 38

AN ACT TO PROVIDE FOR THE PAYMENT OF COSTS AND EXPENSES INCURRED BY A PREVAILING DEFENDANT IN A CIVIL ACTION; TO AUTHORIZE THE FILING OF A SUIT TO RECOVER SUCH COSTS AND EXPENSES; TO AMEND SECTION 11-53-31, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; TO AMEND SECTIONS 11-55-5 AND 11-55-7, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A PARTY AND HIS ATTORNEY SHALL BE JOINTLY LIABLE FOR COSTS AND DAMAGES IN A FRIVOLOUS SUIT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. In civil actions which are filed by an individual or group of individuals against another individual or group of individuals, the individual defendant or defendants named may file as part of the response to the plaintiff's pleading a statement that such defendant will provide an itemized list of expenses which may include time spent in preparation of defense and other legitimate expenses to the court for approval of payment from the plaintiff and the plaintiff's attorney to the defendant in the event that the decision is in favor of the defendant. If the plaintiff's attorney has a payment arrangement of a set fee or an hourly fee as his remuneration from the plaintiff, then the attorney will have no obligation to the defendant. If the plaintiff's attorney has a contingency fee arrangement with the plaintiff, then the plaintiff's attorney shall not be liable for more than the maximum contingency percentage of the award that the plaintiff's attorney would have received if the plaintiff had been the successful party in the lawsuit. If the plaintiff and the plaintiff's attorney do not pay the submitted list of expenses within ninety (90) days to the defendant, then the defendant may file suit in the same court for payment of the list of expenses plus reasonable expenses for that suit. All laws of joint and several liability shall apply to any suit filed under the provisions of this section.

SECTION 2. Section 11-53-31, Mississippi Code of 1972, is amended as follows:

11-53-31. Except as otherwise provided in Section 1 of this act, all costs accrued at the instance of the successful defendant in a suit, which cannot be collected out of the other party, may be collected from such defendant; and after return of "no property" on execution against a plaintiff or complainant against whom costs were adjudged, execution may be issued against the successful defendant for all costs accrued at his instance and not paid or collected from the other party. A successful plaintiff or complainant shall be liable for all the costs of the case accrued at his instance which cannot be collected from the defendants; and after return of "no property" on execution against the defendant against whom costs were adjudged, execution may be issued against the successful plaintiff or complainant for all the costs of the case accrued at his instance not paid or collected from the defendant. An unsuccessful plaintiff or complainant shall be liable for all the costs of the case.

SECTION 3. Section 11-55-5, Mississippi Code of 1972, is amended as follows:

11-55-5. (1) Except as otherwise provided in this chapter, in any civil action commenced or appealed in any court of record in this state, the court shall award, as part of its judgment and in addition to any other costs otherwise assessed, reasonable attorney's fees, costs and the amount of damages sought in the complaint against any party and attorney if the court, upon the motion of any party or on its own motion, finds that an attorney or party brought an action, or asserted any claim or defense, that is without substantial justification, or that the action, or any claim or defense asserted, was interposed for delay or harassment, or if it finds that an attorney or party unnecessarily expanded the proceedings by other improper conduct including, but not limited to, abuse of discovery procedures available under the Mississippi Rules of Civil Procedure. Such award shall be assessed jointly upon such party and the attorney representing such party.

(2) No attorney's fees or costs shall be assessed if a voluntary dismissal is filed as to any action, claim or defense within a reasonable time after the attorney or party filing the action, claim or defense knows or reasonably should have known that it would not prevail on the action, claim or defense.

(3) When a court determines reasonable attorney's fees or costs should be assessed, it shall assess the payment against the offending attorneys and parties, or both, * * * allocate the payment among them, and the offending attorney and party shall be jointly liable for such fees or costs.

(4) No party, except an attorney licensed to practice law in this state, who is appearing without an attorney shall be assessed attorney's fees unless the court finds that the party clearly knew or reasonably should have known that such party's action, claim or defense or any part of it was without substantial justification.

SECTION 4. Section 11-55-7, Mississippi Code of 1972, is amended as follows:

11-55-7. In determining the amount of an award of costs, damages or attorney's fees, the court shall exercise its sound discretion. When granting an award of costs and attorney's fees, the court shall specifically set forth the reasons for such award and shall consider the following factors, among others, in determining whether to assess attorney's fees and costs and the amount to be assessed:

(a) The extent to which any effort was made to determine the validity of any action, claim or defense before it was asserted, and the time remaining within which the claim or defense could be filed;

(b) The extent of any effort made after the commencement of an action to reduce the number of claims being asserted or to dismiss claims that have been found not to be valid;

(d) Whether or not the action was prosecuted or defended, in whole or in part, in bad faith or for improper purpose;

(e) Whether or not issues of fact, determinative of the validity of a party's claim or defense, were reasonably in conflict;

(f) The extent to which the party prevailed with respect to the amount of and number of claims or defenses in controversy;

(g) The extent to which any action, claim or defense was asserted by an attorney or party in a good faith attempt to establish a new theory of law in the state, which purpose was made known to the court at the time of filing;

(h) The amount or conditions of any offer of judgment or settlement in relation to the amount or conditions of the ultimate relief granted by the court;

(i) The extent to which a reasonable effort was made to determine prior to the time of filing of an action or claim that all parties sued or joined were proper parties owing a legally defined duty to any party or parties asserting the claim or action;

(j) The extent of any effort made after the commencement of an action to reduce the number of parties in the action; and

(k) The period of time available to the attorney for the party asserting any defense before such defense was interposed.

SECTION 5. This act shall take effect and be in force from and after July 1, 2007, and shall apply to all causes of action filed on or after that date.