Texas Looks To 'Rejuvenate The Courthouse' With New Rules For Expedited Trial, Permissive Interlocutory Appeal And New 'Loser Pays' Provisions Potentially Creating Strategic Options For Claims Handling And Resolution

INTRODUCTION

In 2011, the Texas Legislature passed House Bill 274, directing the Texas Supreme Court to promulgate new rules reducing the expense and delay of litigation. House Bill 274 calls for early "dismissal of causes of action that have no basis in law or fact" and for "expedited actions" when the amount in controversy does not exceed $100,000.

Two of those sets of rules, governing permissive appeals and offers of judgment, were completed in September 2011. New Rule 168 of the Texas Rules of Civil Procedure allows for permissive appeals of interlocutory orders. Existing Rule 167 of the Texas Rules of Civil Procedure was amended to refine and expand the "loser pays" rules when a party refuses a reasonable settlement.

By its order of November 13, 2012, and effective March 1, 2013, the court promulgated: (1) new Rule 91a of the Texas Rules of Civil Procedure providing for early dismissal of meritless cases, and (2) new Rule 169 of the Texas Rules of Civil Procedure providing an expedited litigation path for cases involving less than $100,000 in controversy. New Rule 169 is further augmented by amendments to Rules 47 and 190 of the Texas Rules of Civil Procedure and Rule 902(c) of the Texas Rules of Evidence.

Taken as a whole, these rule changes work together to provide new strategic ways of handling cases. Texas Supreme Court Justice Nathan Hecht characterized the new rules as "rejuvenating the courthouse."

NEW PERMISSIVE (INTERLOCUTORY) APPEAL PROVISION

Gravamen of Rule Change

Previously, Texas law allowed for interlocutory appeals only in very limited circumstances, as detailed in Texas Civil Practice and Remedies Code Chapter 51.014. Under this statute, interlocutory orders could be appealed only in narrowly defined circumstances or if both parties agreed to the interlocutory appeal, which happened rarely. Thus, in the vast majority of cases, the rulings of the trial court could not be reviewed until the controversy was finally decided — after trial and the incursion of all costs incurred in preparing for trial.

New Texas Rule of Civil Procedure 168, adopted effective September 1, 2011, along with corollary Rule 28 in the Texas Rules of Appellate Procedure, allows for the interlocutory appeal of any trial court order either on motion of a party or by the court's independent initiative, so long as the order: (1) involves a controlling question of law, (2) as to which there is a substantial ground for difference of opinion, and (3) appeal of the order would materially advance the ultimate termination of the litigation. Mutual consent of the parties is no longer required. The order to be appealed should state that permission to appeal is granted, identify the controlling question of law and state the reason why appeal would advance the resolution of the case. New Rule 168 applies to prior trial court rulings so long as a party obtains an amended order complying with the procedure.

A trial court order will not guarantee review by the court of appeals. A party must first petition the court of appeals for permission to appeal within 15 days of the signing of the order in question. If the petition is granted, the permissive appeal is treated as an accelerated appeal.

Import of Rule Change

Many litigants...