Colorado Legislative Council Staff
NO FISCAL IMPACT
January 2, 1998
Susan Colling (866-4784)
TITLE: CONCERNING THE PAYMENT OF LEGAL FEES IN CIVIL ACTIONS.
Summary of Legislation
This bill would replace the “substantially frivolous, groundless, or vexatious” standard for awarding attorney fees in civil cases. Under the new standard, a case deemed to lack substantial justification would allow for attorney fee awards under the following circumstances:
∙ the claim is presented for improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation;
∙ the claims, defenses, or legal contentions are not warranted by existing law or by a nonfrivolous argument for a change in the law or for establishment of new law;
∙ the allegations and other factual contentions do not have evidentiary support or are unlikely to have evidentiary support after discovery; or
∙ the denials of factual contention are not warranted by the evidence or are not reasonably based on a lack of information or belief.
The bill further requires reasonable attorney fees be awarded to a party who makes a written settlement offer that is rejected, and the court ultimately enters a judgment that is less favorable than the rejected settlement offer. The bill provides that fees awarded would be calculated from the date of the first settlement offer that is not less favorable than the judgment. Cases involving domestic matters, juvenile matters brought under the “Colorado Children’s Code”, and traffic offenses would be excluded.
Further, the bill would define what constitutes a judgment that is less favorable than a rejected settlement offer and establishes a time frame for making and accepting written settlement offers. The bill would specify parameters regarding attorney fee awards such as:
∙ how awards would be allocated among multiple parties;
∙ how awards would be calculated;
∙ what factors justify a court’s action to vary the amount awarded; and
∙ how contingency fee cases would be calculated on the basis of a reasonable hourly rate.
The bill would become effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution.
This bill would apply to civil litigation in the court system, but it does not exclude administrative actions in the Department of Regulatory Agencies. If administrative settlements were included there would be minimal impact, but any increase in workloads would be absorbed within existing resources. The bill does not create any additional workload in the courts. Therefore, this bill is assessed as having no fiscal impact.
Department of Law
Department of Personnel
Department of Regulatory Agencies
State Public Defender