HB4325

Regular Session

Relating to civil liability for prohibited barratry.

ModeratePlan for compliance

Low Cost

Effective:2025-06-22

Enforcing Agencies

Texas Civil Courts (via private right of action by plaintiffs)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: June 22, 2025 (Passed by 2/3 supermajority, overriding the standard September 1 date).
Compliance Deadline: Immediate. The increased penalty applies to any civil action *filed* on or after June 22, 2025. If you committed a solicitation violation in 2024 but are sued on June 23, 2025, you are liable for the $50,000 penalty.
Agency Rulemaking: None. This statute is self-executing and enforced through private civil litigation in Texas courts. Do not wait for agency guidance; judicial interpretation will set the standards.

Immediate Action Plan

1. Audit Pending Threats: Review all threatened or potential barratry claims currently on your docket. Settle these before June 22, 2025, to lock in the lower $10,000 penalty exposure.
2. Verify Lead Sources: Conduct a "deep dive" audit of your top three lead sources. If a vendor cannot explain exactly how a lead was generated, terminate the contract immediately.
3. Update Indemnification: Issue contract addendums to all marketing partners shifting the $50,000 liability to them for non-compliant leads.
4. Sanitize the Docket: If you have cases where the solicitation method is questionable, consider disengaging immediately to prevent a future counterclaim for barratry.

Operational Changes Required

Contracts

Marketing Vendor Agreements: Immediately amend Master Services Agreements (MSAs) with lead generators and marketing agencies. Insert specific indemnification clauses requiring vendors to cover the $50,000 statutory penalty and legal fees if their lead generation methods violate Texas Disciplinary Rules of Professional Conduct.
Employment Agreements: Update contracts for investigators, intake specialists, and liaison staff to explicitly prohibit direct solicitation. Include termination-for-cause provisions to mitigate vicarious liability claims against the business entity.

Hiring/Training

Intake Scripting: Retrain intake staff to verbally verify and record the "origin of contact" for every potential client. Staff must be trained to identify and reject leads that appear to be the result of "runner" activity or unrequested solicitation.
Prohibited Incentives: Audit compensation structures. Ensure no non-lawyer employees or external partners (e.g., chiropractors, body shops) receive compensation calculated by the number of referrals to legal counsel.

Reporting & Record-Keeping

Chain of Custody: Implement mandatory fields in your CRM (e.g., Salesforce, Filevine) to document the specific marketing channel for every client. "Referral" is insufficient; you must document *who* referred the client and confirm no value was exchanged for that referral.
Non-Solicitation Affidavits: For high-risk practice areas (Personal Injury/Mass Tort), require new clients to sign an affidavit at intake confirming they initiated contact voluntarily and were not approached by a third party.

Fees & Costs

Uninsurable Losses: The $50,000 penalty is a statutory fine, not compensatory damages. Consequently, it is likely excluded from coverage under standard General Liability and Legal Malpractice insurance policies. This cost will hit your bottom line directly.
Litigation Settlement Floors: Expect the "nuisance value" of barratry claims to rise. Plaintiffs' counsel will use the $50,000 statutory floor as the starting point for settlement negotiations.

Strategic Ambiguities & Considerations

"Engaged In" Liability: The statute penalizes persons who "engaged in" barratry. It is currently ambiguous whether plaintiffs can stack penalties by suing both the individual "runner" and the firm/business owner separately for the same act ($50,000 x 2). Courts will likely decide if this liability is joint and several or cumulative.
Digital Solicitation: The line between aggressive digital marketing (retargeting) and prohibited solicitation remains blurry. While the statute targets direct contact, plaintiffs may argue that unsolicited direct messages (DMs) or text messages constitute barratry under the new penalty regime.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsCivil Remedies & Liabilities Lawyers

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

C.S.H.B. 4325

By: Moody

Judiciary & Civil Jurisprudence

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The civil penalty for barratry, which amounts to $10,000 in addition to damages and attorney's fees, has remained static since its establishment and is recoverable by a person who prevails in a barratry action. However, the bill author has informed the committee that some practitioners have argued that the penalty is insufficient to deter prohibited barratry and make victims whole, especially unsophisticated victims who enter agreements without a contract. C.S.H.B. 4325 seeks to address this issue by increasing the civil penalty for barratry to $50,000 when recovered by a person who was solicited through barratry but did not enter into a contract as a result of that conduct.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 4325 amends the Government Code to increase from $10,000 to $50,000 the amount of the penalty to be recovered from each person who engaged in certain conduct constituting barratry in a civil action filed by a person who was solicited but did not enter into a contract as a result of that conduct and prevails in the action.

C.S.H.B. 4325 applies only to an action filed on or after the bill's effective date. An action filed before the bill's effective date is governed by the law in effect on the date the action was filed, and that law is continued in effect for that purpose.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

C.S.H.B. 4325 differs from the introduced in minor or nonsubstantive ways by conforming to certain bill drafting conventions.

House Authors

Rep. Joseph MoodyDemocrat · Primary Author

Joint Authors

Cassandra Garcia Hernandez (D)

Senate Sponsor

Sen. Juan HinojosaDemocrat · Primary Sponsor

Bill Text(with markup)

H.B. No. 4325

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to civil liability for prohibited barratry.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 82.0651(d), Government Code, is amended
	to read as follows:
	(d) A person who prevails in an action under Subsection (c)
	shall recover from each person who engaged in barratry:
	(1) a penalty in the amount of $50,000 [~~$10,000~~];
	(2) actual damages caused by the prohibited conduct;
	and
	(3) reasonable and necessary attorney's fees.
	SECTION 2. Section 82.0651(d), Government Code, as amended
	by this Act, applies only to an action filed on or after the
	effective date of this Act. An action filed before the effective
	date of this Act is governed by the law in effect on the date the
	action was filed, and that law is continued in effect for that
	purpose.
	SECTION 3. This Act takes effect September 1, 2025.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


April 8, 2025

TO:	Honorable Jeff Leach, Chair, House Committee on Judiciary & Civil Jurisprudence

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB4325 by Moody (Relating to the civil penalties for the offense of barratry.), As Introduced

No significant fiscal implication to the State is anticipated.

It is assumed that any costs associated with the bill could be absorbed using existing resources.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

LBB Staff:

JMc, KDw, CMA

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Frequently Asked Questions

Common questions about HB4325

What does Texas HB4325 do?

The Texas Legislature has increased the statutory civil penalty for barratry (illegal solicitation of legal clients) by 400%, raising the fine from $10,000 to $50,000 per violation. This liability extends beyond law firms to include medical providers, towing companies, and marketing agencies involved in the lead generation ecosystem, creating strict, often uninsurable financial exposure for any entity that improperly refers clients to counsel. Implementation Timeline Effective Date: June 22, 2025 (Passed by 2/3 supermajority, overriding the standard September 1 date).

Who authored HB4325?

HB4325 was authored by Texas Representative Joseph Moody during the Regular Session.

When was HB4325 signed into law?

HB4325 was signed into law by Governor Greg Abbott on June 22, 2025.

Which agencies enforce HB4325?

HB4325 is enforced by Texas Civil Courts (via private right of action by plaintiffs).

How urgent is compliance with HB4325?

The compliance urgency for HB4325 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB4325?

The cost impact of HB4325 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB4325 address?

HB4325 addresses topics including civil remedies & liabilities and lawyers.

Legislative data provided by LegiScanLast updated: November 25, 2025

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