AN ACT Relating to prejudgment interest for posteconomic damages and disclosure of contingent attorneys' fees; amending RCW 4.56.110; adding a new section to chapter 4.56 RCW; adding a new section to chapter 2.44 RCW; creating a new section; and repealing RCW 4.56.115.

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

Sec. 1. Section 4, chapter 136, Laws of 1895 as last amended by section 19, chapter 360, Laws of 1989 and RCW 4.56.110 are each amended to read as follow:

Interest on judgments shall accrue as follows:

(1) Judgments founded on written contracts, providing for the payment of interest until paid at a specified rate, shall bear interest at the rate specified in the contracts: PROVIDED, That said interest rate is set forth in the judgment.

(2) All judgments for unpaid child support that have accrued under a superior court order or an order entered under the administrative procedure act shall bear interest at the rate of twelve percent.

(3)(a) In any action based on fault, as defined in RCW 4.22.015, if the claimant makes a written offer to settle the action that is not accepted by the defendant prior to trial or within thirty days, whichever occurs first, and the claimant obtains a more favorable judgment, then the judgment shall bear interest on the unpaid portion of past economic damages at the treasury rate, calculated from the date of the claimant's first written offer to settle the action which is exceeded by the judgment, and interest shall accrue until the entry of judgment, and after entry of judgment, shall bear interest as provided in subsection (4) of this section.

(b) For the purposes of this section: (i) "Treasury rate" means the equivalent coupon issued yield (as published by the federal reserve bank of San Francisco) of the average bill rate for twenty-six week treasury bills as determined at the first bill market auction conducted during the calendar month immediately preceding the date of entry of the judgment; (ii) "economic damages" means objectively verifiable monetary losses, including medical expenses, loss of earning, burial costs, loss of use of property, cost of replacement or repair, cost of obtaining substitute domestic services, loss of employment, and loss of business or employment opportunities; "economic damages" does not include subjective, nonmonetary losses such as pain and suffering, mental anguish, emotional distress, disability and disfigurement, inconvenience, injury to reputation, humiliation, destruction of the parent-child relationship, the nature and extent of an injury, loss of consortium, society, companionship, support, love, affection, care, services, guidance, training, instruction, and protection; and (iii) "written offer to settle" means a firm, definite, and unconditional offer by the claimant to settle the claim for a sum certain in money that is communicated in writing to the defendant by personal service or registered mail.

(4) Except as provided under RCW 19.52.010, 82.32.060, and subsections (1) and (2) of this section, judgments shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof: PROVIDED, That in any case where a court is directed on review to enter judgment on a verdict or in any case where a judgment entered on a verdict is wholly or partly affirmed on review, interest on the judgment or on that portion of the judgment affirmed shall date back to and shall accrue from the date the verdict was rendered.

(5) This section applies to judgments against any judgment debtor, whether public or private.

NEW SECTION. Sec. 2. A new section is added to chapter 4.56 RCW to read as follows:

Any attorney for a claimant shall not receive as compensation any portion of the prejudgment interest awarded pursuant to RCW 4.56.110(3).

NEW SECTION. Sec. 3. A new section is added to chapter 2.44 RCW to read as follows:

A contingent fee consisting of a percentage of the monetary amount recovered for a claimant, agreed to after the effective date of this section, shall be based on the net amount recovered after payment or reimbursement out of the recovery of unrecovered legal costs and expenses such as filing fees, deposition expenses, document copying costs, trial transcript costs, travel expenses, expert witness fees, and other expenses necessary to conduct the matter or litigation.

A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall be paid to the lawyer. Upon conclusion of a contingent fee matter, the lawyer shall provide to the client a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination. In the absence of a written agreement to the contrary, a contingent fee agreement shall be deemed to include the work necessary to handle any appeals and collect judgment in the same matter.

A contingent fee consisting of a percentage of the monetary amount recovered for a claimant, in which all or part of the recovery is to be paid in the future, shall be paid only (a) by applying the percentage to the net amounts recovered as they are received by the client; or (b) by applying the percentage to the actual cost of the settlement or award to the defendant, or if the cost is unknown and undiscoverable, to the present money value of the payments.

NEW SECTION. Sec. 4. Section 1, chapter 26, Laws of 1975, section 2, chapter 147, Laws of 1983 and RCW 4.56.115 are each repealed.

NEW SECTION. Sec. 5. Sections 1 and 2 of this act apply to cases filed on and after the effective date of this act.