82R5310 CAE-F
By: Williams S.B. No. 21
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a voluntary compensation plan as
an alternative to litigation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 7, Civil Practice and Remedies Code, is
amended by adding Chapter 160 to read as follows:
CHAPTER 160. VOLUNTARY COMPENSATION PLAN
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 160.001. DEFINITIONS. In this chapter:
(1) "Claim" means a claim for personal injury, death,
or property damage caused by an event or product covered by this
chapter.
(2) "Claimant" means a person making a claim.
(3) "Plan administrator" means an individual a
claimant can contact to obtain information about or compensation
from a voluntary compensation plan. There may be more than one plan
administrator.
(4) "Plan creator" means a person who establishes a
voluntary compensation plan under this chapter.
(5) "Potentially liable person" means a person who:
(A) may be responsible, in whole or in part, for
damages arising out of personal injury, death, or property damage
caused by an event covered by this chapter; or
(B) may be liable for a cause of action covered by
Chapter 82 for damages arising out of personal injury, death, or
property damage caused by a defective product covered by this
chapter.
(6) "Voluntary compensation plan" means a plan
established under this chapter to compensate a claimant for damages
arising out of personal injury, death, or property damage caused by
an event or product covered by this chapter.
Sec. 160.002. APPLICABILITY OF CHAPTER. This chapter
applies to:
(1) an event that caused:
(A) the death of two or more people;
(B) serious bodily injury to five or more people;
or
(C) damage to real property owned by five or more
people; and
(2) a product that may have caused:
(A) the death of two or more people;
(B) serious bodily injury to five or more people;
or
(C) damage to real property owned by five or more
people.
Sec. 160.003. ESTABLISHMENT OF PLAN. (a) A potentially
liable person, acting alone or with another potentially liable
person, may establish a voluntary compensation plan to compensate
an individual who sustained damages covered by this chapter.
(b) Except as provided by Section 160.005(d), a voluntary
compensation plan is established when the person establishing the
plan has published the notice required by Subchapter B.
(c) Except as provided by Section 160.004, a voluntary
compensation plan for damages caused by an event must be
established not later than the 90th day after the date the event
occurred.
Sec. 160.004. PETITION TO EXTEND TIME. (a) A person may
file a petition in district court to request an extension of time to
establish a voluntary compensation plan for an event.
(b) A petition for an extension of time under this section
must be filed in the county in which notice of the establishment of
a voluntary compensation plan must be published under Section
160.052.
(c) A copy of a petition filed under this section must be
served on a party to any pending case in which a plaintiff alleges
that the potentially liable person is liable for damages caused by
an event.
(d) Notice that a petition under this section was filed must
be published as provided by Subchapter B.
(e) A hearing on a petition filed under this section may not
be held before the 14th day after the date the notice is filed,
served, or published, whichever date is later.
(f) An interested person may intervene in a proceeding under
this section to support or oppose the petition. The court may not
consider any other issue at a hearing under this section.
(g) The court shall extend the deadline for establishing a
voluntary compensation plan under this chapter on a showing of good
cause.
(h) A court's decision under this section may be reviewed
by petition for writ of mandamus.
Sec. 160.005. ABATEMENT OF SUITS. (a) A defendant in an
action seeking damages arising out of personal injury, death, or
property damage caused by an event or product covered by this
chapter may file a plea in abatement instead of filing an answer to
the action if:
(1) the action was filed after the defendant
established a voluntary compensation plan with respect to the event
or product alleged to have caused the damages; or
(2) the action is for damages allegedly caused by an
event and the action was filed before the expiration of the period
prescribed by Section 160.003(c) or an extension period granted by
a court under Section 160.004.
(b) A court may impose an appropriate penalty authorized by
Chapter 10 for the signing of a frivolous pleading or motion against
a party who obtains an abatement under Subsection (a)(2) but does
not establish a voluntary compensation plan within the period
provided by this subchapter, including any extension period.
(c) If a defendant files a plea in abatement in accordance
with Subsection (a), the defendant is not required to file an answer
to the abated suit before the 21st day after the date the abatement
period expires as provided by Subsection (d).
(d) Unless extended for good cause, an abatement under this
section expires on the 90th day after the date the voluntary
compensation plan is established, as determined by the trial court
in which the plea in abatement is filed.
(e) A court's refusal to grant a plea in abatement under
this section and a court's decision regarding the date the
voluntary compensation plan was established may be reviewed by
petition for writ of mandamus.
[Sections 160.006-160.050 reserved for expansion]
SUBCHAPTER B. NOTICE AND PUBLICATION
Sec. 160.051. NOTICE REQUIRED; CONTENT. (a) Before a
voluntary compensation plan may be established, the person
establishing the plan must publish notice of intent to create a
plan.
(b) A notice under this section must include:
(1) the name of the person establishing the voluntary
compensation plan;
(2) the name, address, telephone number, and e-mail
address of the plan administrator;
(3) the kind or class of claimants who may be eligible
to receive compensation from the plan;
(4) the deadline by which claims must be filed with the
plan administrator;
(5) the criteria the plan administrator will use to
determine whether a claim is legitimate;
(6) the formula, method, or information the plan
administrator will use to determine the amount that will be paid to
a claimant for a legitimate claim;
(7) a schedule showing the dates and methods by which
legitimate claims will be paid;
(8) a statement of the extent to which accepting a
payment from the plan bars an action against the plan creator or
others; and
(9) any other information necessary for a claimant to
obtain information about or request compensation from the plan.
Sec. 160.052. PUBLICATION OF NOTICE. (a) A notice under
Section 160.051 must be published in a newspaper of record in the
county in which the person establishing the voluntary compensation
plan has the person's principal office or the person's principal
place of business in this state.
(b) If a voluntary compensation plan is established to pay
for damages caused by an event covered by this chapter and that
occurred in this state, notice must also be published in a newspaper
in the county in which the event occurred.
(c) A notice published under this section must:
(1) state that the plan creator has established a
voluntary compensation plan for a specified event or product;
(2) contain the information required by Section
160.051; and
(3) be at least 25 square inches in size.
(d) Notice of the establishment of a voluntary compensation
plan must also be posted on the home page of the Internet website of
the person establishing the plan. The notice on the website must
state that the plan creator has established a plan for a specified
event or product, contain the information required by Section
160.051, and provide a link to a website a potential claimant can
use to contact the plan administrator. The notice must remain
posted on the home page of the website until the plan is
discontinued.
Sec. 160.053. NOTIFICATION TO POTENTIAL CLAIMANT. In
addition to the publication requirements of this subchapter, a plan
creator must use the best method reasonably available under the
circumstances to notify known potential claimants of the voluntary
compensation plan's establishment.
Sec. 160.054. REASONABLE ESTIMATE OF COMPENSATION. (a) On
the request of a potential claimant, a plan administrator must
provide a potential claimant a reasonably accurate statement of the
compensation the claimant would receive under the voluntary
compensation plan.
(b) A plan administrator may comply with Subsection (a) by
making available to a potential claimant a program or other method
that the potential claimant may use to determine a reasonable
estimate of the compensation the potential claimant would receive
under the voluntary compensation plan.
Sec. 160.055. AMENDMENT OF PLAN. A voluntary compensation
plan may be amended at any time. Any amendment to a plan must be
published in the same manner as required for the establishment of
the plan.
[Sections 160.056-160.100 reserved for expansion]
SUBCHAPTER C. PLAN AS SETTLEMENT OFFER
Sec. 160.101. APPLICATION OF CERTAIN COST-SHIFTING
PROVISIONS. (a) Not later than the 60th day after the date an
abatement period expires as provided by Section 160.005, a plan
creator who has been named as a defendant in an action seeking
damages caused by an event or a product covered by this chapter may
apply the settlement provisions of Section 42.004 to the action by
filing with the court a document prepared by the plan administrator
stating the gross amount of money that would have been paid to the
claimant under the voluntary compensation plan as of the date the
abatement period ended.
(b) Unless a plan administrator has rejected the claim, a
filing under this section is a settlement offer for the purposes of
Section 42.004.
(c) A filing under this section is not a declaration
required by Section 42.002 that the settlement procedure allowed by
Chapter 42 is available in the action.
Sec. 160.102. DETERMINATION OF SIGNIFICANTLY LESS
FAVORABLE JUDGMENT. For the purposes of applying Section 42.004
under this subchapter:
(1) the award is the gross recovery under the judgment
minus the claimant's attorney's fees under the contract between the
claimant and the claimant's attorney at the time the claimant was
notified of or became aware of the existence of the voluntary
compensation plan; and
(2) the rejected settlement offer is the gross
compensation the claimant would have received under the voluntary
compensation plan minus the amount the claimant would have paid in
attorney's fees if the claimant had accepted compensation from the
plan.
[Sections 160.103-160.150 reserved for expansion]
SUBCHAPTER D. LEGAL EFFECT OF PLAN
Sec. 160.151. NOT ADMISSION OF LIABILITY. Establishing,
attempting to establish, or planning with respect to establishing a
voluntary compensation plan under this chapter is not an admission
of liability by any person.
Sec. 160.152. NOT ADMISSIBLE. Except as provided by this
chapter, evidence that a person established, attempted to
establish, planned with respect to establishing, or sought
information or compensation from a voluntary compensation plan is
not admissible in any civil, criminal, or administrative proceeding
to determine:
(1) liability arising from an event or product; or
(2) damages:
(A) caused by a product; or
(B) that are the result of an event.
Sec. 160.153. NOT SUBJECT TO DISCOVERY OR DISCLOSURE. A
plan creator's consideration of or planning with respect to
establishing a voluntary compensation plan is privileged from
discovery or disclosure in any civil, criminal, or administrative
proceeding to determine:
(1) liability arising from an event or product; or
(2) damages:
(A) caused by a product; or
(B) that are the result of an event.
Sec. 160.154. NO DUTY OR CAUSE OF ACTION. (a)
Establishing, attempting to establish, or planning with respect to
establishing a voluntary compensation plan does not create a duty
owed by the plan administrator or plan creator.
(b) Establishing, attempting to establish, or planning with
respect to establishing a voluntary compensation plan does not give
rise to a cause of action against a plan administrator or plan
creator:
(1) for a breach of a duty of good faith and fair
dealing;
(2) under the Deceptive Trade Practices-Consumer
Protection Act (Subchapter E, Chapter 17, Business & Commerce
Code); or
(3) for a breach of any other common law or statutory
duty.
(c) Establishing a voluntary compensation plan does not
create an obligation for the plan administrator or plan creator to
negotiate the terms or conditions of payment from the plan or for
the settlement of litigation or threatened litigation.
[Sections 160.155-160.200 reserved for expansion]
SUBCHAPTER E. DUTY OF ATTORNEY OR PLAN ADMINISTRATOR
Sec. 160.201. ACTION SUBJECT TO ABATEMENT. If a voluntary
compensation plan has been established and an action is filed that
the plan creator has a right to abate under Section 160.005, an
attorney representing a claimant or potential claimant must, not
later than the 15th day after the date the attorney learns of the
existence of the plan, inform the claimant or potential claimant in
writing:
(1) of the existence of the plan;
(2) of the name, address, telephone number, and e-mail
address of the plan administrator;
(3) that the claimant or potential claimant may
contact the plan administrator directly and without the attorney's
participation;
(4) that if the claimant or potential claimant seeks
compensation from the plan without the assistance of the attorney,
the claimant or potential claimant will not owe the attorney any fee
for services in connection with that claim for compensation; and
(5) that if the claimant or potential claimant seeks
compensation from the plan with the assistance of the attorney, it
is unlawful for the attorney to receive or contract to receive a fee
in excess of five percent of the amount received by a claimant or
potential claimant from the plan.
Sec. 160.202. NO RIGHT TO ABATEMENT. If a voluntary
compensation plan has been established and an action is filed that
the plan creator has a right to abate under Section 160.005, an
attorney representing a claimant in that action must, not later
than the 15th day after the date the attorney learns of the
existence of the plan, inform the claimant or potential claimant in
writing:
(1) of the existence of the plan;
(2) of the name, address, telephone number, and e-mail
address of the plan administrator;
(3) that the claimant or potential claimant may
contact the plan administrator directly and without the attorney's
participation; and
(4) of the fee the attorney will charge to the claimant
or potential claimant if the claimant or potential claimant elects
to accept payment from the plan instead of pursuing litigation.
Sec. 160.203. PROHIBITED CONTACT. (a) A plan creator or
plan administrator may not initiate the first contact with a
claimant or potential claimant except to provide notice of the
establishment of a voluntary compensation plan as provided by
Subchapter B.
(b) A plan creator or plan administrator may not initiate
contact with a claimant or potential claimant for the purpose of
encouraging or attempting to induce the claimant or potential
claimant to accept compensation under the voluntary compensation
plan.
SECTION 2. The changes in law made by this Act apply only to
a cause of action that accrues on or after the effective date of
this Act. A cause of action that accrues before the effective date
of this Act is governed by the law in effect immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 3. This Act takes effect September 1, 2011.