By:  Harris, Jack                                      H.B. No. 595
       73R918 DLF-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to alternative dispute resolution.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Subchapter A, Chapter 154, Civil Practice and
    1-5  Remedies Code, is amended by adding Section 154.004 to read as
    1-6  follows:
    1-7        Sec. 154.004.  RULES FOR IMPLEMENTATION.  The chief justice
    1-8  of the supreme court shall adopt rules governing implementation of
    1-9  alternative dispute resolution.  The rules shall govern:
   1-10              (1)  procedures for limited discovery;
   1-11              (2)  standards for determining whether a case should be
   1-12  referred to alternative dispute resolution, considering any
   1-13  relevant factors including whether:
   1-14                    (A)  factual issues predominate over legal issues
   1-15  in the action; and
   1-16                    (B)  the action involves complex or novel legal
   1-17  issues requiring judicial action; and
   1-18              (3)  any other appropriate matter.
   1-19        SECTION 2.  Section 154.021, Civil Practice and Remedies
   1-20  Code, is amended to read as follows:
   1-21        Sec. 154.021.  REFERRAL OF PENDING DISPUTES FOR ALTERNATIVE
   1-22  DISPUTE RESOLUTION PROCEDURE.  (a)  A court may<, on its own motion
   1-23  or the motion of a party,> refer a pending dispute for resolution
   1-24  by an alternative dispute resolution procedure including:
    2-1              (1)  an alternative dispute resolution system
    2-2  established under Chapter 152 <26, Acts of the 68th Legislature,
    2-3  Regular Session, 1983 (Article 2372aa, Vernon's Texas Civil
    2-4  Statutes)>;
    2-5              (2)  a dispute resolution organization; or
    2-6              (3)  a nonjudicial and informally conducted forum for
    2-7  the voluntary settlement of citizens' disputes through the
    2-8  intervention of an impartial third party, including those
    2-9  alternative dispute resolution procedures described under this
   2-10  subchapter.
   2-11        (b)  Not later than the earlier of the 120th day after the
   2-12  date on which citation is served or the 30th day before the date
   2-13  set for trial, the <The> court shall confer with the parties in a
   2-14  pending dispute to review <in the determination of the most
   2-15  appropriate> alternative dispute resolution procedures that may be
   2-16  used to resolve the claims in controversy <procedure>.
   2-17        SECTION 3.  Section 154.022(c), Civil Practice and Remedies
   2-18  Code, is amended to read as follows:
   2-19        (c)  If <the court finds that there is a reasonable basis
   2-20  for> an objection is filed under Subsection (b), the court may not
   2-21  refer the dispute under Section 154.021.
   2-22        SECTION 4.  Subchapter B, Chapter 154, Civil Practice and
   2-23  Remedies Code, is amended by adding Section 154.0235 to read as
   2-24  follows:
   2-25        Sec. 154.0235.  OUTCOME DETERMINATIVE MEDIATION.  (a)
   2-26  Outcome determinative mediation is a proceeding in which a single
   2-27  mediator or a panel of three mediators selected under the direction
    3-1  of the court determines the outcome of the action.
    3-2        (b)  Not later than the 30th day after the date a
    3-3  determination is made by the mediator or mediators, each party
    3-4  shall give notice as to whether it accepts or rejects the
    3-5  determination.
    3-6        (c)  The court shall order a claimant who rejects the
    3-7  determination and who does not obtain a final judgment that is at
    3-8  least 10 percent greater than the amount awarded under the
    3-9  determination to pay the attorney's fees and costs incurred by the
   3-10  defendant after the date of the rejection of the determination.
   3-11        (d)  The court shall order a defendant who rejects the
   3-12  determination and who does not obtain a final judgment that is at
   3-13  least 10 percent less than the amount awarded under the
   3-14  determination to pay the attorney's fees and costs incurred by the
   3-15  claimant after the date of the rejection of the determination.
   3-16        (e)  For purposes of this section:
   3-17              (1)  "Claimant" means a party, including a plaintiff,
   3-18  counterclaimant, cross-claimant, or third-party claimant, seeking
   3-19  recovery of monetary damages; and
   3-20              (2)  "Defendant" means a party, including a
   3-21  counterdefendant, cross-defendant, or third-party defendant, from
   3-22  whom a claimant seeks damages.
   3-23        SECTION 5.  Subchapter B, Chapter 154, Civil Practice and
   3-24  Remedies Code, is amended by adding Section 154.028 to read as
   3-25  follows:
   3-26        Sec. 154.028.  EARLY NEUTRAL EVALUATION.  Early neutral
   3-27  evaluation is a procedure in which an impartial third party
    4-1  evaluates the merit and value of claims of the party and advises
    4-2  all parties of the evaluation.
    4-3        SECTION 6.  Section 154.051(b), Civil Practice and Remedies
    4-4  Code, is amended to read as follows:
    4-5        (b)  The court shall <may> appoint a third party who is
    4-6  agreed on by the parties without regard to whether <if> the person
    4-7  qualifies for appointment under this subchapter.
    4-8        SECTION 7.  Section 154.054, Civil Practice and Remedies
    4-9  Code, is amended by adding Subsection (c) to read as follows:
   4-10        (c)  The court may use a volunteer impartial third party in
   4-11  dispute resolution under this chapter.
   4-12        SECTION 8.  (a)  This Act takes effect September 1, 1993.
   4-13        (b)  The chief justice of the supreme court shall adopt rules
   4-14  in accordance with Section 154.004, Civil Practice and Remedies
   4-15  Code, not later than March 1, 1994.
   4-16        (c)  This Act applies to use of alternative dispute
   4-17  resolution procedures in an action commenced on or after March 1,
   4-18  1994.  Use of alternative dispute resolution procedures in an
   4-19  action commenced before March 1, 1994, is governed by the law as it
   4-20  existed immediately before the effective date of this Act, and that
   4-21  law is continued in effect for that purpose.
   4-22        SECTION 9.  The importance of this legislation and the
   4-23  crowded condition of the calendars in both houses create an
   4-24  emergency   and   an   imperative   public   necessity   that   the
   4-25  constitutional rule requiring bills to be read on three several
   4-26  days in each house be suspended, and this rule is hereby suspended.