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