CHAPTER 417. THIRD-PARTY LIABILITY - Texas Statutes

LABOR CODE

TITLE 5. WORKERS' COMPENSATION

SUBTITLE A. TEXAS WORKERS' COMPENSATION ACT

CHAPTER 417. THIRD-PARTY LIABILITY

Sec. 417.001. THIRD-PARTY LIABILITY. (a) An employee or legal

beneficiary may seek damages from a third party who is or becomes

liable to pay damages for an injury or death that is compensable

under this subtitle and may also pursue a claim for workers'

compensation benefits under this subtitle.

(b) If a benefit is claimed by an injured employee or a legal

beneficiary of the employee, the insurance carrier is subrogated

to the rights of the injured employee and may enforce the

liability of the third party in the name of the injured employee

or the legal beneficiary. The insurance carrier's subrogation

interest is limited to the amount of the total benefits paid or

assumed by the carrier to the employee or the legal beneficiary,

less the amount by which the court reduces the judgment based on

the percentage of responsibility determined by the trier of fact

under Section 33.003, Civil Practice and Remedies Code,

attributable to the employer. If the recovery is for an amount

greater than the amount of the insurance carrier's subrogation

interest, the insurance carrier shall:

(1) reimburse itself and pay the costs from the amount

recovered; and

(2) pay the remainder of the amount recovered to the injured

employee or the legal beneficiary.

(c) If a claimant receives benefits from the subsequent injury

fund, the division is:

(1) considered to be the insurance carrier under this section

for purposes of those benefits;

(2) subrogated to the rights of the claimant; and

(3) entitled to reimbursement in the same manner as the

insurance carrier.

(d) The division shall remit money recovered under this section

to the comptroller for deposit to the credit of the subsequent

injury fund.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 12.13, eff. Sept.

1, 1997; Acts 2003, 78th Leg., ch. 204, Sec. 4.09, eff. Sept. 1,

2003.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.285, eff. September 1, 2005.

Sec. 417.002. RECOVERY IN THIRD-PARTY ACTION. (a) The net

amount recovered by a claimant in a third-party action shall be

used to reimburse the insurance carrier for benefits, including

medical benefits, that have been paid for the compensable injury.

(b) Any amount recovered that exceeds the amount of the

reimbursement required under Subsection (a) shall be treated as

an advance against future benefits, including medical benefits,

that the claimant is entitled to receive under this subtitle.

(c) If the advance under Subsection (b) is adequate to cover all

future benefits, the insurance carrier is not required to resume

the payment of benefits. If the advance is insufficient, the

insurance carrier shall resume the payment of benefits when the

advance is exhausted.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Sec. 417.003. ATTORNEY'S FEE FOR REPRESENTATION OF INSURANCE

CARRIER'S INTEREST. (a) An insurance carrier whose interest is

not actively represented by an attorney in a third-party action

shall pay a fee to an attorney representing the claimant in the

amount agreed on between the attorney and the insurance carrier.

In the absence of an agreement, the court shall award to the

attorney payable out of the insurance carrier's recovery:

(1) a reasonable fee for recovery of the insurance carrier's

interest that may not exceed one-third of the insurance carrier's

recovery; and

(2) a proportionate share of expenses.

(b) An attorney who represents the claimant and is also to

represent the subrogated insurance carrier shall make a full

written disclosure to the claimant before employment as an

attorney by the insurance carrier. The claimant must acknowledge

the disclosure and consent to the representation. A signed copy

of the disclosure shall be furnished to all concerned parties and

made a part of the division file. A copy of the disclosure with

the claimant's consent shall be filed with the claimant's

pleading before a judgment is entered and approved by the court.

The claimant's attorney may not receive a fee under this section

to which the attorney is otherwise entitled under an agreement

with the insurance carrier unless the attorney complies with the

requirements of this subsection.

(c) If an attorney actively representing the insurance carrier's

interest actively participates in obtaining a recovery, the court

shall award and apportion between the claimant's and the

insurance carrier's attorneys a fee payable out of the insurance

carrier's subrogation recovery. In apportioning the award, the

court shall consider the benefit accruing to the insurance

carrier as a result of each attorney's service. The total

attorney's fees may not exceed one-third of the insurance

carrier's recovery.

(d) For purposes of determining the amount of an attorney's fee

under this section, only the amount recovered for benefits,

including medical benefits, that have been paid by the insurance

carrier may be considered.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.

Amended by:

Acts 2005, 79th Leg., Ch.

265, Sec. 3.286, eff. September 1, 2005.

Sec. 417.004. EMPLOYER LIABILITY TO THIRD PARTY. In an action

for damages brought by an injured employee, a legal beneficiary,

or an insurance carrier against a third party liable to pay

damages for the injury or death under this chapter that results

in a judgment against the third party or a settlement by the

third party, the employer is not liable to the third party for

reimbursement or damages based on the judgment or settlement

unless the employer executed, before the injury or death

occurred, a written agreement with the third party to assume the

liability.

Acts 1993, 73rd Leg., ch. 269, Sec. 1, eff. Sept. 1, 1993.