CHAPTER 417. THIRD-PARTY LIABILITY
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.