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H.B. 4 Tull Text

Summary of 2003 Tort Reform H.B. 4 [Selected Sections]

CONTENTS

Article 1 - Class Actions
Article 2 - Settlement Offers
Article 3 - Multidistrict Litigation
Article 3 - Venue
Article 3 - Forum Non Conveniens
Article 4 - Proportionate Responsibility
Article 5 - Products Liability Reform
Article 6 - Pre-Judgment Interest
Article 7 - Appeal Bonds
Article 8 - Evidence Relating to Seat Belts
Article 10 - Health Care Liability Reform
Article 11 - Claims Against Health Care workers in Public Hospitals
Article 13 - Damages
Article 15 - Public School Teachers
Article 16 - Admissibility of Evidence (Nursing Homes)
Article 17 - Successor Liability for Asbestos Related Litigation
Article 18 & 19 - Charitable / Volunteer Immunity
Article 20 - Design Professionals
Article 21 - Limitation on Trespass Actions for Air Contaminants
Article 22 - Limitation of Liability for Nonprofit Hospitals
Article 23 - Effective Dates

Article 1 - Class Actions
1.Extends jurisdiction to the Texas Supreme Court to hear an appeal from a trial court order certifying or refusing to certify a class
2.Stays all proceedings in the trial court pending that appeal
3. Requires the Texas Supreme Court to promulgate rules to be used by trial courts in calculating the fees to be awarded to class counsel, including rules requiring that:
- the fee be calculated using the lodestar method, which requires a reasonable fee based on the hours actually worked by class counsel
-if part of the recovery by the class is non-cash, the fee paid to class counsel must be in cash and non-cash in the same percentage as the recovery by the class
4.Requires that before a class is certified, the trial court must rule on any plea to the jurisdiction in which it is asserted that the plaintiff's claims are within the jurisdiction of a state agency

Article 2 - Settlement Offers
1.Provides incentives for parties to make and accept reasonable settlement offers early in lawsuits by shifting litigation-related costs when a party refuses a pre-trial settlement offer that turns out to be as good as or better than what that party ultimately wins
2.This cost-shifting mechanism is available in most civil cases, and comes into play upon the defendant filing an election to have the mechanism in play in that case
3.The defendant's litigation costs are shifted to the plaintiff if the plaintiff's judgment is less than 80% of the defendant's settlement offer
4.The plaintiff's litigation costs are shifted to the defendant if the plaintiff's judgment is more than 120% of the plaintiff's settlement offer
5.Even if costs are shifted against the plaintiff, the plaintiff still recovers at least 50% of his or her economic damages plus the amount of any statutory liens against the plaintiff's recovery

Article 3 - Multidistrict Litigation
1.Creates the five-member Judicial Panel on Multidistrict Litigation, appointed by the Chief Justice of the Texas Supreme Court, that is empowered to transfer factually related cases pending in multiple counties to a single court for consolidated or coordinated pretrial proceedings
2.The cases must be returned to the county in which the case was filed for trial
3.This procedure, which is modeled on federal law, provides for more consistent outcomes and reduces the overall cost of large-scale litigation by creating a procedure for consolidating cases with common fact questions

Article 3 - Venue
Fixes an anomaly in the current law by allowing an immediate appeal of a trial court's decision that a plaintiff in a multi-plaintiff case has independently established venue in the county of suit

Article 3 - Forum Non Conveniens
1.Creates a single standard-based on federal law-for determining whether a case should be dismissed so that it may be pursued in a more appropriate state or country
2.The court will be able to dismiss a case that has no connection to Texas and should have been brought in another state or country if dismissal is in the interest of justice and for the convenience of the parties

Article 4 - Proportionate Responsibility
1.Ensures that named defendants will be responsible only for the portion of fault attributable to them by allowing the jury or factfinder to consider the conduct of all potentially responsible persons when allocating fault for a plaintiff's injury
2.The jury may allocate fault to any responsible person, including a bankrupt, criminal, person beyond the court's jurisdiction, or employer with workman's compensation immunity
3.Does not impose additional liability or cost on businesses that carry workers' compensation insurance or others who are not parties to the case or are immune from liability
4.Provides that the credit for the pre-trial settlement by another defendant in cases other than healthcare liability claims is based on the percentage of responsibility allocated to the settling defendant rather than being based on the amount of the settlement
5.Provides that the credit for the pre-trial settlement by another defendant with respect to healthcare liability claims is based on the total dollar amount of the settlements unless all nonsettling defendants agree to a credit based on the percentage of responsibility allocated to the settling defendant
6.Corrects a problem with the definition of "claimant", identified by the Texas Supreme Court

Article 5 - Products Liability Reform
1.Establishes a 15-year statute of repose for product liability claims, except in "latent disease" cases, in which the disease does not manifest for many years after use of the product
2.Creates an "innocent retailer defense" under which a retailer cannot be held liable for a product defect unless the retailer has some actual responsibility for the defect
3.Numerous exceptions to the defense are provided, including an exception that prevents use of the defense if the responsible manufacturer is outside the court's jurisdiction or insolvent
3.Provides protection from liability, through the use of a rebuttable presumption, to manufacturers, distributors, or prescribers of pharmaceutical products in cases in which it is alleged that the defendant failed to provide an adequate warning about the product's risk
5.Defense is available if the defendant provided government approved warnings.
6.Several exceptions are provided, including one making the defense inapplicable if the manufacturer misrepresented or withheld required information from the government
7.Provides additional protection from liability, through the use of a rebuttable presumption, for manufacturers who comply with federal standards or regulatory requirements applicable to a product
8.Protection is available only if the standard was (1) mandatory, (2) applicable to the aspect of the product that allegedly caused harm, and (3) adequate to protect the public from the risk
9.Requires the Texas Supreme Court to revise the Texas Rules of Evidence to conform them to the Federal Rules of Evidence in regard to the admissibility of "subsequent remedial measures" in a products liability action

Article 6 - Pre-Judgment Interest
1.Prohibits the assessment of pre-judgment interest on an award of future damages
2.Establishes a post-judgment interest rate that is based on the prime rate and, therefore, more closely reflects market conditions
3.Adjusts the current floor and ceiling of the post-judgment interest rate from 10%-20% to 5%-15%

Article 7 - Appeal Bonds
1.Modifies the rules relating to appeal bonds so that the cost of the bond alone will not make the appeal of a trial court judgment prohibitive
2.Limits the bond requirement to compensatory damages awarded to the plaintiff and places reasonable limits on the total amount of a bond

Article 8 - Evidence Relating to Seat Belts
Allows the jury or fact-finder to know whether a plaintiff was wearing a seat belt at the time of an accident for the purpose of allocating fault and determining the cause of damages.

Article 10 - Health Care Liability Reform
1.Current Art. 4590i , Title 71 of Vernon's Texas Civil Statutes is moved to Chapter 74 of the Civil Practices and Remedies code.
2.The limit on non-economic damages varies based on whether the defendant is a physician or health care provider or a health care institution:
- $250,000 cap applies to all physicians and health care providers (other than health care institutions) on a per case/occurrence basis, and
-$250,000 cap applies to each health care institution on a per case/occurrence basis; however, total damages against health care institutions, collectively, cannot exceed $500,000 in any single case.
3.Cap on non-economic damages not indexed for inflation
4.Health care provider not required to maintain proof of financial responsibility in order for cap on non-economic damages to apply
5.An alternative limit on non-economic damages is established that is linked to an insurability requirement; this would be necessary only in the event the cap above, without the insurance requirement, is found unconstitutional (i.e., if HJR3 is not passed by the voters and a constitutional challenge to the above cap is successful). This cap is the same cap as above, but linked to the following insurance requirement:
6.Cap on non-economic damages applies to physician or registered nurse who provides proof of financial responsibility:
- effective 9/1/03 - $200,000/$600,000
- effective 9/1/05 - $300,000/$900,000
- effective 9/1/07 - $500,000/$1million
5.Cap on non-economic damages applies to physicians in residency training programs who provides proof of financial responsibility of $100,000/$300,000
5.Proof of financial responsibility established by:
- Purchase of liability insurance or plan of insurance; or
-purchase of coverage through risk retention group
-maintenance of reserves in financial institution or letter of credit
9.Clarifies limitation on damages in wrongful death and survival cases Note: this is an existing $500,000 cap, which was deemed by the courts to apply only to statutory/wrongful death actions; the courts also interpreted it to exclude punitive damages. It is indexed for inflation since 1977. This cap, as indexed, is approximately $1.4 million today.
10.This cap continues to exclude all actual health care expenses (past and future) and will continue to be adjusted for inflation (same as current law).
11.Clarifies that this cap includes punitive damages
12.Clarifies Clarifies that this cap applies to all claimants seeking recovery for another's injury (per occurrence) and that the cap applies to all defendants ($500,000, regardless of the number of defendants).
13.Clarifies Liability of insurer under Stowers' Doctrine limited to liability amount of insured
14. Note: This is the doctrine that requires an insurer to settle a case within policy limits if the insured wants to settle. [It is often in the interest of the insured to settle a case within policy limits so that he/she is not at risk for any potential awards above policy limits if the case were to proceed. This is true regardless of the merits of the case.]
15.Limits the recovery of health care expenses to the amount actually paid or incurred by claimant.
16.Allows future damages other than medical expenses to be paid through periodic payments
17.Future damages in excess of $100,000 made be made by periodic payments rather than by lump-sum, but court not required to order periodic payments plan
18.Judgment shall specify how and when the periodic payments are made
19.Periodic payments of future health care will terminate upon death of recipient
20.Periodic payments of future earnings will not terminate upon death of recipient
21.Court shall require defendant(s) to provide proof of adequate insurance or post security adequate to assure full payment of the periodic payment
22.Attorney fees are paid at time of judgment based on present value of future damages
23.10 year statute of repose established for health care liability cases
24.Emergency Care:
-Requires jury instructions on circumstances associated with emergency care
-Provides that standard of proof in cases involving emergency care is preponderance of evidence
25.Modifies various pre-trial procedures to address frequency of claims
26.Eliminates cost bond requirement
27.Allows parties to extend date for serving expert report by agreement
28.Defendants must object to sufficiency of report within 21 days
29.Allows time extensions to cure deficiencies in expert report
30.If expert report not timely filed, the court shall dismiss the action and award attorney fees and costs to defendant(s)
31.Allows interlocutory appeal if trial judge fails to dismiss claim due to failure to meet expert report requirement
32.HIPAA confidentiality requirements: Establishes process for disclosure of patient's medical records in compliance with HIPAA.
33.Experts: Clarifies qualifications for expert rendering opinion on causal relationship between injury and alleged departure from applicable standard of care. Establishes qualifications for expert in suit against providers, other than a physician
34.Clarifies how the Good Samaritan Law applies to health care providers who respond to emergency situations.
35.Limits liability of hospitals that provide charity care services.
36.Defers application of a nursing home insurance requirement that was to go into effect September 1, 2003, until September 1, 2005.

Article 11 - Claims Against Health Care workers in Public Hospitals
1.Extends limit on personal liability of governmental employees to health care personnel workers employed by a public hospital and physicians who provide emergency services at the hospital.
2.Limits liability of nonprofit organizations that manage a city or hospital district hospital.

Article 13 - Damages
1.Requires jury awards of punitive damages to be based on a unanimous jury verdict
2.Limits recovery of health care expenses to expenses actually incurred by the plaintiff
2.Allows the jury to consider a plaintiff's income taxes when awarding lost future income

Article 15 - Public School Teachers
Provides additional protection for teachers against frivolous litigation related to the actions taken by the teacher at school (same as SB930, which also passed).

Article 16 - Admissibility of Evidence (Nursing Homes)
Limits the admissibility of various surveys, reports, and other findings by state agencies.

Article 17 - Successor Liability for Asbestos Related Litigation
Limits a successor corporation's liability in asbestos related litigation to the amount of the assets of the acquired company if the acquisition that generated the asbestos related liability took place before May 13,1968. [Does not limit the successor corporation's liability for its own wrongdoing - only for the acts of the acquired company].

Article 18 & 19 - Charitable / Volunteer Immunity
Provides protection from lawsuits for volunteers of charitable organizations and volunteer firefighters.

Article 20 - Design Professionals
In a suit against a registered architect or licensed professional engineer, requires the plaintiff, at the time suit is filed, to provide an affidavit by a third-party registered architect or licensed professional engineer setting forth the specific acts of negligence it is alleged the defendant committed.

Article 21 - Limitation on Trespass Actions for Air Contaminants
Limits a trespass action for migration or transport of an air contaminant to require a showing of actual and substantial damage to the plaintiff. [Excepts those relating to odors.]

Article 22 - Limitation of Liability for Nonprofit Hospitals
Limits the liability of a nonprofit hospital or hospital system that provides charity care and community benefits in an amount equal to at least 8% of the net patient revenue of the hospital or system, and provides at least 40% of the charity care provided in the county in which the hospital or system is located.

Article 23 - Effective Dates
1.All provisions in the bill take effect September 1, 2003.
2.The following apply to lawsuits filed on or after July 1, 2003:
Article 5 - Product Liability
Article 8 - Evidence Relating to Seat Belts.
Article 2 on Settlement Offers applies to actions filed on or after Jan. 1, 2004.

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