LABOR CODE

CHAPTER 417. THIRD-PARTY LIABILITY


	§ 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 commission 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 commission 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, § 1, eff. Sept. 1, 1993.  Amended 
by Acts 1997, 75th Leg., ch. 1423, § 12.13, eff. Sept. 1, 1997;  
Acts 2003, 78th Leg., ch. 204, § 4.09, eff. Sept. 1, 2003.


	§ 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, § 1, eff. Sept. 1, 1993.                    


	§ 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 commission 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, § 1, eff. Sept. 1, 1993.                    


	§ 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, § 1, eff. Sept. 1, 1993.