HBA-ATS S.B. 731 76(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 731 By: Harris Civil Practices 4/25/1999 Engrossed BACKGROUND AND PURPOSE Currently, no clear requirements exist for an attorney to convey information to a claimant about an offer of a structured settlement after the claimant has filed a personal injury suit. This failing may force the claimant to accept a settlement that may not be in the claimant's best interest. Setting forth certain time periods, conditions under which an attorney is appointed, and procedures under which a structured settlement is presented may help a client make an informed decision. S.B. 731 provides that an offer of a structured settlement made after a suit on a claim for damages arising from personal injury (injury) to an incapacitated person or in which the injury has resulted in the substantial disablement of the injured person has been filed must be made in writing and presented to the attorney for the claimant. The attorney receiving the offer is required to present it to the claimant or the claimant's personal representative. In addition, to the extent reasonably necessary to permit the claimant or the claimant's personal representative to make an informed decision regarding the acceptance or rejection of a proposed structured settlement, the attorney must advise the claimant or the claimant's personal representative about the terms, conditions, and other attributes of the proposed structured settlement, and the appropriateness of the structured settlement under the circumstances. If a guardian ad litem (GAL) has been appointed by the court to participate in the case as necessary to protect the interests of the claimant, the GAL owes to the claimant a fiduciary duty of integrity, loyalty, and the utmost good faith, and is required to obtain, before any structured settlement offer is accepted, competent counsel from a person qualified to analyze and explain structured settlement offers and make suggestions for tailoring the structured settlement to meet the needs of the claimant. A court may, on the application of the claimant's next friend, order the appointment of an attorney ad litem (AAL) for the claimant if the court finds that any GAL appointed for the claimant is not adequately performing the guardian's duties or the claimant would otherwise be benefitted by the appointment of the AAL. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Title 6, Civil Practice and Remedies Code, by adding Chapter 139, as follows: CHAPTER 139. PERSONAL INJURY TO CERTAIN PERSONS SUBCHAPTER A. GENERAL PROVISIONS Sec. 139.001. DEFINITIONS. Defines "claimant" and "incapacitated person." Sec. 139.002. SCOPE OF CHAPTER. Provides that this chapter applies only to a suit on a claim for damages arising from personal injury (injury) to an incapacitated person or in which the injury has resulted in the substantial disablement of the injured person. SUBCHAPTER B. ATTORNEY AD LITEM Sec. 139.051. APPLICATION OF NEXT FRIEND. Authorizes a court, on the application of the claimant's next friend, to order the appointment of an attorney ad litem (AAL) for the claimant if the court finds that any guardian ad litem (GAL) appointed for the claimant is not adequately performing the guardian's duties or the claimant would otherwise be benefitted by the appointment of the AAL. SUBCHAPTER C. STRUCTURED SETTLEMENT OFFER Sec. 139.101. WRITTEN OFFER REQUIRED. Provides that an offer of a structured settlement made after a suit to which this chapter applies has been filed must be made in writing and presented to the attorney for the claimant. Sec. 139.102. PRESENTATION TO CLAIMANT. Requires the attorney receiving the offer to present it to the claimant or the claimant's personal representative as soon as practicable after receiving the offer under Section 139.101, but not later than any expiration date that may accompany the quotation that outlines the terms of the structured settlement offered. Requires the attorney, to the extent reasonably necessary to permit the claimant or the claimant's personal representative to make an informed decision regarding the acceptance or rejection of a proposed structured settlement, to advise the claimant or the claimant's personal representative about the terms, conditions, and other attributes of the proposed structured settlement, and the appropriateness of the structured settlement under the circumstances. Sec. 139.103. DUTIES OF GUARDIAN AD LITEM. Provides that a GAL who has been appointed by the court to participate in the case as necessary to protect the interests of the claimant owes to the claimant a fiduciary duty of integrity, loyalty, and the utmost good faith. Requires the GAL to obtain, before any structured settlement offer is accepted, competent counsel from a person qualified to analyze and explain structured settlement offers and make suggestions for tailoring the structured settlement to meet the needs of the claimant. SECTION 2. Effective date: September 1, 1999. SECTION 3. Makes application of this Act prospective. SECTION 4. Emergency clause.