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Frequently Asked Questions

Generally speaking, negligence means failing to act as a reasonably careful person would act under the same or similar circumstances.

For example, a person driving faster than everyone else during a rainstorm who loses control of their car and injures someone has likely acted negligently. Reasonably careful drivers—the people the negligent person was passing—were driving slower.

There are different types of product liability cases in Texas, just as there are in much of the country. A few of the most common types of product liability cases are discussed below.

Manufacturing defect: This occurs when a specific product is manufactured defectively and unsafely, even though the product is usually manufactured safely.

Design defect: A design defect is basically the opposite of a manufacturing defect. In a design defect case, the product is manufactured as intended, i.e., as designed. However, the design itself renders the product unreasonably dangerous.

Defective warnings or instructions: Companies generally must provide consumers adequate warnings about the dangers of their products, and companies must also provide adequate instructions for how to operate their products. Failure to do so, coupled with a consumer being hurt, may result in a claim for defective warnings or defective instructions.

Premises liability cases generally refer to situations where someone is injured by an unsafe condition on another’s property. A common example would be a slip-and-fall case at a retail store. In Texas, liability in these types of cases depends on a lot of variables. One of the main things at issue, however, is the injured person’s status on the property.

Invitees: If a landowner invites the injured person onto the property, the injured person is generally considered an “invitee.” This is usually the case in commercial and retail settings, where businesses invite customers to come in and shop. Invitees receive the greatest protection under the law.

Licensees: If a landowner permits the injured person to come onto the property, but does not invite them onto the property, the injured person is likely a “licensee.” For example, if you own a farm that is adjacent to your neighbor’s farm, and your neighbor permits you to pass through their property to move your equipment efficiently, you are probably a licensee. Licensees receive some protection under the law, but not as much as invitees.

Trespassers: People who do not fall into either category above are usually considered “trespassers.” They receive the least amount of protection under the law. Trespassers generally do not have a claim unless the landowner is grossly negligent, which is very difficult to prove.

The categories described above are straightforward in theory, but there are a lot of exceptions and nuances. As mentioned above, these cases depend on a lot of variables.

Texas follows a concept known as “proportionate responsibility.“ The jury determines each person’s percentage of responsibility. The jury’s determination takes into account if a plaintiff is themselves at fault.

The jury can divide responsibility among the plaintiff, the defendant(s), any person who previously settled out of the case, and even people known as “responsible third parties.” 

A plaintiff’s ultimate recovery, if any, is then reduced in accordance with how the responsibility is divided. This concept is governed by Civil Practice and Remedies Code, Chapter 33.

One big factor is the plaintiff’s percentage of responsibility, if any. Under the law, a plaintiff cannot recover any compensation if their responsibility is greater than 50%.

Bad faith claim: This is a claim a person who has insurance (the insured) makes against their insurance company (the insurer) alleging that the insurance company is acting in bad faith by denying coverage. 

In Texas, most bad faith claims are created by statute, found at the Insurance Code, Chapter 541, as well as the Business and Commerce Code, Chapter 17. This latter authority is the Deceptive Trade Practices Act, specifically made applicable to insurance companies by section 17.50(a)(4).

In a nutshell, an insured pays premiums on their insurance policy and the insurance company has an obligation to fulfill their end of the bargain when it’s time to pay benefits. If the insurance company fails to do so, the insured may be able to sue them for bad faith. In dealing with your insurance company, it is important to know your rights. In Texas, consumers have various rights that the Texas Department of Insurance has detailed here.

Insured: This is the person who is covered by an insurance policy.

Insurer: Also sometimes called a “carrier,” this is simply the insurance company.

Policy: This is simply the insurance contract. It governs the relationship between the insurer and the insured. The “declarations” page generally provides a good overview of coverage.

Third party v. first party: This is confusing. And insurance companies sometimes forget most folks do not work in the insurance industry. Again, however, it is pretty simple when you break it down.

In the insurance relationship, the “first party” is the insured. The “second party” is the insurer (the insurance company). The “third party” is someone else. Just as it sounds, a third-party claim is made by the third party. Most commonly, if you are in a car wreck and injured by a negligent driver, you are the third party. The negligent driver is the first party; the negligent driver’s insurance company is the second party; you are the third party. Third-party claims are also sometimes called “liability claims,” meaning you are trying to hold someone liable.

Another type of claim is a first-party claim. Just as it sounds, this is a claim made by the first party (the insured person) pursuant to a policy they’ve purchased. For example, if you file a UIM claim with your insurance company (discussed below), that is a first-party claim. A bad faith claim (discussed above) is a first-party claim as well. Another example would be if you file a claim for damage to your home pursuant to your homeowner’s insurance policy.

UIM Coverage / Underinsured or Uninsured Motorist Coverage: Imagine this scenario: you are in a car wreck caused by another driver’s negligence; you have sustained $50,000 in damages; the other driver only has a minimum liability policy (usually $30,000) or, worse yet, they broke the law and have no insurance at all.

This is where UIM coverage comes into play. This is a type of coverage that you elect with your insurance carrier. It provides additional compensation to you if you are injured by someone else’s negligence and that person lacks sufficient coverage to compensate you. It is important to keep in mind that you can usually only collect UIM benefits if you use up or exhaust the other side’s insurance coverage; thus, if you accept an offer from the other side below their insurance policy limits, you cannot then collect UIM benefits from your insurance company. In Texas, UIM coverage is generally governed by the Insurance Code, Chapter 1952, Subchapter C. The Texas Department of Insurance also has a good overview available here.

When someone is injured by someone else’s wrongdoing, the injured person may be entitled to compensation. This compensation is also referred to as “damages.” There are three general types of damages: economic; noneconomic; and exemplary or punitive. Damages are generally defined at Civil Practice and Remedies Code, Chapter 41.

Economic or “Pocketbook” Losses: Economic damages can be thought of as pocketbook losses. These are the damages that can be readily quantified. Texas defines these as “compensatory damages intended to compensate a claimant for actual economic or pecuniary loss.” 

A simple example would be if someone is injured and misses two weeks of work; assuming they were not paid or compensated otherwise, the two weeks of missed pay would be readily quantifiable.

The calculations can be significantly more complex. For example, if a 30-year-old accountant is negligently killed, an expert economist can calculate what an average accountant would have made from that point forward. This calculation would take into account age, experience, length of career, geographic area, life expectancy, etc. It is complex, but it can be done.

Noneconomic or “Human” Losses: Noneconomic damages can be thought of as human losses. These things are not readily quantifiable, but they are certainly not worthless. In short, these represent losses for the things we cherish in everyday human life.

Texas defines these as “damages awarded for the purpose of compensating a claimant for physical pain and suffering, mental or emotional pain or anguish, loss of consortium, disfigurement, physical impairment, loss of companionship and society, inconvenience, loss of enjoyment of life, injury to reputation, and all other nonpecuniary losses of any kind other than exemplary damages.” 

For example, if someone sustains a back injury and can no longer go on hikes, which was their favorite hobby, that would be a human loss. If a parent is injured and can no longer play with their young children, that would be another example of a human loss.

Exemplary or Punitive Damages: These are reserved for rare cases where a wrongdoer should be punished through the civil justice system. (Mind you, most punishment from the law occurs through the criminal justice system). 

Texas defines these as “damages awarded as a penalty or by way of punishment but not for compensatory purposes.” In other words, these are punishment for the sake of punishment, nothing else. They are reserved for rare cases where a wrongdoer has acted intentionally or with gross negligence, and the person seeking these is required to meet a higher standard of proof. These damages are rare, but the law authorizes them in some situations.

A “pre-suit settlement” is an agreement to settle a lawsuit before it is filed. These are common in situations where civil litigation is likely, such as car wreck cases.
Imagine a negligent driver (potential Defendant) runs a red light and injures someone (potential Plaintiff). Potential Defendant’s negligence is clear. It might make sense for both sides to agree to a pre-suit settlement. Potential Plaintiff agrees to not file a lawsuit, and potential Defendant (usually through their insurance company) agrees to pay money. 

Lawsuits often take years from the time they are filed until they reach trial. Lawsuits are also very expensive because collecting records, taking depositions, etc., all costs money. Thus, with a pre-suit settlement, everyone has resolution quicker and everyone avoids the delays and expenses of a lawsuit.
The amount of money involved in pre-suit settlements is often lower than what Plaintiffs might otherwise obtain at trial. That’s because it needs to make financial sense for a Defendant to agree to a pre-suit settlement, i.e., they need to think they will save money by paying to settle the claim so early. For Plaintiffs, they also have the benefit of obtaining a settlement quicker, thereby allowing them to invest and grow the money, and of avoiding legal expenses which would otherwise eat away at their settlement. It is also quite common for Plaintiffs’ attorneys’ contingency agreements to increase (e.g., from 33% to 40%) once a lawsuit is filed due to the additional work, expenses, and risk involved. These are all factors that should be considered in deciding whether to accept a pre-suit settlement.
Take the prior example. If potential Defendant offered a pre-suit settlement of $15,000, it might look something like this:
$15,000 (total settlement)
$5,000 (legal fees of 33%)
$0 (expenses)
$10,000 (total to potential Plaintiff)
If potential Plaintiff rejected the pre-suit settlement and insisted on more money, it might take years to obtain. (And it might never be obtained because all lawsuits involve risk.). It also might not result in more money for potential Plaintiff. For example, if potential Defendant offered $25,000 after three years of depositions and discovery, it might look something like this:
$25,000 (total settlement)
$10,000 (legal fees of 40%)
$5,000 (expenses)
$10,000 (total to Plaintiff)

Pre-suit settlements are not appropriate or feasible in all cases. Sometimes the parties cannot agree to a number that would make everyone happy. But it is important for people who are injured to understand how pre-suit settlements work; that way, they can make the best decision on their case.

This is a technical term representing a very simple concept: paying someone back. Oftentimes, insurance companies have subrogation rights when their insured is injured by someone else’s negligence.

A common example: you are injured by someone else’s negligence; you go to the hospital and use your private health insurance to receive $10,000 worth of medical treatment; your health insurance company likely has a subrogation right to seek repayment from the negligent person. 

Put another way, they have a right to be paid back by the person at fault for the expenses. If you later receive a settlement for $20,000, you usually cannot just pocket the money without first resolving their subrogation interest. Subrogation can arise in a lot of different contexts, sometimes due to a contract and sometimes due to a statute. However, the most common is with private health insurance, which is governed by the Civil Practice and Remedies Code, Chapter 140.

A lien essentially means a right to collect a debt. There are a lot of different types of liens, e.g., tax liens and child support liens. But the most common lien we encounter in injury cases is a medical lien.

A common example: you are injured by someone else’s negligence; you go to the hospital and receive medical treatment, but you cannot afford to pay the full bill (perhaps your insurance only covers a portion or perhaps you have no insurance); you then owe the hospital money. However, because you are not at fault, the hospital may choose not to try to collect from you. Instead, the hospital may pursue a lien on any future recovery from the negligent person. In Texas, medical liens are governed by the Property Code, Chapter 55

An expert witness is a witness who will testify to an opinion that is outside a layperson’s knowledge. Sometimes these are people who have some factual involvement in a case, such as a treating physician. Oftentimes, however, these are people hired by the law firms involved to review records, conduct tests (if needed), and provide an opinion.

Legal cases frequently involve complex issues; experts provide testimony on those complex issues. However, even simple issues on their face may require an expert. For example, if someone is in a car wreck and develops back pain afterwards, it may be common sense that the car wreck caused the back pain. But a Plaintiff (the person injured) cannot testify to a medical opinion. Thus, an expert may be required to review the Plaintiff’s medical records before the car wreck, as well as the records from treatment after the car wreck, and offer an expert opinion that the car wreck caused the injury.

Experts oftentimes write a report. Experts differ in their preferences with reports, but the reports usually follow some version of the following:

  1. Expert’s name, profession, and current position (often incorporating a resume or C.V.).
  2. Description of how the expert came to be involved in the case.
  3. Statement of fees earned (often incorporating an invoice or fee schedule).
  4. Statement of what the expert has reviewed in the case.
  5. Statement of opinions and the basis for those opinions. (The “basis” is also sometimes called the methodology; it generally involves the expert explaining the testing or analysis they conducted in order to arrive at their opinions).
  6. A statement that all opinions are to a reasonable degree of professional certainty in the expert’s field.