Changes in the DTPA


TLIE's Standard P-7A provides coverage for DTPA damages in many circumstances. TLIE's Basic Policy, and those of many of TLIE's competitors, do not cover DTPA damages. House Bill 668, which has become law, modifies the liability of professionals under the DTPA by adding to the Texas Business and Commerce Code Section 17.49(c). That section provides that the DTPA "does not apply to a claim for damages based upon the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar skills."

The bill did not, however, eliminate liability for (1) express misrepresentation of material facts that cannot be characterized as advice, judgment or opinion, (2) failure to disclose information that could cause confusion or misunderstanding as to the source, sponsorship, approval or certification of goods or services, (3) an unconscionable act that cannot be characterized as advice, judgment or opinion, or (4) breach of an express warranty that cannot be characterized as advice, judgment or opinion. Claims of misrepresentation of and unconscionable actions are common in legal malpractice cases. TLIE believes that attorneys for legal malpractice plaintiffs will continue to plead cases in a manner that attempts to create fact issues under the exceptions to the professional exemption under the revised statute.

Even if the exemption for professional liability ultimately shields attorneys to some degree from DTPA damages, it is imperative to understand that the changes in the DTPA apply to claims that accrue on or after September 1, 1995. The changes will also apply to all claims filed after September 1, 1996, regardless of the date the claim accrued. In short, claims can continue to be filed until September 1, 1996 that will be subject to the old statute. DTPA coverage is still an important component to consider in looking at your professional liability needs.


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