Report Title:

Workers' Compensation; Attorney's Fees

Description:

Establishes criteria for evaluating and approving attorney's fees.

HOUSE OF REPRESENTATIVES

H.B. NO.

832

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to workers' compensation.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 386-94, Hawaii Revised Statutes, is amended to read as follows:

"§386-94 Attorneys, physicians, other health care providers, and other fees. (a) Claims for services shall not be valid unless approved by the director or, if an appeal is had, by the appellate board or court deciding the appeal. Any claim so approved shall be a lien upon the compensation in the manner and to the extent fixed by the director, the appellate board, or the court. An arbitrary limitation or cap shall not be placed upon the amount of a fee request submitted for approval.

(b) An attorney's fee shall be reasonable. The following factors shall be considered in determining the reasonableness of a fee:

(1) The time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;

(2) The likelihood that the acceptance of the particular employment will preclude other employment by the attorney;

(3) The fee customarily charged in the locality for similar legal service;

(4) The amount involved and the results obtained;

(5) The time limitations imposed by the client or by the circumstances;

(6) The nature and length of the professional relationship with the client;

(7) The experience, reputation, and ability of the attorney or attorneys performing the services;

(8) Whether the fee is fixed or contingent, and in contingency fee cases the risk of no recovery and the conscionability of the fee in light of the net recovery to the client;

(9) The relative sophistication of the attorney and the client; and

(10) The informed consent of the client to the fee agreement.

(c) When the attorney has not regularly represented the client, the basis or rate of the fee shall be communicated to the client in writing, before or within a reasonable time after commencing the representation.

(d) A fee may be contingent on the outcome of the matter for which the service is rendered. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the attorney in the event of settlement, trial or appeal, litigation and other expenses to be deducted by the recovery, and whether the expenses are to be deducted before or after the contingent fee is calculated. Upon the conclusion of a contingent fee matter, the attorney shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

(e) When determining whether to approve a request for attorney's fees, the director, the appellate board, and the court shall consider the hourly rate of attorney's fees approved by the courts, and any other reliable source of information on prevailing hourly rates charged by attorneys for civil litigation in the State.

(f) Any person who receives any fee, other consideration, or gratuity on account of services so rendered, without approval, or not in conformity with [the preceding paragraph,] this section, shall be fined by the director not more than $10,000."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:

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