HOUSE OF REPRESENTATIVES

H.B. NO.

2494

TWENTY-SEVENTH LEGISLATURE, 2014

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to the UNAUTHORIZED practice of law.

 

 

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

 


     SECTION 1.  The legislature finds that Hawaii has a unique heritage, as it began as a monarchy, became an independent republic, and then was annexed to the United States early in the twentieth century.  The Hawaiian language remained the primary language of the State well into the twentieth century.  Pursuant to section 1-13, Hawaii Revised Statutes, Hawaiian and English are currently the two official languages of Hawaii. 

     The legislature further finds that the real property system in Hawaii is based upon a nineteenth century Hawaiian property ownership system.  Real property legal practices in Hawaii continue to use Hawaiian words to describe unique real property concepts.  For example, terms such as "ahupuaa" and "kuleana" and the real property concepts they describe are fundamental to real property law in Hawaii.  Native Hawaiians are afforded real property rights that are not shown on title.  Water rights are also determined according to a unique public trust doctrine.  Hawaii also has a unique dual system of real property recordation and registration with important legal consequences.

     The legislature further finds that, in addition to Hawaiians and Caucasians, large numbers of people from Asia and the Pacific, including Chinese, Japanese, Koreans, Filipinos, Polynesians, and Micronesians, have immigrated to Hawaii over the last two centuries.  Each ethnic group has left its mark on the Hawaii legal system, and the various languages of these ethnic groups have been integrated into the "Pidgin English" commonly spoken in Hawaii.

     The effective practice of law in this State requires knowledge of Hawaii's unique heritage and the commonly used words and legal concepts that have evolved from that heritage.  It is very difficult for attorneys from other states to practice law effectively in Hawaii without a knowledge of Hawaii's unique legal system, real property system, language, and customs.  For these reasons, there are many examples of clients who have been poorly served by unlicensed out-of-state attorneys attempting to practice law in Hawaii.  In some cases, the clients have lost millions of dollars as a result of work performed by unlicensed out-of-state attorneys.  In other cases, out-of-state attorneys who are not licensed to practice law in Hawaii have been sued for millions of dollars as a result of their lack of understanding of the Hawaii legal system.  There have also been instances in which properly licensed Hawaii attorneys have had to pay millions of dollars for failing to detect mistakes made by out-of-state attorneys who are not licensed to practice law in Hawaii.

     The purpose of this Act is to protect the public by specifying the acts that constitute the unauthorized practice of law and addressing the increasingly pervasive problem of the unauthorized practice of law in Hawaii by out-of-state attorneys who are not licensed to practice law in Hawaii.

     SECTION 2.  Section 605-14, Hawaii Revised Statutes, is amended to read as follows:

     "§605-14  Unauthorized practice of law prohibited[.]; out-of-state attorneys; requirements for out-of-state attorneys to practice law.  (a)  It shall be unlawful for any person, firm, association, or corporation to engage in or attempt to engage in or to offer to engage in the practice of law, or to do or attempt to do or offer to do any act constituting the practice of law, except and to the extent that the person, firm, or association is licensed or authorized so to do by an appropriate court, agency, or office or by a statute of the State or of the United States.  Nothing in sections 605-14 to 605-17 contained shall be construed to prohibit the preparation or use by any party to a transaction of any legal or business form or document used in the transaction.

     (b)  The unauthorized practice of law includes the following acts by any person who has not been admitted to practice law in this State or otherwise authorized to do so by the Hawaii supreme court or the United States District Court for the District of Hawaii:

     (1)  Holding oneself out as an attorney authorized to practice law in the State;

     (2)  Appearing on behalf of any person or entity in any hearing or proceeding in the State before any judicial officer, arbitrator, mediator, court, public agency, referee, magistrate, commissioner, hearing officer, or governmental body in a dispute resolution process with respect to any matter involving:

         (A)  The rights or obligations of any person or property in the State; or

         (B)  Any dispute to be resolved wholly or in part under the laws of the State;

     (3)  Preparing any document on behalf of another person that is to be:

         (A)  Submitted to any judicial officer, arbitrator, mediator, court, public agency, referee, magistrate, commissioner, hearing officer, or governmental body in a dispute resolution process in the State; or

         (B)  Recorded in any form in the bureau of conveyances or the land court; or

     (4)  Advising any person or entity located in the State regarding the laws of the State.

     (c)  This section shall not apply to the following:

     (1)  The practice of law specifically authorized by a limited license to practice law pro hac vice granted by the circuit court of the circuit in which the attorney is to practice law or by the United States District Court for the District of Hawaii;

     (2)  Service in a neutral capacity as a mediator, arbitrator, conciliator, or facilitator in the State;

     (3)  Services customarily provided by licensed real estate brokers and agents for the sale or rental of real estate in the State;

     (4)  Services customarily provided by licensed real estate brokers and agents in the management of rental properties in the State;

     (5)  Services customarily provided by licensed title and escrow companies in the State;

     (6)  Services customarily provided by accountants in preparing federal, state, or county tax returns or audits and in interpreting statutes, rules, and regulations relating to taxes, audits, and accounting services in the State;

     (7)  Services customarily provided by lobbyists in the State who are registered pursuant to chapter 97;

     (8)  Services customarily provided by collection agencies in collecting debts in the State;

     (9)  Services performed for a corporation by the director, officers, or employees of the corporation; provided that the services relate directly to the business of the corporation and do not involve appearance before a judicial officer, arbitrator, mediator, court, public agency, referee, magistrate, commissioner, hearing officer, or governmental body in a dispute resolution process;

    (10)  Services performed by the following persons under the direct supervision of an attorney authorized to practice law in the State:

         (A)  Law students as part of a clinical law program at a law school accredited by the American Bar Association; or

         (B)  Paralegals and other assistants who are not attorneys;

    (11)  Services provided by an attorney licensed in another state or by a graduate of a law school accredited by the American Bar Association who is employed by a Hawaii law firm while awaiting admission to the Hawaii bar, if the services are provided under the direct supervision of an attorney authorized to practice law in the State.  This paragraph shall not be construed as authorizing appearances on behalf of any person or entity in any hearing or proceeding in the State before any judicial officer, arbitrator, mediator, court, public agency, referee, magistrate, commissioner, hearing officer, or governmental body in a dispute resolution process with respect to any matter involving:

         (A)  The rights or obligations of any person or property in the State; or

         (B)  Any dispute to be resolved wholly or in part under the laws of the State; and

    (l2)  Services provided exclusively to indigent clients at a qualified legal services provider, on an interim basis not exceeding two years, and under the direct supervision of an attorney authorized to practice in the State, by an attorney admitted in good standing and on an active basis in another United States jurisdiction and who has not been denied admission to the Hawaii bar by the Hawaii supreme court.  For the purposes of this paragraph, "qualified legal services provider" means a not-for-profit legal services organization that receives or is eligible to receive funds from the indigent legal assistance fund established under section 607-5.7(f).

     (d)  An attorney actively licensed to practice law in another state but who is not authorized to practice law in this State may practice law in this State only:

     (1)  If first admitted pro hac vice by a judge of the circuit court of the circuit in which the attorney intends to practice law or the United States District Court for the District of Hawaii;

     (2)  In the circuit where the attorney is admitted to practice law or in the United States District Court for the District of Hawaii if admitted by the court; and

     (3)  If the circuit court or the United States District Court for the District of Hawaii first finds that the legal work to be performed by the attorney cannot be performed competently by any attorney licensed in the State.

     (e)  It is a violation of this section for any person to aid or assist another person in the unauthorized practice of law in the State, including allowing a person to participate in proceedings before a judicial officer, arbitrator, mediator, court, public agency, referee, magistrate, commissioner, hearing officer, or governmental body in a dispute resolution process."

     SECTION 3.  Section 605-15.1, Hawaii Revised Statutes, is amended to read as follows:

     "§605-15.1  Standing.  [The] Only the attorney general [or any bar association in this State may] may maintain an action for violations of section 605-14."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Unauthorized Practice of Law; Out-of-State Attorneys

 

Description:

Specifies acts that constitute the unauthorized practice of law, and exempted acts.  Establishes requirements for out-of-state attorneys to practice law in Hawaii.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.