Recovering Your Attorney's Fees in Hawaii

Under the so-called American Rule, each litigant pays its own attorneys fees. I have been practicing civil litigation for over twenty years, and nothing seems to anger clients more about the legal system than when they are forced to pay thousands of dollars in attorneys fees and costs simply to prove that they did nothing wrong. Fortunately, under Hawaii law, in certain commercial cases, the prevailing party may recover some or all of its attorneys fees from the losing party. The Hawaii law is called the "assumpsit statute" and states as follows:

"§607-14 Attorneys' fees in actions in the nature of assumpsit, etc. In all the courts, in all actions in the nature of assumpsit . . . there shall be taxed as attorneys' fees, to be paid by the losing party and to be included in the sum for which execution may issue, a fee that the court determines to be reasonable . . . . The court shall then tax attorneys' fees, which the court determines to be reasonable, to be paid by the losing party; provided that this amount shall not exceed twenty-five per cent of the judgment.

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The above fees provided for by this section shall be assessed on the amount of the judgment exclusive of costs and all attorneys' fees obtained by the plaintiff, and upon the amount sued for if the defendant obtains judgment." Haw. Rev. Stat. § 607-14 (emphasis added).

There are critical points about this statute about which each client should be made aware, including the following:

1. Plaintiff's recovery of attorneys fees is capped at twenty five percent (25%) of the judgment awarded. Thus, for example, if the plaintiff is awarded a judgment of $100,000, the plaintiff's recovery is capped at 25% of $100,000 or $25,000.

2. The defendant's recovery is capped at 25% of the damages unsuccessfully sought by the plaintiff. Thus, for example, if the plaintiff seeks $100,000, the defendant's potential award is capped at $ 25,000.

3. If the applicant has not specified the amount he seeks, and it is for the Court, the damages sought by the plaintiff can not establish the defendant prevailing all reasonable legal fees' are assigned. Thus, the actor very encouraged early in the case of damage caused to the plaintiff, seeking to ensure that, if the plaintiff fails, the attorney fees award is limited.

4. The Hawaii Supreme Court ruled thatthe attorneys fees award under HRS § 607-14 is not discretionary. The Court must award attorney's fees to the prevailing party.

5. The statute only applies to cases concerning "assumpsit" damages. The Hawaii Supreme Court has defined an "assumpsit" case as a claim "for the recovery of damages for the non performance of a contract . . . as well as quasi contractual obligations." Schulz v. Honsador, Inc. 67 Haw. 433 (1984). Although this law only applies to matters of "assumpsit," it has been applied to various types of litigation including breach of contract, breach of fiduciary duty, and legal malpractice so long as they concern (i) an attempt to recover damages and (ii) a contractual arrangement.

Unfortunately, Hawaii does not have a similar attorneys fee provision in personal injury cases. Moreover, although HRS § 607-14 is not the only Hawaii law that allows for the recovery of attorneys fees. Therefore, when analyzing a case, a Hawaii attorney should also explore other theories that may allow the recovery of attorneys fees.