HB981 would limit attorneys’ fees and costs in Hawaii cases involving construction defects. The bill applies both to settlements arising from construction-defect disputes and to actions alleging construction defects in which a plaintiff prevails. In either setting, the plaintiff’s attorney could recover accrued fees and costs only up to 25% of the recovery amount.
The bill defines “construction defect” broadly to include deficiencies arising from design, specifications, surveying, planning, construction, supervision, or observation of construction of a building or structure. It also includes standard legal protections stating that the measure should not impair existing contracts in a constitutionally prohibited way and should not affect rights, duties, penalties, or proceedings that arose before the effective date. The bill is set to take effect on July 1, 3000, which is a common placeholder effective date used in draft legislation.
Impact
HB981 would amend Hawaii Revised Statutes chapters 605 and 607 by adding new provisions governing attorney compensation in construction-defect matters. It would cap recoverable accrued attorneys’ fees and costs at 25% of the recovery amount in both settlements and litigated actions, thereby limiting fee awards that might otherwise be governed by other law or contract. The practical effect would be to increase the share of any recovery available to plaintiffs for repairs or other losses, while reducing the amount available for counsel in these cases.
Sentiment
The bill’s stated purpose reflects a consumer-protection and homeowner-relief rationale: lawmakers note that large fee deductions can leave plaintiffs with too little money to repair construction defects and may even leave them worse off after litigation. No committee testimony or vote record is provided, so there is no documented opposition or support from hearings in the materials supplied. Based on the text alone, the bill appears intended to address a perceived fairness problem in construction-defect litigation and settlement outcomes.
Contention
The main policy tension is between protecting plaintiffs’ net recovery and preserving flexibility in attorney compensation for complex construction-defect cases. Supporters would likely emphasize that homeowners need enough of any settlement or judgment to fund repairs and avoid devaluation of their property. Potential opponents, though not identified in the provided record, could argue that a hard 25% cap may interfere with private fee agreements, reduce incentives for attorneys to take difficult cases, or conflict with existing fee-shifting arrangements in some disputes. The bill also includes constitutional savings language, suggesting awareness of possible contract-impairment concerns.