REPORT TITLE:
Public Assistance


DESCRIPTION:
Clarifies that when the department in third-party liability
situations prosecutes its own claims, or intervenes or joins in
any action, or actively participates with a claimant or
claimant's attorney in the prosecution of claims, it shall be
allowed to recover its attorney fees and costs.  (SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2857
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PUBLIC ASSISTANCE.



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

 1      SECTION 1.  In 1999, the legislature amended section 346-37,
 
 2 Hawaii Revised Statutes, to require the department of human
 
 3 services to contribute to a claimant's attorney's fees and costs
 
 4 under certain limited circumstances.  To avoid the contribution
 
 5 requirement of section 346-37(h), Hawaii Revised Statutes, the
 
 6 department must prosecute its own claims, or intervene or join in
 
 7 any action, or actively participate with a claimant or a
 
 8 claimant's attorney in the prosecution of claims if it has been
 
 9 given timely written notice of any claim or action.  However, the
 
10 law is unclear as to whether or not the department is entitled to
 
11 also recover its attorney's fees and costs when it prosecutes its
 
12 own claims, or intervenes or joins in any action, or actively
 
13 participates with a claimant or a claimant's attorney in the
 
14 prosecution of claims.  
 
15      The purpose of this Act is to specify that when the
 
16 department prosecutes its own claims, or intervenes or joins in
 
17 any action, or actively participates with a claimant or a
 
18 claimant's attorney in the prosecution of claims, it shall be
 
19 allowed to recover its attorney's fees and costs in addition to
 
20 its reimbursement rights, claims, or liens.
 

 
Page 2                                                     2857
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1      SECTION 2.  Section 346-37, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (h) to read as follows:
 
 3      "(h)  The lien shall attach as provided by subsection (g).
 
 4 If a notice of lien is properly served upon the attorney
 
 5 representing the claimant as provided in subsection (g), that
 
 6 attorney shall pay the full amount of the lien, prior to
 
 7 disbursing any of the proceeds of the suit or settlement to the
 
 8 attorney's client.  If a notice of lien is properly served upon
 
 9 the third person, the third person's agent or attorney, or the
 
10 third person's insurance company, as provided in subsection (g),
 
11 it shall be the responsibility of the person receiving the
 
12 notices to pay the full amount of the lien prior to disbursing
 
13 any of the proceeds to the claimant's attorney,
 
14      If, after having received timely written notice of any claim
 
15 or action under subsection (e), the department did not intervene
 
16 or join in the action or prosecute its own claims or actively
 
17 participate with the claimant or the claimant's attorney in the
 
18 prosecution of claims, or a distribution agreement was not
 
19 entered into between the parties, then the department shall
 
20 determine its fair contribution toward [attorney] attorney's fees
 
21 and costs incurred in the action that shall be a reasonable
 
22 amount based solely upon legitimate costs and services rendered
 

 
 
 
Page 3                                                     2857
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 by the claimant or claimant's attorney in recovering the lien
 
 2 amount.  Any dispute regarding the department's determination of
 
 3 its contribution to fees and costs may be submitted to
 
 4 administrative hearing under subsection (i) or a court of
 
 5 competent jurisdiction.  [The value of services contributed by
 
 6 the claimant and department may be considered in fairly
 
 7 allocating fees and costs between the claimant and department
 
 8 where both contribute to recovering the lien amount.] If the
 
 9 department prosecutes its own claims, or intervenes or joins in
 
10 any action, or actively participates with a claimant or a
 
11 claimant's attorney in the prosecution of claims, then, in
 
12 addition to any reimbursement rights, claims, or liens provided
 
13 in this section, the department shall also be entitled to recover
 
14 its attorney's fees and costs which shall be used to reimburse
 
15 the department for such attorney's fees and costs incurred by
 
16 it."
 
17      SECTION 3.  Statutory material to be repealed is bracketed.
 
18 New statutory material is underscored,
 
19      SECTION 4.  This Act shall take effect upon its approval. 
 
20