STAND. COM. REP. NO. 478-00

                                 Honolulu, Hawaii
                                                   , 2000

                                 RE: H.B. No. 2798
                                     H.D. 1





Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Labor and Public Employment, to which was
referred H.B. No. 2798 entitled: 

     "A BILL FOR AN ACT RELATING TO WORKERS' COMPENSATION,"

begs leave to report as follows:

     The purpose of this bill is to require the Director of Labor
and Industrial Relations (Director) to approve attorneys' fees in
amounts comparable to attorneys' fees awarded in civil
litigation.

     The Worker's Compensation Section of the Consumer Lawyers of
Hawaii, and ILWU Local 142 submitted testimony in support of this
bill.  Argonaut Insurance Company, the Hawaii Insurers Council,
and the Department of Labor and Industrial Relations (DLIR)
expressed concerns about this bill. 

     The current procedure in place at the DLIR to approve
attorneys' fees in worker's compensation cases results in
approving fees lower than comparable fees awarded for attorneys
in civil litigation cases.

     For an injured worker to recover due compensation for his
injuries, the worker must have the opportunity to select
attorneys who are qualified to competently conduct a worker's
compensation case which can be as taxing as other civil
litigation cases.  An attorney with specialized legal knowledge
has a significant effect on the recovery to the injured worker.

 
 
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     The less-than-comparable attorneys' fees discourage
attorneys from taking worker's compensation cases.  The fees must
not only provide for the living expenses of the attorney, but
must also cover the attorney's office overhead expenses.

     The Department's current attorneys' fees approval procedure
lacks the basis for determining an amount that is reasonable in
light of the complexity, time expended, and the experience of the
attorney in a worker's compensation case.  

     Your Committee has amended this bill by:

     (1)  Providing factors that the Director, appellate board,
          or court may consider to arrive at amounts comparable
          to that of attorneys' fees awarded in civil litigation
          cases; and

     (2)  Deleting language mandating that the Director approve
          comparable attorneys' fees as unnecessary.  

     As affirmed by the record of votes of the members of your
Committee on Labor and Public Employment that is attached to this
report, your Committee is in accord with the intent and purpose
of H.B. No. 2798, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as H.B. No. 2798, H.D.
1, and be referred to the Committee on Consumer Protection and
Commerce.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Labor and Public
                                   Employment,



                                   ______________________________
                                   TERRY NUI YOSHINAGA, Chair