HB518

HOUSE OF REPRESENTATIVES	H.B. NO.	518
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO SMALL CLAIMS COURT.

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

SECTION 1. The legislature finds that small claims court was initially intended to be a means to bypass the formal and expensive traditional judicial process. Though in practice, by allowing for legal representation, individuals can find themselves in inequitable circumstances when it comes to presenting legal arguments, objecting to motions, and appealing decisions.

The legislature finds that hiring a lawyer for small claims court is rarely cost efficient. In addition, Hawaii small claims court limits the amount in controversy in most cases to $5,000, while most individuals filing claims for that amount or less are unable to afford or find an attorney to represent them. The legislature also finds that numerous states including California, Nebraska, and Idaho do not allow for legal representation in small claims courts.

The purpose of this Act is to ensure that small claims court remains a cost effective, equitable, fair, and accessible method of obtaining justice for all individuals in Hawaii by prohibiting representation in small claims court by legal counsel for all parties.

SECTION 2. Section 633-28, Hawaii Revised Statutes, is amended to read as follows:

"§633-28 Small claims, no appeal; appearance by whom. (a) Actions shall be commenced and conducted in the small claims division of the district court as provided by the rules of court. The clerk of the court, at the request of an individual, shall prepare the papers required to be filed in an action in the court, but the clerk's services in the preparation of these papers shall not be available to a corporation, partnership, or association, or to any individual proprietorship. The mode of service shall be:

(1) As provided by law or rule of court for cases in the district courts; provided that for any small claims action, service may be made by one of the parties to the action by means of personal service to the other parties, on the condition that:

(A) The party being served signs that party's name to indicate actual receipt of service; or

(B) A competent witness, who is not an employee, family member, or agent of the plaintiff appears at a hearing on the matter or provides a notarized affidavit testifying that personal service on the party sought to be served was accomplished in the witness' presence;

(2) As to actions arising under paragraphs (1) and (3) of section 633-27(a), by registered mail or by certified mail with return receipt signed by the addressee showing delivery within the circuit; or

(3) As to actions arising under paragraph (2) of section 633-27(a), by registered mail or by certified mail with return receipt signed by the addressee showing delivery at any place within or without the State.

There shall be no appeal from a judgment of the small claims division, but the court, sitting as the small claims division, may alter or set aside any judgment as provided by the rules of court.

(b) Notwithstanding any provision of law requiring the licensing of practitioners, [~~any person, with the approval of the court, may appear on behalf of the person or another person in the small claims division of the district court; provided that,~~] in cases in the small claims division of the district court [~~involving disagreement between landlord and tenant about the security deposit in a residential landlord-tenant relationship,~~] licensed practitioners are prohibited from appearing on behalf of another person. The services of an unlicensed person appearing under this subsection shall be without compensation, either by way of direct fee, contingent fee, or otherwise. In the event representation services are rendered for compensation, this subsection is inapplicable and the rendering of the services constitutes the unlawful practice of law, except as otherwise provided."

SECTION 3. Statutory material to be repealed is bracketed and stricken.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________