“Generally, under the ‘American Rule’ each party is responsible for paying his or her own litigation expenses.” Hall v. Laroya, –P.3d —, 2010 WL 3438726, *3 (Hawaii App., September 2, 2010)(citations omitted). However, in Hawaii, Haw. Rev. Stat. §607-14 allows for an award of attorneys fees to the prevailing party “in all actions in the nature of assumpsit.” Haw. Rev. Stat. §607-14. The amount of attorneys fees awarded pursuant to Haw. Rev. Stat. §607-14 “shall not exceed twenty-five percent of the judgment.” Id.
Actions “in the nature of assumpsit” are generally actions that arise out of a contract (ie. breach of a contract). As such, the Hawaii Intermediate Court of Appeal held on September 2, 2010, in Hall v. Laroya, that when a client promises to pay for legal services to his or her attorney, the “action to collect the fees he owes is ‘in the nature of assumpsit.’” Hall v. Laroya, –P.3d —, 2010 WL 3438726, *3. The Hawaii Intermediate Court of Appeal, in Hall v. Laroya, reviewed case law and the legislative intent of Haw. Rev. Stat. §607-14 and stated that case law, the broad language of Haw. Rev. Stat. §607-14, and the legislative history of the statute “support a determination that the award for attorneys’ fees is allowed where an attorney represents his or her firm in an assumpsit action.” This, in turn, means that attorneys can recover attorneys fees accrued in their own action for the collection of attorneys fees. So, if a party fails to pay their attorneys’ legal fees, the attorney may attempt to collect his or her fees from the client for the client’s action (if the clients’ action is in the nature of assumpsit) as well as collect for the fees that that attorney accrued in bringing and litigating the action to collect his or her fees.
*Please note that the opinion from Hall v. Laroya, –P.3d —, 2010 WL 3438726 (Hawaii App., September 2, 2010), which is discussed at length above, has not been released for publication in the permanent law reports as a petition for reconsideration in the Court of Appeals or a petition for Certiorari in the Supreme Court may be pending.