You get seriously injured in a car accident. Insurance agents are calling for statements. You are in the hospital and the medical bills are adding up. You decide to call a personal injury attorney (perhaps not one of the ones that is yelling on TV... maybe someone a bit more human). But, how are you going to pay for an attorney when you just got involved in an accident, your medical bills are piling up, and you can't work because of your injuries?
That's where the concept of a contingency fee arrangement comes in. Most personal injury attorneys in Hawaii take new clients and cases on a "contingency fee" basis. Taking a case on contingency means that the attorney will agree to represent the injured person in exchange for a portion of the settlement that the attorney helps recover on behalf of the injured person. Typically, that portion is 1/3 (33%). [Note: before you actually hire the attorney, the contingency fee percentage should be agreed upon in writing to protect both the client and the attorney.]
Why are contingency fee arrangements beneficial to an injured claimant? Well, oftentimes, an injured person does not have the financial ability to hire an attorney on an hourly rate. Most attorneys bill out at hourly rates of $200.00 or more. Can you imagine after getting in a horrific accident, while you're struggling to make ends meet, paying an attorney for some unknown amount of hours at a very high rate to pursue your claims (and with no guarantee that you will recover more than your attorney will make)? That would simply not work and in many cases, result in a grave injustice to the client. An hourly fee arrangement under such circumstances would probably deter many people from bringing their valid injury claims.
Enter, the contingency fee arrangement. The contingency fee arrangement, as described above, shifts a lot of the risk of bringing a claim to the attorney. The client does not pay an hourly rate, and typically does not pay anything up front to hire the attorney. The client and attorney simply sign an agreement reciting the contingency fee arrangement and the terms of representation, and the attorney gets to work. The attorney commits to working an unknown number of hours (sometimes in the hundreds of hours, if the matter goes to trial), for a set percentage fee. And the attorney's and client's interests are aligned: the attorney will only recover a fee for their time, if the client recovers a settlement (otherwise, 33% of zero is still zero!).
Have you ever signed a waiver before partaking in a recreational activity such as scuba diving, horseback riding, or the like? Would you be surprised to learn that in many cases in Hawaii, that such a release is often not worth the paper that it is written on?
In HRS § 663-1.54, Hawaii’s legislature has provided that recreational business operators and owners cannot absolve themselves from liability for negligence by having their patrons sign express waivers of negligence. So, if the release that you sign before participating in a recreational activity that you paid for attempts to absolve the recreational business from liability for negligence, that waiver will not hold up in court.
The statute does specify that recreational businesses may attempt to absolve themselves from liability for “inherent risks” of a recreational activity via waiver. See HRS § 663-1.54. However, HRS § 663-1.54 specifies that by definition, an inherent risk is not negligence. Additionally, the question of whether a risk is “inherent” is automatically a determination for the fact-finder. See Mohler v. Kipu Ranch Adventures, LLC, Civil No. 13-00611 JMS-BMK at * 14 (D. Haw., Nov. 7, 2014) (“Thus, § 663-1.54 precludes waivers of liability for negligence, and allows waivers only for damages resulting from ‘inherent risks’ that have been fully disclosed to the customer. And pursuant to § 663-1.54(c), ‘[t]he determination of whether a risk is inherent or not is for the trier of fact,’ meaning that the court cannot determine on summary judgment whether a written release constitutes a valid waiver of Defendant’s liability in this action.”) (emphasis added).
The practical effect of this statute in litigation is that where a plaintiff has sued for negligence, a recreational business defendant in Hawaii should not be able to get out on summary judgment by arguing that the plaintiff signed a release or waiver, even if they argue that the patron was injured by an inherent risk of the activity instead of negligence.