Haw. Sup. Ct. R. 10.3

(a) Eligible claims. The trustees may consider for payment all claims resulting from the dishonest conduct of a member of the Bar of this State or any attorney specially admitted by any court of this State, provided that:

(1) Said conduct was engaged in while the attorney was a licensed member of the Bar of this State or specially admitted by any court of this State; and

(i) the claim originates from the attorney’s providing legal services in the State of Hawaiʻi; and

(ii) the claimant engaged the attorney’s services in the State of Hawaiʻi; and

(iii) the dishonest conduct occurred in the State of Hawaiʻi; and

(2) The claim arises out of an attorney-client or fiduciary relationship customary to the practice of law such as where an attorney acts as an administrator, executor, trustee of an express trust, guardian or conservator; and

(3) The attorney has (one of the following):

(i) died;

(ii) been adjudicated a bankrupt;

(iii) been adjudicated an incompetent or incapacitated from continuing the practice of law by reason of physical or mental infirmity or illness or because of the use of drugs or intoxicants;

(iv) been disbarred or suspended from the practice of law, or voluntarily resigned from the practice of law;

(v) become a judgment debtor of the claimant, which adjudication shall have been based upon dishonest conduct while acting as specified in Rule 10.3(a) (2) and which judgment or judgments remain unsatisfied in whole or in part;

(vi) been adjudged guilty of a crime, which adjudication shall have been based upon the dishonest conduct of the attorney; or

(vii) left the jurisdiction and cannot be found.

(4) In addition to satisfaction of one of the requirements for eligibility under Rule 10.3(a) (3), the trustees may require that the application demonstrate either:

(i) that the alleged defalcating attorney is a judgment debtor of the claimant, the judgment or appeal is final, and the claimant has exhausted all remedies in attempting to collect the judgment; or

(ii) that the alleged defalcating attorney is without assets or that under the circumstances it is otherwise impracticable to obtain a judgment against the attorney, and there is no applicable insurance or bond.

(b) Nonreimbursable losses. The following losses shall not be reimbursable:

(1) Losses of a spouse, children, parents, grandparents, siblings, partners, associates, employers and employees of, or business entities or trusts owned or beneficially owned by an attorney causing the losses;

(2) Losses covered by any bond, surety agreement, or insurance contract to the extent covered thereby, including any loss to which any bondsman or surety or insurer is subrogated to the extent of that subrogated interest;

(3) Losses of any financial institution which are recoverable under a "banker’s blanket bond" or similar insurance or surety contract;

(4) Consequential or incidental damages, such as lost interest, or lawyers’ fees, or other costs incurred in seeking recovery of a loss.

(c) Discretion of trustees. In cases of extreme hardship, or if other interests of justice so warrant, the trustees may, in their discretion, recognize a claim which would otherwise be excluded under these rules.

(d) Consideration of trustees. In making determinations on claims, the trustees shall consider, among other appropriate factors, the following:

(1) The amounts available and likely to become available to the Fund for the payment of claims and the size and number of claims which are likely to be presented;

(2) The amount of the claimant’s loss as compared with the amount of losses sustained by other eligible claimants;

(3) The degree of hardship suffered by the claimant as a result of the loss;

(4) The degree of negligence, if any, of the claimant which may have contributed to the loss;

(5) The existence of any collateral source for the reimbursement of the claim.

(e) Limitation on payments. The trustees shall, by rules, fix the maximum amount which any one claimant may recover from the Fund and the aggregate maximum amount which may be recovered because of the dishonest conduct of any one attorney.

(f) Rights to fund. No claimant or any other person or organization shall have any right in the Fund as beneficiary or likewise. All awards by the trustees are a matter of discretion.

(g) Conditions of payment. The trustees may require as a condition of payment that the claimant execute such instruments, take such action or enter into such agreements as the trustees require, including assignments, subrogation agreements, trust agreements, exhaustion of other remedies, and promises to cooperate with the trustees in making or prosecuting claims or charges against any person.

(h) Attorney’s fee. No attorney representing a claimant before the Fund shall receive a fee for the attorney’s services unless authorized by the rules and regulations of the trustees and upon their express direction.

(i) Investments. Losses arising from investment advice given by the claimant’s attorney, although such advice may result in loss of the claimant’s monies, is not in and of itself a ground for seeking reimbursement from the Fund. Claims arising out of investments may be considered for payment. However, when an attorney advises a claimant to invest funds he or she obtained from the claimant, by virtue of an attorney-client or fiduciary relationship, in a business or other venture, and the attorney then converts the claimant’s monies, in no event will interest on such investments be reimbursable. All payments on the investment, representing principal or interest received by the claimant, will be deducted from the claimant’s initial investment in order to determine, for Fund purposes, the valid amount of the claim.

(Added July 29, 1981, effective July 29, 1981; amended May 24, 1984, effective May 24, 1984; renumbered September 1984; amended effective May 5, 1988; further amended February 7, 1992, effective February 7, 1992; further amended August 14, 2000, effective January 1, 2000; further amended October 15, 2012, effective January 1, 2013; further amended February 15, 2018, effective July 1, 2018; further amended August 4, 2022, effective August 4, 2022.)