Unlicensed Mainland Attorneys' Participation in Local Arbitrations

• Publication year: 2015

Unlicensed Mainland Attorneys' Participation in Local Arbitrations

by David C. Farmer

May an attorney, not licensed in Hawaii, represent a party in an arbitration conducted in Hawaii?

Haw. Rev. Stat. § 605-14 prohibits such unauthorized practice of law.¹Further, Hawaii Rules of professional Conduct Rule 5.5(b) prohibits Hawaii-licensed attorneys from assisting an unlicensed person in the unauthorized practice of law.

Can this prohibition be overcome by an attorney appearing pro se for a corporate entity in which he or she is an officer and shareholder?

A longstanding and widely practiced rule prohibits corporations from being represented by non-attorneys,²consistent with the existence of a corporation as a "person" separate and distinct from its shareholders, officers and employees.³

The traditional rule regarding corporations is that they must be represented by a licensed attorney in courts of law⁴ This rule was recognized very early in American jurisprudence.⁵

Additionally, this general rule against non-attorney representation is not only recognized in the federal courts, but also has been recognized by state courts, including in Hawaii.⁶

Haw. Rev. Stat. § 605-2, Hawaii law since 1859, provides that "any person" may appear without legal counsel in legal proceedings. In Oahu Plumbing & Sheet Metal Ltd. v. Kona Constr., 60 Haw. 372, 590 p.2d 570 (1979), the supreme court held that, except in limited circumstances, a corporation may be represented only by an attorney, and non-attorney agents are not allowed to represent corporations in litigation before the courts of the state on the basis that the statute allowing "any person" pro se representation applied only to natural persons, not to juridical persons, such as corporations.

A number of courts have stated their rationale for upholding the rule prohibiting corporations from representing themselves pro se. One such rationale noted by the courts is that a corporation is merely fictional, lacking substance, and therefore is incapable of representing itself.⁷ Courts have so held, even when the individual attempting to represent the corporation is that corporation's president and majority stock-holder.⁸

Finally, an overriding justification for this rule seems to be that if a party chooses the benefits of incorporation, then he "must now bear the burdens of that incorporation."⁹ Such rationale is obviously persuasive, and lends credibility to the rule that corporations must be represented in arbitrations...