Maui judge agrees to ask state Supreme Court about barriers to $4B wildfire settlement

HONOLULU (AP) — The Hawaii Supreme Court will be asked to weigh in on an issue that threatens to thwart a $4 billion settlement in last year’s devastating Maui wildfires.

Judge Peter Cahill on Maui agreed Friday to ask the state high court questions about how insurance companies can go about recouping money paid to policyholders.

Insurance companies that have paid out more than $2 billion in claims want to bring independent legal action against the defendants blamed for causing the deadly tragedy. It’s a common process in the insurance industry known as subrogation.

But Cahill ruled earlier this month they can seek reimbursement only from the settlement amount defendants have agreed to pay, meaning they can’t bring their own legal actions against them. The settlement was reached on Aug. 2, days before the one-year anniversary of the fires, amid fears that Hawaiian Electric, the power company that some blame for sparking the blaze, could be on the brink of bankruptcy. Other defendants include Maui County and large landowners.

Preventing insurers from going after the defendants is a key settlement term.

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