Post on 03-Jun-2018
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PROBLEM AREA IN LEGAL ETHICS
Attorneys Fees and
Compensation for Legal Services
Submitted to:
Atty. Rodel V. Capule
Submitted by:
De Rivera, Ana Hendrika
Fulgado, Nathaniel
Pascua, Jettner
2ndSemester,
A! 2"#$%2"#&
ntroduction
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T'ere is ( )ommon s(yin* t'(t money is the root cause of all evil , but money is +ery
ne)ess(ry (nd indisens(b-e be)(use .it'out it t'e e)onomies o/ (-- n(tions in t'e .or-d
.i-- )ert(in-y )o--(se0 (nd t'(t in)-udes t'e -e*(- ro/ession1Ho.e+er, i/ t'e -e*(-
ro/ession is to 'onor its resonsibi-ities to ub-i) ser+i)e, it is essenti(- t'(t t'e so)iety,
.'i)' it ser+es, s'ou-d not +ie. t'e ro/ession(- (bi-ities o/ -(.yers (s reresentin*
(+(ri)ious (nd ure-y erson(- e//orts to obt(in .e(-t' Inste(d, t'e *o(- o/ t'e ro/ession
s'ou-d be to im(rt to (-- se*ments o/ so)iety t'e underst(ndin* t'(t -(.yers (re
rim(ri-y de+oted to ub-i) ser+i)e (nd to t'e ursu(n)e o/ 1usti)e (nd (re (--o.ed
)omens(tion )ommensur(te .it' ro/ession(- e//orts 2
'i-e doin* my (rt o/ t'is rese(r)' (er, one o/ my )ousins (s3ed me Is it true that
attorneys fees are paid by the losing party? And I 4ui)3-y re-ied, 5Well, not
necessarily, only if its awarded by the court as damages And 'e s(id, Oh, I think I
read it somewhere before, maybe it pertained to another country6 T'(t e+enin*, I
de)ided to rese(r)' ( bit more (bout t'e (ttorney7s /ees in ot'er )ountries (nd true
enou*', my )ousin .(s ri*'t:
In t'e 8nited St(tes, t'e *ener(- ru-e 9)(--ed t'e merican !ule6 is t'(t e()' (rty (ys
on-y t'eir o.n (ttorney;s /ees, re*(rd-ess o/ .'et'er t'ey .in or -ose T'is (--o.s eo-e
to brin* )(ses (nd -(.suits .it'out t'e /e(r o/ in)urrin* e
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%( re)ise )'(r*e /or er/ormin* one de/ined -e*(- 1ob
2. Hourly !ee
%)ommon-y bi--ed ())ordin* to t'e time ( (rti)u-(r m(tter t(3es to )om-ete
3. Contingent !ee
%/ee (id out o/ t'e re)o+ery ( )-ient re)ei+es on t'e )(se
4. Percentage !ee
%it is .'en ( -(.yer is (id ( se)i/i) er)ent(*e o/ t'e +(-ue o/ t'e est(te
5. Retainer
%it is t'e ()t o/ t'e )-ient by .'i)' 'e em-oys (n (ttorney to m(n(*e /or 'im ( )(use to .'i)' 'e
is ( (rty, or ot'er.ise to (d+ise 'im (s )ounse- 9eit'er *ener(- or se)i(-
6. Acceptance !ee
%/ee )'(r*ed by (n (ttorney si*ni/yin* 'is (*reement to '(nd-e t'e (rti)u-(r )(se or en*(*ement
to t'e (rti)u-(r )-ient see3in* 'is -e*(- ser+i)es
%t'is is se(r(te (nd indeendent /rom t'e tot(-ity o/ t'e (ttorney7s /ees /or ser+i)es to be ()tu(--y
rendered in t'e )ondu)t o/ t'e -iti*(tion
7. "o#ili$ation e%penses
%(mount o/ money deosited .it' t'e (ttorney to be used /or tr(+e-, tr(nsort(tion (nd (--ied
e
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reasonable compensation for his services, with a view to the importance of the sub'ect
matter of the controversy, the e(tent of the services rendered, and the professional
standing of the attorney"
It is (-so ro+ided t'(t t'e )ourt is not bound by t'e oinion o/ (ttorneys (s e
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'en t'e -(.yer is *ui-ty o/ /r(ud or b(d /(it' to.(rd 'is )-ient in t'e m(tter o/
'is em-oyment
'en t'e )ounse-7s ser+i)es (re .ort'-ess be)(use o/ 'is ne*-i*en)e
'en )ontr()t is i--e*(-, (*(inst mor(-s or ub-i) o-i)y
D Ser+in* (d+erse interest un-ess -(.yer ro+es t'(t it .(s .it' t'e )onsent o/ bot'
(rties
Right to Co)pensation 'ithout a Contract
In t'e (bsen)e o/ (n e
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T'is is t'e b(sis o/ determinin* t'e -(.yer7s ro/ession(- /ees in t'e (bsen)e o/ (
)ontr()t, but re)o+er(b-e by 'im /rom t'e )-ientHe s'(-- be entit-ed to re)ei+e .'(t 'e
merits /or 'is ser+i)es
It is (ut'ori=ed .'ere:
( T'ere is no e
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1usti/y t'eir (.(rd in /(+or o/ t'e .innin* (rty
E
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lawyer shall, in cases of referral, with the consent of the client, be entitled to a division
of fees in proportion to the work performed and responsibility assumed"
'en t.o or more -(.yers reresentin* )ommon )-ients '(+e ( ro/ession(- bre(3%u
durin* t'e enden)y o/ t'e )(se, t'eir (ttorney7s /ees s'(-- be s'(red in (mounts to be
determined by t'e )ourt@
!ule -.".0"
lawyer shall not, with the full knowledge and consent of the client, accept any fee,
reward, costs, commission, interest, rebate or forwarding allowance or other
compensation whatsoever related to his professional employment from anyone other than
the client"
T'e on-y e
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6. T'e 1ud*ment debtor '(s /u--y (id t'e 1ud*ment )reditor (nd t'e -(.yer '(s not
t(3en (ny -e*(- ste to '(+e 'is /ees (id dire)t-y to 'im /rom t'e 1ud*ment
ro)eeds
Co)pensation to 'hich &a'yer is 2ntitled Depending on His Capacity
1. &ounsel de 1arte> He is entit-ed to ( re(son(b-e (ttorney7s /ees (*reed uon or in
t'e (bsen)e t'ereo/, on 54u(ntum meruit6 b(sis
2. &ounsel de Officio> T'e )ounse- m(y not dem(nd /rom t'e ())used (ttorney7s
/ees e+en i/ 'e .ins t'e )(se He m(y 'o.e+er )o--e)t /rom t'e *o+ernment /unds
i/ (+(i-(b-e b(sed on t'e (mount /i
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Recent Supreme Court decisions involving Attorneys Fees:
alta$ar v. Atty. a3e$ Jr., 4 A.C. No. 5657 4 77 Dec 8679
Facts
Com-(in(nts (re t'e o.ners o/ t'ree (r)e-s o/ -(nd -o)(ted in in(-ui'(n, B(t((n On
& Setember 2""2, t'ey entered into (n (*reement .it' Gerry R ?e+id(- 9?e+id(-, (
subdi+ision de+e-oer In t'(t (*reement, t'ey stood to be (id P$,""",""" /or (-- t'e
-ots t'(t .ou-d be so-d in t'e subdi+ision
?or t'(t urose, t'ey e
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?e+id(- did not ud(te )om-(in(nts (bout t'e st(tus o/ t'e subdi+ision ro1e)t (nd /(i-ed
to ())ount /or t'e tit-es to t'e subdi+ided -(nd Com-(in(nts (-so /ound t'(t 'e '(d so-d
( number o/ (r)e-s to t'ird (rties, but t'(t 'e did not tum t'e ro)eeds o+er to t'em
T'us, on 2$ Au*ust 2"", t'ey re+o3ed t'e Se)i(- Po.er o/ Attorney t'ey '(d
re+ious-y e
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be-ie+e t'(t .'i-e )om-(in(nts re)ei+ed +(rious (mounts (s -o(ns /rom resondent /rom
Au*ust 2"" to Kune 2"", t'ey )ou-d not s(re e+en ( /e. minutes to (s3 (bout t'e
st(tus o/ t'e )(se
Not'ithstanding the !oregoing, respondent is not 'ithout !ault.
ndeed, 'e !ind that the contract !or legal services he has e%ecuted 'ith
co)plainants is in the nature o! a cha)pertous contract : an agree)ent 'here#y an
attorney undertakes to pay the e%penses o! the proceedings to en!orce the client*s
rights in e%change !or so)e #argain to have a part o! the thing in dispute.
+uch contracts are contrary to pu#lic policy and are thus void or ine%istent.
/hey are also contrary to Canon 7;.6< o! the Code o! Pro!essional Responsi#ility,'hich states that la'yers shall not lend )oney to a client, e%cept 'hen in the
interest o! 1ustice, they have to advance necessary e%penses in a legal )atter they are
handling !or the client.
A re(din* o/ t'e )ontr()t /or -e*(- ser+i)es s'o.s t'(t resondent (*reed to (y /or (t
-e(st '(-/ o/ t'e e
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"iranda v. Carpio 4 A. C. No. ;8B7 4 +epte)#er 8;, 8677
$his is a disbarment case against tty" *acario 2" &arpio filed by 3alentin &" *iranda"
Facts
Com-(in(nt (-entin C Mir(nd( is one o/ t'e o.ners o/ ( (r)e- o/ -(nd In #@@&,
)om-(in(nt initi(ted L(nd Re*istr(tion Commission /or t'e re*istr(tion o/ t'e (/ores(id
roerty urin* t'e )ourse o/ t'e ro)eedin*s, )om-(in(nt en*(*ed t'e ser+i)es o/
resondent Atty C(rio (s )ounse- in t'e s(id )(se .'en 'is ori*in(- )ounse-, Atty
S(mue- M(r4ue=, /i*ured in ( +e'i)u-(r ())ident
In )om-(in(nt;s A//id(+it, )om-(in(nt (nd resondent (*reed t'(t )om-(in(nt .(s to
(y resondent T.enty T'ous(nd Pesos 9P'P2",""""" (s ())et(n)e /ee (nd T.o
T'ous(nd Pesos 9P'P2,""""" (s (e(r(n)e /ee Com-(in(nt (id resondent t'e
(mounts due 'im, (s e+iden)ed by re)eits du-y si*ned by t'e -(tter urin* t'e -(st
'e(rin* o/ t'e )(se, resondent dem(nded t'e (ddition(- (mount o/ Ten T'ous(nd Pesos
9P'P#",""""" /or t'e re(r(tion o/ ( memor(ndum, .'i)' 'e s(id .ou-d /urt'er
stren*t'en )om-(in(nt;s osition in t'e )(se, -us t.enty er)ent 92" o/ t'e tot(- (re(
o/ t'e sub1e)t roerty (s (ddition(- /ees /or 'is ser+i)es
Com-(in(nt did not ())ede to resondent;s dem(nd /or it .(s )ontr(ry to t'eir
(*reement As ( resu-t o/ )om-(in(nt;s re/us(- to s(tis/y resondent;s dem(nds, t'e -(tter
be)(me /urious (nd t'eir re-(tions'i be)(me sore
On K(nu(ry #2, #@@D, ( e)ision .(s rendered *r(ntin* t'e etition /or re*istr(tion,
.'i)' e)ision .(s de)-(red /in(- (nd e
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du-i)(te o/ t'e tit-e o/ t'e roerty
On Ari- $, 2""", )om-(in(nt .ent to t'e R to *et t'e o.ner;s du-i)(te o/ t'e Ori*in(-
Certi/i)(te o/ Tit-e 9OCT be(rin* No "%@& He .(s surrised to dis)o+er t'(t t'e s(me
'(d (-re(dy been )-(imed by (nd re-e(sed to resondent on M(r)' 2@, 2""" On M(y &,2""", )om-(in(nt t(-3ed to resondent on t'e 'one (nd (s3ed 'im to turn o+er t'e
o.ner;s du-i)(te o/ t'e OCT, .'i)' 'e '(d )-(imed .it'out )om-(in(nt;s 3no.-ed*e,
)onsent (nd (ut'ority Resondent insisted t'(t )om-(in(nt /irst (y 'im t'e
P'P#",""""" (nd t'e 2" s'(re in t'e roerty e4ui+(-ent to $D s4u(re meters, in
es
!unds, docu)ents and papers and ?9@ unsatis!ied clai) !or attorney>s !ees. Further,
the attorney>s retaining lien is a general lien !or the #alance o! the account #et'een
the attorney and his client, and applies to the docu)ents and !unds o! the client'hich )ay co)e into the attorney>s possession in the course o! his e)ploy)ent.
In t'e resent )(se, )om-(in(nt )-(ims t'(t t'ere is no su)' (*reement /or t'e (yment
o/ ro/ession(- /ee )onsistin* o/ 2" o/ t'e tot(- (re( o/ t'e sub1e)t roerty (nd submits
t'(t t'eir (*reement .(s on-y /or t'e (yment o/ t'e ())et(n)e /ee (nd t'e (e(r(n)e
/ees
As )orre)t-y /ound by t'e IBP%CB, t'ere .(s no roo/ o/ (ny (*reement bet.een t'e
)om-(in(nt (nd t'e resondent t'(t t'e -(tter is entit-ed to (n (ddition(- ro/ession(- /ee
#&
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)onsistin* o/ 2" o/ t'e tot(- (re( )o+ered by OCT No "%@& T'e (*reement bet.een t'e
(rties on-y s'o.s t'(t resondent .i-- be (id t'e ())et(n)e /ee (nd t'e (e(r(n)e
/ees, .'i)' t'e resondent '(s du-y re)ei+ed C-e(r-y, t'ere is no uns(tis/ied )-(im /or
(ttorney;s /ees t'(t .ou-d entit-e resondent to ret(in 'is )-ient;s roerty Hen)e,
resondent )ou-d not +(-id-y .it''o-d t'e tit-e o/ 'is )-ient (bsen)e ( )-e(r (nd 1usti/i(b-e
)-(im
Atty C(rio /(i-ed to -i+e u to 'is duties (s ( -(.yer by un-(./u--y .it''o-din* (nd
/(i-in* to de-i+er t'e tit-e o/ t'e )om-(in(nt, desite ree(ted dem(nds, in t'e *uise o/ (n
(--e*ed entit-ement to (ddition(- ro/ession(- /ees He '(s bre()'ed Ru-e #"# o/ C(non #
(nd Ru-e #"$ o/ C(non # o/ t'e Code o/ Pro/ession(- Resonsibi-ity
II
?urt'er, in )o--e)tin* /rom )om-(in(nt e
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Cerdan v. o)e$ 4 A.C. No. 57< 4 "arch 75, 8678
4efore the &ourt is the undated !esolution of the 4oard of 5overnors of the Integrated
4ar of the 1hilippines I416 finding tty" &arlo 5ome7 tty" 5ome76 liable for violating
&anon /8 of the &ode of 1rofessional !esponsibility and recommending that he be
suspended from the practice of law for si( 86 months"
Facts
T'e )(se stemmed /rom t'e (//id(+it%)om-(int o/ Auror( Cerd(n 9)om-(in(nt, /i-ed
be/ore t'e Committee on B(r is)i-ine o/ t'e IBP on Ari- #, 2"" T'e )om-(int
(--e*ed t'(t )om-(in(nt (nd .ido.er Ben1(min Ru/ino 9Ru/ino -i+ed to*et'er (s
'usb(nd (nd .i/e0 t'(t durin* t'eir )o'(bit(tion, t'ey ur)'(sed se+er(- re(- roerties0t'(t t'ey m(int(ined s(+in*s ())ounts (-- o/ .'i)' .ere in t'e n(me o/ Ru/ino0 t'(t .'en
Ru/ino died on e)ember 2D, 2""&, )om-(in(nt sou*'t t'e -e*(- (d+i)e o/ Atty Gome=
(s to .'(t to do .it' t'e roerties -e/t by Ru/ino0 (nd t'(t s'e (id Atty Gome=
(ttorney7s /ees in t'e (mount o/ P#2,""""" but on-y t'e (mount o/ P#"",""""" .(s
re/-e)ted in t'e re)eit
Com-(in(nt )-(imed t'(t s'e (ut'ori=ed Atty Gome=, t'ru ( se)i(- o.er o/ (ttorney
9SPA, to:
sett-e Ru/ino7s s(+in*s ())ount0
t'(t t'e ori*in(- (*reement o/ ( "%" s'(rin* bet.een )om-(in(nt (nd t'e
)'i-dren o/ Ru/ino .(s re-()ed by t'e Comromise A*reement entered into by
Atty Gome=, .'erein t'e 'eirs o/ Ru/ino *ot " o/ t'e s'(re .'i-e s'e on-y
re)ei+ed &"0
t'(t Atty Gome= in)-uded in t'e Comromise A*reement t'e s(+in*s ())ount in
?CB%N(rr( Br(n)' .'en t'e s)oe o/ t'e SPA .(s on-y t'e ())ount in ?CB%
ue=on br(n)'0
t'(t Atty Gome= too3 'er b(n3 boo3 /or t'e ?CB ())ount in N(rr( Br(n)'
)ont(inin* deosits in t'e (mount o/ more or -ess P#,""""" (nd ne+er returned
it to 'er0
(nd t'(t Atty Gome= .it'dre. /rom 'er ?CB ())ounts (nd t'ere(/ter *(+e t'e
(mount o/ P2@",""""" (nd uttered, 5ITO NA LAHAT ANG PERA MO AT ANG
SA AQIN NAQ8HA QO NA6
In 'is Ans.er, Atty Gome= (dmitted t'(t Ru/ino en*(*ed 'is -e*(- ser+i)es in +(rious
)(ses He, 'o.e+er, denied t'e ())us(tions st(ted in t'e )om-(int%(//id(+it /i-ed by
)om-(in(nt
Ruling
#
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T'e Court (*rees .it' t'e /indin*s o/ t'e IBP
In t'e )(se (t ben)', Atty Gome= /(i-ed to obser+e t'e utmost *ood /(it', -oy(-ty, )(ndor,
(nd /ide-ity re4uired o/ (n (ttorney in 'is de(-in*s .it' )om-(in(nt Atty Gome=
e
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"as)ud v. N&RC G o Jr., 4 .R. No. 7B99B 4 Fe#ruary 79 8665
4efore the &ourt is a petition for review on certiorari assailing the 2ecision of the &ourt
of ppeals
Facts
On Ku-y @, 2""$, E+(n*e-in( M(smud7s 9E+(n*e-in( 'usb(nd, t'e -(te A-e
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Ruling
/here are t'o concepts o! attorney>s !ees. n the ordinary sense, attorney>s !ees
represent the reasona#le co)pensation paid to a la'yer #y his client !or the legal
services rendered to the latter. (n the other hand, in its e%traordinary concept,
attorney>s !ees )ay #e a'arded #y the court as inde)nity !or da)ages to #e paid #y
the losing party to the prevailing party, such that, in any o! the cases provided #y
la' 'here such a'ard can #e )ade, e.g., those authori$ed in Article 886B o! the
Civil Code, the a)ount is paya#le not to the la'yer #ut to the client, unless they
have agreed that the a'ard shall pertain to the la'yer as additional co)pensation
or as part thereo!.
Here, .e (-y t'e ordin(ry )on)et o/ (ttorney7s /ees, or t'e )omens(tion t'(t Atty Go
is entit-ed to re)ei+e /or reresentin* E+(n*e-in(, in substitution o/ 'er 'usb(nd, be/ore
t'e -(bor tribun(-s (nd be/ore t'e )ourt
9vangelina maintains that rticle /// of the :abor &ode is the law that should govern
tty" 5os compensation as her counsel and assiduously opposes their agreed retainer
contract"
Arti)-e ### o/ t'e s(id Code ro+ides:
!$" ///" ttorney;s fees" < a6 In cases of unlawful withholding of wages the culpable
party may be assessed attorney;s fees e+uivalent to ten percent of the amount of the
wages recovered"
Contrary to 2vangelina*s proposition, Article 777 o! the &a#or Code deals 'ith the
e%traordinary concept o! attorney*s !ees. t regulates the a)ount recovera#le as
attorney>s !ees in the nature o! da)ages sustained #y and a'arded to the prevailing
party. t )ay not #e used as the standard in !i%ing the a)ount paya#le to the la'yer
#y his client !or the legal services he rendered.
In t'is re*(rd, Se)tion 2&, Ru-e #$D o/ t'e Ru-es o/ Court s'ou-d be obser+ed in
determinin* Atty Go7s )omens(tion T'e s(id Ru-e ro+ides:
#9&" -=" &ompensation of attorney;s> agreement as to fees" < n attorney shall be
entitled to have and recover from his client no more than a reasonable compensation for
his services, with a view to the importance of the sub'ect matter of the controversy, the
e(tent of the services rendered, and the professional standing of the attorney" o court
shall be bound by the opinion of attorneys as e(pert witnesses as to the proper
compensation, but may disregard such testimony and base its conclusion on its own
professional knowledge" written contract for services shall control the amount to be
paid therefor unless found by the court to be unconscionable or unreasonable"
/he retainer contract #et'een Atty. o and 2vangelina provides !or a contingent
#@
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!ee. /he contract shall control in the deter)ination o! the a)ount to #e paid, unless
!ound #y the court to #e unconsciona#le or unreasona#le. Attorney>s !ees are
unconsciona#le i! they a!!ront one>s sense o! 1ustice, decency or reasona#leness. /he
decree o! unconsciona#ility or unreasona#leness o! a stipulated a)ount in a
contingent !ee contract 'ill not preclude recovery. t )erely 1usti!ies the !i%ing #y
the court o! a reasona#le co)pensation !or the la'yer>s services.
T'e )riteri( /ound in t'e Code o/ Pro/ession(- Resonsibi-ity (re (-so to be )onsidered in
(ssessin* t'e roer (mount o/ )omens(tion t'(t ( -(.yer s'ou-d re)ei+e C(non 2",
Ru-e 2""# o/ t'e s(id Code ro+ides:
&O -. < :W@9! #A:: &A!59 O:@ BI! 2 !9#O4:9
B99#"
!ule -."./" < lawyer shall be guided by the following factors in determining
his fees%
a6 $he time spent and the e(tent of the services rendered or re+uired>
b6 $he novelty and difficulty of the +uestion involved>
c6 $he importance of the sub'ect matter>
d6 $he skill demanded>
e6 $he probability of losing other employment as a result of acceptance of the
proffered case>
f6 $he customary charges for similar services and the schedule of fees of the I41
&hapter to which he belongs>
g6 $he amount involved in the controversy and the benefits resulting to the client
from the service>
h6 $he contingency or certainty of compensation>
i6 $he character of the employment, whether occasional or established> and
'6 $he professional standing of the lawyer"
Contingent !ee contracts are su#1ect to the supervision and close scrutiny o! the
court in order that clients )ay #e protected !ro) un1ust charges. /he a)ount o!
contingent !ees agreed upon #y the parties is su#1ect to the stipulation that counsel
2"
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'ill #e paid !or his legal services only i! the suit or litigation prospers. A )uch
higher co)pensation is allo'ed as contingent !ees #ecause o! the risk that the la'yer
)ay get nothing i! the suit !ails. /he Court !inds nothing illegal in the contingent !ee
contract #et'een Atty. o and 2vangelina*s hus#and. /he CA co))itted no error
o! la' 'hen it a'arded the attorney*s !ees o! Atty. o and allo'ed hi) to receive an
e0uivalent o! 95 o! the )onetary a'ard.
Considerin* t'(t Atty Go su))ess/u--y reresented 'is )-ient, it is on-y roer t'(t 'e
s'ou-d re)ei+e (de4u(te )omens(tion /or 'is e//orts E+en (s .e (*ree .it' t'e
redu)tion o/ t'e (.(rd o/ (ttorney;s /ees by t'e CA, t'e /()t t'(t ( -(.yer -(ys ( +it(-
ro-e in t'e (dministr(tion o/ 1usti)e em'(si=es t'e need to se)ure to 'im 'is 'onor(rium
-(./u--y e(rned (s ( me(ns to reser+e t'e de)orum (nd rese)t(bi-ity o/ t'e -e*(-
ro/ession A -(.yer is (s mu)' entit-ed to 1udi)i(- rote)tion (*(inst in1usti)e or
imosition o/ /r(ud on t'e (rt o/ 'is )-ient (s t'e )-ient is (*(inst (buse on t'e (rt o/ 'is
)ounse- T'e duty o/ t'e )ourt is not (-one to ensure t'(t ( -(.yer ()ts in ( roer (nd
-(./u- m(nner, but (-so to see t'(t ( -(.yer is (id 'is 1ust /ees it' 'is )(it(-
)onsistin* o/ 'is br(ins (nd .it' 'is s3i-- ()4uired (t tremendous )ost not on-y in money
but in e