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GROUP 5 ATTY.

NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.
ATTORNEYS FEES

I. In general

Definition:

Attorneys fee is the reasonable compensation paid to a lawyer


for the legal services he has rendered to a client. It may also an
indemnity for damages ordered by the court to be paid by the losing
party to the prevailing party in a litigation.

Right to private counsel, a precondition.

- He must not only show that the case falls under any of the
exceptions that may warrant the award thereof; he must have
employed and, in the case of a public litigant, must show his
right to employ a private counsel as well.
- For this reason, a successful litigant who prosecuted his action
without the assistance of counsel is not entitled to the award of
1
attorneys fees.

II. Two Concepts of Attorneys Fees


a) Ordinary: (As a payment to a lawyer for legal services)
- It is the reasonable compensation paid to the lawyer for
the legal services he had rendered the client. The basis of
this compensation is the fact of employment by the client.

b) Extra-ordinary: (As an award for damages)


- An indemnity for damages ordered by the court to be paid
by the losing party to the prevailing parry in a ligation.
The basis of this is nay of the cases authorized by law
and is payable not to the lawyer but to the client unless
they have agreed that the award shall pertain to the
lawyer as an additional compensation or as part thereof.

III. CANON 20 A lawyer shall charge only fair and reasonable fees.

Factors in Determining Attorneys Fee (Rule 20.1, Canon 20)

1. Time spent and the extent filed the services rendered or


required;;
2. Novelty and the difficulty of the questions involved;
1
Andreas v. Green, 48 Phil. 463 (1925)
GROUP 5 ATTY. NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.
3. Importance of the subject matter;
4. Skill demanded;
5. Probability of losing other employment a result of the
acceptance of the proffered case;
6. Customary charges for similar services and the schedule of fees
of the IBP Chapter to which he belongs;
7. Amount involved in the controversy and the benefits resulting
to the client from the services;
8. Contingency or certainty of compensation;
9. Character of the employment whether occasional or established,
and
10. The professional standing of the lawyer.

Kinds of Payment which may be stipulated upon:


1. a fixed or absolute fee which is payable regardless of the result
of the case
2. a contingent fee that is conditioned to the securing of a
favorable judgment and recovery of money or property and the
amount of which may be on a percentage basis
3. a fixed fee payable per appearance
4. a fixed fee computed by the number of hours spent
5. a fixed fee based on a piece of work

Quantum of Meruit means as much as the lawyer deserves or such


amount as his services merit.

Instances of recovery of Attorneys fees on the basis of Quantum of


Meruit

1. There is no express contract for payment of attorneys fee


agreed upon between the lawyer and the client.
2. When although there is a formal contract for attorneys fees, the
fees stipulated are found unconscionable.
3. When the contract for attorneys fee is void due to formal
matter.
4. When for justifiable cause the lawyer was not able to finish the
case.
5. When the lawyer and the client disregard the contract for fees.
6. When the client dismissed his counsel before the term,ination of
the case or the latter withdrew therefrom for valid reasons.

Ways attorneys fees may be claimed by the lawyer:


1. It may be asserted either in the very action in which the
services of a lawyer had been rendered or in a separate action.
GROUP 5 ATTY. NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.
2. A petition for attorneys fees may be filed before the judgment in
favor of the client is satisfied or the proceeds thereof delivered to the
client.
3. The determination as to the propriety of the fees or as to the
amount thereof will have to be held in abeyance until the main case from
which the lawyers claim for attorneys fees may arise has become final.
Otherwise, the determination of the courts will be premature.

Kinds of Retainer Agreements on Attorneys fees:


1. General Retainer or Retaining Fee it is the fee paid to a lawyer
to secure his future services as general counsel for any ordinary legal
problem that may arise in the ordinary business of the client and
referred to him for legal action;

2. Special Retainer that is a fee for a specific case or service


rendered by the lawyer for a client

Guides for Determining Attorneys fees on Quantum Meruit Basis


1. Time spent and extends of the services rendered or required.
2. Novelty and difficulty of question involved.
3. Importance of subject matter.
4. Skill demanded of a lawyer

IV. Rule 20.02 A 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.

V. Rule 20.03 A lawyer shall not, without 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.

VI. Rule 20.04 A lawyer shall avoid controversies with clients


concerning his compensation and shall resort to judicial action only to
prevent imposition, injustice or fraud.

When counsel cannot recover full amount despite written contract for
attorneys fees:
1. When he withdraws before the case is finished
2. justified dismissal of attorney (payment: in quantum meruit
only)

CHAMPERTOUS CONTRACTS (VOID)


GROUP 5 ATTY. NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.
Lawyer stipulates with his client that in the prosecution of the case,
he will bear all the expenses for the recovery of things or property being
claimed by the client and the latter agrees to pay the former a portion of the
thing/property recovered as compensation.

OTHER MATTERS TO NOTE:


Compensation to an attorney for merely recommending another
lawyer is improper (agents)
Attorneys fees for legal services shared or divided to non-lawyer
is prohibited. Division of fees is only for division of service or
responsibility.
A lawyer should try to settle amicably any differences on the
subject. A lawyer has 2 options. Judicial action to recover attorneys
fees:
1. In same case: Enforce attorneys fees by filing an
appropriate motion or petition as an incident to the main action
where he rendered legal services.
2. In a separate civil action.

VII. EXTRAORDINARY ATTORNEYS FEES- Attorneys Fees as an award


for damages
ART. 2208. In the absence of stipulation, attorneys fees and expenses
of litigation, other than judicial costs, cannot be recovered, except:

1. When exemplary damages are awarded;


2. When the defendants act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest;
3. In criminal cases of malicious prosecution against the plaintiff;
4. In case of a clearly unfounded civil action or proceeding against the
plaintiff;
5. Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiffs plainly valid, just and demandable claim;
6. In actions for legal support;
7. In actions for the recovery of wages of household helpers, laborers
and skilled workers;
8. In actions for indemnity under workmens compensation and
employers liability laws;
9. In a separate civil action to recover civil liability arising from a
crime;
10. When at least double judicial costs are awarded;
11. In any other case where the court deems it just and equitable that
attorneys fees and expenses of litigation should be recovered.
GROUP 5 ATTY. NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.
In all cases, the attorneys fees and expenses of litigation must be
reasonable.

GENERAL RULE: Fee as damages not recoverable


- The general rule is that attorneys fees in the concept of
damages are not recoverable.2
- It is not the fact of winning alone but the attendance of an of
the special circumstances3 and, in the case of a public litigant,
the existence of the right to private counsel that justify the
award of attorneys fee as damages in favour of the prevailing
party.4

EXCEPTION: Fees as damages recoverable


- Attorneys fees in the concept of damages may be awarded in
any of the following circumstances:
1. When there is agreement.
2. When exemplary damages are awarded.
3. When defendants action or omission compelled plaintiff to
litigate.
4. In criminal cases of malicious prosecution.
5. When the action is clearly unfounded.
6. When defendant acted in gross and evident bad faith.
7. In action for support.
8. In cases of recovery of wages.
9. In actions for indemnity under workmens compensation and
employees liability laws.
10. In separate civil action arising from a crime.
11. When at least double costs are awarded.
12. When the court deems it just and equitable.
13. When a special law so authorizes.

VIII. Award of attorneys fees discretionary.

- The decision should state the reason why the award is made,
unless the text thereof plainly shows the case comes within one
of the exceptions.
- A statement by the trial court that it considers it just and
equitable to require the payment of attorneys fees because the
claim set up or the defense raised is untenable is insufficient to
justify the award.
IX. Pleading and practice.

2
Jimenes v. Bucoy, 193 Phil. 40 (1958)
3
Art. 2208, Civil Code of the Philippines.
4
Rizal surety & Ins. Co. v. Court of Appeals, 20 SCRA 61 (1967)
GROUP 5 ATTY. NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.
- The claim for attorneys fee in the concept of damages and the
ground relied upon must be pleaded. In the absence of such
allegation, neither the trial court nor the appellate court may
grant attorneys fees. 5
- To merit the award of attorneys fees as item of damages, the
amount thereof must be proved and it must be specifically
prayed for, not just in such other relief and remedy as the court
may dee, just and equitable. 6
- For it is settled that the award of attorneys fee is the exception
rather than the rule; hence, the trial court should make
findings of fact and law, which would bring the case within the
7
exception and justify the award.

X. JURISPRUDENCE

Heirs and/or Estate of Atty. Rolando P. Siapian, represented by Susan S.


Mendoza vs. Intestate Estate of the Late Eufrocina G. Mackay as represented
by Dr. Roderick Mackay, et al., G.R. No. 184799, September 1, 2010.

It is settled that a claim for attorneys fees may be asserted either in the
very action in which a lawyer rendered his services or in a separate action.
But enforcing it in the main case bodes well as it forestalls multiplicity of
suits. The intestate court in this case, therefore, correctly allowed Atty.
Siapian to interject his claim for attorneys fees in the estate proceedings
against some of the heirs and, after hearing, adjudicate the same on April 3,
1997 with an order for Arturo, et al to pay Atty. Siapian the fees of P3
million due him. Since the award of P3 million in attorneys fees in favor of
Atty. Siapian had already become final and executory, the intestate court
was within its powers to order the Register of Deeds to annotate his lien on
the Estates titles to its properties. The Estate has no cause for complaint
since the lien was neither a claim nor a burden against the Estate itself. It
was not enforceable against the Estate but only against Arturo, et al, who
constituted the majority of the heirs.

Filomena R. Benedicto vs. Antonio Villaflores; G.R. No. 185020. October 6,


2010

5
Enecillat v. Magsaysay, 17 SCRA 125 (1966); PNB v. CA, 256 SCRA 491 (1996)
6
Trans-Asia Shipping Lines, Inc. v. Court of Appeals, 69 SCRAD 40, 254 SCRA 260 (1996)
7
SCC Chemical Corp. v. CA, G.R. No. 128538, Feb. 28, 2001.
GROUP 5 ATTY. NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.
It is settled that the award of attorneys fees is the exception rather than
the general rule; counsels fees are not awarded every time a party prevails
in a suit because of the policy that no premium should be placed on the
right to litigate. Attorneys fees, as part of damages, are not necessarily
equated to the amount paid by a litigant to a lawyer. In the ordinary sense,
attorneys fees represent the reasonable compensation paid to a lawyer by
his client for the legal services he has rendered to the latter; while in its
extraordinary concept, they may be awarded by the court as indemnity for
damages to be paid by the losing party to the prevailing party. Attorneys
fees as part of damages are awarded only in the instances specified in
Article 2208 of the Civil Code. As such, it is necessary for the court to make
findings of fact and law that would bring the case within the ambit of these
enumerated instances to justify the grant of such award, and in all cases it
must be reasonable.

TRADERS ROYAL BANK EMPLOYEES UNION-INDEPENDENT vs. NATIONAL


LABOR RELATIONS COMMISSION and EMMANUEL NOEL A. CRUZ, G.R. No.
120592 March 14, 1997

There are two commonly accepted concepts of attorney's fees, the so-called
ordinary and extraordinary. In its ordinary concept, an attorney's fee is the
reasonable compensation paid to a lawyer by his client for the legal services
he has rendered to the latter. The basis of this compensation is the fact of
his employment by and his agreement with the client.

In its extraordinary concept, an attorney's fee is an indemnity for damages


ordered by the court to be paid by the losing party in a litigation. The basis
of this is any of the cases provided by law where such award can be made,
such as those authorized in Article 2208, Civil Code, and is payable not to
the lawyer but to the client, unless they have agreed that the award shall
pertain to the lawyer as additional compensation or as part thereof.

With respect to the first situation, the remedy for recovering attorney's fees
as an incident of the main action may be availed of only when something is
due to the client. Attorney's fees cannot be determined until after the main
litigation has been decided and the subject of the recovery is at the
disposition of the court. The issue over attorney's fees only arises when
something has been recovered from which the fee is to be paid.
GROUP 5 ATTY. NOEL GRETARE
Bagundang, Zaidamin D. Problem Areas in Legal Ethics
Harun, Jehan V.
Maulana, Princess Joy M.
Mansilla, Andrei Casimiro A.
Jamon, Lilybeth B.

While a claim for attorney's fees may be filed before the judgment is
rendered, the determination as to the propriety of the fees or as to the
amount thereof will have to be held in abeyance until the main case from
which the lawyer's claim for attorney's fees may arise has become final.
Otherwise, the determination to be made by the courts will be premature.
Of course, a petition for attorney's fees may be filed before the judgment in
favor of the client is satisfied or the proceeds thereof delivered to the client.