Legal Ethics Agpalo Chapters 8-19

Legal and Judicial Ethics Reviewer Legal and Judicial Ethics (2009 ed.) Chap 8 to Chap 19 By Ruben E. Agpalo

CHING, Catherine Anna A. || ESPIRITU, Maria Nikka N. || Guzman, Anne Clarisse A. San Beda College of Law A.Y. 2013-2014

CHAPTER VIII LAWYERS FIDUCIARY

OBLIGATIONS

A. EFFECTS OF FIDUCIARY RELATION GENERALLY: - Atty. client relationship is highly fiduciary and strictly confidential requiring utmost good faith, loyalty, fidelity and disinterestedness on the part of the atty for the protection of the client - principles of justice and expediency require that the atty must not derive any advantage from such act when done by him as may operate to the prejudice of his client and that ALL advantages arising there from must inure to the clients benefit DEALINGS SUBJECT TO SCRUTINY

- fiduciary relation exists as a matter of law which requires all dealings to be subject to the closest judicial scrutiny

- courts duty to guard and protect clients from any undue consequences

- measure of good faith required from atty is much higher compared to what is required in business dealings

- no presumption of innocence or improbability of wrong doing is considered in attys favour

- dealings must be characterized with utmost honesty and good faith

- it is upon the lawyer to prove that the transaction was FAIR

ABUSE OF CONFIDENCE A lawyer should refrain from any action whereby for his personal benefit or gain he abuses or takes advantage of the confidence reposed in him by his client.

- a lawyer may not retain money of client to force settlement of a disputed claim

- cannot obtain money thru false pretense or misrepresentation

- Undue influence in the preparation of the will shown by persuasive circumstances such as preferential treatment and inclusion of a bequest more than a token or modest amount

REBATES AND COMMISSIONS 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.

- to secure the wholehearted fidelity to the clients cause and prevent him from full discharge of duty to his client

- Whatever a lawyer receives from the opposite party in the service of his client belongs to the client, in the absence of the clients consent made after the full disclosure of the facts

A LAWYER SHALL NOT BORROW MONEY FROM THE CLIENT unless the clients interests are fully protected by the nature of the case or by independent advice (borrowing allowed if under this exception but should not abuse by delaying payment) AND LEND MONEY TO HIM except, when in the interest of justice he has to advance necessary expenses in a legal matter he is handling for the client.

- intended to assure the lawyers independent professional judgment for if there is financial interest the free exercise of his judgment may be affected

- violation of oath of good fidelity to client and make lawyering a money making venture

B.ACCOUNTING OF CLIENTS FUNDS



Canon 16: a lawyer shall hold in trust all moneys and properties of his client that may come into his possession. Rule 16.01 a lawyer shall account for all the money or property collected or received for or from the client.

- a lawyer may receive money for or from the client in the course of his employment which he holds in trust and under the obligation to make an accounting thereof. Such money may include: 1. money collected in pursuance of a judgment in favour of his client 2. money of client not used for the purpose for which it was entrusted 3. any property redeemed with the clients money and registered in the lawyers name 4. any fund received from a judgment creditior as consideration to desist from participating in a public sale

- if there is failure to accomplish a

specific purpose for which money given by the client was to paid, the atty must return such money immediately to the client

- ..failure to return such money upon demand give rise to the presumption that he misappropriated it for his own use and to the prejudice of and in violation of the trust reposed in him by his client. It is a gross violation of general morality, professional ethics and impairs public confidence in the legal profession. (Celaje v. Soriano)

- also applies even without atty-client relationship

- may retain part of money if authorized by the client

A LAWYER SHALL NOT COMMINGLE CLIENTS FUNDS

A lawyer shall keep the funds of each client separate and apart from his own and those of others kept by him.

- not commingle money of client with that of other clients and with his private funds, nor use the clients money for personal purposed without the clients consent

- promptly report money of his client coming to his possession

A LAWYER SHALL DELIVER FUNDS TO CLIENT, SUBJECT TO HIS LIEN Rule 16.03: A lawyer shall deliver the funds and property of his client when due or upon demand. However he shall have a lien over the funds and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements, giving notice promptly thereafter to his client.

- assumes that the client agrees with the lawyer as to the amount of attys fees and the application of the clients funds to pay such fees

- without the consent, lawyer cannot apply the money for his fees, but should instead return money to the client without prejudice to filing a case for the recovery of his fees

C. RESTRICTION AGAINST BUYING CLIENTS PROPERTY PURCHASE OF PROPERTY IN LITIGATION

- prohibits lawyer from purchasing even at auctions, either in person or through the mediation of another, any property or interest involved in any litigation in which he may take part by virtue of his profession

- rests on public policy and interests - such prohibition is ABSOLUTE AND

PERMANENT - moral obligation of the atty to refrain

from placing himself in a position which excites conflict between self interest and integrity



ELEMENTS: a. atty-client relationship exists b. property or interest of client in litigation c. atty takes part as counsel in such case d. atty by himself or through another purchases such property or interest during pendency of litigation

Applies even when:

- purchase or lease in favour of a partnership of which the counsel is a partner

- purchase by attys wife of an interest belonging to estate of the decedent

- acquisition of guardians lawyer of the wards property

- property in litigation deeded in favour of atty for payment of fees and the value of such is greatly more than the worth of the attys services

- transfer of right over a parcel of land in a pending litigation as attys fees (malpractice)

Not applicable in the ff:

- property not in litigation - sale took place prior to litigation - purchaser was a corporation even

though the atty was an officer thereof

- sale after termination of the litigation - atty bidding on behalf of his client at

the auction of clients property - contingent fee contract unless

unreasonable PURCHASE IN VIOLATION OF THIS RULE IS NULL AND VOID AB INITIO

- It is definite, permanent and cannot be ratified.

PURCHASE OF CHOSES IN ACTION

- prohibition applies - if allowed, lawyer becomes a

voluntary litigant for profit which is improper conduct

- also improper to buy judgment noted or other choses for much less their face value with intent to collect them at large profit

Exception: - if acquired not in his professional

capacity but as a LEGITIMATE INVESTMENT

CHAPTER IX

LAWYERS DUTY TO PRESERVE CLIENTS CONFIDENCE

A. PRESERVATION OF CLIENTS CONFIDENCE Canon 21: a lawyer shall preserve the confidence and secrets of his client even after the atty-client relationship is terminated.

- applicable to matters disclosed by prospective clients

Rule 21.01 - A lawyer shall not reveal the confidences or secrets of his client except; (a) When authorized by the client after acquainting him of the consequences of the disclosure; (b) When required by law; (c) When necessary to collect his fees or to defend himself, his employees or associates or by judicial action. Rule 21.02 - A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto. Rule 21.03 - A lawyer shall not, without the written consent of his client, give information from his files to an outside agency seeking such information for auditing, statistical, bookkeeping, accounting, data processing, or any similar purpose. Rule 21.04 - A lawyer may disclose the affairs of a client of the firm to partners or associates thereof unless prohibited by the client. Rule 21.05 - A lawyer shall adopt such measures as may be required to prevent those whose



services are utilized by him, from disclosing or using confidences or secrets of the clients. Rule 21.06 - A lawyer shall avoid indiscreet conversation about a client's affairs even with members of his family. Rule 21.07 - A lawyer shall not reveal that he has been consulted about a particular case except to avoid possible conflict of interest. DURATION OF DUTY

- perpetual, continues even after clients death

- he may not do anything which will injuriously affect his former client

- nor at any time disclose or use against him any knowledge or information acquired by virtue of the professional relationship

- some privileged communication may lose privileged nature by some supervening act done pursuant to the purpose of the communication

REASON FOR THE RULE

- encourage full disclosure of facts to atty. and place unrestricted confidence in him in matters affecting his rights and obligations

- preserve the confidential and trust relation between atty and client

A LAWYER SHALL NOT USE CLIENTS SECRETS WITHOUT HIS CONSENT A lawyer shall not, to the disadvantage of his client, use information acquired in the course of employment, nor shall he use the same to his own advantage or that of a third person, unless the client with full knowledge of the circumstances consents thereto. A LAWYER SHALL NOT GIVE INFORMATION FROM HIS FILES A lawyer shall not, without the written consent of his client, give information from his files to an outside agency seeking such information for auditing, statistical, bookkeeping, accounting, data processing, or any similar purpose.

- work product of lawyer such as his effort, research and thought and the records of his client are Privileged matters

- neither the lawyer, his heir or legal representatives disclose the contents of such files without clients permission

A LAWYER MAY DISCLOSE AFFAIRS OF CLIENT TO PARTNERS

- employment of a law firm is equivalent to retainer of the members thereof

- employment of one member of a law firm is considered as employment of the law firm

- partners and associates are not considered third persons because they are considered as one person

A LAWYER SHALL ADOPT MEASURES AGAINST DISCLOSURES OF CLIENTS SECRETS A lawyer shall adopt such measures as may be required to prevent those whose services are utilized by him, from disclosing or using confidences or secrets of the clients.

- employment of secretaries, stenographers, messengers, clerks etc is allowed and clients secrets learned by these persons In the performance of their services to the lawyer or his client are privileged communications

A LAWYER SHALL AVOID INDISCREET CONVERSATION ABOUT CLIENTS AFFAIRS even with members of his family.

- may result in prejudice to client and lessen respect due to the legal profession

- A LAWYER SHALL NOT REVEAL HIS HAVING CONSULTED



A lawyer shall not reveal that he has been consulted about a particular case except to avoid possible conflict of interest.

- applies to matters disclosed by prospective client because the disclosure creates atty-client relationship even though the atty does not eventually accept the employment

- lawyer should ascertain as soon as practicable whether there is conflict of interest and inform the prospective client that he cannot accept employment on such ground

B. SCOPE OF ATTY- CLIENT PRIVILEGE REQUISITES (Mercado v. Vitriolo) Evidentiary privilege (all must concur): 1. legal advice of any kind is sought 2. from a professional legal adviser in his capacity as such 3. the communications relating to such purpose 4. made in confidence 5. by the client 6.are at his instance permanently protected 7. from disclosure by himself or by the atty 8. except if the protection is waived

- the person from whom legal advice is sought must be an atty.

- applies if person poses as a lawyer for some ulterior purpose and client confides in him

- communication of client for purpose other than on account of the atty-client relation is NOT privileged

- communication must be for a lawful purpose or lawful end

- client who asserts the existence of atty-client relation has burden of proving such fact

CONFIDENTIALITY

- mere relation of atty and client does not raise presumption of confidentiality

- the client must intend the communication to be confidential and for the purpiose of seeking legal advice

- Confidential information- transmitted by voluntary act of disclosure between atty and client in confidence and by means which so far as the client is aware, discloses the information to no third person other than one reasonably necessary to accomplish the purpose for which it was given.

- a third person who overheard privilege communication, privilege rule does not apply

FORM OR MODE OF COMMUNICATION -oral, written, actions, signs and other means of communication intended to be confidential by the client -no particular mode required for the privilege rule to attach PERSONS ENTITLED TO CLAIM PRIVILEGE

- generally extends to the atty, his client as well as to the attys secretary, stenographer, or clerk.

- interpreter or messenger transmitting the communication

- experts such as accountant, physician etc hired either by client or atty for consultation

- for protection of client - may be asserted by clients assignee,

heir or legal representative APPLICATION OF RULE

- lawyer may be compelled to disclose unprivileged communication but he cannot volunteer such information for his own benefit to the prejudice of his client



A LAWYER SHALL NOT REVEAL CLIENTS CONFIDENCE A lawyer shall not reveal the confidences or secrets of his client except; (a) When authorized by the client after acquainting him of the consequences of the disclosure; (b) When required by law; (c) When necessary to collect his fees or to defend himself, his employees or associates or by judicial action.

- lawyer may not disclose clients funds to creditor to enable attachment of such funds

- lawyer cannot reveal the commission of a matrimonial offence committed by client contemplating the filing for legal separation

- lawyer who acquires knowledge of past wrongful acts of a corporate client may disclose them to the directors but not to others

- when lawyer discovers fraud committed by client, endeavour to rectify it by advising client and informing person injured

- breach of duty by lawyer (art 209 of RPC) o prision correccional or a fine

200-1000 pesos C. EXCEPTIONS TO THE RULE ON PRIVILEGE A lawyer shall not reveal the confidences or secrets of his client except; (a) When authorized by the client after acquainting him of the consequences of the disclosure; (b) When required by law; (c) When necessary to collect his fees or to defend himself, his employees or associates or by judicial action. - in addition to these, when it refers to the commission of a contemplated crime or perpetuation of fraud CLIENTS WAIVER OF THE PRIVILEGE - only client can waive except: > when the person to be examined the

attys secretary, stenographer or clerk, the consent of the atty is also necessary - client may waive personally - or through counsel except:

> controversy involves atty-client relation as in cases of breach of confidence

- client waives privilege by filing a complaint against his atty or by refusing to pay attys fees - waives cannot be made partially - partial waiver is equivalent to a waiver in whole DISCLOSURE TO PROTECT ATTYS RIGHTS

- privilege cannot be used as shield for wrongdoing nor can it be employed to deny a lawyer the right to protect himself against abuse by the client or false charges by third persons

- if atty is accused of misconduct by his client, he may disclose the truth necessary only to protect his rights

- avoid any disclosure not necessary to protect his rights

*read People v Sandiganbayan p. 291 (275 SCRA 505)

CHAPTER X Lawyers Duties of Fair Dealings and Avoiding Conflict of Interests

A. FAIRNESS IN DEALING WITH CLIENT

Duty to be candid, fair and loyal in all dealings with client, generally

Canon 15 lawyer shall observe candor, fairness and loyalty in all dealings with client.

Generally, the relation of attorney and client is strictly personal and highly confidential and fiduciary.

Highly Confidential o Trust o Confidence



Fiduciary o Absolute Integrity o Undivided Allegiance

A lawyer shall ascertain possible conflict of interests

Rule 15.01 A lawyer, in conferring with a prospective client shall ascertain as soon as practicable whether the matter would involve a conflict with another client or his own interest, and if so shall forthwith inform the prospective client.

The disclosure is more for the protection of the lawyer than that of the client.

Concealment of facts material to the employment may cause his client to lose confidence in him and may even affect hi fee.

A client may presume from an attorneys failure to disclose matters material to his employment that the attorney has no interest which will interfere with his devotion to the cause confided to him.

Duty to decline employment

A lawyer should decline professional employment even though how attractive the fee offered may be if its acceptance will involve violation of any of the rules of legal profession.

Lawyer should not accept employment as an advocate in any matter in which he had intervened while in the government service. Reason: Necessity that

professional integrity and public confidence in that integrity be maintained.

Lawyer should not accept employment the nature of which might easily be used as a means of advertising his professional service or his skills.

While there is no statutory restriction for a lawyer to be an advocate and a

witness for a client in a case, the canons of the profession forbid him from acting in that double capacity as he will find it difficult to disassociate his relation to the client as a lawyer and his relation to the litigant as a witness.

GR: A lawyer shall not refuse his services to the needy.

Exceptions: He is not in a position to carry it

out effectively or competently He labors under a conflict of

interest between him and prospective client or between a present one and the prospective.

A lawyer shall preserve the secrets of a prospective client (even if such client does not retain the lawyer or latter declines employment) Rule 15.02 Lawyer is bound by the rule on privileged communication in respect of matters disclosed to him by a prospective client. Reason: To make the prospective client free to discuss whatever he wishes with the lawyer without fear that what he tells the lawyer will not be divulged nor used against him, and for the lawyer to be equally free to obtain information from the prospective client. A lawyer may act as mediator Rule 15.04 A lawyer, with written consent of all concerned, may act as a mediator, conciliator or arbitrator in settling disputes.

However, a lawyer shall not act as counsel for any of them, otherwise the rule prohibiting representation of conflicting interests will apply.

B. REPRESENTING CONFLICTING INTERESTS A lawyer shall not represent conflicting interest Rule 15.03 A lawyer shall not represent conflicting interest except by written consent of all concerned given after full disclosure of the facts.



The rule covers not only cases in which confidential communications have been confided but also those in which no confidence has been bestowed or will be used.

Test of inconsistency of interest : Whether the acceptance of a new client will prevent an attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or invite suspicion of unfaithfulness and whether the acceptance of the new relation will require the attorney to do anything which will injuriously affect his first client in any matter in which he represents.

Reason for the prohibition: Relationship of a lawyer and a client is one of trust and confidence of the highest degree. Effect of termination of relation

The termination of the relation provides no justification for a lawyer to represent an interest adverse to or in conflict with the former client.

Reason: Clients confidence once reposed cannot be divested by the expiration of the professional employment. Materiality of confidential information

The bare attorney-client relationship with a client precludes a lawyer from accepting professional employment from the clients adversary in the same case or difference case but related action.

Foundation of, & reason for, the rule

The stern rule against representation of conflicting interests is founded on principles of Public Policy & Good Taste.

Opposing clients in same or related suits

It is improper for a lawyer to appear as counsel for one party against the adverse party who is his client in a related suit, as a lawyer is prohibited from representing conflicting interest.

Even though the opposing clients, after full disclosure of facts, consent to the lawyers dual representation, the lawyer when his clients cannot see their way clear to settling their controversy amicably, retire from the case.

Opposing clients in unrelated suits

A lawyer cannot appear as counsel for one party against the adverse party who is his client in another totally unrelated action.

The lawyer in that situation will not be able to pursue with vigor and zeal the client claims against the other to properly represent the latter in the unrelated action; or if he can do so it would invite suspicion.

New client against former client

A lawyer is forbidden from representing a subsequent client against a former client only when the subject matter of the preset case is related, directly or indirectly, to the subject matter of the previous litigation in which he appeared for the former client.

Conflicting duties

A lawyer may not undertake to discharge conflicting duties any more than may he represent antagonistic interests.

Attorneys interest versus clients interest

A lawyer should not put himself in a position where self-interest tempts him to do less than his best for his client.



For this reason, it is improper for a lawyer to continue representing a client in a suit against a party even with the clients consent after a lawyer brings a suit in his own behalf against the same defendant if it is uncertain whether such defendant will be able to satisfy both the judgments.

Rule applicable to Law Firms

Where a lawyer is disqualified or forbidden from appearing as counsel in a case because of conflicting of interests, the law firm of which he is a member as well as any member, associate, or assistant therein is similarly disqualified from so acting.

It is corollary to the rule that the employment of one member of a law firm is considered as an employment of the law firm and that the employment of a law firm is equivalent to the retainer of the members thereof.

A lawyer may not, therefore, represent a client whose interest are adverse to those of the employer of a member of the firm.

Limitation on General Rule

GR: Lawyer may not represent conflicting interests.

Limitations: o No conflict of interest exists o Client knowingly consents to

the dual representation o No true attorney-client

relationship is attendant Where no conflicting interest exists

A lawyer may properly represent a subsequent client against a former client in a matter which is not, in any way, related to the previous controversy in which he appeared for the former client.

Where client knowingly consent

Generally, a lawyer may at a certain stage of the controversy and before it reaches the court represent conflicting interest with the express written consent of all parties concerned given after full disclosure of the facts.

This rule is only applicable when one client is a former client and not when both clients are current/present clients in the case, where each asserts an interest adverse to that of the other.

In this situation the lawyer cannot represent both clients at the same time, even if they give written consent , for it is not only awkward for him to sustain the claim of one and oppose the same in favor of the other but it is also highly unethical.

A lawyer may not represent conflicting interest even though parties agree to dual representation where conflict is between the attorneys interest and that of client, because the lawyer should yield to clients interest, or between a private clients interest and that of the government by reason of public policy and interest.

Where no true attorney-client relationship exists

The rule forbidding a lawyer from representing an interest adverse to that of the former client assumes, as a general proposition, that a true client-attorney relationship existed.

Consequently the absence of such relationship either with the lawyer of law firm of which he is a member makes the prohibition inapplicable.



A public prosecutor may ethically sustain an information against an accused who is the complainant in another information filed by the same prosecutor because the latter represents not the private complainants but the people of the Philippines as the real offended party.

The lawyers secretary, stenographer, or clerk who, in such capacity, has acquired confidential information from the attorneys client may not accept employment or after becoming a member of the bar, represent an interest adverse to that of the lawyers client.

The general prohibition applies to such person, notwithstanding the absence of attorney client relationship at the time the confidential information was acquired because of the nature of the work.

Effects of representation of Conflicting Interest

1. Subjects the lawyer to disciplinary action.

2. The attorney may be disqualified from representing the new client upon petition of his former client.

3. Where the representation of conflicting interest is unknown and works prejudice to the new client, the judgment against the new client may on that ground, set aside.

4. Lawyers right to be paid for his services rendered in favor of the former client may be affected only if the two matters are related and the former client objected to the representation.

CHAPTER XI

Authority of Attorney

A. IN GENERAL Power to bind the client, generally

A lawyer must perform his duties to his client within the scope of his authority.

Within hi scope of authority, a lawyer may bind the client for any acts performed by him in pursuant thereto.

Two Types of Lawyers Authority

1. General and Implied Authority Professional employment of an

attorney confers upon him this authority to do on behalf of the client such acts as are necessary or incidental to the prosecution or management of the suit entrusted to him.

Refers to ordinary procedure. 2. Special Authority

Authority granted by the client to bind him on substantial matter.

GR: Negligence or mistake of the counsel binds the client, based on the rule that any act done by the lawyer within the scope of his authority binds the client.

Employment by itself confers upon the lawyer no special authority to bind the client upon substantial matters.

The cause of action or claim which is the subject matter of the litigation are substantial matters which the lawyer cannot impair, novate, compromise and settle without clients consent.

Attorney as agent of client

The relationship of attorney and client is in many respect one of agency and the general rules of ordinary agency apply to such relation.



An attorney representing a client in court is, however, more than an agent and has powers different from and superior to those of an ordinary agent, he being an officer of the court.

Collection of Claims

An attorney retained by a creditor to enforce a claim has authority to take all steps necessary to collect it, such as sending a letter of demand requiring payment or filing the corresponding action in court if the debtor refuses to pay.

A lawyer without special authority discharge his clients claim for less than the amount thereof or for the full amount in kind.

Acceptance of Service of Summons

A lawyer has no power to receive or accept on behalf of his client the service of summon in his bare professional capacity.

He is not an agent within the meaning of the rule authorizing service of summons upon an agent of corporation.

Exception: Lawyer may be regarded as an agent upon whom service of summons may be made and binding to the latter, where there are circumstances showing that he has been conferred or exercising additional powers that what is implied from the professional employment.

Thus, a foreign corporation without an agent or officer in this country other than its counsel who is also the sole representative for setting claims, the service made upon such counsel binds the foreign corporation because being the sole representative, it is presumed that he

has communicated to his client the service of process upon him.

Delegation of Authority

The lawyer cannot delegate the confidence and authority reposed to him by the client to another lawyer because of the fiduciary relationship.

Exception: Consent of the client, express or implied.

Client may also ratify the unauthorized delegation.

Delegation of legal work

A lawyer has the implied power to delegate to his associate or assistant attorney under his supervision and responsibility, part or whole of his legal work, in the absence of an express agreement with the client to the contrary.

He may authorize another lawyer on his behalf to appear in court and such lawyer is presumed to be empowered to act as such.

The fact of the delegation of legal work does not create an attorney-client relationship between the other lawyer and the client.

A lawyer may not however delegate to a layman any work which involves the study of law or its application such as computation & determination of period to appeal.

B. AUTHORITY TO APPEAR

Generally

A lawyer without being retained or authorized by the court may not represent another in court.

GR: The authority of the attorney continues until the termination of the litigation.

Exception: Unless sooner revoked or withdrawn by the client.



No written authority from the client is required to enable a lawyer to represent him in court.

Appearance

Coming into court as party either as a plaintiff or as a defendant and asking relief therefrom.

Appearance by counsel is a voluntary submission to the courts jurisdiction by a lawyer professionally engaged to represent the cause of another such as by actual physical appearance or filing of a pleading.

The orderly conduct of judicial proceedings requires the counsel for a party to file with the court his formal written appearance in the case.

Without such formal appearance, counsel is not generally entitled to notice.

General & Special Appearance

General Appearance Any action on the part of the

defendant or his counsel, except to object solely on the jurisdiction of the court over the person of the defendant, constitutes such appearance.

Amounts to voluntary submission to the courts jurisdiction.

Special Appearance One which seeks to contest solely

the jurisdiction of the court over the person of the defendant and which seeks no relief other than the dismissal of the action exclusively on that ground.

Does not operate as voluntary submission.

It also refers to the failure of a counsel to appear, another lawyer appears on his behalf for a particular purpose.

As amended by the 1997 Rules of Procedure, there is no longer a distinction between general and special appearance.

Now, defendant may file a motion to dismiss not only on the ground of lack of jurisdiction over his person but also on some other grounds without waiving the jurisdiction of the court over his person.

Presumption of Authority

An attorney is presumed to be properly authorized to represent any cause in which he appears in all stage of the litigation and no written authority is required to authorize him to appear.

The fact that a second attorney has entered his appearance on behalf of a litigant does not authorize a presumption that the authority of the first attorney has been withdrawn, it merely means that the litigant has employed an additional counsel.

This presumption only applies to ordinary procedures and not with respect to substantial matters.

Presumption disputable

The presumption that an attorney is duly authorized to manage a litigation is a disputable one and may be overcome by a clear evidence to the contrary.

Disclosure of Authority

Notwithstanding the fact that an attorney is presumed to be duly authorized to represent a party, the presiding judge may On motion of either party and on reasonable grounds being shown require him to produce or prove his authority and to disclose whenever pertinent to the issue the name of the person who employed him.



Trial & Appellate court, motu proprio and on valid grounds, may also require him to show authority.

Effects of unauthorized appearance

A party who has not authorized the lawyer to represent him is not bound by the lawyers appearance in the case nor the judgment rendered therein.

If the unauthorized appearance is willful the lawyer may be cited for contempt and be disciplined for professional conduct.

Ratification of aunathorized Appearance

Unauthorized appearance of an attorney may be ratified by party expressly or impliedly.

Ratification retroacts to the date of the attorneys first appearance and validates his actions.

Express ratification Categorical assertion by the

client that he has authorized the attorney of that he is confirming the authority to represent him.

Implied ratification requires the concurrence of the requirements: 1. That the party represented by

lawyer is of age or competent, otherwise, he must have a duly appointed guardian or legal representative.

2. That the party or guardian is aware of the representation by the lawyer.

3. The he fails to promptly repudiate the assumed authority.

The absence of any of the requisites renders the ratification inoperative.

C. CONDUCT OF LITIGATION

Generally

Generally, a client may waive, surrender, dismiss or compromise any of his rights involved in the litigation in favor of the other party even without or against the consent of his attorney

An attorney can bind his client as to such substantial matters only with his clients express or implied consent.

Reason: Designed to safeguard the clients interest against malicious actions of his lawyer. Determination of Procedural Questions

A lawyer who has been retained to prosecute or defend an action has an implied authority to determine what procedural steps to take which, in his judgment will best serve the interest of his client,

Such as what pleadings hould be filed, where & when to file it and what defenses to raise.

Making admissions

The authority of the lawyer to manage the clients cause includes the power to make admission of facts for the purpose of litigation.

No need of special authority from client.

It may be express or implied. Admissions made by counsel are

imputed to and conclusive against the client except if there is a showing of palpable mistake.

GR: Authority to make admissions is limited to the action which he is retained; Admissions made by him on behalf of a client in one case are not binding upon the same client in another suit.

Exception: If lawyer has been expressly authorized to make such admission or if the 2 cases are related.

Admission which operated as a waiver or surrender of the clients



cause is beyond the scope of the lawyers authority.

Entering into stipulations

A lawyer has an implied authority to agree or stipulate upon the facts involved in the litigation even without prior knowledge or consent of his client.

GR: Such Stipulations are binding to the client.

Exceptions: 1. If he is allowed to withdraw

therefrom with the consent of the adverse party.

2. When the court, upon showing of palpable mistake, permits him to withdraw

3. When what the lawyer agreed is that a witness, if presented in court, would testify as stated by the adverse party.

Agreement as to what witness would testify

Agreement as to the truth of what a witness , if presented, would testify . Generally binding to the client

Agreement as to what a witness would testify as that stated by the adverse party . Not binding. It deprives the court of the

benefit of reflection as to the intelligence and veracity of the witness which can only arise through the process of examination in court.

Compromise of cause of action

Compromise o Contract whereby the

parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced.

Lawyer is not authorized to enter into compromise without special authority from his client.

The approval by the court of the compromise is not essential to the validity except if it is a class suit or executed on behalf of a minor or incompetent or an absentee.

Effect of Want of Special Authority

A compromise by the lawyer without special authority by the client does not bind the latter.

It amounts to a fraud against the client.

A compromise entered into without such authority is an unenforceable contract.

Judgment based on such compromise may be set aside or reopened.

Ratification of unauthorized compromise

Client may ratify the unauthorized compromise, expressly or impliedy.

Implied ratification may take many forms such as silence or acquiescence by acts showing approval.

Confession of Judgment

A confession of judgment stands on the same footing as a compromise.

Hence, a lawyer may not confess judgment against his client except with the knowledge and at the instance of the client.

Dismissal of action or withdrawal of appeal

A lawyer has no authority to dismiss his clients case with prejudice or an adjudication upon the merits which constitutes res judicata, even if he does not believe that his client is entitled to prevail in the action.

He has however an implied power to dismiss the clients case without prejudice, that step not being a legal obstacle to refilling, whenever he is



convinced that it is to the clients interest.

He has no implied power to waive his clients right to appeal nor withdraw a pending without a special authority, but it may be ratified by the client.

Clients right to dismiss or compromise action

The right of a lawyer for compensation for services rendered cannot have a higher standing than the right of the client to dismiss his cause or settle his litigation.

Nor can such right of counsel work as an obstacle to the approval by the court of the settlement effected by client.

Limitations on clients right

The clients right to settle his actions is not absolute.

The dismissal or compromise by the client of his cause may not defeat the attorneys right to just compensation for his services.

The client cannot exercise such right in a manner that is contrary to law, public policy, order morals or good customs or prejudicial to third person with a right recognized by law.

He cannot compromise civil status. Validity of marriage or legal separation, future legitime, ground of legal separation, future support and jurisdiction of courts.

Authority after judgment

The power of attorney after judgment is more restricted.

In the absence of a greater authority expressly conferred, an attorney has only the power to take such steps as are necessary to make the judgment fully effective or to sustain it, or to relieve his client from its effects if it is adverse.

An attorney has authority to bind his client in taking an appeal, it being a procedural measure to relieve the client to adverse effect of judgment.

D. MATTERS IMPUTED TO CLIENT

Knowledge acquired by attorney

Knowledge acquired by attorney during the time that he is acting within the scope of his authority is imputed to the client.

Doctrine of Imputed Knowledge is based on the assumption that the attorney, who has notice of matters affecting his client, communicated the same to his principal in the course of employment.

The doctrine applies whether or not he actually communicated it to his client, the lawyer and his client being in legal contemplation, one juridical person.

Notice to counsel as notice to client

The law requires that service of any written notice upon a party who has appeared by attorney/s shall be made upon his attorney or one of them, unless service upon the party himself is ordered by the court.

A notice sent to party who has appeared by counsel is not a notice in law.

Purpose: Maintain a uniform procedure.

Lawyer to whom the service of notice is to be made refers to the counsel of record or one who in writing has entered a formal appearance.

Where no notice of withdrawal or substitution of counsel is shown, notice to counsel of record is for all purposes notice to client.

The right to be notified through counsel may be waived either by attorney or his client.



Notice to one as notice to other counsels; Exceptions

If a party appears by 2 or more counsel of record, notice to one of the, is notice to others as well as to the client, even though the one upon whom the service is made in only a deputy of the other.

The Solicitor General (SG) is the lawyer of the Republic and its officials sued in their official capacities.

When the SG has deputized government lawyer, he remains the principal counsel and service of notice on him of legal processes and not on the deputized lawyers is decisive.

Notice to such deputized lawyers is not binding

However, if an agency of the government appears by its own internal counsel, not as a deputized lawyer by the SG, notice to such counsel is deemed notice to SG.

EXCEPTIONS to the rules: 1. Either by agreement or proper

manifestation one of the lawyers is expressly designated as one to whom service is to be made.

2. Instances when it is admittedly clear that one is the leading counsel and the rest are mere helpers, as when the adverse party and the court consider one of the lawyers as the principal counsel.

Exceptions to rule that notice to counsel is notice to client

1. Strict application might foster dangerous collusion to the detriment of justice.

2. If service upon the party himself is ordered by the court.

Mode of Service of Notice

1. Personal Service Completed upon actual delivery

2. Ordinary Mail Completed upon expiration of 10

days after mailing, unless court otherwise provides.

3. Registered Mail Completed upon actual receipt

by the addressee or after 5 days from the date he received the first notice of postmaster whichever is earlier.

Personal service preferred; explanation required

Sec.11, Rul2 13 or ROC Whenever practicable, the service and filing of pleadings and other papers shall be done personally. Except with respect to papers emanating from the court, a resort to other modes must be accompanied by a written explanation why the service or filing was not done personally. A violation of this may be cause to consider the paper as not filed.

Mistake or negligence of counsel binding upon client

GR: Client is bound by his counsels conduct, negligence and mistake in handling the case.

The mistake of counsel in the conduct of the proceedings as a result of his ignorance, inexperience or incompetence does not constitute a ground for a new trial.

Instances where mistakes are binding to client:

o Failure to file responsive pleading within reglementary period

o Failure to appear at the scheduled hearing due to another engagement without asking for postponement



o Failure to present additional evidence and submitting the case on evidence already adduced

o Failure to file appellants brief due to political activities

o Failure to notify his client regarding an adverse judgment.

Exceptions:

1. Adherence thereto will result to outright deprivation of the clients liberty or property

2. Interests of justice so require 3. Gross or palpable mistake or

negligence of the counsel depriving the client of due process and law.

Instances of gross/palpable mistake: o Lawyer to attend hearing of

criminal case, his failure to advise his client that he was going abroad which resulted to clients conviction

o Counsels erroneous contrived strategy which prevented the accused from presenting an important evidence, which if presented would possibly result to his acquittal, even if such judgment has become final.

o Failure to counsel to file the appellants brief without cause attributable to client, which resulted to his conviction

o Failure of counsel to appear in the hearing which resulted to the accuseds conviction

CHAPTER XII TERMINATION OF ATTORNEYS AUTHORITY AND CHANGE OF

COUNSEL A. Termination of Counsels Authority GENERALLY: The relation of atty and client may be terminated by:

- the client - the lawyer - the court - reason beyond the control of the

parties A client has an absolute right to discharge his atty at any time with or without cause or even against consent. The existence of just cause is only important in determining the right of the atty to a just compensation. The right of the client to terminate the retainer is an implied term in every professional employment. LIMITATIONS ON CLIENTS RIGHT

- The discharge or substitution of an atty without just cause does not negate his right to full payment of compensation as agreed in writing or in the absence of a retainer, to a reasonable amount based on quantum meruit

NECESSITY OF NOTICE OF DISCHARGE

- as between client and his atty: no notice required; any act of the client indicating purpose to terminate the relation is sufficient

- however appearance of another counsel to file a motion to dismiss or other pleading does not operate as an implied revocation of the authority of the original lawyer



- as between the court and the party: there must be notice of discharge or a manifestation clearly indicating that purpose filed with the court and a copy served on adverse party

- atty must file a notice of withdrawal

- without such notice any process served on original counsel is binding upon the party

EFFECT OF DISCHARGE

- authority of atty to represent ceases

- however there are some cases when the atty may be required by the court to continue representation to prevent failure or miscarriage of justice

DEATH OR INCAPACITY OF CLIENT

- terminates the relation between atty and client, hence atty may not represent the client in court unless he is retained by the administrator or heirs of the clients estate or the clients guardian (if client becomes incapacitated or incompetent during the pendency of the case)

- it is the duty of the atty to inform the court of the clients death or incapacity and to give the name of the administrator, executor or the guardian as the case may be

LAWYER MAY WITHDRAW ONLY FOR A GOOD CAUSE

- atty may withdraw before the final judgment with the clients written consent or the courts approval of his petition to withdraw

- approval of court not necessary if withdrawal is with conformity of client and is accompanied with the appearance of new counsel,

however if no new counsel has entered appearance court may require the attys withdrawal in abeyance until another lawyer appears for the party

- atty may withdraw without clients consent but must be with approval of the court and only for a good cause namely:

o client pursues illegal or immoral course of conduct in connection with the case he is handling

o client insists the lawyer pursue conduct violative of the canons and ethics

o inability to work with co-counsel will not promote interest of the client

o due to mental or physical incapacity

o client deliberately fails to pay fee for services or comply with the retainer agreement

o lawyer is elected or appointed to a public office

o other similar causes (i.e. client stops contact, client refuses cooperation)

PROCEDURE FOR WITHDRAWAL 1. If without clients consent, file petition for withdrawal in court. 2. Serve copy of the petition upon client and the adverse party at least 3 days before the date set for hearing. 3. Present the petition in advance of the trial of the action to allow his client to secure the services of another lawyer. 4. The court may grant or deny depending on circumstances. 5. The lawyer must still appear on the date of hearing until there is a withdraw of record.



- lawyer has no right to presume

that his petition will be granted. he remains counsel of record until his petition is approved

DEATH OF ATTY

- terminates atty-client relationship

- death of a partner in a law firm does not severe the professional employment between law firm and the client, the remaining partners continue to assume professional responsibility

ACCEPTANCE OF INCOMPATIBLE OFFICE

- terminates atty-client relationship

- notice must be given to the court because it will not take judicial notice of the same, without such notice, process served upon such counsel is still binding on client

B. CHANGE OR SUBSTITUTION OF COUNSEL REQUIREMENTS: a. written application for substation b. written consent of client c. written consent of atty to be substituted d. proof of service of notice of the application upon atty to be substituted

- verbal substitution not allowed - defective substitution or one

which does not comply with the requirement will not terminate the original counsels authority but will still recognize the appearance of the new counsel (both will be considered counsel of record)

- client may employ as many counsel as he pleases but professional courtesy requires that new counsel should communicate with the original

counsel before entering his appearance

CHAPTER XIII

COMPENSATION OF ATTORNEY

A. RIGHT TO ATTORNEYS FEES Generally

Two concepts of Attorneys Fees o Ordinary Concept

Reasonable compensation paid to a lawyer by his client for the legal services he has rendered the latter. o Second Concept

Amount of damages which the court may award to be paid by the losing party to the prevailing party

- The award of damages belong to the client, unless the lawyer & the client have agreed that whatever attorneys fee awarded by the court when the client prevails in the action shall belong to the lawyer as part of his compensation.

The rule that the practice of law is a profession and not a money-making trade does not operate as to deny the lawyer the right to attorneys fees for his professional service.

He has a right to have and recover from his client a fair and reasonable compensation for his services, except

1. where he has agreed to render his services gratuitously or 2. he has been appointed as counsel de officio.

The compensation of a lawyer should be a mere incident of the practice of



law, the primary purpose of which is to render public service.

Right to protection of counsels fees

A lawyer is much entitled to judicial protection against injustice, imposition or fraud on the part of his client as his client on the part of his counsel.

The duty of the court is not alone to see that a lawyer acts in proper and lawful manner, it is also its duty to see that lawyer is paid for his services.

Requisites for right to accrue: 1. Existence of Attorney-client

relationship 2. Rendition of a lawyer of legal services

A lawyer who rendered professional

services in favor but over the objection of the party is not entitled to fees even though the services redounded to the benefit of the party.

Written Agreement

A written agreement is not necessary to establish a clients obligation to pay attorneys fees.

The clients obligation to pay attorneys fees arises from the inanimate contrat of facius ut des (I do and you give) which is based on the principle that no one shall unjustly enrich himself at the expense of another.

Quantum meruit (QM)

It means as much as the lawyer deserves or such amount which his services merit.

Recovery of attorneys fees on the basis of QM is authorized: 1. No express contract for payment

of attorneys fees

2. Although there is a formal contract for attorneys fees, the fees stipulated are found unreasonable or unconscionable by the court

3. Contract for attorneys fees is void due to purely formal defects of execution

4. When the lawyer, for justifiable cause, was not able to finish the case to its conclusion

5. When the lawyer and the client disregard the contract for attorneys fees.

6. Client dismissed his counsel before the termination of the case or the latter withdrew therefrom for valid reasons.

QM is a device to prevent undue enrichment based on equitable postulate that it is unjust for a person to retain benefit without paying for it.

Who is liable for attorneys fees

GR: Only the client who engaged the services of counsel either personally or through an authorized is liable for attorney fees.

A party who is not a privy to the employment contract or who did not authorize the lawyers retainer is generally speaking not liable for such fees.

The exceptions on this rule rest on the equitable principle that a person who accepts the benefits of the legal representation impliedly agrees to pay the attorneys fees for he may not unjustly enrich himself at the expense of the lawyer.

Liability of persons benefited by counsels service

GR: A person who had no knowledge of or objected to, the lawyers representation may not be held liable



for attorneys fees even though it has redounded to his benefit.

The objection to the lawyers appearance should be raised before and not after beneficial services shall have been rendered by the lawyer, otherwise such party who benefited from the representation may be required to pay counsel fees.

The liability is based on equity. If the legal representation redounded

to the benefit of the party concerned, the retention /acceptance of the benefit cure the defect of lack of authority on the part of the agent to retain the lawyer.

Exception: Employment of private lawyer to represent the government entity by an official who has no authority in law to do so, since the benefits secured by the legal representation cannot take the place of the law and will not create an obligation on the part of the government entity to pay fees. Liability of Assignee

Since an assignee of all interests pent elite usually steps into shoes of the assignor and acquires all of the latters rights and obligations in the action, the assignee may be held liable for attys fees from out of the proceeds of favorable judgment.

Liability in Labor Cases

A lawyer who represents a union and its members and with whom he has a retainer for payment for a fixed percentage amounts recovered from the company is entitled to be paid his fees not only by the union members but also by the non-union members as well those who derive benefits from his services.

It is just and fair that the lawyer who represented the struggling members of the union to secure benefits for all

employees be paid just fees by all those who received benefits.

Attorneys fees in labor cases may not be more than what the law provides and they may not be checked off from any amount due the employees without their written consent.

Liability in derivative suits

Where in derivative suit, the services of counsel who instituted the action upon the request of stockholder are beneficial to the corporation, the counsel fees may be properly charged against corporate funds.

Any stockholder may intervene and oppose the grant of such fees as charge against funds of the corporation.

Liability in receivership proceedings

The assets under receivership may be liable for the fees of a lawyer employed by a receiver to help him in the discharge of his duties.

However, attorneys fees of the counsel for a defendant in a receivership proceeding are personal obligations of the defendant and may not be paid out of the assets in the hands of receiver, unless it redounded to the benefit of the receivership or of the plaintiff who asked for the appointment of receiver.

Liability in trusteeship or guardianship proceeding

Trustee may be indemnified out of the trust estate for his expenses in rendering and proving his accounts and for the counsel fees in connection therewith.

The court may determine whether or not a trustee may be allowed expenses for attorneys fees and



permitted to charge the same against the trust estate.

The property of the ward may lawfully answer for the lawyers fees of the lawyer employed by the guardian, provided there is prior approval of the guardianship court.

Liability in estate proceedings

Fees of lawyer appointed by executor or administrator to assist him in the execution of his trust are not chargeable against estate of the deceased since the services are rendered to the executor.

Liability for payment rests on the executor or administrator who may, if the services are beneficial to the estate, either seek reimbursement from the estate if he has already paid them or include them in his account with due notice to all parties interested.

Ultimately, the estate will answer for the fees of the lawyer whose services are beneficial to the estate.

If the assets have been distributed, the distributees or heirs will have to contribute their share for the payment of the fees as the obligation of the estate follows the assets, except in the hands of purchaser in good faith.

Who are entitled to or the share in attorneys fees

The lawyer who has been engaged by a client is the one entitled to recover the fees.

However, if more than one lawyer have been employed by a client, the question of fess may arise.

GR: Lawyers who jointly represent a common client for a given fee, in the absence of an agreement as to division of fees, share equally as they

are special partners for special purpose/

Partners in law firm share in the profits according with their partnership agreement even though only one of them actually rendered the service.

Lawyer shall in cases of referral, with the consent of the client, or those lawyers who rendered services at one time or another in the action, be entitled to a division of fees in proportion to the work actually performed and responsibility assumed.

Non-Lawyer not entitled to lawyers fees

The statutory rule that an attorney shall be entitle to have and recover from his client reasonable compensation requires an attorney-client relationship as a condition for the recovery of attorneys fees.

A non-lawyer cannot therefore recover attorneys fees even if there is a law authorizing him to represent a litigant in court.

Restrictions on some lawyers to charge fees

A lawyer who is absolutely disqualified from engaging in the private practice of law by reason of his government position may neither practice law nor should he do so illegally, charge attorneys fees for such services.

The prohibition does not apply to the collection of fees for services rendered before the lawyer qualified for the public office even though payment thereof is made thereafter.

A lawyer, as a government official charge with the duty of extending legal services to indigent litigants may not collect attorneys fees.

An executor or administrator is prohibited from charging the estate



under his administration of professional fees for services rendered by him as a lawyer.

Reason: Legal maxim that the one acting in fiduciary capacity must not place himself in such a position as to make his interests antagonistic with his principal. Right of counsel de oficio to fees

In the absence of a law allowing compensation, a counsel de officio cannot charge the government nor the indigent litigant for his services.

It is not a violation of the constitutional restriction against taking of property w/o remuneration or due process

Reason: It is one of the obligations which an attorney willingly assumed when he took his oath as a lawyer is to render free legal services whenever required by the court to do.

The ROC provides a token compensation for counsel de oficio, subject to the availability of the funds as may provided by law the court may order that a counsel de oficio be compensated in such sum as court may reasonably fix which shall NOT: a. Be less than P30 nor more than

P50 in light felony b. P100 in less grave felonies c. P200 grave felonies other than

capital felonies d. P500 for capital offenses

Compensation for counsel de oficio is not intended as a source of regular income.

Attorneys conduct affecting his right to fees Right of a lawyer to recover

attorneys fees may be affected or negated by misconduct on his part such as:

o Carelessness o Negligence in the discharge

of duties o Misrepresentation

o Abuse of clients confidence o Unfaithfulness in

representing his clients cause

The adverse result of the litigation does not deprive a lawyer of his right to attorneys fees.

A mere honest mistake in the discharge of his duties does not also defeat his right to fees.

Withdrawal of counsel from the case

Lawyers unceremonious withdrawal or abandonment of the action which prejudices the client negates his right to attorneys fees/

This constitutes as a breach of his implied undertaking to prosecute or defend the clients cause until termination of the litigation.

If the withdrawal is with the clients written conformity, it is presumed in the absence of evidence to contrary, that he and his client have mutually agreed to terminate the services and to compensate him for such services up to the termination of their relation.

The lawyer must refund to the client such part of the retainer as has not been clearly earned.

Representation of Adverse Interests

Representation of conflicting interests without written consent of the client as to the dual representation made after full disclosure of facts negates the lawyers right to receive compensation from both of them.

Lawyers right unaffected by clients conduct

A client cannot, in the absence of lawyers fault, consent or by a waiver, deprive the lawyer of his just fees already earned.



While a client has the right to discharge his lawyer at any time, dismiss or settles his action he cannot by taking such step deprive the lawyer of what is justly due to him unless the lawyer by his actions, waives or forfeits his right.

Attorneys discharge by client

The discharge of a lawyer by his client without a valid cause before the conclusion of the litigation does not negate the lawyers right to just fees.

However, the discharge may or may not affect the amount of fees depending upon the existence or absence of a valid written contract for professional service and nature of that contract. 1. No express written agreement as

to fees - Lawyer may only be entitled

to recover the reasonable value of his services up to the date of his dismissal.

- this rule applies if there is an express understanding of payment of fees but it is not reduced to writing except if the dismissal was made after the termination of the case, in which case the lawyer is entitled to full amount agreed. 2. If there is a written agreement and fee stipulated is reasonable and absolute - a lawyer discharged without valid cause shall be entitled to the full amount agreed. - If the fee stipulated is contingent, and dismissal was made before termination of case, he shall be entitled to fees for services thus rendered. BUT if the contingency occurs or the client prevents its occurrence by dismissing or settling his cause, lawyer is entitled to the full amount agreed. - The lawyer should question his discharge to entitle him to the amount agreed upon otherwise the quantum meruit applies as the basis of payment.

The discharge of a lawyer for valid cause does not deprive the lawyer of his right to just fees.

He may only be deprived of such right IF the cause for his dismissal constitutes in itself an obstacle for recovery.

Clients dismissal of action

Client may dismiss his cause or action with or without his lawyers counsel.

But this should not deprive the lawyer of his right to attorneys fees in the absence of waiver by the lawyer.

If dismissal of action was made in good faith, the lawyer is entitled to such reasonable fees for the services rendered.

If the dismissal was made with the intention to defraud the lawyer with respect to his fees, he shall be entitled to the full amount agreed or in absence of agreement, a reasonable value of his services based on QR.

A lawyers consent to the dismissal does not negate his right unless under the circumstances it constitutes as a waiver.

Clients compromise of action

A lawyers right to just compensation does not give him a superior right as to preclude the client from settling his case.

Compromise does not also deprive the lawyer of such right.

** Same rule sa dismissal of action with respect of the intention of the client.

B. CONTRACT FOR ATTORNEYs FEES Generally

A contract of professional services may either be Oral or Written.



Fee stipulated may be Absolute or Contingent. It may be a :

o Fixed percentage of the amount recovered in the action.

o May provide a fee per appearance, per piece of work or an hourly basis.

o Combination of these arrangements.

A written retainer has distinct advantages over an oral contract.

o In case of controversy as to question of fees, a written contract generally controls the amount thereof.

o Event of lawyers dismissal by the client before conclusion of the litigation without justifiable cause, attorney may be entitled to the full amount agreed.

o Without written agreement, he may only recover the reasonable worth of his services rendered up to the date of his dismissal.

Kinds of Retainer: General & Special

General Retainer or retaining fee - Fee paid to a lawyer to

secure his future services as a general counsel for any ordinary legal problem that may arise in the routinary business of the client and referred to him for legal action.

- Fees are paid whether or not there cases referred to the lawyer.

Reason: Compensation for a lost opportunity of a lawyer to render service to other parties.

Special Retainer - A fee for specific case

handled or special service rendered by a lawyer for a client.

Validity of Contract

General rules governing the validity of an ordinary contract apply to an agreement for professional services.

It must not be contrary to law, good morals, public policy, public order and good customs.

Effect of Nullity of Contract

Nullity of a professional contract which results from the illegality of the object sought to be achieved precludes a lawyer from recovering his fees for such services.

However, if nullity is due to want of authority on the part of one of contracting parties or irregularity in its formal execution or to unreasonable amount of fees fixed therein lawyer is entitled to recover what is justly due to him on the basis of QR.

In this case the object is legitimate and contract will not be enforced because of its formal defects.

Effect of Unconscionability of amount

Written contract of service shall control the amount to be paid unless found by the court to be unconscionable or unreasonable.

Unconscionability of the amount renders the contract invalid.

However it will not preclude recovery, it will only justify the court to fix the reasonable worth of his services based on QR.

Contingent Fee Contract

It is an agreement in writing in which the fee, usually a fixed percentage of what may be recovered in the action, is made to depend upon the success in the effort to enforce or defend a supposed right.



The lawyer gets paid only if he wins the case UNLESS the client prevents the successful prosecution or defense of the action, in which case lawyer is entitled to fees based on QR; or to the full amount agreed if client acted in bad faith.

Absolute fee on the other hand, entitles a lawyer to get paid for his efforts regardless of the outcome of the litigation.

Contingent fee contract is subject to supervision and scrutiny of court to protect client from unjust charges.

The court may reduce the amount of unconscionable contingent fee to a reasonable sum, even if client consented thereto.

Unconscionable fee amount which according to the circumstances of the case, constitutes an over exaggeration of the worth of the services of a lawyer.

It depends upon an express contract without which, lawyer may only recover only on the basis of QR.

It applies even if initial fees are paid before or during the progress of litigation as long as the bulk of the fees depends on the success of the lawyer.

It is applicable to Civil and Criminal actions.

It is the only way by which a poor litigant may have his rights enforced or protected by a lawyer J

Validity of Contingent Fee

In this jurisdiction, it is not prohibited by law & is impliedly sanctioned.

Its validity DEPENDS upon the reasonableness of the amount fixed as contingent fee under the circumstances of the case.

Generally, Valid and Binding UNLESS obtained by FRAUD, IMPOSITION,

SUPPRESSION OF FACTS OR EXCESSIVE FEES. L

Effect of Agreement to pay litigation expenses

The rule of the profession forbid a lawyer from agreeing to pay or bear the expenses of litigation.

He may HOWEVER, in good faith, advance the expenses as matter of convenience but subject to reimbursement.

REASON: To prevent lawyer from acquiring any interest in the litigation & avoid conflict of interests between them.

This agreement is known as CHAMPERTRY. L

Construction of Professional Contract

GR: To adopt such construction as would be more favorable to the client even if it is prejudicial to the lawyer L

Reason: Inequality of situation between the lawyer, who knows the technicalities of the law and the client who is ignorant of such and also because of the lawyers status as officers of court.

C. MEASURE OF COMPENSATION Amount fixed in valid contract

The amount attorneys fees due is stipulated in the written retainer agreement which is conclusive as to amount of lawyers compensation

This rule applies whether the fee contracted for is absolute or contingent.

Factors taken into account

In determining the amount of fess which a lawyer may charge his client the following factors are considered as provided in Rule 20.01 of the Code namely: 1. The time spent and extent of

services rendered or required.



2. The novelty and difficulty of questions involved.

3. Importance of subject matter 4. Probability of losing other

employment as a result of acceptance of the case

5. Skill demanded 6. Customary charges for similar

services and the schedule of fess of the IBP charter to which he belongs

7. Amount involved in the controversy and the benefits resulting to the client from the service

8. Contingency or certainty of compensation

9. Character of employment , whether occasional or established

10. Professional standing of the lawyer.

These factors, not one of which is controlling are mere guides in ascertaining the real value of a lawyer.

Determination of attorneys fees based on these factors are question of facts , it requires evidence to prove the amount of fees.

Nature of Services

The value of the lawyers service is in large measure determined by the nature, quality & quantity of such services.

Skill & Standing of a lawyer

A lawyer acquires a reputation for professional capacity & fidelity to trust through years of hard labor and devotion to duty evidenced by the quality of his works.

Such lawyer with high reputation also acquires persuasive ability in the pleadings he makes.

Ability, skill & competence of a lawyer are not measured by his income.

Neither is the length of time a lawyer has practiced a safe criterion of his character and quality of his work.

Value of interest involved

Generally, the bigger the size or value of the interest or property involved in a litigation the higher the attorneys fees.

Reason: The higher the stakes the more the case is hotly litigated and the greater efforts the lawyer exerts.

But in a million peso litigation, the percentage fee contingent upon recovery becomes smaller as the amount of recovery gets bigger. (INVERSE PROPORTION RULE)

Reason: based on the assumption that the amount of work required remains the same even though the interest in the action exceeds several million pesos. Loss of opportunity for other employment

Two ways which a lawyer may loss opportunity for employment: 1. The acceptance will preclude a

lawyer from appearing for others in cases likely to arise out of the transaction in view of prohibition against representation of adverse interests.

2. There is a reasonable expectation that the lawyer not accepted employed by other clients.

Difficulty of issues involved

It includes the preparation, study and research put into the case by the lawyer, to convince the court as to the soundness of the clients cause.



Test Case Where several actions or possible

disputes, such as in insurance, tax or labor, involve an identical question and one case is litigated as a test case, the value in controversy in all the actions should bear its appropriate proportion to the amount due as fees to the lawyer who prosecuted the test case.

A test case is usually litigated with energy and diligence even if the actual amount is insignificant because the resolution of the other actions which involve large sums of money is made to depend on the favorable outcome of the test case.

Results secured

The fact that a lawyer failed to secure for his clients what he desires does not deprive him of the right to recover compensation for his services except when the fee agreed upon is contingent.

A different rule would mean that every professional fee is contingent fee and for every litigated case, it is only the lawyer in the winning side will get paid for his services.

If that were the rule, the practice of law will cease to be a dignified and honorable profession.

Statutory limitation as to fees

Legislature, in the exercise of police power may by law prescribe the limit of the amount of attorneys fees.

Art. 111 of Labor Code provides it shall be unlawful for any person to demand or accept in any judicial or administrative proceedings for the recovery of wages, attorneys fees which exceed 10% of the amount of wage recovered

Art. 222 of the same Code No attorneys fees xxx arising from any

collective bargaining negotiations shall be imposed on any individual member of a contracting union: Provided however, the attorneys fee may be charged against the union fund in an amount agreed upon by the parties. Any contract to the contract is void

Art. 203 of the same Code No agent, Attorney xxx pursuing or in charge of the preparation or filing of any claim under Employee Compensation& State Insurance Fund shall demand or charge his services any fee, stipulations to the contrary are void.

Fees in case of Referral

It is improper for a lawyer to receive compensation for merely recommending another lawyer to his client for if such practice is permitted, it would tend to develop the evils of commercialism.

It is only when, in addition to referral , he performs legal service or assumes responsibility in the case that he will be entitled to a fee.

A lawyer shall not receive from another without clients consent

Rule 20.03 of the Code A lawyer shall not, without full knowledge & consent of the client, accept fee, reward, commission, interest or other compensation related to his employment from another person other than his client

This rule is designed to secure the fidelity to the clients cause and to prevent room of suspicion on the part of the client.

Corollary to this rule is the principle that whatever a lawyer receives from the opposite party in the service of his client belongs to the client.



A lawyer shall avoid controversies with client concerning his fees

Rule 20.4 of this Code a lawyer should avoid controversies with clients concerning his compensation and to resort to judicial action only to prevent imposition, injustice or fraud.

He may take judicial action to protect his fees either in the main action he rendered his services or an independent civil suit against his client.

D. PROCEDURE TO RECOVER FEES

Lawyers application to pay his fees

Canon 16, Rule 16.03, a lawyer may apply so much of the clients funds that come into his possession as may be necessary to satisfy his fees and disbursements, giving notice promptly to his clients.

This provision assumes that the client agrees with the lawyer as to the amount of the fees.

In case of disagreement or when client disputes the amount claimed for being unconscionable, the lawyer may not arbitrarily apply the funds in his possession for payment of his fees for it is violative of their trust relationship.

The lawyer should file the necessary action in court to fix and recover the amount of his fe

Documents

Legal Ethics Agpalo Chapters 8-19