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Controversy over legal fees, C3S46 CPRA

Section 46, Canon III

SECTION 46. Controversy over legal fees. – A lawyer shall avoid any controversy with a client concerning fees for legal services and shall resort to judicial action solely to prevent imposition, injustice or fraud. (2023 Code of Professional Responsibility and Accountability or CPRA)

1. Controversy over legal fees

Under this section, lawyers are required to “avoid any controversy with a client concerning fees for legal services and shall resort to judicial action solely to prevent imposition, injustice or fraud.”

Bihag v. Era, En Banc, A.C. No. 12880, November 23, 2021, Per Curiam:

• [T]he deferment of the payment of his success fees proved unacceptable to Atty. Era. He threatened to file administrative, civil, and criminal cases against those who were responsible for the delay in the payment of his fees, and made true his threats when he instituted an action for the collection of a sum of money before the RTC-Quezon City. In the process, he violated a slew of ethical rules, including Rule 20.04 of the [old CPR], which states that a lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud.

Cueto v. Jimenez, Jr., A.C. No. 5798, January 20, 2005, Per Corona, J.:

• There was clearly no imposition, injustice or fraud obtaining in this case to justify the legal action taken by respondent. As borne out by the records, complainant Cueto had already paid more than half of respondent’s fee. To resort to a suit to recover the balance reveals a certain kind of shameful conduct and inconsiderate behavior that clearly undermines the tenet embodied in Canon 15 [of the old CPR] that “[A] lawyer should observe candor, fairness and loyalty in all his dealings and transactions with his client.” And what can we say about the failure of respondent’s son Jose III to pay his own obligation to complainant Cueto? It in all probability explains why Cueto ran short of funds. Respondent therefore should have been more tolerant of the delay incurred by complainant Cueto.

Retuya v. Gorduiz, A.M. No. 1388, March 28, 1980, Per Aquino, J.

• Ana F. Retuya, a widow with four minor children, filed a claim for workmen’s compensation against Eastern Shipping Lines, Inc., the employer of her husband who died in 1968. In a decision dated December 4, 1970 the Workmen’s Compensation Unit at Tacloban City awarded to Ana the sum of P8,792.10 consisting of (a) P6,000 as compensation benefits, (b) P2,292.10 for medical and hospitalization expenses, (c) P200 as burial expenses and (d) P300 as attorney’s fees of Atty. Iñego Gorduiz…

• The employer appealed. During the pendency of the appeal, the employer proposed to compromise the claim by paying P4,396.05 or only one-half of the total award. Ana accepted the proposal and directed that the amount be remitted to Fiscal Mamerto Daclan through the Philippine National Bank’s branch at Maasin, Southern Leyte.

• The employer paid the reduced award on November 16, 1972. Ana sent to the employer the receipt and release signed by her with a covering letter dated December 19, 1972 wherein she explained that her lawyer, Gorduiz, did not sign the joint motion to dismiss the claim because he wanted twenty percent of the award as his attorney’s fees. She was willing to give him ten percent.

• After she had cashed the check for P4,396.05, she was not able to contact Gorduiz and pay his fee. Then, unexpectedly, in February, 1973, she was served with a warrant of arrest issued in Criminal Case No. R-2362 of the municipal court of Maasin. To avoid detention, she had to post bail in the sum of one thousand pesos.

• It turned out that on January 12, 1973 Atty. Gorduiz executed an affidavit stating that Ana had misappropriated his attorney’s fees amounting to three hundred pesos and that he had demanded payment of the amount from her but, she refused to make payment and. instead, she went to Cebu and starved there for a long time.

• On the basis of that affidavit, the acting chief of police filed against Ana a complaint for estafa in the municipal court of Maasin. After posting bail, she filed a motion to quash wherein she explained that she did not pay the fees of Atty. Gorduiz because he was demanding one-third of the award: that when she did not accede to his demand, he lowered his claim to eight hundred pesos, and that she bargained for six hundred fifty pesos but he refused to accept that amount. Ana averred that the estafa case was filed just to harass her.

• [Respondent-lawyer] acted precipitately in filing a criminal action against his client for the supposed misappropriation of his attomey’s fees. It is not altogether clear that his client had swindled him and, therefore, there is some basis for concluding that, contrary to his lawyer’s oath, he had filed a suit against her and had harassed and embarrassed her.

Montano v. IBP, A.C. No. 4215, May 21, 2001, Per Kapunan, J.:

• We find Atty. Dealca’s conduct unbecoming of a member of the legal profession. Under Canon 22 of the Code of Professional Responsibility, a lawyer shall withdraw his services only for good cause and upon notice appropriate in the circumstances. Although he may withdraw his services when the client deliberately fails to pay the fees for the services, under the circumstances of the present case, Atty. Dealca’s withdrawal was unjustified as complainant did not deliberately fail to pay him the attorney’s fees. In fact, complainant exerted honest efforts to fulfill his obligation. Respondent’s contemptuous conduct does not speak well of a member of the bar considering that the amount owing to him was only P3,500.00. [R]ule 20.4 of Canon 20 [of the old CPR], mandates that a lawyer shall avoid controversies with clients concerning his compensation and shall resort to judicial action only to prevent imposition, injustice or fraud. Sadly, for not so large a sum owed to him by complainant, respondent lawyer failed to act in accordance with the demands of the Code.

References

Canon III, 2023 Code of Professional Responsibility

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