COMPETENCE AND DILIGENCE

CANON 18
A lawyer shall serve his client with competence and diligence.

 RULE 18.01 – COLLABORATING COUNSEL

 RULE 18.02 – ADEQUATE PREPARATION
 RULE 18.03 – NEGLIGENCE
 RULE 18.04 – DUTY TO APPRISE CLIENT

 Competence
It refers to sufficiency of lawyer's qualification to deal with the matter in question and
includes knowledge and skill and the ability to use them effectively in the interest of the client in a
reasonable time to the client's Request for information.

 Diligence
It is the attention and care required of a person in a given situation and is the opposite of
negligence. It is axiomatic in the practice of law that the price of success is eternal diligence to the
cause of the client.
Degree of diligence required in the profession
o The legal profession demands of a lawyer that degree of vigilance and attention of a
good father of a family (Lapena, 2009) or ordinary pater familias (Pineda, 2009). He
is not required to exercise extraordinary diligence.

SANCHEZ VS AGUILOS, A.C. No. March 16, 2016

FACTS:
Sanchez charged Atty. Aguilos with misconduct for the latter’s refusal to return the amount
she had paid for his professional services. She avers that Atty. Aguilos demanded the full payment of
his fee before working on the case; that the lawyer contemplated to file a petition for legal separation
instead of petition for annulment, of which the latter is the main consideration for his professional
employment yet Atty. Aguilos further asked for a higher acceptance fee for the latter. Sanchez
subsequently withdrew the case and demanded the refund of the amounts paid less the amounts
corresponded to the services he already performed but Atty. Aguilos refused.

ISSUE:
Whether Aguilos liable for misconduct

RULING:
Yes. Aguilos was liable for misconduct and he should be ordered to return the entire amount
received from the client. As the foregoing findings reveal, he did not know the distinction between
the grounds for legal separation and for annulment of marriage. Such knowledge would have been
basic and expected of him as a lawyer accepting a professional engagement for either causes of action.
The case unquestionably contemplated by the parties and for which his services was engaged, was
no other than an action for annulment of the complainant's marriage with her husband with the
intention of marrying her British fiancee. They did not contemplate legal separation at all, for legal
separation would still render her incapacitated to re-marry. That the respondent was insisting in his
answer that he had prepared a petition for legal separation, and that she had to pay more as
attorney's fees if she desired to have the action for annulment was, therefore, beyond comprehension
other than to serve as a hallow afterthought to justify his claim for services rendered. Aguilos failed
to live up to the standards imposed on him as an attorney. He thus transgressed Canon 18, and Rules
18.01, 18.02 and 18.03 of the Code of Professional Responsibility.

 Instances of Lawyer’s lack of Diligence and their resulting consequences

1. Lawyer failed to file his client’s position paper which caused the client to be default in an
ejectment case. The complainant’s appeal was also denied since the lawyer failed to file an
appeal memorandum. The lawyer was DISBARRED (Enriquez v. Atty. Lavadia, A.C. No. 5686,
June 16, 2015).
2. Lawyer failed to file his client’s position paper and he did not inform the complainant that his
case was dismissed by the court. The lawyer was suspended from practice of law for three
years (Olvida v. Atty. Gonzales, A.C. No. 5732, June 16, 2015)
3. The lawyer’s services were availed in order to file a petition for adoption of a minor child but
he failed to perform anything related to the case despite the lapse of one year. The lawyer
was SUSPENDED for a period of three years (Sps. Lopez, Atty. Limos, A.C. No. 7618, February
2, 2016).
4. Lawyer failed to file a motion for reconsideration on behalf of his client and further neglected
to regularly update his clients on the status of the case. The lawyer was SUSPENDED for two
years (Ramiscal v. Atty. Orro, A.C. No. 10945, February 23, 2016).

RULE 18.01
(COLLABORATING COUNSEL)

A lawyer shall not undertake a legal service, which he knows or should know that he is
not qualified to render. However, he may render such service if, with the consent of his client, he
can obtain as collaborating counsel a lawyer who is competent on the matter.

 COLLABORATING COUNSEL
One who is subsequently engaged to assist a lawyer already handling a particular case for a
client (Pineda, 2009).

NOTE: The handling lawyer cannot just take another counsel without the consent of the client. The
new lawyer on the other hand cannot just enter his appearance as collaborating counsel without the
conformity of the first counsel.

 WHEN A LAWYER ACCEPTS A CASE, WHETHER FOR A FEE OR NOT, HIS ACCEPTANCE IS AN
IMPLIED REPRESENTATION:
The lawyer’s acceptance, whether for a fee or not, is an implied representation that he
possesses the requisite degree of academic learning, skill and ability to handle the case.

1. That he possesses the requisite degree of academic learning, skill and ability necessary in the
practice of his profession.
2. That he will exert his best judgment in the prosecution or defense of the litigation entrusted
to him;
3. That he will exercise ordinary diligence or that reasonable degree of care and skill demanded
of the business he undertakes to do, to protect the client’s interests and take all steps or do
all acts necessary thereof [Uy v. Tansinsin, A.C. 8252 (2009)]; and
 4. That he will take steps as will adequately safeguard his client’s interests [Islas v. Platon, G.R.
No. L-23183 (1924)]

He is therefore directed not to take legal services, which he knows or should know he is not
qualified or competent to render except if his client consents, the lawyer.

 QUESTION: When is professional incompetence a ground for disbarment under the Rules
of Court? Explain. (2010 BAR)

Answer: Professional incompetence of a lawyer may be a special ground for disbarment if his
incompetence is so total, gross and serious that he cannot be entrusted with the duty to protect
the rights of his clients. “A lawyer shall not undertake a legal service where he knows or should
know that he is not qualified to render” (Rule 18.01, CPR). If he does so, it constitutes malpractice
or gross misconduct in office which are grounds for suspension or disbarment under Section 27,
Rule 138 of the Rules of Court.

RULE 18.02
(ADEQUATE PREPARATION)

A lawyer shall not handle any legal matter without adequate preparation.

A lawyer should prepare his pleadings with great care and circumspection. He should refrain
from using abrasive and offensive language, for it merely weakens rather than strengthens the force
of legal reasoning and detracts from its persuasiveness. In preparing a complaint for damages,
counsel for plaintiff should allege and state the specific amounts claimed not only in the body of the
complaint but also in the prayer, so that the proper docket fees can be assessed and paid (Fernandez
v. Atty. Novero, A.C. No. 5394, December 2, 2002).

The counsel must constantly keep in mind that his actions or omissions, even malfeasance and
nonfeasance would be binding to his client. Verily, a lawyer owes to the client the exercise of utmost
prudence and responsibility in representation.

A lawyer should safeguard his client’s rights and interests by thorough study and preparation,
mastering applicable law and facts involved in a case, and keeping constantly abreast of the latest
jurisprudence and developments in all branches of the law [Agpalo (2004)] A lawyer should give
adequate attention, care and time to his cases. This is the reason why a practicing lawyer should
accept only so many cases he can handle. [Legarda v. CA, G.R. No. 94457 (1991)]

RULE 18.03
(NEGLIGENCE)

A lawyer shall not neglect a legal matter entrusted to him, and his negligence in connection
therewith shall render him liable.

If by reason of the lawyer’s negligence, actual loss has been caused to his client, the latter has
a cause of action against him for damages. [Callanta]

 General rule: A client is bound by the attorney’s conduct, negligence and mistake in handling the
case or in management of litigation and in procedural technique, and he cannot be heard to
complain that result might have been different had his lawyer proceeded differently.
 Exceptions: He is not so bound where the ignorance, incompetence or inexperience of lawyer is
so great and error so serious that the client, who has good cause, is prejudiced and denied a day
in court [People v. Manzanilla, G.R. No. L-17436 (1922); Alarcon v. CA, G.R. No. 126802 (2000)]

 EXAMPLES OF LAWYER’S NEGLIGENCE:

1. Failure of counsel to ask for additional time to answer a complaint resulting in a default
judgment against his client (Mapua v. Mendoza, G.R. L-19295 (1923)];
2. Failure to bring suit immediately, as when it was filed when the defendant had already
become insolvent and recovery could no longer be had;
3. Failure to ascertain date of receipt from post office of notice of decision resulting in the non-
perfection of the appellant’s appeal [Joven-De Jesus v. PNB, G.R. No. L-19299 (1964)]
4. Failure to file briefs within the reglementary period [People v. Cawili, G.R. No. L-30543,
(1970)];
5. Failure to attend a trial without filing a motion for postponement or without requesting either
of his two partners in the law office to take his place and appear for the defendants [Gaerlan
v. Bernal, G.R. No. L-4039 (1952)]; 6) Failure to appear at pre-trial [Agravante v. Patriarca,
G.R. No. L-48324 (1990)]; 7) Failure of counsel to notify clients of the scheduled trial which
prevented the latter to look for another lawyer to represent them while counsel was in the
hospital [Ventura v. Santos, 59 Phil. 123 (1993)]; 8) Failure to appear simply because the
client did not go to counsel’s office on the date of the trial as was agreed upon (Alcoriza v.
Lumakang, A.M. No. 249 (1978)]; 9) Failure to pay the appellate docket fee after receiving the
amount for the purpose [Capulong v. Alino, A.M. No. 381 (1968)]

RULE 18.04
(DUTY TO APPRISE CLIENT)

A lawyer shall keep the client informed of the status of his case and shall respond within
a reasonable time to the client’s request for information.

A lawyer should notify his client of the adverse decision while within the period to appeal to
enable the client to decide whether to seek an appellate review. He should communicate with him
concerning the withdrawal of appeal with all its adverse consequences. The client is entitled to the
fullest disclosure of the mode or manner by which his interest is defended or why certain steps are
taken are taken or omitted.

RAMISCAL VS ORRO, A.C. No. 10945, February 23, 2016

FACTS:
Sps. Ramiscals engaged the legal services of Atty. Edgar S. Orro to handle a case in which they
were the defendants seeking the declaration of the nullity of title to a parcel of land. Upon receiving
the P10,000.00 acceptance fee from them, Orro handled the trial of the case until RTC decided it in
their favor. When the case reached CA, Orro requested from the spouses an additional amount of
P30,000.00 for the preparation and submission of their appellees’ brief. Later on, the CA reversed the
decision of the RTC. Orro did not inform the Ramiscals of the adverse decision of the CA which they
only learned about from their neighbors. They endeavored to communicate with Orro but their
efforts were initially in vain. When they finally reached him, he asked an additional P7,000.00 from
them as his fee in filing a motion for reconsideration in their behalf, albeit telling them that such
motion would already be belated. They later discovered that he did not file the motion for
reconsideration; hence, the decision attained finality, eventually resulting in the loss of their
property.
ISSUE:
Whether Atty. Orro competently and diligently discharge his duties as a lawyer?

RULING:
NO. Every lawyer, upon becoming a member of the Philippine Bar, solemnly takes the
Lawyer’s Oath, by which he vows, among others, that: "I will delay no man for money or malice, and
will conduct myself as a lawyer according to the best of my knowledge and discretion, with all good
fidelity as well to the courts as to my clients." If he should violate the vow, he contravenes the Code
of Professional Responsibility, particularly its Canon 17, and Rules 18.03 and 18.04 of Canon 18. As
an essential part of their highly fiduciary relationship, the client is entitled to the periodic and full
updates from the lawyer on the developments of the case. Updating the clients could have prevented
their substantial prejudice by enabling them to engage another competent lawyer to handle their
case. As it happened, his neglect in that respect lost for them whatever legal remedies were then
available. His various omissions manifested his utter lack of professionalism towards them.
NOTE: The lawyer is obliged to respond within a reasonable time to a client's request for information.
A client is entitled to the fullest disclosure of the mode or manner by which that client’s interest is
defended or why certain steps are taken or omitted. A lawyer who repeatedly fails to answer the
inquiries or communications of a client violates the rules of professional courtesy and neglects the
client’s interests.

 DOCTRINE OF IMPUTED KNOWLEDGE

The knowledge acquired by an attorney during the time he is acting within the scope of his
authority is imputed to the client. It is based on the assumption that an attorney, who has notice of
matter affecting his client, has communicated the same to his principal in the course of professional
dealings.

NOTE: The doctrine applies regardless of whether or not the lawyer actually communicated to the
client what he learned in his professional capacity, the attorney and his client being one judicial
person.

 NOTICE TO COUNSEL IS NOTICE TO CLIENT, BUT NOT VICE VERSA IF THE LATTER
APPEARED BY ATTORNEY

General Rule: The law requires that service of any notice upon a party who has appeared by
attorney shall be made upon his attorney. Notice sent to a party who has appeared by counsel is
not notice in law, it being immaterial that the client actually received the notice or volunteered to
get a copy thereof.
1. Strict application might foster dangerous collusion to the detriment of justice;
2. Service of notice upon party instead of upon his attorney is ordered by the court;
3. Notice of pre-trial is required to be served upon parties and their respective lawyers; and
4. In appeal from the lower court to the RTC upon docketing of appeal.
 ATTORNEY’S FEES

CANON 20

A lawyer shall charge only fair and reasonable fees

 RULE 20.01
 RULE 20.02
 RULE 20.03
 RULE 20.04

 General Rule: Only lawyers are entitled to attorney’s fees. The same cannot be shared with a
non-lawyer. It is unethical.

 Exception: A lawyer may divide a fee for legal services with another under the following
instances: [CPR]

1. A lawyer undertakes to Complete the unfinished legal business of a deceased lawyer;

2. There is a Pre-existing agreement with a partner or associate that, upon the latter’s death,
money shall be paid over a reasonable period of time to his estate or to persons specified
in the agreement;
3. A lawyer or law firm includes non-lawyer employees in Retirement plan, even if the plan
is based, in whole or in part, on a profitsharing agreement. (Rule 9.02, CPR)

 NOTE: Entitlement to lawyer’s fees is presumed (Funa, 2009).

Unless otherwise expressly stipulated, rendition of professional services by a lawyer is for a fee
or compensation and is not gratuitous (Research and Services Realty, Inc. v. CA, G.R. No. 124074,
January 27, 1997).

RULE 20.01

A lawyer shall be guided by the following factors in determining his fees:

a. the time spent and the extent of the service rendered or required;
b. the novelty and difficulty of the questions involved;
c. The importance of the subject matter;
d. The skill demanded;
e. The probability of losing other employment as a result of acceptance of the
proffered case;
f. The customary charges for similar services and the schedule of fees of the IBP
chapter to which he belongs;
g. The amount involved in the controversy and the benefits resulting to the client from
the service;
h. The contingency or certainty of compensation;
i. The character of the employment, whether occasional or established; and
j. The professional standing of the lawyer.
 FACTORS IN DETERMINING THE ATTORNEY’S FEES (1994 BAR)
In determining what is fair and reasonable, a lawyer shall be guided by the following factors:
[STIP-SNACCC]
1. Skill demanded;
2. Time spent and the extent of the services rendered or required;
3. Importance of the subject matter;
4. Probability of losing other employment as a result of acceptance of the proffered case;
5. Professional Standing of the lawyer;
6. Novelty and difficulty of the questions involved;
7. Amount involved in the controversy and the benefits resulting to the client from the services;
8. Customary Charges for similar services and the schedule of fees of the IBP chapter to which
he belongs;
9. Contingency or certainty of compensation; and
10. Character of the employment, whether occasional or established.

 DIFFERENT TYPES OF FEE ARRANGEMENT

1. Retainer’s fee where the lawyer is paid for services for an agreed amount for the case.
2. The lawyer agrees to be paid per court appearance.
3. Contingent fee where the lawyer is paid for his services depending on the success of the case.
This applies usually in civil suits for money or property where the lawyer’s fee is taken from
the award granted by the court.
4. Attorney de officio. The attorney is appointed by the court to defend the indigent litigant in a
criminal case. The client is not bound to pay the attorney for his services although he may be
paid a nominal fee taken from a public fund appropriated for the purpose.
5. Legal aid. The attorney renders legal services for those who could not afford to engage the
services of paid counsel.
6. Quantum meruit basis. If there is no specific contract between the lawyer and the client, the
lawyer is paid in this basis, what the lawyer deserves for his services.

 FACTORS TO CONSIDER IN DETERMINING THE AMOUNT OF ATTORNEY’S FEES IN THE

ABSENCE OF ANY FEE ARRANGEMENT [TINS]
o QUANTUM MERUIT as much as a lawyer deserves.
Essential requisite: Acceptance of the benefits by one sought to be charged for
services rendered under circumstances as
1. Time spent and the services rendered or required – A lawyer is justified in fixing higher fees
when the case is so complicated and requires more time and effort in fixing it.
2. Importance of subject matter – The more important the subject matter or the bigger the value
of the interest of the property in litigation, the higher is the attorney’s fees.
3. Novelty and difficulty of questions involved – When the questions in a case are novel and
difficult, greater effort, deeper study and research are bound to burn the lawyer’s time and
stamina considering that there are no local precedents to rely upon.
4. Skill demanded of a lawyer – The totality of the lawyer’s experience provides

NOTE: Generally, the amount of attorney’s fees due is that stipulated in the retainer agreement which
is conclusive as to the amount of lawyer’s compensation (Funa, 2009) unless the stipulated amount
in the written contract is found by the court to be unconscionable or unreasonable. (Sec. 24, Rule 138,
RRC)

In the absence thereof, the amount of attorney’s fees is fixed on the basis of quantum meruit.
(Sesbreno v. Court of Appeals, G.R. No. 117438, June 8, 1995; Funa, 2009)
 KINDS OF PAYMENT OR MANNER BY WHICH ATTORNEYS MAY BE PAID
1. Fixed or absolute fee that which is payable regardless of the result of the case.
a. A fixed fee payable per appearance
b. A fixed fee computed upon the number of hours spent
c. A fixed fee based on piece work
d. Combination of any of the above
2. Contingent fee a fee that is conditioned on the securing of a favorable judgment and
recovery of money or property

 ATTORNEY’S RETAINING LIEN

A retaining lien is the right of an attorney to retain the funds, documents and papers of his
client who have lawfully come into his possession and may retain the same until his lawful fees
and disbursements have been paid, and may apply such funds to the satisfaction thereof.

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.
NOTE: This is not in the nature of a broker’s commission.

 LAWYER-REFERRAL SYSTEM
Under this system, if another counsel is referred to the client, and the latter agrees to take
him as collaborating counsel, and there is no express agreement on the payment of attorney’s fees,
the said counsel will receive attorney’s fees in proportion to the work performed and
responsibility assumed. The lawyers and the client may agree upon the proportion but in case of
disagreement, the court may fix the proportional division of fees. (Lapena, 2009)

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.

It is intended to secure the fidelity of the lawyer to his client’s cause and to prevent a situation
in which the receipt by him of a rebate or commission from another with the client’s business may
interfere with the full discharge of his duty to his client.

 GENERAL RULE: Fees shall be received from the client only.

 EXCEPTION: A lawyer may receive compensation from a person other his client when the
latter has full knowledge and approval thereof.

ILLUSTRATION:
Q: Atty. X, lawyer of a labor union of rank and file employees succeeded in the negotiation of a
collective bargaining agreement for the rank and file employees by virtue of which salary increase
was received by the rank and file employees. At the same time the employer granted salary increase
to supervisory employees who were not members of the union. Atty. X now seeks to collect from the
non-supervisory employees’ attorney’s fees for this increase in salaries. Is he entitled to such fees?
A: NO. Atty. X is not entitled to collect attorney’s fees from the non-union supervisory employees. A
lawyer who rendered services to a party, who did not employ him nor authorize his employment,
cannot recover compensation even if his services have redounded to the benefit of such party.
Otherwise, anyone might impose obligations upon another without the latter’s knowledge or
consent, and even against his protest as what happened in the present case. In labor cases such as
this one, where the company grants the same salary increase to non-union supervisory employees
similar to the rank and file employees who were the clients of the lawyer, it is not because of the
special efforts of the latter’s lawyer that the non-union supervisory employees benefited but because
of the company’s policy of non-discrimination. The lawyer is not entitled to claim attorney’s fees from
the supervisors for the benefits they received.

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. (1998 Bar)

GENERAL RULE: A lawyer should avoid the filing of any case against a client for the enforcement of
attorney’s fees.

NOTE: The legal profession is not a money-making trade but a form of public service. Lawyers should
avoid giving the impression that they are mercenary. It might even turn out to be unproductive for
him for potential clients are likely to avoid a lawyer with a reputation of suing his clients.

EXCEPTIONS:
1. To prevent imposition
2. To prevent injustice
3. To prevent fraud (Rule 20.04, CPR)

NOTE: A client may enter into a compromise agreement without the intervention of the lawyer, but
the terms of the agreement should not deprive the counsel of his compensation for the professional
services he had rendered. If so, the compromise shall be subjected to said fees. If the client and the
adverse party who assented to the compromise are found to have intentionally deprived the lawyer
of his fees, the terms of the compromise, insofar as they prejudice the lawyer, will be set aside, making
both parties accountable to pay the lawyer’s fees. But in all cases, it is the client who is bound to pay
his lawyer for his legal representation.

TWO CONCEPTS OF ATTORNEY’S FEES

1. Ordinary attorney's fee– The reasonable compensation paid to a lawyer by his client for the legal
services he has rendered to the latter (Pineda, 2009).
NOTE: The basis for this compensation is the fact of his employment by and his agreement with
the client.
2. Extraordinary attorney's fee– An indemnity for damages ordered by the court to be paid by the
losing party in litigation.
NOTE: The basis for this is any of the cases provided for by law where such award can be made,
such as those authorized in Article 2208 of the Civil Code, and is payable to the client, NOT to the
lawyer unless they have agreed that the award shall pertain to the