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A contingent fee or contingency fee (in the United States) or conditional fee(in England and

Wales) is any fee for services provided where the fee is payable only if there is a favourable result.
Although such a fee may be used in many fields, it is particularly well associated with legal practice.
In the law, it is defined as a "fee charged for a lawyer's services only if the lawsuit is successful or is
favorably settled out of court.... Contingent fees are usually calculated as a percentage of the client's
net recovery."[1]
In the English legal system, it is generally referred to as a conditional fee agreement or, informally
by the public and press, as "no win no fee". The usual form of this agreement is that
the solicitor will take a law case on the understanding that if lost, no payment is made.
However, if the case is won, the lawyer will be entitled to the normal fee based on hourly billing, plus
a success fee.

(Wikipedia)

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Lawyer’s Fees: quantum meruit explained – GR No. 165828

Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorney’s
fees was contingent. Yet, a contract for a contingent fees is an agreement in
writing by which the fees, usually a fixed percentage of what may be recovered in
the action, are made to depend upon the success in the effort to enforce or defend a
supposed right. Contingent fees depend upon an express contract, without which the
attorney can only recover on the basis of quantum meruit.[71] With neither Atty.
Dibaratun nor Atty. Ballelos presenting a written agreement bearing upon their
supposed contingent fees, the only way to determine their right to appropriate
attorney’s fees is to apply the principle ofquantum meruit.
Quantum meruit – literally meaning as much as he deserves – is used as basis for
determining an attorney’s professional fees in the absence of an express
agreement.[72] The recovery of attorney’s fees on the basis of quantum meruit is a
device that prevents an unscrupulous client from running away with the fruits of the
legal services of counsel without paying for it and also avoids unjust enrichment on
the part of the attorney himself.[73] An attorney must show that he is entitled to
reasonable compensation for the effort in pursuing the client’s cause, taking into
account certain factors in fixing the amount of legal fees.[74]
Rule 20.01 of the Code of Professional Responsibility lists the guidelines for
determining the proper amount of attorney fees, to wit:
Rule 20.1 – A lawyer shall be guided by the following factors in determining
his fees:
a) The time spent and the extent of the services rendered or required;
b) The novelty and difficult of the questions involved;
c) The important 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.
In the event of a dispute as to the amount of fees between the attorney and his
client, and the intervention of the courts is sought, the determination requires that
there be evidence to prove the amount of fees and the extent and value of the services
rendered, taking into account the facts determinative thereof.[75]Ordinarily, therefore,
the determination of the attorney’s fees onquantum meruit is remanded to the lower
court for the purpose. However, it will be just and equitable to now assess and fix
the attorney’s fees of both attorneys in order that the resolution of “a comparatively
simple controversy,” as Justice Regalado put it inTraders Royal Bank Employees
Union-Independent v. NLRC,[76] would not be needlessly prolonged, by taking into
due consideration the accepted guidelines and so much of the pertinent data as are
extant in the records.
Atty. Dibaratun and Atty. Ballelos each claimed attorney’s fees equivalent to 15%
of the principal award of P113,532,500.00, which was the amount granted by the
RTC in its decision. Considering that the attorney’s fees will be defrayed by the
Heirs of Macabangkit out of their actual recovery from NPC, giving to each of the
two attorney’s 15% of the principal award as attorney’s fees would be excessive and
unconscionable from the point of view of the clients. Thus, the Court, which holds
and exercises the power to fix attorney’s fees on a quantum meruitbasis in the
absence of an express written agreement between the attorney and the client, now
fixes attorney’s fees at 10% of the principal award of P113,532,500.00.

Whether it is Atty. Dibaratun or Atty. Ballelos, or both, who should receive


attorney’s fees from the Heirs of Macabangkit is a question that the Court must next
determine and settle by considering the amount and quality of the work each
performed and the results each obtained.
Atty. Dibaratun, the attorney from the outset, unquestionably carried the bulk of the
legal demands of the case. He diligently prepared and timely filed in behalf of the
Heirs of Macabangkit every pleading and paper necessary in the full resolution of
the dispute, starting from the complaint until the very last motion filed in this Court.
He consistently appeared during the trial, and examined and cross-examined all the
witnesses presented at that stage of the proceedings. The nature, character, and
substance of each pleading and the motions he prepared for the Heirs of Macabangkit
indicated that he devoted substantial time and energy in researching and preparing
the case for the trial. He even advanced P250,000.00 out of his own pocket to defray
expenses from the time of the filing of the motion to execute pending appeal until
the case reached the Court.[77] His representation of all the Heirs of Macabangkit was
not denied by any of them.
We note that Atty. Dibaratun possessed some standing in the legal profession
and in his local community. He formerly served as a member of the Board of
Director of the Integrated Bar of the Philippines (IBP), Lanao del Norte-Iligan City
Chapter, and was an IBP national awardee as Best Legal Aid Committee Chairman.
He taught at Mindanao State University College of Law Extension. He was
a Municipal Mayor of Matungao, Lanao del Norte, and was enthroned Sultan a Gaus.
In contrast, not much about the character and standing of Atty. Ballelos, as well as
the nature and quality of the legal services he rendered for the Heirs of Macabangkit
are in the records. The motions he filed in the
Court and in the CA lacked enlightening research and were insignificant to the
success of the clients’ cause. His legal service, if it can be called that, manifested no
depth or assiduousness, judging from the quality of the pleadings from him. His
written submissions in the case appeared either to have been lifted verbatim from
the pleadings previously filed by Atty. Dibaratun, or to have been merely quoted
from the decisions and resolutions of the RTC and the CA. Of the Heirs of
Macabangkit, only Cebu, Batowa-an, Sayana, Nasser, Manta, Mongkoy[78] and
Edgar gave their consent to Atty. Ballelos to appear in their behalf in the CA, which
he did despite Atty. Dibaratun not having yet filed any withdrawal of his appearance.
The Court did not receive any notice of appearance for the Heirs of Macabangkit
from Atty. Ballelos, but that capacity has meanwhile become doubtful in the face of
Amir’s strong denial of having retained him.
In fairness and justice, the Court accords full recognition to Atty. Dibaratun
as the counsel de parte of the Heirs of Macabangkit who discharged his
responsibility in the prosecution of the clients’ cause to its successful end. It is he,
not Atty. Ballelos, who was entitled to the full amount of attorney’s fees that the
clients ought to pay to their attorney. Given the amount and quality of his legal work,
his diligence and the time he expended in ensuring the success of his prosecution of
the clients’ cause, he deserves the recognition, notwithstanding that some of the
clients might appear to have retained Atty. Ballelos after the rendition of a favorable
judgment.[79]
Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and
Edgar, the only parties who engaged him. The Court considers his work in the case
as very minimal. His compensation under the quantum meruit principle is fixed
atP5,000.00, and only the Heirs of Macabangkit earlier named are liable to him.
x x x."

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Pursuant to Canon 10 of the Code of Professional Responsibility, “A


lawyer shall charge only fair and reasonable fees.” In relation thereto,
Rule 20.01 of the same code provides that a lawyer shall be guided by
the following factors in determining his fees:

The time spent and the extent of the services rendered or required;

The novelty and difficulty of the questions involved;

The importance of the subject matter;

The skill demanded;

The probability of losing other employment as a result of acceptance


of the proffered case;

Bases of lawyer’s fee


BY PERSIDA ACOSTA
JANUARY 30, 2017

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 BASES OF LAWYER’S FEE

Persida Acosta
Dear PAO,
I filed a civil action for damages against one bus company when one
of its units hit me last March 2016. As a result, I was confined in the
hospital for almost one month. I engaged the services of Lawyer X
when I filed a claim for damages against the bus company. The court
rendered judgement in my favor and ordered the bus company to pay
me a certain amount. My lawyer requested that I pay him 30 percent
of the amount recovered as this was allegedly indicated in the contract
that I signed. I think this amount is excessive. Is there any law limiting
the fees to be paid to lawyers?
Amber

Dear Amber,
Pursuant to Canon 10 of the Code of Professional Responsibility, “A
lawyer shall charge only fair and reasonable fees.” In relation thereto,
Rule 20.01 of the same code provides that a lawyer shall be guided by
the following factors in determining his fees:

The time spent and the extent of the services rendered or required;

The novelty and difficulty of the questions involved;

The importance of the subject matter;

Play

The skill demanded;


The probability of losing other employment as a result of acceptance
of the proffered case;

The customary charges for similar services and the schedule of fees of
the IBP [Intrgrated Bar of the Philippines] chapter to which he
belongs;

The amount involved in the controversy and the benefits [gained by


the] client from the service;

The contingency or certainty of compensation;

The character of the employment, whether occasional or established;


and

The professional standing of the lawyer.

In your case, since there is a contract signed between you and your
lawyer, the stipulated terms and conditions must be followed,
otherwise the lawyer shall collect reasonable fees with due
consideration to the above-enumerated factors. In the case of Masmud
vs. NLRC (G.R. No. 183385, February 13, 2009; ponente, former
Associate Justice Antonio Eduardo Nachura), the Supreme Court
stated:

The retainer contract between Atty. Go and Evangelina provides for a


contingent fee. The contract shall control in the determination of the
amount to be paid, unless found by the court to be unconscionable or
unreasonable. Attorney’s fees are unconscionable if they affront one’s
sense of justice, decency or reasonableness. The decree of
unconscionability or unreasonableness of a stipulated amount in a
contingent fee contract will not preclude recovery. It merely justifies
the fixing by the court of a reasonable compensation for the lawyer’s
services. Applying the decision in your case, the only instance where
the stipulated fees in the contract will not be followed is when the
same will be found by the court as unconscionable or unreasonable.
Hence, the terms of the contract will not be in control and the court
will have to fix a reasonable compensation for the services of the
lawyer.

We hope that we were able to answer your queries. Please be


reminded that this advice is based solely on the facts you have
narrated and our appreciation of the same. Our opinion may vary
when other facts are changed or elaborated.

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Furthermore, under the principle of “Quantum Meruit” in contingent fees of lawyers


where no apparent amount is involved, the following Rules of Court applies:

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


Rule 20.01 – A lawyer shall be guided by the following factors in determining his fees:

1. a. The time spent and the extent of the services rendered or required.
2. b. The novelty and difficulty of the questions involved;
3. c. The importance of the subject matter;
4. d. The skill demanded;
5. e. The probability of losing other employment as a result of acceptance of the
proffered case;
6. f. The customary charges for similar services and the schedule of fees of the IBP
chapter to which he belongs;
7. g. The amount involved in the controversy and the benefits resulting to the client
from the services;
8. h. The contingency or certainty of compensation;
9. i. The character of the employment, whether occasional or established; and
10. j. The professional standing of the lawyer.
The above captioned administrative case was filed in 2017 and the complainants were
represented by two (2) lawyers who argued vigorously in behalf of the complainants. As
stated above the importance of this case cannot be over emphasized considering the
contract rescission and investment involved. As proof of the skill of the undersigned counsel
in working for the benefit of the respondents, he is attaching his Memorandum herewith.

”Under the principle of quantum meruit, a contractor is allowed to recover the


reasonable value of the services rendered despite the lack of a written contract.
The measure of recovery under the principle should relate to the reasonable
value of the services performed. The principle prevents undue enrichment
based on the equitable postulate that it is unjust for a person to retain any
benefit without paying for it.”

In most jurisdictions, the contingent fee is not less than twenty five Percent (25%) of the
amount save or recovered, thus:
A client is not charged attorney fees if he loses the case. If the client recovers
damages from settlement or a favorable verdict, the attorney receives the fee from
the recovery. The attorney's permitted fee varies depending on the country, and
even local jurisdictions.
In the US, for example, the fee is generally based on the contractual agreement
between the attorney and the party, but is also limited by local rules for
"reasonableness". See e.g., Miss. Rule of Prof'l Conduct 1.5. In most jurisdictions,
contingent fees are "reasonable" as high as 33% to 45% of recovery. Attorneys
charging unreasonable fees may be subject to professional sanctions. The fee is
calculated as a share of the eventual damage judgment or settlement won by the
client. The percentage allowed is subject to the ethical rules of professional conduct,
and in many circumstances, statutory limitations.
In the UK, on the other hand, the client is liable for the normal fee (based on
hourly billing plus a profit element) plus a success (or bonus) fee (no more than
100%). Most lawyers charge a success fee much less than this, 25-50%. In English
law, fees are subject to compliance with the statutory scheme.

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What are contingent fees?

A client pays a contingent fees to a lawyer only if the lawyer handles a case successfully.
Lawyers and clients use this arrangement only in cases where money is being claimed—
most often in cases involving personal injury or workers' compensation.

In a contingent fee arrangement, the lawyer agrees to accept a fixed percentage (often one
third) of the recovery, which is the amount finally paid to the client. If you win the case, the
lawyer's fee comes out of the money awarded to you. If you lose, neither you nor the lawyer
will get any money, but you will not be required to pay your attorney for the work done on
the case.

On the other hand, win or lose, you probably will have to pay court filing fees, the costs
related to deposing witnesses, and similar charges.