1

NOTE:
These (OLD) canons were TRANSPOSED / DISTRIBUTED in
the provisions of the (NEW) CODE OF PROFESSIONAL
RESPONSIBILITY AND ACCOUNTABILITY.

Chapter IV
The Lawyer and the Client

The lawyer’s primordial duties to his/her clients are as

follows:
1. Obliged to deliver utmost learning and ability;
2. Must maintain inviolate the confidence of the client;
3. Must disclose all circumstances/interest regarding the
controversy;
4. Must demonstrate undivided loyalty;
5. Must not reject the cause of the defenseless and the
oppressed;
6. Must show candor and fairness;
7. Must hold in trust the money or property of the client that
may come in his/her possession;
8. Must respond with zeal to the cause of the client.

CANON 14 stresses that a lawyer shall not refuse his/her

services to the needy.

Rule 14.01 - A lawyer shall not decline to represent a person solely on

account of the latter's race, sex, creed or status of life, or because of his
own opinion regarding the guilt of said person.

Rule 14.02 - A lawyer shall not decline, except for serious and sufficient
cause, an appointment as counsel de officio or as amicus curiae, or a
request from the Integrated Bar of the Philippines or any of its chapters
for rendition of free legal aid.

Rule 14.03 - A lawyer may not refuse to accept representation of an

indigent client unless:
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(a) he is not in a position to carry out the work effectively or

competently;

(b) he labors under a conflict of interest between him and the

prospective client or between a present client and the prospective
client.

Rule 14.04 - A lawyer who accepts the cause of a person unable to pay
his professional fees shall observe the same standard of conduct
governing his relations with paying clients.

NOTA BENE (important points to remember)

Rule 14.04 provides that a lawyer cannot refuse to

serve the client on the ground of insufficiency of
compensation or lack of it.

CANON 15 states that a lawyer shall observe candor,

fairness and loyalty in all his dealings and transactions
with his/her client.

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.

Rule 15.02.- A lawyer shall be bound by the rule on privilege

communication in respect of matters disclosed to him by a
prospective client.

Rule 15.03. - A lawyer shall not represent conflicting interests

except by written consent of all concerned given after a full
disclosure of the facts.

Rule 15.04. - A lawyer may, with the written consent of all

concerned, act as mediator, conciliator or arbitrator in settling
disputes.
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Rule 15.05. - A lawyer when advising his client, shall give a

candid and honest opinion on the merits and probable results of
the client's case, neither overstating nor understating the
prospects of the case.

Rule 15.06. - A lawyer shall not state or imply that he is able to

influence any public official, tribunal or legislative body.

Rule 15.07. - A lawyer shall impress upon his client compliance

with the laws and the principles of fairness.

Rule 15.08. - A lawyer who is engaged in another profession or

occupation concurrently with the practice of law shall make
clear to his client whether he is acting as a lawyer or in another
capacity.

NOTA BENE

This Canon speaks of three important parameters:

a) Ascertaining and declaring any conflict of interest
(15.01);
b) Maintaining the privilege communication
/confidentiality; and
c) Avoiding any act that implores the capacity/ability to
influence any tribunal, administrative body, or public
official.

As a general rule, a lawyer cannot represent adverse

interests. By way of exception, he/she may do so if the
parties consent to the representation after full disclosure
of facts.

The TEST in determining Conflicting Interest is whether or

not the acceptance of a new relation will prevent an
attorney from the full discharge of his duty of individual
fidelity and loyalty to his/her client, or invite suspicion of
unfaithfulness / double-dealing in the performance
thereof. (Palacios v. Amora)
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CANON 16 states that a lawyer shall hold in trust all

moneys and properties of his/her client that may come
into his/her possession.

Rule 16.01 - A lawyer shall account for all money or property

collected or received for or from the client.

Rule 16.02 - A lawyer shall keep the funds of each client

separate and apart from his own and those of others kept by
him.

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. He shall also have a lien
to the same extent on all judgments and executions he has
secured for his client as provided for in the Rules of Court.

Rule 16.04 - A lawyer shall not borrow money from his client
unless the client's interest are fully protected by the nature of
the case or by independent advice. Neither shall a lawyer lend
money to a client except, when in the interest of justice, he has
to advance necessary expenses in a legal matter he is handling
for the client.

ELENA PERALTA VDA. DE CAIÑA v. HON. GUSTAVO

VICTORIANO, ET AL, G.R. No. L-12905, February 26, 1959

An attorney's lien is of two kinds: one is called retaining lien and

the other charging lien.

The retaining lien is the right of the attorney to retain the

funds, documents, and papers of his client which have lawfully
come into his possession until his lawful fees and disbursements
have been paid and to apply such funds to the satisfaction
thereof.

The charging lien is the right which the attorney has upon all
judgments for the payment of money, and executions issued in
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pursuance of said judgments, which he has secured in litigation of

his client (Section 33, Rule 127; Rustia vs. Abeto, 72 Phil., 133).

Under this rule, this lien, whether retaining or charging, takes

legal effect only from and after, but not before, notice of
said lien has been entered in the record and served on the
adverse party (Macondray & Company, Inc. vs. Jose, 66 Phil.,
590; Menzi and Company vs. Bastida, 63 Phil., 16).

It may therefore be seen that the right of a lawyer to insure the

payment of his professional fee is either to retain the funds,
documents, and papers of his client which may have
lawfully come into his possession, or to enforce it upon
any judgment for the payment of money he may secure in
favor of his client. And it has been held that the retaining lien is
dependent upon possession and does not attach to anything not
in attorney's hands. The lien exists only so long as the attorney's
retains possession ends (Rustia vs. Abeto).

NOTA BENE
 The attorney’s lien is not an excuse for non-rendition of
accounting.
 The lawyer cannot disburse client’s money to client’s
creditors without the latter’s authority.
 The failure of the lawyer to deliver the money or property of
the client upon demand gives rise to the presumption that
he/she has misappropriated the funds for his/her own use to
the prejudice of the client and in violation of the trust reposed
in him/her.
 The lawyer must notify the client if retaining lien shall be
implemented.
 When a lawyer enforces a charging lien against his/her client,
the client-lawyer relationship is terminated.
 The principle behind Rule 16.04 is to prevent the lawyer from
taking advantage of his/her influence over the client or to
avoid acquiring a financial interest in the outcome of the
case.
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Retaining Lien Charging Lien

Passive Lien: It
cannot be actively Active Lien: It can be
enforced. It is a enforced by execution.
1. Nature general lien It is a special lien.
Lawful possession of
papers, documents, Securing of a favorable
property belonging to money judgment for
2. Basis client. the client.
Covers only papers,
documents and
property in the lawful Covers all judgments
possession of the for the payment of
attorney by reason of money and executions
3. his professional issued in pursuance of
Coverage employment such judgments.
As soon as the
attorney gets As soon as the claim for
4. When possession of the attorney’s fees had
Lien takes papers documents or been entered into the
effect property records of the case
Client need not be Client and adverse
notified to make it party must be notified
5. Notice effective to make it effective
Generally, it is
exercisable only when
May be exercised the attorney had
6. before judgment or already secured a
Applicabili execution or favorable judgment for
ty regardless thereof. his client

CANON 17 states that a lawyer owes fidelity to the cause

of his/her client and he/she shall be mindful of the trust
and confidence reposed in him/her.
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NOTA BENE (important points to remember)

 No fear of judicial disfavor or public popularity should restrain
him/her from full discharge of his/her duty.
 It is the duty of the lawyer at the time of retainer to disclose
to the client all the circumstances of his/her relations to the
parties and any interest in, or connection with, the
controversy which might influence the client in the selection
of a counsel.
 The lawyer owes loyalty to his/her client even after the
relation of attorney and client has been terminated. It is not
a good practice to permit him/her afterwards to defend in
another case other persons against his/her former client
under the pretext that the present case is distinct from the
other case.

CANON 18 provides that a lawyer shall serve his/her client

with competence and diligence.

Rules 18.01 - 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.

Rule 18.02 - A lawyer shall not handle any legal matter without
adequate preparation.

Rule 18.03 - A lawyer shall not neglect a legal matter entrusted

to him, and his negligence in connection therewith shall render
him liable.

Rule 18.04 - 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.

NOTA BENE (important points to remember)

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 Competence refers to the sufficiency of a lawyer’s

qualification to deal with the matter in question, which
includes knowledge and skill, and the ability to use them
effectively in the interest of the client.
 A lawyer must keep himself constantly abreast with the trend
of authoritative pronouncements and developments in all
branches of law.
 There must be extraordinary diligence in the prosecution or
the defense of his/her client’s cause.
 If a lawyer errs like any other human being, he/she is not
answerable for every error or mistake, and will be protected
as long as he/she acts honestly and in good faith to the best
of his/her knowledge and discretion.
 A lawyer is not an insurer of favorable results in a case where
he/she is engaged as the counsel.

CANON 19 provides that a lawyer shall represent his client

with zeal within the bounds of the law.

Rule 19.01 – A lawyer shall employ only fair and honest means
to attain the lawful objectives of his client and shall not
present, participate in presenting or threaten to present
unfounded criminal charges to obtain an improper advantage in
any case or proceeding.

Rule 19.02 – A lawyer who has received information that his

client has, in the course of the representation, perpetuated a
fraud upon a person or tribunal, shall promptly call upon the
client to rectify the same, and failing which he ha to terminate
the relationship with such client in accordance with the Rules of
Court.

Rule 19.03 – A lawyer shall not allow his client to dictate the
procedure in handling the case.

NOTA BENE (important points to remember)

 General Rule: The negligence of the counsel binds the
client.
 Exception: Reckless imprudence that deprives the client of
the due process of law.
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 The lawyer should do his/her best efforts to restrain and to

prevent his/her clients from perpetrating acts which he/she
himself ought not to do. Or else, withdraw. However, the
lawyer shall not volunteer the information about the client’s
commission of fraud to anyone as it is contrary to the duty to
maintain client’s confidence and secrets.

CANON 20 states that 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:

a. The time spent and the extent of the services 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 services;
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.

Kinds of Payment which may be stipulated upon:

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

Attorney’s Fees
1. Ordinary attorney’s fee -the reasonable compensation paid to
a lawyer by his/her client for the legal services he/she has
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rendered to the latter. The basis for this compensation is the

fact of his/her employment by and his/her 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. 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 NOT to the
lawyer but to the client, unless they have agreed that the
award shall pertain to the lawyer as additional compensation
or as part thereof.

How attorney’s fees may be claimed by the lawyer:

1. It may be asserted either in the very action in which the
services of a lawyer had been rendered or in a separate
action.
2. A petition for attorney’s fees may be filed before the
judgment in favor of the client is satisfied, or the proceeds
thereof delivered to the client.
3. The determination as to the propriety of the fees or as to the
amount thereof will have to be held in abeyance until the
main case from which the lawyer’s claim for attorney’s fees
may arise has become final. Otherwise, the determination of
the courts will be premature.

Kinds of Retainer Agreements on Attorney’s fees:

1. General Retainer or Retaining Fee – it is the fee paid to a

lawyer to secure his/her future services as general counsel for
any ordinary legal problem that may arise in the ordinary
business of the client and referred to him/her for legal action;

2. Special Retainer – a fee for a specific case or service

rendered by the lawyer for a client.

3. Quantum Meruit –it means “as much as he deserves”, and is

used as the basis for determining the lawyer’s professional
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fees in the absence of a contract, but recoverable by him/her

from his client.

INTERNATIONAL HOTEL CORPORATION vs. FRANCISCO B.

JOAQUIN, JR. and RAFAEL SUAREZ, G.R. No. 158361 , April
10, 2013

To avoid unjust enrichment to a party from resulting out of a

substantially performed contract, the principle of quantum meruit
may be used to determine his compensation in the absence of a
written agreement for that purpose. The principle of quantum
meruit justifies the payment of the reasonable value of the
services rendered by him.

Quantum Meruit should apply in the absence of an express

agreement on the fees

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. Being predicated on equity, the principle should only be
applied if no express contract was entered into, and no specific
statutory provision was applicable.

NOTA BENE
 Quantum Meruit is resorted to where:
1. There is no express contract for payment of attorney’s fees
agreed upon between the lawyer and the client;
2. When although there is a formal contract for attorney’s
fees, the stipulated fees are found unconscionable or
unreasonable by the court.
3. When the contract for attorney’s fees is void due to purely
formal matters or defects of execution.
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4. When the counsel, for justifiable cause, was not able to

finish the case to its conclusion.
5. When the lawyer and the client disregarded the contract
for attorney’s fees.

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.

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.

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.

NOTA BENE
 An unauthorized counsel is not entitled to attorney’s fees.
 Stipulation regarding payments of attorney’s fees is not
illegal/immoral and is enforceable as the law between the
parties, provided such stipulation does not contravene law,
good morals, public policy.

Circumstances where the counsel cannot recover full amount

despite written contract for attorneys’ fees:

1. When he/she withdraws before the case is finished.

2. Justified dismissal of attorney (payment: in Quantum

Meruit only)
 The reason for the award of attorney’s fees must be stated
in the text of the decision; otherwise, if it is stated only in
the dispositive portion of the decision, the same must be
disallowed on appeal.
 Even though the interest or property involved is of
considerable value, if the legal services rendered do not call
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for much efforts, there is no justification for the award of

high fees.

3. Champertous Contracts – Lawyer stipulates with his/her

client that in the prosecution of the case, he/she will bear all
the expenses for the recovery of things or property being
claimed by the client and the latter agrees to pay the former
a portion of the thing/property recovered as compensation.
A Champertous Contract is a VOID CONTRACT.

4. Compensation to an attorney for merely recommending

another lawyer is improper (agents).

 Attorney’s fees for legal services shared or divided to

non-lawyer is prohibited. Division of fees is only for
division of service or responsibility.
 A lawyer should try to settle amicably any differences on
the subject.

A lawyer has two (2) judicial actions to recover

attorney’s fees:
1. In the same case: Enforce attorney’s fees by filing an
appropriate motion or petition as an incident to the main
action where he rendered legal services.
2. In a separate civil action.

CANON 21 states that a lawyer shall preserve the

confidences and secrets of his client even after the
attorney-client relation is terminated.

 Confidence – refers to information protected by the attorney-

client privilege (ROC).

 Secret – refers to other information gained in the professional

relationship that the client has regulated to be held inviolate
or the disclosure of which would be embarrassing or would
likely be detrimental to the client.
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 An attorney cannot, without the consent of his/her client, be

examined as to any communication made by the client to
him/her, or his/her advice given thereon in the course of
professional employment; nor can an attorney’s secretary,
stenographer, or clerk be examined, without the consent of
the client and his/her employees, concerning any fact the
knowledge of which has been acquired in such capacity (Rule
130, Sec. 21 (b), ROC)

 The mere establishment of a client-lawyer relationship does

not raise a presumption of confidentiality. There must be
an intent or that the communication relayed by the client to
the lawyer be treated as confidential.

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.

NOTA BENE
 When properly authorized after having been fully informed of
the consequences to reveal his confidences/secrets, then
there is a valid waiver.

 Art. 209. Betrayal of Trust by an Attorney or Solicitor.

Revelation of secrets. In addition to the proper administrative
action, the penalty of prision correccional in its minimum
period, or a fine ranging from P200 to P1000, or both, shall be
imposed upon any attorney at law or solicitor who, by any
malicious break of professional duty as inexcusable
negligence or ignorance, shall prejudice his client, or reveal
any of the secrets of the latter learned by him in his
professional capacity.
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The same penalty shall be imposed upon an attorney at law

or solicitor who, having undertaken the defense of a client, or
having received confidential information from said client in a
case, shall undertake the defense of the opposing party in the
same case, without the consent of his first client (Rule 209,
RPC)

General Rule: Obligation to keep secrets covers only lawful

purposes.
Exceptions:
1. Announcements of the intention of a client to commit a crime.
2. The client jumped bail and the lawyer knows his/her
whereabouts; or the client is living somewhere under an
assumed name.
3. Communication involves the commission of future fraud or
crime but crimes/frauds “already committed” falls within the
privilege.

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 other similar purposes.

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 client.

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.
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NOTA BENE
 The lawyer must avoid committing calculated indiscretion or
accidental revelation of secrets obtained in his professional
employment.
 Prohibition applies, even if the prospective client did not
thereafter actually engage the lawyer.

CANON 22 states that a lawyer shall withdraw his/her

services only for good cause and upon notice appropriate
in the circumstances.

Rule 22.01 – A lawyer may withdraw his services in any of

the following cases:
1. a. When the client pursues an illegal or immoral
course of conduct in connection with the matter he is
handling;
2. b. When the client insists that the lawyer pursue
conduct violative of these canons and rules;
3. c. When his inability to work with co-counsel will not
promote the best interest of the client;
4. d. When the mental or physical condition of the
lawyer renders it difficult for him to carry out the
employment effectively;
5. e. When the client deliberately fails to pay the fees
for the services or fails to comply with the retainer
agreement;
6. f. When the lawyer is elected or appointed to a
public office, and
7. g. Other similar cases

Rule 22.02 – A lawyer who withdraws or is discharged shall

subject to a retaining lien, immediately turn over all
papers and property to which the client is entitled, and
shall cooperate with his successor in the orderly transfer of
the matter, including all information necessary for the
proper handling of the matter.

NOTA BENE (important points to remember)

 In the withdrawal as a counsel for a client, an attorney may
only retire from a case either by written consent of his/her
client or by permission of the court after due notice and
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hearing, in which event the attorney should see to it that the

name of the new attorney is recorded in the case.
 An attorney who could not get the written consent of his/her
client must make an application to the court, for the relation
does not terminate formally until there is a withdrawal of
record. Counsel has no right to presume that the court would
grand his withdrawal and therefore must still appear on the
date of hearing.

 Requirements for the Substitution of Counsel in a Case:

1. Written application;
2. Written consent of client;
3. Written consent of attorney to be substituted;
4. If the consent of the attorney to be substituted cannot be
obtained, there must be at least a proof of notice that the
motion for substitution has been served upon him/her, in
the manner prescribed by the rules.

 A lawyer cannot recover compensation from one who did not

employ or authorize his/her employment, however valuable
the results of his/her services may have been to such person.
In similar cases, there shall be no compensation when:
1. Client conducts himself/herself in a manner which tends to
degrade his/her counsel;
2. Client refuses to extend cooperation;
3. Client stops having contact with him/her.

 The right of a client to terminate a lawyer is

absolute. Such termination may be with or without
cause.

***NOTHING FOLLOWS***