LEGAL TECHNIQUE AND LOGIC

By: Socrates S. Sabile JD-1

The question posed in this paper is, as to payment of attorneys fees, which of these rules is best suited to be applied: AMERICAN RULE: Parties in the litigation should pay their respective attorneys. Or; ENGLISH RULE: Losing party in the litigation shall pay for all of the expenses borne out of said litigation. This author believes that in relation to the practice of litigation in the Philippine setting, the best suited rule to be practiced is the American Rule. Consider this, if the English Rule is applied here in the Philippines, more likely than not, expenditures of legal counsel will be substantially increased insofar as those cases that will undergo litigation since the assumption will be that costs will be reduced since the rival will carry said costs and that, by applying said rule, a bigger disparity of the stakes between winning party and losing party will surely be substantial. Another point to consider is when it comes to suits involving damages, the English rule may foster a bias for plaintiff it terms of a reluctance from the judge an imposition of liabilities on plaintiffs for their opponents legal costs, given the premise that plaintiffs already suffered an injury, notwithstanding the strengths and weaknesses of their claims. As to expected value claims, the English rule fosters a mentality on plaintiffs that, if they proceed with high probability claims will at a certain extent ignore the costs borne out of said litigation and instead file all positive award claims. And, by the same token, said rule would discourage claims on such cases where the probability of success is low but award potential is high, since plaintiffs with such

claims face higher litigation costs as they would under the American rule. Moreover, plaintiffs anticipation of greater litigation expenses compromises their intention to proceed with valid claims from which said claims were filed in the first place. In addition, the English rule, in effect promotes a litigation process rather that an extra judicial settlement. The only time settlement may be entertained only when defendants expected litigation costs exceeds that of the expected claims of the plaintiffs. In the Philippine setting the American rule certainly is the more feasible rule to be applied. As elucidated in Article 2208 of the New Civil Code:

Art. 2208: In the absence of stipulation, attorneys fees and expenses in litigation, other than judicial costs, cannot be recovered, except: 1. When exemplary damages are awarded; 2. When defendants act or omission has compelled plaintiff to litigate with third persons or to incur expenses to protect his interest; 3. In criminal cases of malicious prosecution against plaintiff; 4. In a case of clearly unfounded civil action or proceeding against the plaintiff; 5. When the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim; 6. In actions for legal support; 7. In actions for the recovery of wages of household helpers, labourers and skilled workers; 8. In actions for indemnity under workmens compensation and employers liability laws;

9. In a separate civil action to recover civil liability arising from a crime; 10.When at least double judicial costs are awarded; 11.In any other case where the court deems it just and equitable that attorneys fees and expenses of litigation should be recovered.

Said provision clearly states the need to establish proper justification in the awarding of attorneys fees. That such fees must be commensurate to services rendered, injury suffered by party in terms of infringement of rights or incurred costs, and indemnification based on a just and equitable manner. By applying said rule, it fosters a more proper filing of cases such as in claims, and that such damages sought to be awarded are only proper and justified. By application of said rule, only justified claims are sought, and that such filing of claims will not be anchored on the premise of higher chances of monetary gain by the padding of attorneys fees as well as the erroneous focus of the party in going instead after positive award claims which brings about a higher gain. In addition, the fear of a pro-plaintiff bias which may arise from the bench will be eradicated.