ISSUE # 4:

If Louis agrees, spends his own money for expenses necessary to litigate, such amount
exceeding P20,000 but loses the case anyway, can he demand a fee more than that agreed
on?

No, Louis cannot demand a fee more than that agreed on other than the reimbursement of the
advanced necessary expenses he incurred in litigating the case.
Canon 20 of the Code of Professional Responsibility provides that a lawyer shall charge only
fair and reasonable fees, and Rule 20.01 of the same Code enumerates the factors a lawyer
shall consider in determining his fees.
Another statute that can be useful in resolving this issue is Rule 138, Section 24 of the Rules of
Court which provides that an attorney shall be entitled to have and recover from his client no
more than a reasonable compensation for his services, with a view to the importance of the
subject-matter of the controversy, the extent of the services rendered, and the professional
standing of the attorney. No court shall be bound by the opinion of attorneys as expert
witnesses as to the proper compensation but may disregard such testimony and base its
conclusion on its own professional knowledge. A written contract for services shall control the
amount to be paid therefor unless found by the court to be unconscionable or unreasonable.
In Taganas vs.NLRC, the Supreme Court maintains that a contingent fee arrangement may be
agreed on by the lawyer and a his client as this arrangement is valid in the Philippine
jurisdiction. The arrangement is, however, under the supervision and scrutiny of the court to
protect clients from unjust charges. Section 13 of the Canons of Professional Ethics states that
"[a] contract for a contingent fee, where sanctioned by law, should be reasonable under all the
circumstances of the case including the risk and uncertainty of the compensation, but should
always be subject to the supervision of a court, as to its reasonableness". When it comes,
therefore, to the validity of contingent fees, in large measure it depends on the reasonableness
of the stipulated fees under the circumstances of each case. The reduction of unreasonable
attorney's fees is within the regulatory powers of the courts.
In Bautista vs. Gonzales, the Court cited Canon 42 of the Canons of Professional Ethics which
provides that a lawyer may not properly agree with a client to pay or bear the expenses of
litigation. Although a lawyer may in good faith, advance the expenses of litigation, the same
should be subject to reimbursement. The Court further maintained that an agreement whereby
an attorney agrees to pay expenses of proceedings to enforce the client's rights is champertous
Such agreements are against public policy especially where the attorney has agreed to carry on
the action at his own expense in consideration of some bargain to have part of the thing in
dispute. The execution of these contracts violates the fiduciary relationship between the lawyer
and his client, for which the former must incur administrative sanctions.