Wednesday, January 8, 2020

May third parties fund litigation and appeals?

See -

"x x x.

Costs, settlement and funding of appeals in Philippines

x x x.

What are the rules regarding attorneys’ fees and costs on appeal?

There are two commonly accepted concepts of attorneys’ fees: ordinary and extraordinary. In its ordinary concept, an attorney’s fee is the reasonable compensation paid to a lawyer by his or her client for the legal services he or she has rendered to the latter; while in its extraordinary concept, attorneys’ fees are deemed indemnity for damages ordered by the court to be paid by the losing party in litigation. The instances where these may be awarded are those enumerated in article 2208 of the Civil Code (Alva v High Capacity Security Force, Inc, G R No. 203328, 8 November 2017). An appellate court may affirm, modify or set aside a trial court’s award of extraordinary attorneys’ fees in the process of appellate review.

Meanwhile, costs shall be awarded in favour of the prevailing party as a matter of course, but the court has the power, for special reasons, to adjudge that either party shall pay the costs of an action or that the same be divided, as may be equitable. Likewise, where an action or appeal is found to be frivolous, double or treble cost may be imposed on the plaintiff or appellant, which shall be paid by his or her attorney, if so ordered by the court. Again, this imposition may be affirmed, modified or set aside on appeal.

Settlement of first instance judgment after appeal lodged

Can parties enter into a settlement agreement to vacate the trial court judgment after an appeal has been taken?

Yes. Parties are allowed to enter into compromise or settlement agreements that cover cases pending trial, on appeal or even those that have already been finally decided. There is no time limitation as to when a compromise or settlement agreement may be entered into (Magbanua v Uy, G R No. 161003. 6 May 2005).

Limits on settlement after commencement of appeal

Are there any limits on settlement once an appeal has been taken?

The filing of an appeal does not limit the parties’ ability to enter into compromise or settlement agreements as long as such agreements are not contrary to law, morals, good customs or public policy. Article 2935 of the Civil Code of the Philippines, however, provides that no compromise upon the following questions shall be valid:

the civil status of persons;
validity of a marriage or a legal separation;
any ground for legal separation;
future support;
jurisdiction of courts; or
future legitime.

Third-party funding

May third parties fund appeals?

There are no specific rules in this jurisdiction that govern third-party litigation funders, and a litigant would ordinarily be free to source his or her litigation funds. However, an agreement whereby an attorney agrees to pay the expenses of proceedings to enforce the client’s rights is champertous (Roxas v Republic Real Estate Corp, G R No. 208205, 1 June 2016). A champertous contract is considered against public policy as it violates the fiduciary relations between the lawyer and his or her client, whose weakness or disadvantage may be exploited by the former (Nocom v Camerino, G R No. 182984, 10 February 2009).
Disclosure of litigation funding

If litigation funding is permitted in an appeal, must funding sources be disclosed to the court or other parties to the litigation?

There are no express rules covering third-party litigation funders in this jurisdiction (see question 25).

SyCip Salazar Hernandez & Gatmaitan - Jewelle Ann Lou P Santos and Ramon G Songco.

x x x."