Supreme Court Rules That Award of Attorney's Fees in Disability Claims Not Automatic

The case stemmed from a complaint filed by a Pumpman who injured his back while lifting heavy weights.  He was referred to the company-designated physician (CDP)who after treatment and examination, assessed him with a grade 11 disability.  Unsatisfied, the seafarer sought a second medical opinion with his own doctor who found him permanently unfit for sea duties.  Armed with such assessment, he filed a claim for disability benefits under the CBA.


The Voluntary Arbitrators of the NCMB awarded the seafarer US$102,308 disability benefits under the CBA plus 10% thereof as attorney’s fees on the ground that seafarer is considered permanently and totally disabled.  Upon appeal to the Court of Appeals, the award was reduced to US$60,000 disability benefits plus 10% thereof as attorney’s fees.  It was held that the CBA is not applicable and the POEA Contract should apply. 

When the case reached the Supreme Court, the award of disability benefits was affirmed.  However, the Court provided a lengthy discussion on the propriety of awarding attorney’s fees in disability/death compensation cases.

The Court noted that over the years, attorney’s fees was awarded based on the provisions of the Labor Code (Article 111) and the Civil Code [Article 2208 (2) (8)].  However, a clarification was made by the Court that this is erroneous.

The Court held:
 
Article 111 of the Labor Code allows an award of attorney’s fees when the worker is compelled to make a claim because of unlawful withholding of wages and not in cases of disability/death compensation. 
 

Article 2208 (2) of the  Civil Code states that attorney’s fees is proper when the defendant’s act/omission has compelled the plaintiff to litigate with third persons or incur expenses to protect their interests.  The mere fact that  a seafarer or his heirs was compelled to litigate is not reason to award attorney’s fees considering that the law says that the litigations is with third persons.

Also, Article 2208 (8) of the Civil Code, while allowing attorney’s fees, it must be based on actions for indemnity under workmen’s compensation and employer’s liability laws.  Since a claim for disability/death benefits is based on contract (POEA Contract), then said provision will also not apply.
 

In conclusion, the Court held that for an award of attorney’s fees demands a factual, legal or equitable justification which must be shown upon which the court exercises its discretion to issue such an award. 
 

Pacific Ocean Manning, Inc. and/or V.Ships UK Ltd./Nordic American Tankers Ltd. v. N.B., G.R. No. 259982, October 28, 2024; First Division, Associate Justice Ricardo Rosario, ponente Attys. Aldrich Del Rosario and Florencio Aquino of DelRosarioLaw handled for vessel interests).

Firm News

Joseph Rebano elected as PBA President

DelRosarioLaw Senior Partner Jospeh Rebano was elected as President of the Philippine Bar Association (PBA) for the year 2025.
 
The PBA is the oldest voluntary national organization of lawyers in the Philippines.  From the time of its inception, the PBA has always been at the forefront in advocating for the rule of law, legal advocacies in helping the marginalized and has spoken out on different forms of injustices that have substantial significance to the lives of Filipinos.
 
Past Presidents of the PBA include DelRosarioLaw founder, Arturo M. Del Rosario (1990) and DelRosarioLaw Co-Managing Partner, Arturo Del Rosario, Jr. (2008).

Our congratulations to Joseph!

Gina Guinto elected as MARLAW President

DelRosarioLaw Partner Gina Guinto was elected as President of the Maritime Law Association of the Philippines (MARLAW).
 
Since 1982, MARLAW seeks to help spur progress in the maritime legal practice to advance the interest of the Philippine maritime profession and maritime industry as a whole.
 
Our congratulations to Gina!

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