Case Summary (A.C. No. 10557)
Singapore Tort Action and Settlement Distribution
Respondents and Gurbani & Co. filed a tort claim in the Singapore High Court, retaining foreign and expert advisers at additional cost. Negotiations produced a US$95,000 settlement; Gurbani & Co. remitted US$59,608.40 to respondents. Respondents then deducted US$5,000 for expert fees, their own 35% share, and other expenses, yielding US$18,132.43—tendered as US$20,756.05—to complainant, who refused to accept it.
Domestic Civil Proceedings on Accounting
Respondents filed a preliminary injunction case to compel complainant’s acceptance, which was dismissed by the RTC and this Court (July 7, 2008). Complainant’s accounting suit in Ligao City RTC (June 16, 2011) ordered respondents to render full accounting and refund excess fees; the Court of Appeals affirmed but reduced legal fees to 10%. The Supreme Court affirmed on February 20, 2013, and issued final Entry of Judgment August 8, 2013.
IBP Disciplinary Proceedings
Complainant’s IBP complaint alleged (1) refusal to remit settlement funds, (2) depositing client money into respondents’ account, (3) ambulance-chasing. The CBD found violations of CPR Canons 2, 3, 16, 17, 18: unauthorized solicitation by agents, failure to account and deliver client funds, and engaging foreign counsel without client’s informed consent. It recommended one-year suspension and compliance with the accounting decision. The IBP Board, after motions, increased suspension to two years and directed return of 5% of assessed fees.
Supreme Court’s Ethical Analysis
The Court affirmed that the practice of law is a public trust under the 1987 Constitution. It upheld findings of:
• Ambulance-chasing via paid paralegals in the hospital (Rule 1.03; Rule 2.03; Canon 3)
• Fiduciary breach in failing to account accurately and promptly remit collected funds (Canon 16; Rules 16.01, 16.03)
• Improper commingling and safekee
Case Syllabus (A.C. No. 10557)
Background and Accident
- Jerry M. Palencia was employed as an overseas Filipino seafarer aboard the M/T “Panos G” (Cyprus-flagged vessel).
- He suffered serious injuries after falling into the elevator shaft of the vessel.
- Initial medical treatment was administered in Singapore; he was subsequently discharged and flown to Manila for continued treatment and rehabilitation at Manila Doctors Hospital.
Engagement of Legal Representation
- While confined at Manila Doctors Hospital, two paralegals (“Moises” and Jesherel L. Millena) from respondents’ law office approached the complainant.
- Complainant was persuaded to engage the services of Attorneys Pedro L. Linsangan, Gerard M. Linsangan, Glenda M. Linsangan-Binoya, and the Singapore law firm Gurbani & Co. to file claims for indemnity.
- On respondents’ repeated visits, complainant executed:
• An Attorney-Client Contract agreeing to pay 35% of any recovery or settlement to respondents and their Singapore counsel.
• A Special Power of Attorney authorizing respondents and Gurbani & Co. to pursue his claims abroad.
Proceedings in Singapore and Settlement
- Respondents and Gurbani & Co. filed a tort claim against the owners of the “Panos G” in the High Court of Singapore.
- Legal assistance was secured from Papadopoulos, Lycourgos & Co. (Cyprus) for Cyprus-law issues, and from retired Justice Emilio Gancayco for expert opinions on litigation matters.
- Negotiations led to a settlement award of US$95,000 in favor of the complainant.
- After deductions by Gurbani & Co. (fees, expenses, disbursements, bank charges and expert fees), US$59,608.40 was remitted to respondents in Manila.
Dispute Over Fees and Funds Tendered
- From the US$59,608.40 received by respondents, they further deducted:
• US$5,000 payment to Justice Gancayco.
• Their 35% attorney’s fees.
• Other litigation expenses and bank charges. - These deductions left a net balance of US$18,132.43 claimed due the complainant.
- Respondents tendered US$20,756.05 (including applicable interest) to the com