(Question XI-A, Legal and Judicial Ethics, 2017 Bar Exam)
Define champerty. (3%)
Champerty is any agreement by a lawyer to conduct the litigation in his own account, to pay the expenses thereof or to save his client therefrom and to receive as his fee a portion of the proceeds of the judgment is obnoxious to the law. Champerty is prohibited.
(Question XI-B, Legal and Judicial Ethics, 2017 Bar Exam)
Atty. Andy and Atty. Valeriano were classmates in law school. As such, they developed a close friendly relationship. They agreed that they would refer clients to each other, and whoever referred clients would receive a commission or portion of the attorney’s fees. Atty. Andy referred a client to Atty. Valeriano, who charged the client ₱100,000.00 as initial attorney’s fees. Thereafter, Atty. Valeriano sent 15% of ₱100,000.00, or ₱15,000.00, to Atty. Andy as the latter’s referral fee.
Explain if the agreement on the referral fee is ethical. (3%)
The agreement is unethical. Answer
Under the Code of Professional Responsibility, a lawyer shall, in case of referral, with the consent of the client, be entitled to a division of fees in proportion to the work performed and responsibility assumed. Rule
In the case at bar, there is no indication that Atty. Andy performed any service for which he is compensated via the referral fee. There is also no indication that the client gave consent thereto. Apply
Thus, it is unethical for Atty. Valeriano to pay referral fee to Atty. Andy. Conclusion
(Notice: The suggested answers simulate those that a bar examinee may provide, and thus specific citations are not provided. Notwithstanding, in the reviewers, the bar exam question is answered under the appropriate topic which discusses the concepts and principles, as well as provide for specific citations. Accordingly, please refer to it on the reviewer or in the Library.)
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