2020-21 Procedure and Professional Ethics, Q14

During work, an overseas Filipino seafarer was seriously injured after falling into the elevator shaft of a foreign vessel. After initial treatment in Singapore, the seafarer was flown to the Philippines to continue medical treatment. While the seafarer was confined in a hospital, two paralegals representing a lawyer approached the seafarer offering that lawyer’s services at a significantly discounted rate. They explained that they could sue the employer for indemnity and added that the lawyer had a good track record at the National Labor Relations Commission. The paralegals even bragged about the lawyer’s connections at the Supreme Court. The seafarer agreed to engage the lawyer’s services. The employer proposed to settle the case out of court and eventually paid PHP5,000,000.00. The employer deposited this amount in the lawyer’s bank account. The lawyer tried to remit PHP1,000,000.00 to the seafarer, making it appear that the settlement was only for that amount. The seafarer refused to accept the amount of PHP1,000,000.00, as no prior approval had been given to the lawyer to settle the case. The seafarer filed a complaint before the Supreme Court for the lawyer’s disbarment. Does the seafarer have legal grounds to file the complaint? Explain briefly.

Quick check

What unethical practice occurs when a lawyer sends paralegals to solicit legal business from a hospitalized accident victim?

Does a lawyer have inherent legal authority to settle a client’s claim without express approval?

What ethical duty is breached when a lawyer fails to remit the full settlement money received on behalf of a client?

Under the Code of Professional Responsibility and Accountability, what is the effect of claiming improper influence over courts?

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Which sanction may the Supreme Court impose on a lawyer who commits ambulance chasing, unauthorized compromise, and misappropriation?

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1. Ambulance Chasing Prohibition
Under the Code of Professional Responsibility and Accountability (CPRA), ambulance chasing is strictly prohibited as an unethical practice of soliciting legal business. Ambulance chasing occurs when a lawyer, directly or through representatives or paralegals, approaches vulnerable individuals who have suffered recent accidents or injuries in hospitals or accident sites to solicit employment. Solicitations exploiting a victim’s physical distress or emotional vulnerability degrade the legal profession, undermine public confidence, and warrant severe administrative sanctions, including suspension or disbarment from the practice of law.

2. Client Funds Misappropriation
Lawyers hold a fiduciary duty to account for all money or property collected or received for or from the client. Under the CPRA, client funds must be kept separate from the lawyer’s personal bank accounts and remitted promptly to the client upon receipt. Attempting to conceal the actual settlement amount received from an employer and retaining unauthorized portions of client money constitutes dishonesty, deceit, and gross misappropriation. Such unethical financial conversion demonstrates a lack of moral fitness and warrants the supreme penalty of disbarment.

3. Unauthorized Case Compromise
A lawyer possesses implied authority to conduct litigation but lacks inherent authority to compromise or settle a client’s cause of action without express written authorization. Under Article 1878 of the Civil Code and procedural rules, compromising a suit requires a special power of attorney or explicit client consent. Settling a claim behind the client’s back, accepting a lump-sum payment without authority, and concealing the compromise terms violate professional duties of loyalty and candor, giving the client valid grounds for disbarment.

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The questions reproduced here are the official texts of the Philippine Bar Examinations, published by the Supreme Court. They are reproduced for study purposes.The suggested answers are the author’s own.

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Where a question comes from an earlier examination, the suggested answer applies the law as it now stands, which may differ from the law in force when the question was given, and may therefore differ from what would have been the correct answer at that time. Where the difference is material, the answer notes it.The practice scoring feature measures wording overlap with the suggested answer. It is not a grade, carries no official weight, and says nothing about whether your reasoning is sound.Errors are possible. If you find one, please tell me and I will correct it.Last reviewed: October 2026