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CONFLICT OF INTEREST AND

ATTORNEYS LIEN
Undivided Allegiance to the Client A Must for Lawyers
Therefore, treachery and double-dealing is a ground for
disciplinary action.
CANON 15 - A LAWYER SHALL OBSERVE CANDOR,
FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND
TRANSACTIONS WITH HIS CLIENTS
Rule 15.03 A lawyer shall not represent
conflicting interests except by written consent of all
concerned given after a full disclosure of the facts.
CANON 15 - A LAWYER SHALL OBSERVE CANDOR,
FAIRNESS AND LOYALTY IN ALL HIS DEALINGS AND
TRANSACTIONS WITH HIS CLIENTS
Rule 15.03 A lawyer shall not represent
conflicting interests except by written consent of all
concerned given after a full disclosure of the facts.
When is there conflict of interest?
There is conflict of interest when there is inconsistency in the
interests of two or more opposing parties, such that in behalf
of one client, it is the lawyer's duty to fight for an issue or
claim, but it is also his duty to oppose it for the other client.
(Note: This also applies to government lawyers)

General Rule: An attorney cannot represent


adverse interest.
Exception: Where the parties consent to the
representation after full disclosure of facts.

TEST IN DETERMINING REPRESENTING CONFLICTING


INTERESTS
Will the acceptance of a new lawyer-client relation
prevent a lawyer from discharging fully his duty of undivided
fidelity and loyalty to another client or invite suspicion of
unfaithfulness or double-dealing in the performance thereof?
The TEST in determining Conflicting Interest: The
test is whether or not the acceptance of a new relation will
prevent an attorney from the full discharge of his duty of
individual fidelity and loyalty to his client or invite suspicion of
unfaithfulness in double-dealing in the performance thereof
whether or not the actions which he handled were related or
totally unrelated. The prohibition against representing
conflicting interests rests on the relation of trust and
confidence of the highest degree between attorney and
client and on the principle of public policy and good taste.
(Tiana vs. Ocampo 200 SCRA 472)
Foundation of the Proscription on Conflicting Interest

It is generally the rule based on sound public


policy that an attorney cannot represent adverse interest. It
is highly improper to represent both sides of an issue. The
proscription against representation of conflicting interest
finds application where the conflicting interest arises with
respect to the same general matter and is applicable
however slight such adverse interest may be. It applies
although the attorney's intention and motives were honest
and he acted in good faith.
However, representation of conflicting interest may be
allowed where the parties consent to the representation after
full disclosure of facts. (Nakpil vs. Valdez, 286 SCRA 758).
Raison d'tre for the Rule:
To bar dishonest practitioners from fraudulent conduct and
prevent the honest practitioner from putting himself into a
position where he may be required to choose between
conflicting duties. It is designed not only to prevent the
dishonest practitioner from fraudulent conduct, but as well to
protect the honest lawyer from unfounded suspicion of
unprofessional practice. . . .
It is founded on principles of public policy, of good taste. As
has been said in another case, the question is not
necessarily one of the rights of the parties, but as to whether
the attorney has adhered to proper professional standard.
With these thoughts in mind, it behooves attorney, like
Caesar's wife, not only to keep inviolate the client's
confidence, but also to avoid the appearance of treachery
and double dealing. Only thus can litigants be encouraged to
entrust their secrets to their attorneys which is of paramount
importance in the administration of justice.
Communications between attorney and client are, in a great
number of litigations, a complicated affair, consisting of
entangled relevant and irrelevant, secret and well-known
facts. In the complexity of what is said in the course of
dealings between an attorney and client, inquiry of the
nature suggested would lead to the revelation, in advance of
the trial, of other matters that might only further prejudice the
complainant's cause." (Hilado vs. David, 84 Phil. 571)
In the similar case of Pasay Law and
Conscience Union, Inc. vs. Paz, (95 SCRA 24 [1980]) where
a former Legal Officer and Legal Prosecutor of PARGO who
participated in the investigation of the Anti-Graft case
against Mayor Pablo Cuneta later on acted as counsel for
the said Mayor in the same anti-graft case, this Court, citing
Nombrado vs. Hernandez (26 SCRA 13 119681) ruled:
The Solicitor General is of the opinion,
and we find no reason to disagree with him, that even if
respondent did not use against his client any information or
evidence acquired by him as counsel it cannot be denied
that he did become privy to information regarding the
ownership of the parcel of land which was later litigated in
the forcible entry case, for it was the dispute over the land
that triggered the mauling incident which gave rise to the
criminal action for physical injuries.

It is unprofessional to represent conflicting interests, except


by express conflicting consent of all concerned given after a
full disclosure of the facts. Within the meaning of this canon,
a lawyer represents conflicting interest when, in behalf on
one client, it is his duty to contend for that which duty to
another client requires him to oppose. (PNB vs. Atty.
Telesforo S. Cedo, 243 SCRA 1)
Respondents justification for his actions reveal a patent
ignorance of the fiduciary obligations which a lawyer owes to
his client. A lawyer-client relationship is not terminated by
the filing of a motion for a writ of execution. His acceptance
of a case implies that he will prosecute the case to its
conclusion. He may not be permitted to unilaterally
terminate the same to the prejudice of his client. (GLORITO
V. MATURAN, petitioner, vs. ATTY. CONRADO S.
GONZALES, respondent. [A.C. No. 2597. March 12, 1998])
It is improper for a lawyer to appear as counsel for one party
against the adverse party who is his client in a related suit,
as a lawyer is prohibited from representing conflicting
interests or discharging inconsistent duties. He may not,
without being guilty of professional misconduct, act as
counsel for a person whose interest conflicts with that of his
present or former client. That the representation of
conflicting interest is in good faith and with honest intention
on the part of the lawyer does not make the prohibition
inoperative.
It is improper for a lawyer to appear as counsel for one party
against his present client even in a totally unrelated case.
With regard to a former client, the traditional rule is to
distinguish between related and unrelated cases. A lawyer
may not represent a subsequent client against a former
client in a controversy that is related, directly or indirectly, to
the subject matter of the previous litigation in which he
appeared for the former client. Otherwise, he may.

he has represented him but also after the relation


of attorney and client has terminated as it is not good
practice to permit him afterwards to defend in another case
other person against his former client under the pretext that
a case is distinct from, and independent of the other case. It
behooves respondent not only to keep inviolate the clients
confidence but also to avoid the appearance of treachery
and double-dealing for only then can litigants be encouraged
to entrust their secrets to their attorneys which is of
paramount in the administration of justice.
- Justice Hector L. Hofilena
In a recent case of Atty. Era (2013)
X x x the termination of the attorney-client
relationship does not justify a lawyer to represent an interest
adverse to or in conflict with that of the former client. The
spirit behind this rule is that the clients confidence once
given should not be stripped by the mere expiration of the
professional employment.

Even after the severance of the relation, a lawyer


should not do anything that will injuriously affect
his former client in any matter in which the lawyer
previously represented the client. Nor should the
lawyer disclose or use any of the clients
confidences acquired in the previous relation.
Thus, Atty. Era was found guilty of Rule 15.03 of
Canon 15 and Canon 17 of the Code of
Professional Responsibility and was suspended
from the practice of law for two (2)
years. Ferdinand A. Samson v. Atty. Edgardo O.
Era, A.C. No. 6664, July 16, 2013.

It is a duty of a lawyer at the time of


retainer to disclose to the client all the
circumstances of his relations to the parties and
any interest in or connection with the controversy,
which might influence the client in the selection of
counsel.

It is unprofessional to represent conflicting


interests, except by express consent of all
concerned given after a full disclosure of the facts.
Within the meaning of this canon, a lawyer
represents conflicting interests when, in behalf of
one client, it is his duty to contend for that which
duty to another client requires him to oppose.
The obligation to represent the client with
undivided fidelity and not to divulge his secrets or
confidence forbids also subsequent acceptance of
retainers or employment from others in matters
adversely affecting any interest of the client with
respect to which confidence has been reposed.
There is conflict of interest when a lawyer
represents inconsistent interests of two or more
opposing parties. The test is whether or not in
behalf of one client, it is the lawyers duty to fight
for an issue or claim, but it is his duty to oppose it

In the case of Rosacia vs. Atty. Bulalacao, 248 SCRA 665,


the Supreme Court ruled that a lawyer may not accept a
case against a former client even after the termination of his
attorney-client relationship with the latter.
In the case of Rosacia vs. Atty. Bulalacao, 248
SCRA 665, the Supreme Court ruled that a lawyer may not
accept a case against a former client even after the
termination of his attorney-client relationship with the latter.
The Court reiterates that an attorney owes loyalty to his
client not only in the case in which he has represented him
but also after the relation of attorney and client has
terminated as it is not good practice to permit him afterwards
to defend in another case other person against his former
client under the pretext that the case is distinct from,
and independent of the former case. (See also Sumangil
v. Santo Roman, 84 Phil. 777 (1949); San Jose v. Cruz, 57
Phil. 792 (1933).)
The Court reiterates that an attorney owes loyalty to his
client not only in the case in which

for the other client. In brief, if he argues for one


client, this argument will be opposed by him when
he argues for the other client.
This rule covers not only cases in which
confidential communications have been confided,
but also those in which no confidence has been
bestowed or will be used.

Finally, some conflict-of-interest rules protect


interests of the legal system in obtaining adequate
presentations to tribunals. In the absence of such
rules, for example, a lawyer might appear on both
sides of the litigation, complicating the process of
taking proof and compromise adversary
argumentation.
An attorney should not put himself in a position
where self-interest tempts him to do less that his
best for his client. For this reason, it is improper
for a lawyer to continue representing a client in a
suit against a party even with the clients consent
after the lawyer brings suit on his own behalf
against the same defendant. It is likewise
improper to have financial stakes in a subject
matter of the suit brought on behalf of his client.
In either case, the possibility of a conflict between
self-interest and that of his client exists which may
affect the performance of his duty of undivided
fidelity to his client.

This rule covers not only cases in which


confidential communications have been confided,
but also those in which no confidence has been
bestowed or will be used.

Also, there is conflict of interests if the acceptance


of the new retainer will require the attorney to
perform an act which will injuriously affect his first
client in any matter in which he represents him
and also whether he will be called upon in his new
relation to use against his first client any
knowledge acquired through their connection.
Another test of the inconsistency of interests is
whether the acceptance of a new relation will
prevent an attorney from the full discharge of his
duty of undivided fidelity and loyalty to his client or
invite suspicion of unfaithfulness or double dealing
in the performance thereof.
First, the law seeks to assure clients that their
lawyers will represent them with undivided loyalty.
A client is entitled to be represented by a lawyer
whom the client can trust. Instilling such
confidence is an objective important in itself. x x x.
Second, the prohibition against conflicts of interest
seeks to enhance the effectiveness of legal
representation. To the extent that a conflict of
interest undermines the independence of the
lawyers professional judgment or inhibits a lawyer
from working with appropriate vigor in the clients
behalf, the clients expectation of effective
representation x x x could be compromised.
Third, a client has a legal right to have the lawyer
safeguard the clients confidential information xxx.
Preventing use of confidential client information
against the interests of the client, either to benefit
the lawyers personal interest, in aid of some other
client, or to foster an assumed public purpose is
facilitated through conflicts rules that reduce the
opportunity for such abuse.
Fourth, conflicts rules help ensure that lawyers will
not exploit clients, such as by inducing a client to
make a gift to the lawyer xxx.
Fourth, conflicts rules help ensure that lawyers will
not exploit clients, such as by inducing a client to
make a gift to the lawyer xxx.
Finally, some conflict-of-interest rules protect
interests of the legal system in obtaining adequate
presentations to tribunals. In the absence of such
rules, for example, a lawyer might appear on both
sides of the litigation, complicating the process of
taking proof and compromise adversary
argumentation.

CANON 16 A lawyer shall hold in trust all


moneys and properties of his client that may
come into his possession.
Rule 16.01 A lawyer shall account
for all money or property collected or received
for or from the client.
Rule 16.02 A lawyer shall keep the
funds of each client separate and apart from
his own and those of others kept by him.
Rule 16.03 A lawyer shall deliver the funds
and property of his client when due or upon
demand. However, he shall have a lien over
the funds and may apply so much thereof as
may be necessary to satisfy his lawful fees
and disbursements, giving notice promptly
thereafter to his client. He shall also have a
lien to the same extent on all judgments and
executions he has secured for his client as
provided for the Rules of Court.
RETAINING LIEN VS. CHARGING LIEN
Attorneys Liens - an attorney shall have a lien
upon the funds, documents and papers of his
client which have lawfully come into his
possession and may retain the same until his
lawful fees and disbursements have been paid,
and may apply such finds to the satisfaction
thereof.
He shall also have a lien to the same extent upon
all judgments for the payment of money, and
executions issued in pursuance of such judgments
which he has secured in a litigation of his client,
from and after the time when he shall have
caused a statement of his claim of such lien to be
entered upon the records of the court rendering
such judgment, or issuing such execution, and
shall have caused written notice thereof to be
delivered to his client and to the adverse party;
and he shall have the same right and power over
such judgments and executions as his client
would have to enforce his lien and secure the

payment of his fees and disbursements. (Sec, 37,


Rule 138, RRC)
Rule 16.04 A lawyer shall not borrow money
from his client unless the clients interests are
fully protected by the nature of the case or by
independent advice. Neither shall a lawyer
lend money to a client except, when in the
interest of justice, he has to advance
necessary expenses in the legal matter he is
handling for the client.
Attorneys lien is not an excuse for non-rendition
of accounting
Cannot disburse clients money to clients
creditors without authority.
Failure to deliver upon demand gives rise to the
presumption that he has misappropriated the
funds for his own use to the prejudice of the client
and in violation of the trust reposed in him.
Notify client if retaining lien shall be implemented
When a lawyer enforces a charging lien against
his client, the client-lawyer relationship is
terminated.
The principle behind Rule 16.04 is to prevent the
lawyer from taking advantage of his influence over
the client or to avoid acquiring a financial interest
in the outcome of the case.
Just today...
SC disbars lawyer for dishonesty, orders him to
return P1.3M in docket fees to client

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The Supreme Court held that deliberate failure
to pay just debts and the issuance of
worthless checks constitute gross
misconduct, for which a lawyer may be
sanctioned with suspensions from the practice
of law. Lawyers are instruments for the
administration of justice and vanguards of our
legal system. Isidra Barrientos vs. Atty.
Elerizza Libiran-Meteoro (A.C. No. 6408,
August 31, 2004)
They are expected to maintain not only legal
proficiency but also high standards of
morality, honesty, integrity and fair dealing so
that the peoples faith and confidence in the
judicial system is ensured. (Ibid.)
They must at all times faithfully perform their
duties to society, to the bar, the courts and to
their clients, which include prompt payment of
financial obligations. They must conduct
themselves in a manner that reflects the
values and norms of the legal profession as
embodied in the Code of Professional
Responsibility. (Ibid.)

CANON 17 A lawyer owes fidelity to the


cause of his client and he shall be mindful of
the trust and confidence reposed in him.
No fear of judicial disfavor or public popularity
should restrain him from full discharge of his duty.
It is the duty of the lawyer at the time of retainer to
disclose to the client all the circumstances of his
relations to the parties and any interest in, or
connection with, the controversy which might
influence the client in the selection of counsel.
The lawyer owes loyalty to his client even after the
relation of attorney and client has terminated. It is
not good practice to permit him afterwards to
defend in another case other persons against his
former client under the pretext that the case is
distinct from and independent of the former case.
No fear of judicial disfavor or public popularity
should restrain him from full discharge of his duty.
It is the duty of the lawyer at the time of retainer to
disclose to the client all the circumstances of his
relations to the parties and any interest in, or
connection with, the controversy which might
influence the client in the selection of counsel.
The lawyer owes loyalty to his client even after the
relation of attorney and client has terminated. It is
not good practice to permit him afterwards to
defend in another case other persons against his
former client under the pretext that the case is
distinct from and independent of the former case.
Rule 18.01 A lawyer shall not undertake a
legal service which he knows or should know
that he is not qualified to render. However, he
may render such service if, with the consent of
his client, he can obtain as collaborating
counsel a lawyer who is competent on the
matter.
Rule 18.02 A lawyer shall not handle any
legal matter without adequate preparation.
Rule 18.03 A lawyer shall not neglect a legal
matter entrusted to him and his negligence in
connection therewith shall render him liable.
Rule 18.04 A lawyer shall keep the client
informed of the status of his case and shall
respond within a reasonable time to the
clients request for information.
Competence: sufficiency of lawyers qualification
to deal with the matter in question and includes
knowledge and skill and the ability to use them
effectively in the interest of the client.
A lawyer must keep himself constantly abreast
with the trend of authoritative pronouncements
and developments in all branches of law.
There must be extraordinary diligence in
prosecution or defense of his clients cause.
If a lawyer errs like any other human being, he is
not answerable for every error or mistake, and will
be protected as long as he acts honestly and in
good faith to the best of his skill and knowledge.
Lawyer is not an insurer of the result in a case
where he is engaged in the counsel.
CANON 19 A lawyer shall represent his client
with zeal within the bounds of the law.

Atty. Galang is handling the case for drug


trafficking against his young clients. He is a
seasoned practitioner who, for a long time, has
established a good relationship with people in
government agencies where he makes the rounds
in his practice. In one instance, he got letterheads
from the DOJ which is one of these agencies. He
got an Order of dismissal for the case but the
same has been submitted for review. In what he
terms as extraordinary diligence in defense of his
clients, he drafted an Order for their release and
submitted the same to the office of the head of the
said agency. A cause-oriented group files a case
for disbarment against him. State if the case has
merit and give your reasons for stating so.
Suggested Answer:
Extraordinary diligence in handling the
case for the client entitles the lawyer to employ
only honorable means to secure for his client what
is justly due him or to present even defense
provided by law to enable the client to succeed.

The act is improper and may create a suspicion of


partiality on a government agency which is
mandated to dispense justice. A perception, if
created, may result to an erosion of the publics
confidence in the administration of justice.
Problem:
Atty. Ayala worked in the BPI Bank
since the time of his admission to the bar. After
twenty years of employment, he resigned from the
bank to go into private practice. Since he has
been known to be banker/lawyer, almost all his
clients were people related to the banking
institutions and/clients of the BPI. In most of
these cases, the complaints he was tasked to
handle were against BPI. In the first few years of
his practice, he was threatened with administrative
suits and was, therefore, compelled to withdraw
from the cases. It has been ten years from his
severance from the bank. Can he still be charged
administratively for violation of the pertinent
Canon? Reason.

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