PHILIPPINES Law and Practice Contributed by: Elaine A. Atienza and Bianca Georgia T. Paloma, Villaraza & Angangco
able fees”, and while jurisprudence recognises that greater compensation may be allowed as contingency fees considering the risk on the part of the lawyer, contingency fee arrangements remain subject to court scrutiny for the protection of clients. 5.4 Insurance Insurance coverage for litigation, arbitration and ADR costs is available in the Philippines. Liability insur- ance policies may be structured to cover legal costs incurred in defending claims, and commercial general liability policies may include defence cost coverage as a standard component. Such arrangements are governed by the general provisions of the Insurance Code and are treated as contractual matters between the insured and the insurer. 5.5 Costs Under the Rules of Court, costs are generally awarded in favour of the prevailing party as a matter of course. However, the court has discretion to apportion costs, or to award no costs, based on the circumstances of the case. Where a case or appeal is found to be frivolous, the court may impose double or treble costs In litigation, the Rules of Court provide for a sched- ule of recoverable costs, and the court’s assessment focuses primarily on the officially recognised cost items. When awarding attorney’s fees as damages under Article 2208 of the Civil Code, courts consid- er the factors established in jurisprudence: the time and effort of counsel, the complexity of the issues, the importance of the subject matter, the amount involved, and the results obtained. In arbitration, the assessment of costs is guided by the applicable insti- tutional rules and the tribunal’s broad discretion. The general principle applied is that costs should reflect the relative success of each party, the reasonableness of the positions advanced, and whether either party engaged in dilatory or vexatious conduct. A party that unreasonably prolongs proceedings or raises unfounded defences may be required to bear a dis- proportionate share of the costs. There is no auto- matic entitlement to recover the full quantum of legal fees incurred; courts and tribunals retain the power to against the offending party. 5.6 Assessment of Costs
moderate the award where the fees claimed appear excessive.
6. Interim Remedies 6.1 Availability of Interim Relief
Philippine courts provide a comprehensive suite of interim reliefs to parties in commercial disputes. These are primarily governed by the Rules of Court and, in the context of arbitration support, by the ADR Act and Special ADR Rules. A TRO may be issued ex parte for a period of not more than 72 hours (extendable to 20 days upon notice and hearing) to maintain the status quo and prevent immediate and irreparable harm. A WPI is a more durable restraining order issued after notice and hearing, which remains in force during the pendency of the case. Preliminary attachment is avail- able to secure the satisfaction of a potential judgment by placing the defendant’s property under the con- structive custody of the court. It is granted in specific circumstances, such as where the defendant is about to depart from the Philippines, or property has been transferred fraudulently, or the action is for recovery of money on a specified claim. Receivership allows the court to appoint a receiver to preserve and protect assets during litigation, particularly in corporate reha- bilitation cases or disputes involving wasting assets. Replevin is available for the preliminary recovery of personal property claimed by the plaintiff. 6.2 Interim Relief to Support Arbitration and ADR One of the most important roles of Philippine courts in relation to arbitration is the granting of interim meas- ures of protection. Under the ADR Act and the Special ADR Rules, a party to an arbitration may apply to the RTC for interim relief even before the arbitral tribu- nal has been constituted; or at any time during the pendency of the arbitration proceedings. The court’s power to grant interim relief in aid of arbitration mirrors the types of relief available in ordinary litigation: pre- liminary injunctions, TROs, attachment, receivership, replevin, and other protective orders, for the purpose of preserving the subject matter of the dispute, pre- venting irreparable harm, or providing security for the satisfaction of any future award.
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