Lawyer's special authority to compromise client's case

Those in the legal profession must always conduct themselves with honesty and integrity in all their dealings.[1]

Lawyers should maintain, at all times, "a high standard of legal proficiency, morality, honesty, integrity and fair dealing, and must perform their four-fold duty to society, the legal profession, the courts and their clients, in accordance with the values and norms embodied in the Code [of Professional Responsibility]."[2]Members of the bar took their oath to conduct themselves "according to the best of [their] knowledge and discretion with all good fidelity as well to the courts as to [their] clients[,]"[3] and to "delay no man for money or malice[.]"[4]

These mandates apply especially to dealings of lawyers with their clients considering the highly fiduciary nature of their relationship.[5] Clients entrust their causes—life, liberty, and property—to their lawyers, certain that this confidence would not be abused.

Moreover, Article 1878 of the Civil Code provides that "[s]pecial powers of attorney are necessary in the following cases: . . . (3) To compromise, to submit questions to arbitration, to renounce the right to appeal from a judgment, to waive objections to the venue of an action or to abandon a prescription already acquired[.]"

The Rules of Court thus requires lawyers to secure special authority from their clients when entering into a compromise agreement that dispenses with litigation:
SEC. 23. Authority of attorneys to bind clients. - Attorneys have authority to bind their clients in any case by any agreement in relation thereto made in writing and in taking appeals, and in all matters of ordinary judicial procedure. But they cannot, without special authority, compromise their client's litigation, or receive anything in discharge of a client's claim but the full amount in cash.[6] (Emphasis supplied)

[1] Villanueva v. Atty. Ishiwata, 486 Phil. 1, 6 (2004) [Per J. Sandoval-Gutierrez, Third Division].

[2] Jinon v. Jiz, A.C. No. 9615, March 5, 2013, 692 SCRA 348, 354 [Per J. Perlas-Bernabe, En Banc], citing Molina v. Magat, A.C. No. 1900, June 13, 2012, 672 SCRA 1, 6 [Per J. Mendoza, Third Division].

[3] Attorney's Oath.

[4] Attorney's Oath.

[5] Villanueva v. Atty. Ishiwata, 486 Phil. 1, 6 (2004) [Per J. Sandoval-Gutierrez, Third Division], citing Atty. Penticostes v. Pros. Ibañez, 363 Phil. 624, 628 (1999) [Per J. Romero, En Banc].

[6] RULES OF COURT, Rule 138, sec. 23. 

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