CANONS 15 & 16

OF THE CPR

Atty. Louie John D. Lood

The Lawyer and the Client
Canon 15 – Duty of Candor, Fairness and Loyalty to the Client

Rule 15.01 – Duty to ascertain conflict of interest

Rule
Rule 15.02
15.02 –
– Duty
Duty to
to preserve
preserve privileged
privileged communication
communication

Rule
Rule 15.03
15.03 –
– Duty
Duty not
not to
to represent
represent conflicting
conflicting interests
interests

Rule
Rule 15.04
15.04 –
– Duty
Duty to
to act
act as
as mediator,
mediator, conciliator
conciliator or
or arbitrator
arbitrator

Rule
Rule 15.05
15.05 –
– Duty
Duty to
to give
give candid,
candid, honest
honest advice
advice

Rule 15.06 – Duty not to claim influence

Rule
Rule 15.07
15.07 –
– Duty
Duty to
to impress
impress compliance
compliance with
with laws
laws

Rule
Rule 15.08
15.08 –
– Duty
Duty in
in case
case of
of dual
dual profession
profession
The Lawyer and the Client

Canon 15 – Duty of Candor, Fairness and Loyalty to

the Client

• This canon is based on the character of the attorney-client

relationship which is strictly personal and highly confidential and
fiduciary. Only in such a relationship can a person be encouraged to
repose confidence in an attorney.

• The canon therefore is required by necessity and public interest and

is based on the hypothesis that abstinence from seeking legal
advice in a good cause is an evil which is fatal to the administration
of  justice.
The Lawyer and the Client

Rule 15.01 – Duty to ascertain conflict of interest

• Conflict search - It is examining the causes of action between the
prospective client and the lawyer’s current clients.

• Purpose – to be able to determine, in the first instance, if he is

barred from accepting the representation through conflicts with
his present clients or the lawyer’s own interest.
The Lawyer and the Client

1. Conflicting Duties - When, on behalf of one

client, it is the attorney’s duty to contest for
that which his duty to another client requires
him to oppose or when possibility of such
situation will develop.

2. Invitation of Suspicion - Whether the

Three tests to determine acceptance of the new relation will prevent a
lawyer from the full discharge of his duty of
the existence of
undivided fidelity and loyalty to his client or
conflicting interests will invite suspicion of unfaithfulness or
double-dealing in the performance thereof.

3. Use of Prior Knowledge Obtained - Whether

a lawyer will be called upon in his new relation
to use against the first client any knowledge
acquired in the previous employment.
The Lawyer and the Client

Types of Conflict of Interest

• 1. Concurrent or multiple representations -

generally occurs when a lawyer represents clients
whose objectives are adverse to each other, no
matter how slight or remote such adverse interest
may be.
• 2. Sequential or successive representation –
involves representation of a present client who may
have an interest adverse to a prior or former client.
• NOTE: What is material in determining whether
there is a conflict of interest in the representation
is probability, not certainty of conflict.
The Lawyer and the Client

Illustration: Existence of conflict of interest

• 1. A v. B (A and B are present clients)

• 2. C v. D; E v. D (C is the present client and D is not a

present client in the same case but is a client in another case)

• 3. F v. G; H v. G (F is the present client and G was a former

client and the cases are related)

• 4. I v. J; K v. J (I is the present client and J was a former client

in a case that is unrelated)
The Lawyer and the Client

Instances of conflict of interests

• A corporate lawyer cannot join a labor union of
employees in that corporation.
• A lawyer of an insurance corporation who investigated
an accident cannot represent the complainant/injured
person.
• As a receiver of a corporation, he cannot represent the
creditor.
• As a representative of the obligor, he cannot represent
the obligee.
• As a lawyer representing a party in a compromise
agreement, he cannot, subsequently, be a lawyer
representing another client who seeks to nullify the
agreement.
The Lawyer and the Client

Rule 15.02 – Duty to preserve privileged

communication

• Two-fold purpose of the Rule:

• 1. To encourage a client to make a full disclosure of the

facts of the case to his counsel without fear; and

• 2. To allow the lawyer freedom to obtain full information

from his client.
The Lawyer and the Client

Requisites of the Privileged Communication

• 1. There exists an attorney-client relationship or a kind of
consultancy relationship with a prospective client.
• 2. The communication was made by the client to the lawyer in
the course of the lawyer’s professional employment.
• 3. The communication must be intended to be confidential.
The Lawyer and the Client

Parties entitled to invoke the privilege

• a) The client, who is primarily intended to be
protected by the privilege.

• b) The lawyer himself or the client’s employee may

claim the privilege in the absence of any waiver on the
part of the client.

• c) The attorney’s secretary, stenographer, or clerk,

who acquired confidential information in such
capacity, save only when the client and the attorney
jointly consent thereto.
The Lawyer and the Client

Duration of the Privilege

• It continues to exist even after the termination of the

attorney-client relationship. It outlasts the lawyer’s
engagement. It ceases only when waived by the client
himself or after his death, by his heir or legal representative.

Burden of proof

• The party who avers that the communication is privileged

has the burden of proof to establish the existence of the
privilege unless from the face of the document itself, it
clearly appears that it is privileged. The mere allegation that
the matter is privileged is not sufficient.
The Lawyer and the Client

Exceptions to the prohibition

• 1. When there is consent or waiver of client.

• 2. When the law requires disclosure.
• 3. When the disclosure is made to protect
the lawyer’s rights, i.e., to collect his fees or
defend himself, his employees or associates
or by judicial action.
• 4. When such communications are made in
contemplation of a crime or the perpetuation
of a fraud.
The Lawyer and the Client

Basic limitations of the privileged communication

• The communication or the physical object must have been

transmitted to the counsel by the client for the purpose of
seeking legal advice.
• The privilege is limited or has reference only to communications
which are within the ambit of lawful employment and does not
extend to those transmitted in contemplation of future crimes
or frauds.
• If the client seeks his lawyer’s advice with respect to a crime
that has already been committed, the privilege applies.
However, the privilege does not attach with respect to
communications pertaining to a crime the client is intending to
commit in the future and for purposes of which he seeks the
lawyer’s advice.
The Lawyer and the Client

Rule 15.03 – Duty not to represent

conflicting interests

• Rationale: To bar the dishonest

practitioner from fraudulent conduct
and to prevent the honest practitioner
from putting himself in a position where
he may be required to choose between
conflicting duties.
The Lawyer and the Client

An attorney owes to his client undivided allegiance. He cannot,

without the free and intelligent consent of his client, act both for his
client and for one whose interest is adverse to, or conflicting with
that of, his client. The consent of the client must be given after full
knowledge of all the facts and circumstances.

Unauthorized act of representing conflicting interests is a criminal

offense penalized under Article 209 of the Revised Penal Code on
Betrayal of trust by an attorney or solicitor – Revelation of secrets.
The Lawyer and the Client

Rule 15.04 – Duty to act as mediator, conciliator or

arbitrator

• Consent in writing is required to prevent future

controversy on the authority of the lawyer to act as
such.
• An attorney’s knowledge of the law and his
reputation for fidelity may make it easy for the
disputants to settle their differences amicably.
However, he shall not act as counsel for any of
them.
The Lawyer and the Client

Rule 15.05 – Duty to give candid, honest

advice

• A lawyer is bound to give candid and honest opinion

on the merit or lack of merit of client’s case, neither
overstating nor understating the prospect of the case.
He should also give an honest opinion as to the
probable results of the case, with the end in view of
promoting respect for the law and the legal
processes.
The Lawyer and the Client

Rule 15.06 – Duty not to claim influence

• This rule protects against influence peddling. Some

prospective clients secure the services of a particular
lawyer or law firm precisely because he can exert a lot
of influence on a judge and some lawyers exact big
fees for such influence.

• It is improper for a lawyer to show in any way that he

has connections and can influence any tribunal or
public official, judges, prosecutors, congressmen and
others, especially so if the purpose is to enhance his
legal standing and to entrench the confidence of the
client that his case or cases are assured of victory.
The Lawyer and the Client

Rule 15.07 – Duty to impress compliance with laws

The lawyer must impress upon his clients that

everybody must respect the laws and observe the
principles of fairness in their dealings as aptly
enunciated under Art. 19 of the Civil Code which
provides that “every person must, in the exercise
of his rights and in the performance of his duties,
act with justice, give everyone his due and observe
honesty and good faith.”
The Lawyer and the Client

A lawyer is required to
A lawyer should comply
represent his client within
with the client’s lawful
the bounds of the law.
requests. But he should
The CPR enjoins him to
resist and should never
employ only fair and
follow any unlawful
honest means to attain
instructions. In matters of
the lawful objectives of his
law, it is the client who
client and warns him not
should yield to the lawyer
to allow his client to
and not the other way
dictate procedure in
around.
handling the case.
The Lawyer and the Client

Rule 15.08 – Duty in case of dual profession

• Rationale: Intended to avoid confusion; it is for the

benefit of both the client and the lawyer.

• Exercise of dual profession is not prohibited but a lawyer

must make it clear when he is acting as a lawyer and
when he is otherwise, especially in occupations related to
the practice of law. Reason: certain ethical considerations
may be operative in one profession and not in the other.
The Lawyer and the Client

Canon 16 – Duty to be a trustee of client’s money

and property

Rule 16.01 – Duty to account for all money

or property collected or received

Rule 16.02 – Duty to keep client’s funds

separate

Rule 16.03 – Duty to deliver the funds and

property; attorney’s lien

Rule 16.04 – Duty not to borrow from nor

lend money to client
The Lawyer and the Client
Under Canon 16, a lawyer is prohibited from
acquiring properties of his client.

• Art. 1491(5) Civil Code. The following persons cannot

acquire by purchase, even at a public auction, whether in
person or through the mediation of another: (5) Justices,
judges, prosecuting attorneys, clerks of superior and inferior
courts, and other officers and employees connected with the
administration of justice, the property and rights in litigation
or levied upon an execution before the court within whose
jurisdiction or territory they exercise their respective
functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any
litigation in which they may take part by virtue of their
profession.
The Lawyer and the Client

Elements of prohibition against the purchase of property

in litigation under Art.1491 of the Civil Code:

• 1. There is an attorney-client relationship;

• 2. The property is in litigation;
• 3. The attorney takes part as counsel in the case;
and
• 4. The attorney, by himself or through an agent,
purchases such property during the pendency of
said case.
The Lawyer and the Client

Effects of Prohibited Purchase

• 1. A prohibited purchase is null and void ab
initio; public interest and public policy dictate
that its nullity is definite and permanent and
cannot be cured by ratification. The lawyer will
be deemed to hold the property in trust for the
client.

• 2. The client is therefore entitled to recover the

property and interest from his attorney with the
fruits. The client should, however, return the
purchase price and the legal interests.

• 3. Malpractice on the part of the lawyer and the

lawyer may be disciplined for misconduct.
The Lawyer and the Client

Rule 16.01 – Duty to account for all money or

property collected or received

• A lawyer must be scrupulously careful in handling money entrusted

to him in his professional capacity, because of the high degree of
fidelity and good faith expected on his part. (Medina v.
Bautista, A.C. No. 190, September 1964)

• A lawyer, under his oath, pledges himself not to delay any man for
money or malice and is bound to conduct himself with all good
fidelity to his clients. He is obligated to report promptly the money
of his clients that has come into his possession (otherwise a
violation of Sec. 25, Rule 138 of ROC). He should not commingle it
without his client’s consent. He should maintain a reputation for
honesty and fidelity to private trust.
The Lawyer and the Client

Rule 16.02 – Duty to keep client’s funds separate

• A lawyer should keep funds of each client
separate and apart from his own. He should not
use client’s money for personal purposes
without client’s consent. He should report
promptly the money of his client in his
possession.

• Failure of the lawyer to account all the funds and

property of his client which may come into his
possession would amount to misappropriation
which may subject him to disbarment on the
ground of grave misconduct or a criminal
prosecution for estafa under Art. 315, par. 1(b)
of the RPC.
The Lawyer and the Client

Rule 16.03 – Duty to deliver the funds and

property; attorney’s lien

• A lawyer who obtained possession of the funds and

properties belonging to his client in the course of his
professional employment shall deliver the same to his
client when (a) they become due, or (b) upon demand.

• The lawyer’s 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.
The Lawyer and the Client

This rule grants the lawyer a lien over the client’s funds in his
possession as well as on all judgments and executions he has
secured for his client, to satisfy his lawful fees and
disbursements.

• Note: While this rule provides that the lawyer has the right to retain
the funds of his client as may be necessary to satisfy his lawful fees
and disbursements known as attorney’s lien and his lien to the same
extent on all judgments and executions he has secured for his client
called charging lien, he is still duty bound to render an accounting
of his client’s funds and property which may come into his
possession in the course of his professional
employment. In the application of attorney’s lien, a lawyer shall give
notice to his client otherwise, the same might be construed as
misappropriation which may subject him to disciplinary action.
• (Please see also Section 37, Rule 138 of the Rules of Court)
The Lawyer and the Client

Rule 16.04 – Duty not to borrow from

nor lend money to client
• Rationale: The rule against borrowing
of money by a lawyer from his client is
intended (i) to prevent the former from
taking advantage of his influence over
the latter, and (ii) to assure the
lawyer’s independent professional
judgment.

• If a lawyer acquires a financial interest

in the outcome of the case, the free
exercise of his judgment may be
adversely affected.
The Lawyer and the Client

Exceptions to the Rule Against Borrowing or Lending of

Money

• The lawyer is allowed to borrow money from his client

provided the interests of the client are fully protected by the
nature of the case or by independent advice.
• The lawyer may lend money to a client, when it is necessary
in the interest of justice to advance necessary expenses in a
legal matter he is handling for the client. The advances
made shall be subject to reimbursement.