BASIC LEGAL ETHICS (17)

1. Is contingent contract for attorney’s fee allowed? Is it a champertous contract or not?

No, it is not a champertous
contract.

CONTINGENT FEE – payment which may be stipulated uponby the attorney and
clientthat is conditioned on the securing of a favorable judgment and recovery of
money or property and the amount of which may be on a percentage basis.It is
allowed since it neither gives nor purports to give to the attorney an absolute right,
personal or real, in the subject matter during the pendency of the litigation; the
measure of compensation provided is a mere basis for the computation of fees and
the payment made from the proceeds of the litigation is effected only after its
successful termination.

CHAMPERTOUS CONTRACT- one where the lawyer stipulates with his client in the
prosecution of the case that he will bear all of the expenses for the recovery of things
or property being claimed by the client, and the latter agrees to pay the former a
portion of the thing or property recovered as compensation. It is void for being
against public policy; it is purchasing an interest in the litigation to enable a lawyer to
litigate on his own account or to abuse the client’s confidence which is prohibited.

CONTINGENT CONTRACT CHAMPERTOUS CONTRACT

1. Contingent fee is payable in cash 1. Payable in kind ONLY
2. Lawyers do not undertake to pay all 2.Lawyers undertake to pay all expenses
expenses of litigation of litigation
3. Not prohibited 3. Void