G.R. No. L-62354 May 9, 1985
ROSALINDA GODIZANO, petitioner, vs. EMPLOYEES’ COMPENSATION COMMISSION and GOVERNMENT SERVICE INSURANCE SYSTEM (Philippine Navy), respondents.

FACTS

This case involves a motion for partial reconsideration filed by the Government Service Insurance System (GSIS) following a Supreme Court decision granting death benefits to petitioner Rosalinda Godizano, widow of a deceased Philippine Navy employee. The Court’s original decision, dated March 22, 1984, awarded death benefits, funeral expenses, reimbursement for medical costs, and attorney’s fees. The GSIS, in its motion, commendably sought to increase the death and monthly income benefits for the petitioner to align with the present law, offering a higher amount of P27,525.90 in death benefits and P428.96 in monthly income benefits.
However, the GSIS simultaneously requested a reduction of the attorney’s fees awarded from P1,600.00. It argued for modification in light of Article 203 of the Labor Code, which prohibits attorney’s fees from being charged against the compensation awarded, or, alternatively, for the Court to apply its previous holding in Calvero v. ECC & GSIS, which awarded only 5% of the principal sum as attorney’s fees. The petitioner, through counsel Alfred L. Juntilla, was represented in securing these compensation benefits.

ISSUE

The sole issue for resolution is whether the award of attorney’s fees to the petitioner’s counsel should be reduced as requested by the GSIS, considering the prohibition in Article 203 of the Labor Code and prior jurisprudence.

RULING

The Supreme Court denied the GSIS’s plea to reduce the attorney’s fees, amending its previous decision to reflect the increased benefits but maintaining the award of attorney’s fees at 10% of the death benefits. The Court clarified the legal logic underpinning its ruling. Article 203 of the Labor Code exempts the claimant from liability for attorney’s fees to ensure they receive the full award. It does not exempt the defaulting employer or government agency from being liable for such fees when their unjust refusal to recognize a valid claim compels the claimant to engage legal counsel.
The Court cited its precedent in Cristobal v. Employees’ Compensation Commission, which established that the prohibition protects the claimant, not the liable institution. Fairness dictates that counsel be compensated for professional services, especially when their involvement extends beyond mere claim preparation to include appeals and extensive litigation, as in this case. To deny such compensation would deprive counsel of property without due process. Furthermore, the Court noted that while Calvero initially granted 5%, a subsequent resolution in consolidated cases, including Calvero, increased the award to 10%. The Court emphasized that settled issues should not be repeatedly raised, as time is essential for claimants facing currency depreciation. Thus, attorney’s fees were computed at 10% of the new death benefit award, amounting to P2,752.59.