Monday, May 5, 2014

Can the trial court just award attorney's fees without explaining the basis for the same?

No, if the trial court fails to justify and clearly explain the basis for the award of attorney's fees in its decision, then the same should be deleted.

This was ruling in Ledda v. BPI, G.R. No. 200868, 21 November 2012, where the Supreme Court deleted the award of attorney's fees in favor of BPI since the trial court failed to explain its basis, to wit -

Settled is the rule that the trial court must state the factual, legal or equitable justification for the award of attorney's fees. The matter of attorney's fees cannot be stated only in the dispositive portion of the decision. The body of the court's decision must state the reasons for the award of attorney's fees. In Frias v. San Diego-Sison, the Court held:

'Article 2208 of the New Civil Code enumerates the instances where such may be awarded and, in all cases, it must be reasonable, just and equitable if the same were to be granted. Attorney's fees as part of damages are not meant to enrich the winning party at the expense of the losing litigant. They are not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate. The award of attorney's fees is the exception rather than the general rule. As such, it is necessary for the trial court to make findings of facts and law that would bring the case within the exception and justify the grant of such award. The matter of attorney's fees cannot be mentioned only in the dispositive portion of the decision. They must be clearly explained and justified by the trial court in the body of its decision. On appeal, the CA is precluded from supplementing the bases for awarding attorney's fees when the trial court failed to discuss in its Decision the reasons for awarding the same. Consequently, the award of attorney's fees should be deleted.'

In this case, the trial court failed to state in the body of its decision the factual or legal reasons for the award of attorney's fees in favor of BPI. Therefore, the same must be deleted.” (Emphasis and underscoring supplied)

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