One of the challenges private lawyers who are taken in as consultants of government agencies face, is the possibility of having to deal with the issue concerning the procurement of the involved government agency of the consent or acquiescence of the Office of the Solicitor General (OSG) or the Office of the Government Corporate Counsel (OGCC) prior to their hiring. In his private practice, Dr. Ramiscal personally met and knew private lawyers who were not paid for their services to government agencies, and even threatened with disbarment directly or indirectly, because of the non-observance by the government agencies concerned of this rule. Since this column is all about legal ethics and its avowed purpose is to protect lawyers who may be similarly situated currently or in the future, Dr. Ramiscal seeks to analyze this rule that has been the bane for some lawyers, who are or were merely doing the tasks they were required to do by these agencies, in good faith and to the utmost of their abilities.
In April 2, 1986, the Commission on Audit came out with COA CIRCULAR NO. 86-255, which provided:
SUBJECT: Inhibition against employment by government agencies and instrumentalities, including government-owned or controlled corporations, of private lawyers to handle their legal cases.
It has come to the attention of this Commission that notwithstanding restrictions or prohibitions on the matter under existing laws, certain government agencies, instrumentalities, and government-owned and/or controlled corporations, notably government banking and financing institutions, persist in hiring or employing private lawyers or law practitioners to render legal services for them and/or to handle their legal cases in consideration of fixed retainer fees, at times in unreasonable amounts, paid from public funds. In keeping with the retrenchment policy of the present administration, this Commission frowns upon such a practice.
Accordingly, it is hereby directed that, henceforth, the payment out of public funds of retainer fees to private law practitioners who are so hired or employed without the prior written conformity and acquiescence of the Office of the Solicitor General or the Government Corporate Counsel, as the case may be, as well as the written concurrence of the Commission on Audit shall be disallowed in audit and the same shall be a personal liability of the officials concerned.
The most recent rule on this matter was Section 3 of Memorandum Circular No. 9 issued by former President Joseph Estrada on 27 August 1998 which stated:
“GOCCs are likewise enjoined to refrain from hiring private lawyers or law firms to handle their cases and legal matters. But in exceptional cases, the written conformity and acquiescence of the Solicitor General or the Government Corporate Counsel, as the case may be, and the written concurrence of the Commission on Audit shall first be secured before the hiring or employment of a private lawyer or law firm.”
The rationale for this rule as stated by the Supreme Court is to curtail or prevent the hiring by government agencies of private lawyers with excessive fees and with debatable loyalties (PHIVIDEC v. Capitol Steel Corporation, G.R. No. 155692, October 23, 2003).
THE BASES FOR QUESTIONING AND RE-EXAMINATION OF THIS RULE:
REASON I: THE NON-COMPLIANCE BY OSG OF THE ADMINISTRATIVE REQUIREMENTS ON PUBLICATION AND DEPOSIT OF THE RULES RENDERS THE RULE LEGALLY INEFFECTIVE!
While the rationale and purpose for this rule have been expounded by the Supreme Court in several cases, what is not known and established is that the OSG appeared not to have published any set of rules to implement this requirement in the Official Gazette or any newspaper of general circulation, nor had it deposited the reuired number of copies in the Office of the National Administrative Register (ONAR) located in the University of the Philippines Law Center in Diliman Quezon City. From the investigation by Dr. Ramiscal and based on information culled from reliable sources, the OSG rules on this matter is not reflected in its Manual or any of its formal published rules, but appear to be ad hoc and vary from one administration to another. Furthermore, the ONAR cannot release any certification about the deposit of these rules because none was apparently deposited to its database. This is violative of the well established administrative rules governing public agencies on the publication of their rules. In one case, the Supreme Court has eloquently stated:
Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as binding unless their existence and contents are confirmed by a valid publication intended to make full disclosure and give proper notice to the people. The furtive law is like a scabbarded saber that cannot feint, parry, or cut unless the naked blade is drawn (Tañada v. Tuvera, G.R. No. L-63915 December 29, 1986).
ONAR was established to fulfill the requirement under Section 3 of Book VII of the Administrative Code of 1987 which requires every agency in the Government to file three (3) certified copies of every rule adopted by it with the University of the Philippines Law Center. The filing of the required copies is crucial because each rule as provided in Section 4, Book VII of the Administrative Code shall become effective fifteen (15) days from the date of filing with the UP Law Center “unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a statement accompanying the rule”.
Under the ONAR “Guidelines for Receiving and Publication of Rules and Regulations Filed with the UP Law Center” the agencies that are covered by the deposit requirement “includes any department, bureau, office, commission, authority, or offices of the National Government authorized by law or executive order, to make rules, issue licenses, grant rights or privileges, and adjudicate cases; research institutions with respect to licensing functions; government corporations with respect to functions regulating private rights, privilege, occupation or business; and officials in the exercise of disciplinary power as provided by law” with the exception of “Congress, the Judiciary, the Constitutional Commissions, military establishments in all matters relating to Armed Forces personnel, the Board of Pardons and Parole, and State Universities and Colleges” (Memorandum, May 21, 1990, of Associate Dean Merlin M. Magallona, Supervisor of U.P. Law Center to the Acting Head, Information and Publication Division, UPLC). It is clear from these that the OSG is not exempted from the deposit requirement.
Moreover, the same Guidelines stated that the following must be filed with the ONAR:
a) Statements of general applicability which implement or interpret a law;
b) Statements of general applicability which fix and describe the procedure in, or practice requirements of, an agency;
c) Amendments or repeal of any prior rule;
d) Regulations affecting private rights, privilege, occupation, or business;
e) Administrative disciplinary action and the governing rules of procedure (Section 8, ibid, emphasis supplied).
Since the rule on OSG acquiescence has implications on the private lawyers’ rights to just and fair compensation and the exercise of their profession as lawyers, and correspondingly would have a substantial impact on the personal financial liability of government officials and employees who were instrumental in hiring them and paying their fees, it is crucial that the required copies of the OSG rule on this matter should have been published in the Official Gazette or newspaper(s) of general circulation and three copies of such rules should have been deposited with the ONAR.
Absent the fulfillment of these conditions by the OSG, the rule requiring its prior acquiescence to the hiring of private lawyers by any government agency never became effective.
REASON 2: THERE IS NO ESTOPPEL BY PRIOR KNOWLEDGE OF THIS RULE
It is immaterial or irrelevant if the government agency, through its officials and relevant staff, already knew about the OSG rule on prior acquiescence.
In Republic of the Philippines, represented by the Department of Energy v. Pilipinas Shell Petroleum Corporation (G.R. No. 173918, April 8, 2008), the Supreme Court struck down a circular issued by the Department of Energy, because of the non-deposit of its copy with the ONAR. In dealing with the argument of the petitioner that the deposit with ONAR is not necessary because the respondents already knew about the circular, the Supreme Court stated that “(t)his argument is seriously flawed and contrary to jurisprudence. Strict compliance with the requirements of publication (and filing with ONAR) cannot be annulled by a mere allegation that parties were notified of the existence of the implementing rules concerned” because “(t)hese requirements of publication and filing were put in place as safeguards against abuses on the part of lawmakers and as guarantees to the constitutional right to due process and to information on matters of public concern and, therefore, require strict compliance”.
Moreover, in a line of Supreme Court cases, the Court had time and time again declared ineffective any administrative rule that did not satisfy the requirements of publication and/or deposit with the ONAR (see PHILSA International Placement and Services Corp. v. Secretary of Labor and Employment, 408 Phil. 270 (2001), National Association of Electricity Consumers for Reforms v. Energy Regulatory Board, G.R. No. 163935, 2 February 2006, NEA v. Gonzaga, G.R. No. 158761, December 4, 2007, and SEC v. GMA Network, G.R. No. 164026, December 23, 2008).
REASON 3: THE FAILURE BY OSG TO COMPLY WITH THE ADMINISTRATIVE REQUIREMENTS CAN LEAD TO INJUSTICE THAT CAN VIOLATE THE CONSTITUTIONAL AND HUMAN RIGHTS OF PRIVATE LAWYERS
It must be noted at this juncture that the non-procurement of the OSG’s prior acquiescence to the hiring of private lawyers can be used by government agencies to deny the same lawyers they hired to pay for their services regardless of the fact that they have rendered faithful, efficient service for the government which served the public interest. In this case, the COA disallowance is the main reason that the same government agency can use to deny the compensation of these lawyers. On occasion, these private lawyers would also deal with threats of disbarment and innuendoes from disgruntled entities due to the performance of their functions, even if their appointments and actuations went through the usual and proper procedures observed in these agencies.
To counter these grave injustices, it is crucial to remember that it is a universal human right that “(e)veryone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection”. This is found in Article 23, Section 3 of the Universal Declaration of Human Rights (UDHR) which was adopted and proclaimed by the General Assembly Resolution 217 A (III) of December 10, 1948.
The UDHR has been responsible for setting human rights standards all over the world and it laid the basis for the International Covenant on Economic, Social and Cultural Rights (ICESCR) which was signed by the Philippines last December 19, 1966 and ratified last June 7, 1974. This Covenant required the States Parties “to…recognize the right to work, which includes the right of everyone to the opportunity to gain his living by work which he freely chooses or accepts, and will take appropriate steps to safeguard this right (PART III, Article 6, 1). It also required the States Parties to the present Covenant to recognize the right of everyone to the enjoyment of just and favourable conditions of work which ensure, “(r)emuneration which provides all workers, as a minimum, with: (i) fair wages and equal remuneration for work of equal value…; (and) (a) decent living for themselves and their families in accordance with the provisions of the present Covenant (PART III, Article 7, (a)(i) and (ii)).
The Philippines’ 1987 Constitution reflects the UDHR standards and the ICESCR obligations when it expressly declares that the State “values the dignity of every human person and guarantees full respect for human rights” (Article II, State Policies, Section 11). As part of the State’s commitment to Social Justice and Human Rights, the Constitution obligated the State to “afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all” including the right of all workers to “humane conditions of work, and a living wage” (Article XIII, Section 3). These are in accordance with the State’s policy of “promot(ing) a just and dynamic social order that will ensure the prosperity and independence of the nation… through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all” (Article II, State Policies, Section 9).
These Constitutional obligations of the State to its citizens, which are implemented in the social welfare laws of the Philippines, would certainly cover private lawyers hired by government agencies, by virtue of the fact that they are human beings.
The State’s agencies, the judiciary and the legislators cannot close their eyes to the apparent injustice that can be caused if private lawyers are denied their right to be compensated for their services immediately upon rendition of their services just because they are lawyers due to an administrative law that has not been made effective because the implementing agency, OSG, has no written rule, properly published and deposited with the ONAR.
It must also be noted that other private practitioners and professionals who are not lawyers, but are hired as Technical Consultants of government agencies do not have to labor under the unwritten and unpublished requirements of the OSG. Giving paramount value to an ineffective rule would operate to discriminate against a class of technical consultants, i.e., lawyers.
REASON 4: A MERE ADMINISTRATIVE PRACTICE/RULE OF THE OSG CANNOT DEFEAT A CONSTITUTIONAL LAW THAT IS GROUNDED IN AN INTERNATIONAL NORM
It is a basic principle in constitutional law that all laws and contracts must conform with the fundamental law of the land. Those which violate the Constitution lose their reason for being. (Manila Prince Hotel v. Government Service Insurance System, Manila Hotel Corporation, Committee On Privatization and Office of the Government Corporate Counsel, G.R. No. 122156 February 3, 1997).
Under the doctrine of constitutional supremacy, if a law or contract violates any norm of the constitution, that law or contract whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any force and effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract. No act shall be valid, however noble its intentions, if it conflicts with the Constitution (Tawang Multi-Purpose Cooperative v. La Trinidad Water District, G.R. No. 166471, March 22, 2011).
As demonstrated in REASON 3 above, the rule on OSG acquiescence is a mere administrative rule of practice, while the Constitutional right of private lawyers to be paid for the services they have rendered is grounded on the Universal Declaration of Human Rights, which is an international norm. The rule on prior OSG acquiescence, whether it is published or unpublished, whether it was deposited or not deposited with the ONAR, cannot reign supreme and trump over the constitutional rights of private lawyers to be paid for the services that they have faithfully rendered to, and which benefitted the government and the public!
REASON 5: THE RATIONALES FOR THE RULE ON OSG ACQUIESCENCE SHOULD BE EXAMINED IN THE LIGHT OF THE CIRCUMSTANCES THAT THE PRIVATE LAWYERS UNDERWENT IN THE GOVERNMENT AGENCY
The reasons for the administrative rule requiring prior OSG acquiescence in hiring private lawyers by government agencies as mentioned before, were imbued with the intention to prevent the hiring of lawyers with unconscionable fees and questionable loyalties (see PHIVIDEC v. Capitol Steel Corporation, G.R. No. 155692, October 23, 2003).
This rule then cannot be applied absolutely, without taking into consideration all the attendant factors and circumstances in the hiring and services rendered by individual private lawyers, because these factors and concomitant circumstances can negate the reasons behind the rule. In the hiring of a technical consultant by a government agency, who just happens to be a lawyer, the private lawyer’s credentials, the scope of the work, the quality of the work, the amount of the consultancy fee and a finding of the benchmarking standards employed by the government agency in setting the fee, and the degree by which the consultant’s work benefitted the government and the public interest, amongst others should all be scrutinized by the auditing agency, the courts and all interested parties before subjecting and maligning the private lawyer with innuendoes and frivolous accusations in improper fora.
REASON 6: UNJUST ENRICHMENT OF THE GOVERNMENT
In the case of Polloso v. Gangan, (G.R. No. 140563, July 14, 2000), the lawyer, Atty. Satorre was charged by COA for all the fees paid to him by National Power Corporation because he rendered work without the required prior OSG acquiescence, among others. The petitioner, Mr. Polloso, who was the Project Manager for the LCIP interposed the objection that not paying Atty. Satorre would constitute unjust enrichment for the National Power Corporation, and by direct extension to the Philippine Government. But the Supreme Court ruled that “it is not Atty. Satorre who is liable to return the money already paid him, rather the same shall be the responsibility of the officials concerned, among whom include herein petitioner”.
It must be noted that this case decided in 2000 never touched on the non-publication and non-deposit of the OSG rules on its prior acquiescence with ONAR. It also never dealt with the Constitutional right of Atty. Polloso to be paid for his services rendered to National Power Corporation. In fact, these matters were not even raised.
What the Polloso case established was the fact that a PRIVATE LAWYER ALREADY PAID BY THE GOVERNMENT AGENCY CONCERNED CANNOT BE HELD BY COA ACCOUNTABLE FOR THE FEES PAID TO HIM FOR THE SERVICES HE HAD ALREADY RENDERED.
In light of the apparent fact that the ad hoc rules of the OSG in securing its prior acquiescence on the hiring of private lawyers were not in accordance with the legal administrative requirements of publication and deposit with ONAR, such rules should be held inefficacious and ineffective and cannot be used to deny private lawyers their fees for the services they rendered in good faith to the government agency, nor make them liable for the fees they have aready received for their rendered services.
Another important matter that must be noted is that unjust enrichment as a principle and cause of action cannot be raised by the government functionary. This is a ground that should be raised by the private lawyer.
The doctrine of unjust enrichment does not exempt government agencies. In fact it has been applied by the Philippine Supreme Court against the Philippine government in several cases. In one case, the Court based on this principle, upheld the right of a contractor to be paid for the construction of a dike, which was completed way back on July 9, 1992. For almost two decades, the public and the government benefitted from the work done by the respondent contractor (Vigilar et al., v. Aquino, G.R. No. 180388, January 18, 2011). In another case, the Supreme Court ruled that to deny the payment to the contractor of the two buildings which are almost fully completed and presently occupied by a public university would be to allow the government to unjustly enrich itself at the expense of another. Justice and equity demand compensation of the contractor (Eslao v. COA, G.R. No. 89745, April 8, 1991).
If these principles have been applied to private construction contractors, there is no reason why they cannot be applied with the same force and effect on the case of private lawyers prejudiced by the actuations of a government agency that did not comply with the rule on prior OSG acquiescence.
REASON 7: IT IS THE GOVERNMENT AGENCY THAT IS REQUIRED TO SEEK THE PRIOR OSG ACQUIESCENCE NOT THE PRIVATE LAWYER AND THE NON-APPLICATION OF THE ROYAL PREROGATIVE OF DISHONESTY TO THE GOVERNMENT AGENCY
A government agency can always invoke the “royal prerogative of dishonesty”, which is to claim immunity from suit arising from the non-payment of private lawyers’ consultancy fees.
But the Philippine jurisprudence is rife with cases denying the Philippine Government this prerogative if the result is to cause injustice to private citizens (see Heirs of Pidacan v. ATO, G.R. No. 186192, August 25, 2010, EPG Construction v. Vigilar, G.R. No. 131544, March 16, 2001 and Ministerio v. CFI of Cebu, G.R. No. L-31635, August 31, 1971).
Furthermore, a government agency that cannot even honor the legal requirements of a contract of consultancy service, and does not know or cannot secure the legal requirements imposed upon it would have no good faith defense and should not even contract with private parties.
All these stem from the fact that the rule on securing prior OSG acquiescence resides in the government agency involved. The government agency is tasked to ascertain its capacity to hire private lawyers and secure the necessary permission from either the OSG or OGCC and the written concurrence of the COA. The government agency is responsible for sifting through the applicants’ credentials and selecting the consultants it can utilize. It is also the government agency’s responsibility to see to it that the Bids and Awards Committee (BAC) procedures of the agency, as well as the legal review of the contracts of these consultants are properly done.
The private lawyer who is a potential consultant of the government agency has no legal personality to seek the prior permission of OSG or OGCC because he or she is NOT the hiring authority!
Furthermore, the private lawyers hired had nothing to do with the BAC procedures of the agency and the legal review of their contracts, which usually are given to them ready for signing. All of these negate any possible basis for the liability of private lawyers prejudiced by the official action/inaction of the government hiring agency.
CONCLUSION:
These reasons Dr. Ramiscal trusts, constitute why the current rule on securing the prior OSG acquiescence in the hiring of private lawyers by government agencies should be questioned and totally scrutinized for its legal inefficaciousness and the injustice it has wrought on the lives of private lawyers who may not have been paid or paid (too late) belatedly for the services they faithfully rendered that benefitted the government and the public interest. This was also written for those private lawyers whose reputation was smeared unjustly because of the wrong impression and misperceptions about the application of this rule that ironically and apparently failed to conform to the requirements mandated by law.
In writing this piece of legal analysis, Dr. Ramiscal has only engaged in writing the truth as revealed in his own research and study. He has not engaged in any exercise intended to blacken anyone’s reputation. Speaking and/or writing the truth, and upholding the international and constitutional human rights of private lawyers unjustly affected by this rule, cannot in any context, manner or way, be considered a defamatory or libellous act in any part of the free democratic world that subscribes to the human rights enshrined in the Universal Declaration of Human Rights and the ICESCR, which the last time Dr. Ramiscal checked, still included the Philippines.
Philippine Law Bytes: TheCyberLawyer Issues by Dr. Attorney Noel Guivani Ramiscal 