Web Alert: Philippines - Implementing Rules and Regulations (IRR) for the Seafarers Protection Act

On 28 November 2015, the Seafarers Protection Act was signed into law by the President of the Philippines. Most recently on 19 April 2016, the Department of Labor and Employment issued the Implementing Rules and Regulations (IRR) of R.A. No. 10706.  

The IRR elaborates on when ambulance chasing is committed and when excessive fees are imposed. This web alert aims to provide a brief summary of the main points covered.

How is ambulance chasing committed?

The offence of ambulance chasing is committed when all of the following elements are present:

• A person or his agent solicits from a seafarer or his heirs the pursuit of any claim against the employer;
• The claim is for the purpose of recovery of monetary awards or benefits arising from accident, illness or death, including legal interest; and
• The pursuit of the claim is in exchange of an amount or fee, which shall be retained or deducted from the monetary award or benefit granted to or awarded to the seafarers or their heirs.  

When are fees considered excessive?

Fees are considered excessive when all of the following elements are present:

• There is a contract or arrangement between a seafarer or his heirs and a person who appears for or represents them in any case for recovery of monetary claim or benefit, including legal interest;
• The claim is for the purpose of recovery of monetary awards or benefits arising from accident, illness or death, including legal interest;
• The claim is filed before the NLRC or any labour arbiter, NCMB, POEA, DOLE or its regional offices or other quasi-judicial bodies handling labour disputes; and
• The contract or arrangement stipulates that the person who appears for or represents the  seafarer or his heirs shall be entitled to fees, which exceeds 10% of the compensation or benefit awarded to the seafarer or his heirs. 

What actions may be filed against a person in violation of the provisions?

A person who commits a violation of the provisions may be sued criminally, civilly and/or administratively.

There are two offences punishable under the Seafarers Protection Act (R.A. No. 10706):

• Ambulance chasing; and
• Imposition of excessive fees.

A person will be guilty of ambulance chasing if they commit the solicitation of the pursuit of any money claimed against the employer for a fee. Furthermore, a person will violate the law against the imposition of excessive fees, if the fees exceed 10% of the total monetary award. 

A person who commits the offence of ambulance chasing may be sued criminally. The criminal action shall be filed and decided pursuant to the Revised Rules of Criminal Procedure of the Rules of Court.

On the other hand, a person who commits ambulance chasing or imposes excessive fees may be sued civilly. The civil action shall be filed and decided pursuant to the Rules of Civil Procedure of the Rules of Court. Accordingly, it should be noted that when a person has committed the offence of imposition of excessive fees only, he cannot be held criminally liable but only civilly liable.

Any professional, government official or employee, or any other persons found violating the provisions of R.A. 10706 and its IRR may likewise be held administratively liable. Thus, an administrative action may be filed against a person who committed the offence of ambulance chasing and/or imposition of excessive fees, on top of the criminal and/or civil actions. The administrative action shall be initiated and resolved in accordance with the Revised Rules on Administrative Cases in the Civil Service and other related laws, rules and regulations.

For example, lawyer who commits either or the above listed offences may be sued criminally and civilly. In addition, an action for striking-off may likewise be filed against him.

What are the penalties for violations of the provisions?

Any person who commits the offence of ambulance chasing is liable for:

• Criminal liability of a fine of not less than PHP50,000.00 but not more than PHP100,000.00; or
• Imprisonment for one or two years; or
• Both a fine and imprisonment.

The same penalties shall be applied to any person who colludes in the commission of the offence of ambulance chasing.

Ensuring compliance

We have been informed by local correspondents and lawyers that to ensure compliance with the above provision, the NLRC, Labor Arbiters, NCMB, POEA, DOLE or its regional offices or other quasi-judicial bodies handling labour disputes will clearly indicate in their decisions, orders, judgment or awards that the total remuneration of the person who appears for or represents the seafarer or his/her heirs shall not exceed 10% of the compensation or benefit awarded.

The full text of the IRR can be found on the right.