A new law, aimed at protecting seafarers and their families from the unscrupulous practices of "ambulance chasing" lawyers, was signed by President Aquino on 26th November 2015.

Background

ANGKLA (ANCHOR) Party-list Representative, Congressman, Jesulito (Jess) A. Manalo, himself the son of a Sea Captain, is the first elected voice representing the Maritime Industry in Government. Following the Party's election in 2013, Congressman, Manalo proceeded to work to protect seafarers, by filing House Bill No. 2643 in September 2013, entitled "The Anti-Ambulance Chasing Act". This was later substituted by House Bill No. 5268, on 4th December 2014 and was passed by the House of Representatives on 15th December 2014. The House Bill was subsequently sponsored through the Senate, by Senator, Angara, under Senate Bill No. 2835, in June 2015 and was passed by the Senate on 21st September 2015. Having passed both these hurdles in an unprecedented time frame, the corresponding Republic Act No. 10706, was signed into law by the President, on 26th November 2015.

Underlying Concerns

In our industry, where generous no fault contractual benefits are available under the terms of either the POEA Standard Employment Contract (POEA SEC), or a Collective Bargaining Agreement (CBA), there has been increasing concern that seafarers are being exploited as a business opportunity, by an increasing number of "ambulance chasing" lawyers.

Promises of significant awards, are inevitably accompanied by an agreement to pay their lawyer a substantial proportion of any award in their favour, irrespective of the amount ultimately awarded. Whilst it is certainly true that a number of these spurious claims are upheld by the NLRC (National Labor Relations Commission) or NCMB (National Conciliation & Mediation Board), there are numerous instances where those cases are resolved in accord with the provisions of the POEA SEC or CBA. As a result, seafarers, or their families, who should benefit from the generous no fault contractual benefits available to them, in the manner provided for within the contract, often receive far less than provided for under the POEA SEC or CBA, once their lawyer has been paid 30 - 60% of the award. In addition to any advances that may have been provided.

It was never the intention that these generous contractual benefits should go to anyone other than the deserving seafarer or his/her family, but the reality is it is often their lawyer who benefits, through the substantial fees charged for their services.

There is also a clear understanding that the activities of "ambulance chasing" lawyers, cascade down to the people and the Philippine economy, given the on going frustrations faced by foreign shipowners, which has the potential to impact adversely on the local manning industry and the annual billion dollar remittances seafarers bring to the country's economy (a reported USD 5.6Bn in 2014, equivalent to more than 20% of all Overseas Filipino Workers (OFWs) remittances).

The Law

Whilst the existing code of Professional Responsibility of Lawyers prohibits "ambulance chasing", no statutory provision exists which completely and expressly prohibits this practice in the enforcement of labour rights. Republic Act No. 10706 addresses this, with individuals or groups, whether lawyers or not, found to be engaged in ambulance chasing or the act of soliciting, whether in person, or through an agent, being subject to imprisonment of no less than 1 year (but no more than 2 years), or a fine of no less than PHP 50,000 (but not more than PHP 100,000), or both, at the discretion of the courts (Sec. 3 and Sec. 5 of the Act).

In addition, Sec. 4. limits the fees claimant lawyers can receive to 10% of the total amount awarded.

Is the law already in force and does it have retrospective effect?

The law has not yet come into force. Firstly, the law needs to be published in 2 newspapers of general circulation, which occurred on 30th November 2015. In addition, Implementing Rules and Regulations (IRR), which defines how the law is to be interpreted and enforced, need to be formulated within 90 days from 26th November 2015.

Once finalised, the IRR will then need to be published in 2 newspapers of general circulation. Once completed the law will take effect 15 days thereafter - it will not have retrospective effect. An update will be provided once the IRR has been finalised.

It is important that seafarers are made aware of this new law for their protection, and that of their families. If the law is to be enforced, seafarers need to have the knowledge to be able to raise concerns about the practices of "ambulance chasing" lawyers they or their family may come into contact with, so they are not exploited.

One area where this could be achieved, is during the Pre-departure Orientation Seminar (PDOS). The IGPISC-PWG (International Group Personal Injury Sub-Committee - Philippine Working Group) will also be making recommendations that encourage the NLRC and NCMB to ensure seafarers, or their families, are aware of this law for their protection, when a claim is filed and/or during the subsequent Hearings / Conferences held.

Accompanying links:

Republic Act. No. 10706 - http://www.gov.ph/2015/11/26/republic-act-no-10706/

Published Article - http://www.rappler.com/nation/114774-aquino-law-seafarers-protection

Further information:

Any questions please contact Tony Nicholson (Email: tony.nicholson@thomasmiller.com)

Tony is Chairman of the International Group Personal Injury Sub-Committee - Philippine Working Group (IGPISC-PWG) and is a Senior Claims Director for LS3 - The People Claims team