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When Are Attorney's Fees Proper in Seafarer Disability Claims?

The Supreme Court's recent decision in Pacific Ocean Manning, Inc. v. Bobiles (G.R. No. 259982, October 28, 2024) settles a long-standing confusion in Philippine labor law: when exactly may a seafarer recover attorney's fees in disability compensation cases? The ruling clarifies that attorney's fees are not automatically awarded simply because a worker was forced to litigate for benefits.

This matters to every Filipino seafarer, manning agency, and shipowner. The decision resolves conflicting rulings and sets clear parameters for when attorney's fees may be granted.

The Case of Nicolas Bobiles

Nicolas Bobiles worked as a pumpman aboard the vessel Nordic Vega. In January 2017, while lifting equipment, he felt something snap in his back. The pain radiated from his shoulder to his waist, leaving him practically immobile.

He was repatriated on February 28, 2017, and diagnosed with L4-L5 Disc Herniation. Despite physical therapy, his condition showed no favorable prognosis. A private doctor declared him permanently unfit to work as a seafarer.

The company-designated physician issued a Grade 11 disability assessment on September 4, 2017—more than 120 days after repatriation. The National Conciliation and Mediation Board (NCMB) awarded Bobiles total permanent disability benefits plus attorney's fees. The Court of Appeals affirmed with modification, reducing the award to USD 60,000.00 but retaining the attorney's fees.

The 120-Day and 240-Day Rules

The Supreme Court reiterated the rules from Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr. (765 Phil. 341, 2015) on seafarer disability claims:

The company-designated physician must issue a final medical assessment within 120 days from the seafarer's report. If no assessment is issued without justification, the disability becomes permanent and total. If there is sufficient justification—such as the seafarer requiring further treatment—the period extends to 240 days. If still no assessment is issued within 240 days, the disability is deemed permanent and total regardless of justification.

In Bobiles's case, the company physician advised continued therapy and re-evaluation beyond 120 days, justifying the extension. However, the September 4, 2017 assessment was not final because the same physician still required Bobiles to return for re-evaluation on October 11, 2017.

Citing Benhur Shipping Corp. v. Riego (G.R. No. 229179, March 29, 2022), the Court held that a medical assessment is not final when the physician contemporaneously finds that the employee requires further treatment or reevaluation. The failure to issue a final assessment transforms temporary total disability into permanent total disability by operation of law.

Why Attorney's Fees Were Deleted

The Court examined three possible bases for attorney's fees and found none applicable.

Article 111 of the Labor Code applies only to unlawful withholding of wages. Since Bobiles's claim involved disability compensation, not wages, this provision does not apply. The Court expressly abandoned the contrary ruling in Heirs of Aniban v. NLRC (347 Phil. 46, 1997).

Article 2208(2) of the Civil Code requires that the defendant's act compelled the plaintiff to litigate with third persons or incur expenses to protect their interest. The Court emphasized that litigation must be in relation to third persons—not the erring defendant. A contrary rule would make attorney's fees the general rule rather than the exception.

Article 2208(8) of the Civil Code applies only to actions for indemnity under workmen's compensation and employer's liability laws. Bobiles's claim was based on contract—specifically, the POEA-SEC—not on workmen's compensation legislation.

The Court also found no basis under Article 2208(11), which requires factual, legal, or equitable justification. Since the employer covered all treatment costs and sickness allowances, equity favored deleting the award.

Practical Takeaways

• Seafarers must monitor the 120-day and 240-day periods. If the company-designated physician fails to issue a final assessment within these periods, disability is deemed permanent and total by operation of law.

• A medical assessment is not final if it requires further evaluation. Even if issued within the extended period, an assessment directing the seafarer to return for re-evaluation is not conclusive.

• Attorney's fees are not automatic. A seafarer must show unlawful withholding of wages, litigation with third persons, or coverage under workmen's compensation laws—none of which typically apply to POEA-SEC disability claims.

• Employers who provide full treatment and allowances may avoid attorney's fees. The Court considered it equitable to delete the award since the employer covered all medical costs and sickness allowances.

• The 6% legal interest applies. Monetary awards in disability cases earn 6% interest per annum from finality of judgment until full payment.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.