Seafarer Disability Claims: When Can a Seaman Recover Attorney's Fees

The Supreme Court recently clarified the rules on when a seafarer can recover attorney's fees in a disability benefits claim. In OSM Maritime Services, Inc. v. Go (G.R. No. 238128, February 20, 2023), the Court reinstated an award of attorney's fees to a seaman who was forced to litigate to obtain his disability benefits—even though his employer had not acted in bad faith. The ruling is a significant reminder for both seafarers and manning agencies about the consequences of refusing to pay valid disability claims.

The Facts of the Case

Nelson Go worked as an Oiler/Motorman for OSM Maritime Services since 2009. While onboard, he experienced dizziness, vomiting, chest pain, and shortness of breath. He was medically repatriated in 2015. The company-designated physician diagnosed him with hypertension, Meniere's Disease, and myofascial spasm, but initially certified him fit to resume sea duties.

When Go underwent his Pre-Employment Medical Examination (PEME) for his next contract, the company physician declared him unfit to return to sea due to Meniere's Disease—a condition of unknown origin causing progressive deafness, ringing in the ears, and vertigo. Go then consulted his own physician, who certified that his illness was work-related and work-aggravated due to his prolonged exposure to loud engine noises, heat, and harmful chemicals.

Go filed a complaint for permanent and total disability benefits of USD 90,000, plus damages and attorney's fees.

The Procedural History

The Labor Arbiter ruled that Go's illness was work-related and compensable, but awarded only partial disability benefits of USD 3,366 plus 10% attorney's fees. Only Go appealed to the National Labor Relations Commission (NLRC). OSM did not appeal, making the Labor Arbiter's ruling final and executory as to them.

The NLRC reversed the finding of work-relatedness but retained the monetary award since OSM had not appealed. The Court of Appeals (CA) then reversed the NLRC and awarded Go full permanent and total disability benefits of USD 90,000 plus 10% attorney's fees.

The Supreme Court initially affirmed the disability award but deleted the attorney's fees, finding no bad faith on OSM's part. Go moved for partial reconsideration.

The Issue: Attorney's Fees Without Bad Faith

The central question was whether Go was entitled to attorney's fees despite the absence of bad faith by his employer.

The Supreme Court's Ruling

The Court granted Go's motion and reinstated the attorney's fees award on two grounds.

First, the Labor Arbiter's decision awarding partial disability benefits and 10% attorney's fees had become final and executory as to OSM because they failed to appeal within the reglementary period. OSM was therefore precluded from assailing the grant of attorney's fees.

Second, and more importantly, the Court held that Go was compelled to litigate to secure his disability claims. OSM refused to pay disability compensation despite its own company-designated physician declaring Go unfit to resume sea duties. Citing Chan v. Magsaysay Maritime Corp. (G.R. No. 239055, March 11, 2020), the Court noted that a seafarer may recover attorney's fees when compelled to litigate to satisfy a claim for disability benefits—even without a finding of malice or bad faith on the employer's part.

The Court ordered OSM to pay Go USD 90,000 in permanent disability benefits plus 10% attorney's fees, with 6% legal interest per annum from finality until fully paid.

Practical Takeaways

• Attorney's fees are recoverable when litigation is necessary. A seafarer who must sue to obtain disability benefits that are clearly due may recover attorney's fees, even without proving employer bad faith.
• Failure to appeal has consequences. A monetary award becomes final and executory as to a party who does not appeal within the reglementary period, and that party cannot later challenge it.
• The company-designated physician's assessment matters. When the company's own doctor declares a seafarer unfit, refusing to pay disability compensation exposes the employer to additional monetary awards.
• Disability claims should be paid promptly. Employers who withhold benefits despite clear medical findings risk paying not only the principal amount but also attorney's fees and interest.

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