Re Petition For Recognition of The Exemption of The Gsis From Payment of Legal Fees

 

14. RE: PETITION FOR RECOGNITION OF THE EXEMPTION OF THE GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS) FROM PAYMENT OF LEGAL FEES. A.M. No. 08-2-01-0 February 11, 2010 Topic: Judiciary. Rule Making-Power and Fiscal Autonomy of SC Pettoner: GSIS Responden: -- none Ponene: J. Ponene:  J. Corona FACTS: Peon for the recognion of GSIS’ exempt status from payment of legal fees. Courts have been assessing and collecng legal fees from GSIS pursuant to Sec. 22, Rule 141 (Legal Fees) of the Rules of Court, which states: SEC. SEC. 22. Govern Governmen mentt exe exempt mpt.. – The Re Repub public lic of the Philip Philippin pines, es, its age agenci ncies es and instrument instrumentalie aliess are exempt from paying the lega legall fees provided provided in this Rule. Local governmen corporatons and governmen-owned or conrolled corporatons  corporatons   with or without independent charter are no exemp from exemp from paying such fees. actons, criminal or civil, instuted at the instance of the provincial, city However, all cour actons, or municipal treasurer or assessor under Sec. 280 of the Local Government Code of 1991

4. The 4. The right of government workers to social security is an aspect of social jusce. The right to social security is also guaranteed under Arcle 22 of the Universal Declaraon of Human Rights and Arcle 9 of the Internaonal Covenant on Economic, Social and Cultural Rights. The Court has the power to promulgate rules concerning the protecon and enforcement of  constuonal rights, including the right to social security, but the GSIS is not compelling the Court to promulgate such rules. The GSIS is merely asking the Court to recognize and allow the exercise of the right of the GSIS "to seek relief from the courts of jusce sans payment of  legal fees." Commen of OSG: Peon OSG: Peon should be denied because there is nothing in Sec. 39, RA 8291 that exempts GSIS from fees imposed by the Court in connecon with judicial proceedings. Sec. 39 is conned to fees and assessments that do not involve pleading, pracce, and procedure because only the Court, pursuant to its exclusive rule-making power under Sec. 5(5), Art. VII, 1987 Const. has t he power to impose legal fees. Repor and Recommendaton of Oce of he Chief Aorney (OCAT):  The claim of the GSIS for exempon from the payment of legal fees has no legal basis. Read in its proper and full context, Sec. 39 intends to preserve the actuarial solvency of GSIS funds by exempng the GSIS from government imposions through taxes. Legal fees imposed under Rule 141 are not taxes. Moreover, if Congress meant to exempt GSIS from payment of legal fees it would be encroaching on the rule-making power of the Court.

shall be exemp from the payment of court and sheri’s fees. The GSIS seeks exempon from the payment of legal fees. It claims that it should not pay legal fees in acons and proceedings instuted by the GSIS. GSIS’ Argumens: 1. 1. It  It is exempt from taxes, assessments, fees, charges, or dues of all kinds under its charter. Its Charter, the GSIS Act of 1997 or RA 8291, parcularly Sec. 39, which states: SEC. 39. Exempon from Tax, Legal Process and Lien. – It is hereby declared to be the policy of the State that the actuarial solvency of the funds of the GSIS shall be preserved and maintained at all mes and that contribuon rates necessary to sustain the benets under this Act shall be kept as low as possible in order not to burden the members of the GSIS and their employers. Taxes imposed on the GSIS tend to impair the actuarial solvency of its funds and increase the contribuon rate necessary to sustain the benets of this Act. Accordingly,, nowihs Accordingly nowihsandi anding ng any laws o he conrary conrary,, the GSIS GSIS, its assets, revenues including accruals thereto, and benets paid, paid , shall be exemp from all axes, assessmens, fees, charges or dutes of all kinds.  These exempons shall connue unless expressly and specically revoked and any assessment against the GSIS as of the approval of this Act are hereby here by considered considered paid. Consequent Consequently, ly, all laws laws,, ordinances ordinances,, regulaon regulaons, s, issua issuances nces,, opinions or jurisprudence contrary to or in derogaon of this provision are hereby deemed repealed, superseded and rendered ineecve and without legal force and eect. 2. 2. The  The term “fees” (along with taxes, assessments, charges, dues) in the charter should be used in its generic and ordinary sense to mean any form of government imposion. “Fees” is dened as “charges xed by law for services of public ocers or for the use of privilege under control of government” AND it is qualied by the phrase “of all kinds.” Therefore, legal fees are included in the exempon. 3. 3. The  The exempon based on Sec. 39 does not mean that RA 8291 is superior to the Rules of  Court. The Court would only be showing deference to the legislature as a co-equal branch. This This def defere erence nce will will recogn recognize ize the "co "compe mpelli lling ng and ove overri rridin ding" g" Sta State te intere interest st in the preservaon of the actuarial solvency of the GSIS for the benet of its members.

ISSUES: May the legislature exempt the Government Service Insurance System (GSIS) from leg legal al fees fees imp impose osed d by the Court on GOCCs GOCCs and LGUs? LGUs? (Ph (Phras rased ed di diere erentl ntly, y, is it an encroachment on the rule-making power of the Court if Congress creates laws exempng GOCCs and LGUs from payment of all kinds of fees, including legal fees?) HELD: No. HELD:  No. Congress has no such power to exempt the GSIS from payment of legal fees for two reasons:   1. Separaton of Powers The rule-making power of the Court pursuant to Sec. 5(5), Art. VIII, 1987 Const. is NOT a shared power with Congress BUT an EXCLUSIVE power of the SC. The payment of legal fees cannot cann ot be validly annulled annulled,, changed changed or modied by Congress Congress because of the principle of  Separaon of Powers. “The separaon of powers among the three co-equal branches of our government has erected an impregnable wall that keeps the power to promulgate rules of  pleading, pracce and procedure within the sole province of this Court.” The 1987 Constuon revoked the power of Congress to annul, change or modify acts of the SC. Therefore, any acon now on the part of Congress regarding the rule making power of  the SC would be an encroachment of such power. (Prior to 1987 Constuon kasi Congress had the power to amend, see history below) 2. Fiscal Auonomy of he SC Congress Congr ess could not have carved carved out an exempon for the GSIS from the payment payment of legal fees without transgressing another equally important instuonal safeguard of the Court’s

 

independence — scal autonomy. Fiscal autonomy recognizes the power and authority of the Court to levy, assess and collect fees, including legal fees. Moreover, legal fees under Rule 141 have two basic components, components, the Judiciar Judiciary y Developme Development nt Fund (JDF (JDF)) and the Special Special Allowance Allow ance for the Judiciary Judiciary Fund (SAJF). The laws which establi established shed the JDF and the SAJF expressly declare the idencal purpose of these funds to "guarantee the independence of the Judiciary as mandated by the Constuon and public policy." Legal fees therefore do not only constute cons tute a vital source of the Court’s nancial nancial resources resources but also compris comprise e an essenal element of the Court’s scal independence. Any exempon from the payment of legal fees granted grant ed by Congress Cong ress to GOCC GOCCs and LGUs willinrm necessa necessarily reduce the the Court’s JDF and the SAJF. Undoubtedly, such situaon is sconstuonally forrily it impairs guaranteed scal autonomy and erodes its independence. Discussion on rule-making power and Legal Fees: The SC has the power to promulgate rules concer concernin ning g pleadi pleading, ng, pra pracc cce e and pro proced cedure ure in all courts. courts. The Rules Rules of Court Court was promulgated in the exercise of the Court’s rule-making power. The payment of legal fees is part of the rules concerning pleading, pracce and procedure in courts because without payment of legal fees the court cannot acquire jurisdicon over the subject maer or nature of the acon. It is not simply the ling of the complaint or appropriate iniatory pleading but the payment of the prescribed docket fee that vests a court with jurisdicon. Although the court may waive payment of legal fees when it relates to indigent or pauper ligants. Such waiver is not an abdicaon by the Court of its rule-making power but simply a recognion of the limits of that power. It reected a keen awareness that in the exercises of  its rule-making rule-making power, the Court may not dilute or defea defeatt the right of access to jusce jusce of  indigent ligants. But the GSIS is not on the same level as indigent or pauper ligants. The payment of legal fees does not take away the capacity of the GSIS to sue. Therefore the Court sees no reason to exempt them from paying legal fees. RULING:: WHEREFORE, the peon of the GSIS for recognion of its exempon from the RULING payment of legal fees imposed under Secon 22 of Rule 141 of the Rules of Court on GOCCs and LGUs is hereby DENIED DENIED.. History of the Rule-Making Power of SC: 1935 Const. Const.   The power of this Court to promulgate rules concerning pleading, pracce and procedure procedure was granted but was co-existent co-existent with legislave legislave power. power. Congress Congress had the power to repeal, alter or supplement  rules concerning pleading, pracce and procedure, and the admission to the pracce of law in the Philippines Note: In re Cunanan   In 1952 Congress passed RA 972 (Bar Flunkers Act) which xed the passing passi ng grade of the bar for the years 1946 to 1955. Such Act was struck struck down by the SC. “The ulmate ulmate power power to grant licen license se for the pracce of law belongs exclus exclusively ively to this Court…Only this Court, and not the legislave nor execuve department, that may do so. Any aempt on the part of these departments would be a clear usurpaon of its funcon, as is the case with the law in queson….and the law passed by Congress on the maer is of  permissive character, or as other authories say, merely to x the minimum condions for the license.” Despite such ruling the 1973 Constuon reiterated the 1935 Constuon.

1973 Const.  Promulgate rules concerning pleading, pracce, and procedure in all courts, the admission to the pracce of law, and the integraon of the Bar, which, however, may be repealed, altered, or supplemented by the Batasang Pambansa. Note: the 1973 Constuon further strengthened the independence of the judiciary by giving to it the addional power to promulgate rules governing the integraon of the Bar.   1987 Const.  The 1987 Constuon molded an even stronger and more independent  judiciary. Among others, it enhanced enhanced the rule making po power wer of this Court. The rule making power of this Court was expanded. This Court for the rst me was given the power to promulgate rules concerning the protecon and enforcement of constuonal rights. The Court was also granted for the rst me the power to disapprove rules of procedure of special courts and quasi-judicial bodies. But most importantly, the 1987 Constuon took away the power of Congress to repeal, alter, or supplement rules concerning pleading, pracce and procedure. In ne, the power to promulgate rules of pleading, pracce and procedure is no longer shared by this Court with Congress, more so with the Execuve.