Short answer. Yes. Under the Civil Code, attorney's fees may be awarded where the defendant acted in gross and evident bad faith in refusing to satisfy a plainly valid, just and demandable claim. If the refusal forced you to litigate, this is one of the specific statutory grounds for recovery.
What the law says
Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim
Civil Code, Article 2208 — When Attorney's Fees Are Recoverable. Read the full provision →
Why ordinary refusals to pay do not automatically trigger this
Not every refusal to pay a claim entitles the claimant to attorney's fees. Under Article 2208 of the Civil Code, the general rule is that each party shoulders its own litigation costs unless a specific ground exists. The standard for this particular ground is set high: the refusal must involve gross and evident bad faith, and the claim refused must be plainly valid, just and demandable. An honest disagreement about liability, a disputed interpretation of a contract, or a genuine question about the amount owed does not meet this standard. The bad faith must be clear and the claim must have been obviously valid.
What gross and evident bad faith means
Bad faith in this context means something beyond mere negligence or error. It connotes a deliberate or knowing refusal to pay what is clearly owed — acting dishonestly, or with a fraudulent or malicious purpose. An insurance company that delays and denies a claim it knows to be valid, or manufactures pretextual reasons to avoid payment, is acting in bad faith. The word gross adds weight: the bad faith must be serious and patent, not a borderline case. Courts will look at the surrounding circumstances — the company's internal communications, its handling of other similar claims, its reasons for denial — to determine whether this standard is met.
The claim must itself be clearly valid
The second element is equally important: the claim must have been plainly valid, just and demandable at the time of refusal. A claim that has legitimate defences, factual disputes, or unsettled legal questions will not qualify, even if you ultimately prevail. The ground applies where there was no reasonable basis for the refusal — where a careful examination of the claim would have shown immediately that it was owed. In an insurance context, this might mean the loss was clearly covered under the policy, the documentation submitted was complete, and the only reason for refusal was to avoid payment.
The award must still be reasonable
Even where this ground is established, Article 2208 requires that the attorney's fees awarded be reasonable. You cannot claim a blank check for legal costs. The court will assess what was proportionate and necessary to prosecute the case. Supporting your claim with documentation of what your lawyer charged and what work was done strengthens your position. Attorney's fees under this ground compensate you for being put to the burden of suing for something you were already entitled to — but the recovery must reflect actual, reasonable expenses.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Philippine National Construction Corporation vs. Apac Marketing Corporation, represented by Cesar M. Ong, Jr, G.R. No. 190957, June 5, 2013 — read the decision on LawPhil →
- Atty. Melita Go and Wayne Go vs. Saint Jude Catholic School Manila, Inc. et al, G.R. No. 257761, April 22, 2025 — read the decision on LawPhil →
- Sps. Bernabe Mercade, Jr., et al. vs. Sps. Jesus Bardillas and Letecia Gabuya Bardillas, G.R. No. 163157, June 27, 2016 — read the decision on LawPhil →
- CCC Insurance Corporation vs. Kawasaki Steel Corporation, et al, G.R. No. 156162, June 22, 2015 — read the decision on LawPhil →