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UNCLOGGING THE COURT DOCKETS

1


ALFREDO F. TADIAR
2



INTRODUCTION

Court dockets are heavily and unjustifiably congested as a result of the indiscriminate
filing and delayed processing of cases in the courts of justice. Hundreds of thousands of cases
remain pending for further action or resolution. The cases pending in all levels of the judicial
system keep piling up at an alarming rate. The average judicial disposal of cases annually is only
85.83% (see Exhibit A). The situation is believed to become worst and the backlog will
continue to grow rather than diminish unless judges are enabled to dispose of more cases through
a systematic and sustained judicial reform program. The slow or delayed processing of earlier
cases affects the progress of other following cases. As a consequence, some cases have
incredibly taken as long as a generation to resolve.

Judges need time to study, analyze and research to come up with persuasive decisions
that may somehow even convince the losing party to accept the adverse decision and forego an
appeal thereby lightening the docket of the appellate court. Court docket congestion deprives the
courts of the essential element of time. The quality of justice is, therefore, adversely affected.

Thus, the people have become wary, if not distrustful, of the judicial system as an
effective means of violating rights violated and redressing wrongs done. Nonetheless, the crime
victim or aggrieved party more often seek the underworld or underground rebel movement to
secure the justice they never get from the courts. The swift and deadly justice meted out by
the dreaded Sparrow Unit of the Alex Boncayao Brigade (ABB) of the NPA or mercenary
assassins is the result of this extrajudicial relief. This poses danger to the economic growth and
political stability of the country. Social growth and development are also adversely affected.

To the business sector, such delays in processing of cases would increase their business
cost due to high litigation expenses. It is, therefore, imperative that alternative measures of
unclogging court dockets should be explored to help minimize litigation expenses of the business
sector.


CAUSES OF DELAYS IN THE DISPOSITION OF CASES

Many factors cause delays in the disposition of cases filed with the judiciary. For the
purpose of this paper, however, these may be classified into three, namely, (1) those arising
from human failures; (2) those caused by the nature of the judicial system itself; and (3)

1
Paper presented in the Symposium on Economic Policy Agenda for the Estrada Administration, June 1, 1999 at
INNOTECH, Commonwealth Avenue, Diliman, Quezon City.

2
Chairman, National Amnesty Commission and former Associate Dean, U. P. College of Law.


2
indiscriminate filing of cases in court. The causes of delays in disposition of cases are discussed
in detail below.

1. Human Failings

Human failings refer to weaknesses of the men and women administering the
judicial system such as judges, lawyer-advocates, court personnel, prosecutors, sheriffs,
defense counsel, process servers, and others connected to or with the system. Delayed
resolution of cases emanates from inefficiency, incompetence, sloth or laziness,
corruption or conflict of interests of these officials.
3


2. Constitutional and Procedural Requirements

Factors arising from the adversary nature of the judicial process and the
constitutional requirements of due process of law also cause judicial delays. Thus, the
constitutional presumption of innocence requires careful screening of criminal charges
in the form of preliminary investigations conducted by prosecutors or Municipal Trial
Courts performing this function. Only upon an affirmative preliminary finding of merit
may the criminal charge be filed in court.
4
This is an assurance of protection against
hasty and malicious prosecutions. The reform problem that arises here is how to
shorten the periods in the different stages of processing without detracting from that
socially desirable objective of protecting the legal rights of those drawn into the judicial
process.

In both civil and criminal actions, concern with procedural legality requires a net
period of time for giving notices and the preparation of pleadings. These periods are
however, often extended many times, even for such an amorphous reason that counsel is
indisposed.
5
A more strict judge could avoid such unnecessary cause of delay.

Furthermore, the strict requirements on proof of service of pleadings, judgments
and other paers
6
taken together with the much-complained of postal service, are major
causes of judicial delay. Modern electronic means of communication, such as the use of
computers and fax transmission, among others, are not utilized to the fullest. Chief
Justice Hilario Davide, Jr. reaffirms that the Philippine legal system has much catching
up to do with the rapid advances in technology.
7


3
It was reported by the Philippine Star in its issue of 29 March 1999 that based on a survey conducted by the
Economist Intelligence Unit Philippine Corporate Update Program (EIU-PCUP), that a capricious and corrupt
judiciary is one of the major deterrents to corporate growth in the Philippines.

4
Section 14 (1), Article 111, Bill of Rights guarantees that No person shall be held to answer for a criminal
offense without due process of law.
5
Both trial lawyers and judges are equally guilty of postponements due to that undefined cause of being
indisposed.

6
Rule 13, 1997 Rules on Civil Procedure.

7
Phil. Daily Inquirer, 26 April 1999, page 3, at the 7
th
National Convention of Lawyers in Davao City.


3
The Constitution limits the period for rendering decisions: for the Supreme
Court, 24 months; 12 months for all collegiate courts; and 3 months for all other lower
courts.
8
Despite such deadlines, even the Supreme Court has not complied. There is,
therefore, a clear need to strictly comply with deadlines set. It is not, however, clear as
to what sanctions can be imposed upon the offending court for failing to comply with
said deadlines nor what is the effect thereof upon the late decisions.

3. Clogged Dockets Due to I ndiscriminate Filing of Court Cases

Chief Justice Fred Ruiz Castro largely blames the overcrowding of court dockets
to what he calls the over-use, misuse and abuse of the judicial remedy. This means
that a person seeking redress of a grievance has gone directly to court when it probably
would have been more practical to have availed of other modes of dispute resolution.
The hypothesis of Chief Justice Castro is that litigation prone lawyers have the courts
the place of initial settlement rather than the ultimate place of dispute resolution that
they were originally meant to be. The solution to this cause must start with the law
curriculum to give more emphasis to the preventive lawyering function
9
in order to
balance the heavy concentration of preparation for litigation. A re-orientation of lawyers
along this line seems wanting.

4. Clogged Dockets Due to Filing of Cases Related to the I ssuance
of Bouncing Checks

Majority of the cases that clog our court dockets today are those filed under BP 22
or the Bouncing Checks law. Under this law, the mere issuance of a check, which is
later dishonored, immediately makes the drawer criminally liable. The basis of this law,
passed during the time of President Ferdinand Marcos, is to make checks a viable and
credible means of conducting commercial transactions. The proliferation of bad checks
may have negatively affected the economy during martial law as many Filipinos refused
to accept checks in commercial transactions.

With criminal penalties imposed, it was hoped that not only will the issuance of a
bouncing check be deterred, but also payment of the value of the bouncing check by
those who issued it, will be enhanced. There is no in-depth study so far on whether
there are less bouncing checks now due to this law. Whether or not BP 22 is successful
in its declared objective, what is clear though is that, victims of bouncing checks found
it convenient to file a criminal case in court as a means of collecting from drawers of
bouncing checks. Thus, the volume of cases filed has drastically risen as courts are
transformed into collection agencies by creditors who received bad checks.
Furthermore, due to the criminal nature of the charges against drawers of bouncing
checks, judgment is only rendered upon a process more tedious than that applied in civil
cases, further adding to the clogging of court dockets.


8
Section 15 (1) Article III, Constitution.

9
A term used Mr. David N. Smith of the Harvard Law School in a talk to U. P. Law students.

4
APPROACHES TO DECONGESTING COURT DOCKETS

There are several approaches that can be taken to solve the problem of court dockets
congestion. These, among others, are: the output-oriented, input-oriented, and diversion
approaches.

1. The Output-Oriented Approach

Directed towards solving the problem of judicial delay, a major cause of clogged
court dockets, the approach seeks to enhance the disposition of cases by the courts of
justice.

The output-oriented approach is primarily concerned with increasing the number
of cases that a court disposes of in a given period (monthly and yearly). The disposition
of a case could take the form of a decision on the merits of the dispute. This assumes
that a trial has been conducted, or that trial has been waived and the case submitted for
decision on the basis of the pleadings i.e., the Complaint and Answer, submitted by the
parties.
10
Decisions are usually rendered after the lapse of several years from the date
the case was filed in court. This also includes sentencing an accused in a criminal case
upon entering a plea of guilty. Other dispositions relate to rendering summary
judgment
11
based on affidavits, depositions or admissions; dismissals based on
demurrer to evidence
12
which do not prove that the plaintiff is entitled to the relief
prayed for; and dismissals based on technical grounds, such as lack of jurisdiction,
improper venue and the like.
13


A judge who is unduly concerned with the periodic output of his court may resort
to questionable means to show an increase, such as dismissals of civil actions based on
technical grounds (e.g., improper venue, late filing of petition or payment of fees,
absence of certification that a copy of the decision appealed from is a true copy), or in
criminal actions, cajoling an accused to plead guilty despite his innocence thereby
reducing the sentence imposed upon him which may be equal to the period of his
preventive detention up to the date of arraignment. Such an offer may be tempting to an
accused who has been detained for so long under the inhuman conditions in jail. This
questionable tactic is too steep a price for increasing output.

a. Simplification of Procedural Rules

More meaningful efforts to increase the output of judges include simplification of
procedural rules that lawyers unnecessarily argue about and thereby assuring an earlier

10
Rule 34, 1997 Rules of Civil Procedure, providing for Judgment on the Pleadings.

11
Rule 35, ibid.

12
Rule 33. Id.

13
Rule 16, id..


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trial of the case. Along this line was the elimination of the concurrent jurisdiction of the
Municipal Trial Courts and the Regional Trial Courts by the Judiciary Reorganization
Act of 1980
14
The rules on original exclusive jurisdiction of the courts have simplified
the matter.

Simplified rules for forcible entry and unlawful detainer cases,
15
including those
that shall govern the adjudication of small claims proposed to be adopted as part of the
judicial reforms undertaken by the Davide Court, as well as rules detailing the number
of hours that judges are required to devote in daily court sessions
16
are all part of this
output-oriented approach. It also includes the Summary Procedure adopted by the
Supreme Court
17
for Municipal Trial Courts to govern resolution of civil disputes of
small value
18
and petty criminal cases.
19


b. Filling Up Vacancies; I ncreasing Number of Courts

While the foregoing measures relate to increasing the output of individual judges,
concern for the national output of the judiciary in resolving disputes must also be
addressed. Vacancies in courts, prosecutorial offices and support personnel diminish
output. Appointments to fill up vacancies must, therefore, be made soon after every
vacancy that occurs.

Increasing the number of courts in proportion to corresponding demographic
increases and locating them in centers of population for greater accessibility is another
effective measure. Efficiency requires that every trial court should be assigned at least
one trial prosecutor. Another prosecutor should be appointed to handle preliminary
investigation of criminal cases. The two prosecutors could alternately do trial work or
investigative work. In reality, however, this arrangement is far from being attained and
results in the delay in the disposition of criminal cases. The resolution of civil cases has
consequentially also been adversely affected.

c. J udicial Specialization

Specialization greatly contributes to efficiency and thereby increase output.
Along this premise, the Supreme Court has assigned certain courts to take over the
specialized jurisdiction of the defunct Juvenile and Domestic Relations Court. The
assignment of courts to try only heinous crimes is also an attempt at specialization. The

14
Batas 16, id..

15
Rule 70, ibid..

16
Section 5, Interim or Transitional Rules to the Implementation of BP. Blg. 129.

17
Adopted en banc by the Supreme Court effective 15 November 1991.

18
Not to exceed P10,000.00, exclusive of interests and costs.

19
Violation of ordinances, traffic regulations and the rental law and other offenses punishable by imprisonment not
exceeding six months or fine not exceeding P1,000.00.

6
Sandiganbayans exclusive jurisdiction over crimes committed by public officials is
another example of specialization. Perhaps it is time to consider separating civil cases
from criminal cases, and allocate specific courts to try only either civil or criminal cases,
but never jointly. This was perhaps one of the intentions in the creation of the then
Circuit Criminal Courts. Unfortunately, the specialized courts, except for the
Sandiganbayan, have all been abolished. There is, therefore, a clear need for a policy
review to evaluate past experience on court specialization as a means for increasing
efficiency.

2. The Input-Oriented Approach

Historically, the judicial system for the resolution of disputes was intended or
resorted to by the parties as the final and authoritative forum for disputes that have failed
earlier efforts for a private solution or adjustment of differences. The family, the church,
the school and neighborhood associations are the traditional counselors for mediating
disputes and informally settling them. As these institutions weakened in their
mediational role in the course of societys modernization, disputants have resorted to the
courts as the initial forum, rather than the forum of last resort, for settling their dispute.
This has resulted in the filing of petty and even trivial cases in court. Some of them
have been litigated through all levels of the judicial hierarchy up to the Supreme Court
itself.

The use of the term minor or petty to describe a class of disputes relating to
common or everyday conflicts may be misleading. For to the disputants personally
concerned, the subject matter, no matter how inconsequential to others or to society, is
certainly far from being minor or trivial. Even though the dispute may only involve in
the last analysis, merely hurt pride from a perceived slight, yet to the party concerned it
is of serious importance. It is minor then only in the sense that, by itself, it does not
have much financial worth nor social significance.

Partly to blame for this so-called litigiouness, therefore, is the lack of access to
any alternative forum for the settlement of these minor disputes. The Katarungang
Pambarangay Law,
20
provides the appropriate forum for the resolution of this class of
disputes. It compels disputants to confront each other before the Punong Barangay for
mediation of their differences.

Moreover, as a screening mechanism, the KB law imposes as an effective
sanction to disputants who fail to comply with the condition of prior conciliation, that
the offending party cannot seek judicial relief. In other words, the KB law imposes a
procedural bar to free access to the courts.


20
Presidential Decree No. 1508, s. 1978.


7
The 20-year experience of the KB screening mechanism shows that it has
effectively screened out of the judicial system cases that would otherwise have been
filed in court.
21


The idea of restricting the input of cases into the judicial system did not start with
the 1978 KB Law. As early as 1950, the Civil Code of the Philippines had imposed that
No suit shall be filed or maintained between members of the same family unless it
should appear that earnest efforts towards a compromise have been made but that the
same have failed. . .
22
There is also the settled jurisprudence requiring the exhaustion
of administrative remedies before judicial relief may be sought.
23
Non-compliance
with this condition for judicial recourse will result in the dismissal of the suit or
proceedings.

Exhibit B shows the effects of restricted access to court on the disposition of
cases.

3. The Court Diversion Approach

While the input-oriented approach would curtail the generally unrestricted access
to the courts for judicial relief, this third approach seeks to address the tremendous
number of cases that have already been filed and are still awaiting for disposition. After
several years of inaction, the frustrated parties who have become disillusioned with the
efficacy of the judicial mode of dispute resolution, would be ready to end their problem.
Diversion to an alternative mode is the desperate answer. Exhibit C shows the effects of
diversion of cases on the disposition of cases while Exhibit D presents the effects of the
restricted access to court and the diversion of pending cases on the disposition of cases.

The diversion approach originated from the following:

a. The Civil Code of the Philippines

As in the restricted access approach, the origin of the court diversion of cases may
similarly be traced to the Civil Code which was approved on 18 June 1949. It included a
new Title XIV containing two separate chapters on Compromises and Arbitration
provide.

Article 2028 defines the term compromise and the purpose of entering into one,
as follows:


21
See Report of the BILGS.
22
Article 222, Civil Code.

23
Ortua vs. Singson Encarncacion, 59 Phil. 441.


8
A compromise is a contract, whereby the parties, by making
reciprocal concessions, avoid a litigation or put an end to one already
commenced.

For pending cases in court, Article 2029 mandates the judge to persuade the
litigants in civil cases to agree upon some fair compromise. For this purpose, Article
2030 directs suspension of judicial proceedings to afford the parties sufficient time to
formulate the terms thereof. If the efforts to this end are successful, the compromise
agreement is submitted to the court for approval. Judicial approval is necessary to ensure
that what was agreed upon does not contravene law, morals, good customs, public order
or public policy.
24


It is important at this point to distinguish between process and product. A
compromise agreement that would avoid litigation or put an end to one already
commenced is the product of a process that may be either direct negotiations between
the parties or a third party intervention by conciliation or mediation. The mediator may
even be the trial judge himself although some critics say that such a dual role may affect
the integrity of the judicial process.

Article 2030 further provides:

The duration and terms of the suspension of the civil action
or proceeding and similar matters shall be governed by such
provisions of the rules of court as the Supreme Court shall
promulgate. Said rules shall likewise provide for the appointment
and duties of amicable compounders.
. .

It is unfortunate that the challenge posed by the Legislature to the Supreme
Court has not been taken up. Despite the lapse of almost half a century, the
personality of an amicable compounder has not even been recognized by the Rules of
Court.

On the arbitrational mode of resolving disputes, Article 2046
provides:

The appointment of arbitrators and the procedure for
arbitration shall be governed by the provisions of such rules of courts
as the Supreme Court shall promulgate.

24
Article 1409 declares such contract as inexistent and void from the beginning.

9

Like the case of amicable compounders who were intended to facilitate the
compromise settlement of disputes and conflicts, the reliance of the Legislature on the
Supreme Court to promulgate the necessary procedural rules for the appointment of
arbitrators and the procedure for the arbitration has been sadly misplaced. No such rules
have ever been promulgated.

b. The Arbitration Law (R. A. 876)
On 19 June 1953, four years after enacting the Civil Code, and undoubtedly
frustrated by the inaction on the matter by the Supreme Court, Congress enacted
Republic Act No. 876, entitled AN ACT TO AUTHORIZE THE MAKING OF
ARBITRATION AND SUBMISSION AGREEMENTS, TO PROVIDE FOR THE
APPOINTMENT OF ARBITRATORS AND THE PROCEDURE FOR ARBITRATION
IN CIVIL CONTROVERSIES, AND OTHER PURPOSES.

This Congressional effort to divert pending cases in court to an alternative mode
of dispute resolution, however, was to no avail. Arbitration was infrequently availed of
by judges or used by practicing lawyers who were perhaps unaware of the existence of
this law due in large part to the failure of the Supreme Court to incorporate it in the Rules
of Court. Other reasons for its unpopularity are:

1) Lack of or absence of a professional organization of arbitrators, the
integrity and capability of which have been certified to by an official
body, such as the Construction Industry Arbitration Commission
(CIAC), or the Philippine Association of Voluntary Arbitrators
(PAVA). Such body is necessary to provide the requisite training for
skills competence in arbitration, to screen those accredited for good moral
character and to assure the public of high ethical standards of conduct in
the performance of arbitration functions.

2) Outdated straight daily compensation of arbitrators that is still
rigidly fixed to the 1953 rate of P50.00 per day. This is now merely a
quarter of the present minimum wage for unskilled workers. A more
attractive remuneration should be based on a flexible schedule of
professional fees dependent upon the amount or value in controversy, as is
currently being followed in construction arbitration.

3) Structural defect, i.e., the unenforceability of the arbitration award.
The necessity of undergoing the cumbersome process of having the award
judicially confirmed before it could be effectively enforced against a
recalcitrant party, understandably leads to the conclusion of inutility of the
process. As a matter of fact, parties who submit to the jurisdiction of the
Construction Industry Arbitration Commission routinely waive the
provisions of the Arbitration Law and expressly agree to be bound by the
rules of procedure governing construction arbitration.


10
Pertinent to providing an alternative forum to judicial relief or a forum to which
diversion of pending cases may be made is the highly successful arbitration of
construction disputes. This forum was added on in 1985 when President Marcos
promulgated Executive Order No. 1008 establishing the Construction Industry
Arbitration Commission (CIAC) to create an arbitration machinery for the Philippine
Construction Industry.

The construction arbitration essentially addresses the failure of the Arbitration
Law enacted over 30 years earlier. Its success could be attributed to several factors.
Firstly, the law established a SECRETARIAT
25
which functions much like a Clerk of
Court, to receive complaints and other complaints and other pleadings, charge fees, and
give notices. But more than that, it is charged with the important task of providing
training of arbitrators and accrediting them for appointment. Secondly, the Commission
is authorized
26
to collect charges and fees to cover administrative costs, arbitrators fees
and other charges. It is further authorized to use its receipts and deposit of funds to
finance its operation. . . Thirdly, the arbitrators fees shall be computed on the basis of
a percentage of the sum in dispute
27
and thus the fees became respectable, if not
attractive to arbitrators who shall be men of distinction in whom the business sector and
the government can have confidence
28
Fourthly, it is expressly provided that the
arbitral award shall be binding upon the parties (and) shall be final and inappealable
except on questions of law which shall be appealable to the Supreme Court
29
Finally, it
authorizes the arbitrators to issue a writ of execution requiring any sheriff or other
proper officer to execute said decision, order or award
30
that has become final and
executory.

The acceptance and growing popularity of construction arbitration among
contractors and project owners are shown by the increasing number of cases that have
been filed with the Commission, as well as the tremendous value of or amount in dispute
that have been submitted for resolution.
31
Multinational construction companies have
beneficially availed of this alternative. Furthermore, it must be pointed out that appeals
from arbitral awards have generally been unsuccessful thereby affirming the fairness and
finality of arbitral awards.




25
Section 11, E. O. 1008.

26
Section 13, ibid.

27
Section 16, second paragraph, id.

28
fourth paragraph of Section 14, id..

29
Section 19, id.
30
Section 20, id.

31
See attached Report of CIAC.


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c. The Katarungang Pambansa Law Under the Local Government Code

The judicial power to divert pending cases to an alternative mode was given
another boost in 1991 when the Local Government Code was enacted into law. Under
the Codes revised Katarungang Pambarangay Law, a trial court judge is empowered to
divert or refer a pending civil case for mediation.
32
It is important to note two things.
The first one is the diversion or referral is motu proprio, i.e., on the initiative or action of
the judge. The second one is the referral may be made at any stage of proceedings.

Significantly, a motu proprio judicial action may be taken without any formal
motion being filed by a party and, therefore, does not require consent of the parties. The
power of diversion or referral is not confined to the pre-trial stage and, therefore, may be
exercised even after the trial has commenced.

d. The 1997 Rules of Civil Procedure

For the first time since the Rules of Court were first promulgated in 1940, an
alternative mode of dispute resolution has now been made finally available by the 1997
Rules of Civil Procedure. It must be noted, however, that diversion may be initiated by
the trial judge only during the early pre-trial stage of the proceedings.
33
There is nothing
in the Rules that would indicate judicial empowerment to avail of this mode for cases that
have reached a later stage of the proceedings. This could be perceived as excluding the
much more numerous cases in the backlog which have already reached trial stage. This is
unfortunate.

It must further be noted that aside from requiring the trial court to consider the
possibility of an amicable settlement or of a submission to alternative modes of dispute
resolution, the Rules of Civil Procedure give absolutely no guidelines to follow in
making a decision on the matter. The nature of the dispute that may be diverted, the
relationship between the parties to the dispute, the particular mode to which it may be
referred, e.g., conciliation/mediation, arbitration, early neutral evaluation (ENE), or some
other method are essential and important matters that have been completely omitted from
the Rules.

In September 1991, the author conducted an experiment upon the endorsement of
the then Chief Justice Marcelo B. Fernan and the financial assistance of the Asia
Foundation to determine the practicability of using mediation as an alternative means of
settling disputes that have already been filed and are pending in court. A 30% success
rate was targeted as sufficient to endorse the experiment for possible adoption by the
Supreme Court. The experiment was conducted in two sites one in San Fernando, La
Union and the other in Quezon City. Both Regional and Municipal Trials Courts were
involved. Pending cases were referred for mediation by trained neutrals for a period of

32
Section 408, last paragraph, R. A. 7160.

33
Section 2 (a) of Rule 18 requires the court to consider the possibility of submitting the case of alternative modes
of dispute resolution.

12
one year. The mediators were required to undergo a two-day training course that
equipped them with the necessary knowledge, skills and attitude appropriate to their role.
A 31.14% success rate was achieved for the provincial project site but fell short of the
target for Quezon City. Nevertheless, the project proposed that the Supreme Court
should conduct an official validation of the results before making a final decision on the
matter. Possible amendments to the Rules of Court were proposed.
34

Early this year, five years after submission of the project report, the Philippine
Judicial Academy (PHILJA) under the leadership of its Chancellor, retired Supreme
Court Justice Ameurfina M. Herrera, became interested in the concept of diversion. The
author was taken in as consultant. This was an opportunity to revive the proposal for an
official validation of the earlier experiment as a condition for formal inclusion of the
reform measure as part of the Rules of Court. A Supreme Court Circular
35
that the
author drafted for a pilot test of the court-referred mediation program in the City of
Mandaluyong and Valenzuela, Metro Manila, is awaiting approval by the Supreme Court.

THE CONCEPT OF ALTERNATIVE MODES OF DISPUTE RESOLUTION
There are basically two views on the concept of alternative dispute resolution
mechanisms (ADRM). One would view it as giving a choice from the well-established judicial
mode of resolving disputes. The other restricts the concept to those providing a mode of
settling conflicts that is completely different from the adjudicative and essentially adversarial
mode of deciding controversies.
The first view broadly includes as ADR, decisions of all quasi-judicial agencies, such as
the Securities and Exchange Commission (SEC) and the National labor Relations Commission
(NLRC) through the Labor Arbiters. Also included are decisions of the Sole Arbitrator or
Arbitral Tribunal on construction disputes filed with the Construction Industry Arbitration
Commission (CIAC).
36
And, of course, mediation/conciliation is included.
The second view regards as a true alternative only those modes which empower the
disputants themselves to arrive at a compromise settlement of their controversy. This then
includes conciliation, mediation, early neutral evaluation, rent a judge, and other such schemes.
It, however, excludes arbitration.
As a means of unclogging court dockets, the broad view encourages the creation or
establishment of specialized agencies such as a Small Claims Court to deal with narrowly
confined disputes. Along this line is to decriminalize vagrancy and traffic violations,
37
as well as

34
A new rule proposed as Rule 33-A, entitled Referral for Mediation and an amendment of Section 6, Rule 22 of
the Revised rules of Court, are appended to this paper.

35
Attached as annex of this paper.

36
The CIAC was established by Executive Order No. 1008 on 04 February 1985.

37
Traffic violations and tenancy disputes are governed by the Revised Summary Rules of Procedure.

13
bouncing checks to mention just three examples, and then to proceed with administrative
processing of the offenders. Disputes between landlord and tenant, such as claims for the return
of guaranty deposits and advance rentals, could be administratively processed rather than
judicially dealt with.
Critics of this broad view, however, state that the dissatisfactions with the judicial system
are merely carried over to quasi-judicial processing which does not address the problems.
In a research survey that the Author conducted in 1982-84
38
to test the premises of the
Katarungang Pambarangay Law, among other objectives, popular grievances against judicial
justice were uncovered. These were grouped into: (1) judicial delay, (2) high cost, (3) failure to
comprehend the legal process, and (4) perceived unsuitability of the judicial process to the
resolution of everyday conflicts.
The causes of and possible remedies for judicial delay have already been discussed
earlier.
High costs refer to both financial expenditure and time costs. Lawyers fees, docket fees,
sheriffs fees, cost for transcript of stenographic notes and other expenses of litigation, often
mount to a level that could be ill-afforded by many disputants including small busnessmen.
Time spent with lawyers preparing for court battle and for personal attendance for numerous
court hearings that are frustratingly often postponed, detract from the gainful use of time and add
to costs.
Popular incomprehensibility of the judicial process refers not only to the use of English
as the official language of the formal legal system but also to the use of technical jargon of
lawyers. It also refers to highly technical rules of procedure designed to ensure the accuracy of
the fact-finding that is the essential basis for judicial decision-making. The rules are also
intended to ensure that the judge is a neutral, impartial, objective and fair decision-maker.
Unsuitability of judicial proceedings for everyday interpersonal disputes relates to the
nature of the judicial process as essentially punitive and backward looking. It is simply
concerned with the issue of who did what to whom and not to the why and the wherefore.
Only the symptoms are recognized but not the cause of malady.
Many times, however, a complainant is not really interested in punishing the other party
with a jail sentence or a fine. This is true in disputes where the parties have some kind of a
relationship based on kinship, employment or other working relationship. In these cases,
restoration of the disrupted relationship is more important than the imposition of penalties, be it
in the form of a criminal sentence or punitive damages. What the complainant is really
interested in is an opportunity to ventilate his grievance, explore the cause of the problem and get
an assurance that the offending conduct will no longer be repeated.

There are several differences between the modes of dispute resolution. It has been aptly
observed that the principal distinction between a judge and an arbitrator is that while a judge is

38
Bookbound mimeo Tadiar, Research Survey on the Conciliation of Disputes under the Katarungang
Pambarangay Law, 1984, 215 pages, U. P. College of Law.

14
appointed by the President of the Philippines upon recommendation of the Judicial and Bar
Council, an arbitrator derives his authority from the consent of the parties to a dispute to have
him/her render a decision thereon and agree to accept it as binding upon them

It could be inferred, therefore, that a judge and an arbitrator are alike in their function of
rendering a decision to resolve a dispute. Although arbitration may be less formal and not as
strict in adherence to technical rules of procedure and evidence, both modes follow the same
method of adversarial justice. The complainant asserts a claim that is denied by the other.
Cross-examination of a witness is the method of ascertaining the truth of the conflicting claims
and defenses. The result of the process is that one party emerges the victor and the other the
vanquished. One is declared right and the other wrong.

An arbitration proceeding, however, has the advantage of being constituted ad hoc or for
a particular case. An arbitrators attention and study being thus narrowly focused, the
controversy is decided much more expeditiously than a judge who must deal with tens if not
hundreds of cases at the same time.

On the other hand, conciliators and mediators do not render a decision on a controversy.
They merely persuade the parties to arrive at making reciprocal concessions that lead to an
amicable settlement thereof. The result of a conciliated settlement is mutually beneficial and
since no one has been condemned as having acted wrongly, the harmonious relationship between
the parties is restored.

The succeeding sections of this paper discuss in detail the small claims court and the
decriminalization of bouncing checks to help de-clog court dockets.


THE ROLE OF A SMALL CLAIMS COURT IN UNCLOGGING COURT DOCKETS

One of the means of helping unclog court dockets is to screen out issues, which need not
be filed in regular courts, factoring in the nature of the issue and amount of the claim. The
creation of a Small Claims Court (SCC) would be an inexpensive way for the government to
facilitate the speedy administration of justice. It will also give citizens who find expensive court
litigation an impractical solution to a legal problem, which only involves a very small amount, an
opportunity for redress of a wrong committed against them.

A small claims court is an informal, simple, and inexpensive forum in which small claims
issues are threshed out before a judge. The filing fee in a small claims court is inexpensive and
the procedure speedy. The pleadings before the SCC are in Forms, provided by the SCC, which
are easy to fill up by non-lawyer litigants. Its jurisdiction is limited to money claims, the total
amount of which varies depending on the social setting of the court. Judgment of the small
claims court is final and not appealable. The defendant, therefore, is given the option of meeting
the issue in a regular court, if he so makes the reservation in the SCC, before the plaintiff
presents evidence.

15
A small claims court helps in unclogging court dockets and giving regular courts the
breathing space to resolve bigger and more substantial issues. Considering the nature of the
cases filed in the SCC, no lawyers are allowed nor are highly qualified judges required.

Jurisdiction

Small claims court can award monetary damages or equitable relief (limited to orders to
refund, reform, rescind or repair). The SCC has no jurisdiction over criminal cases, cases
involving title to real property and cannot issue writs such as injunction or mandamus. It can,
however, issue an order of attachment or garnishment to implement its decision. Any person of
legal age or legal entities such as partnerships and corporations, may file a small claims suit in
the small claims court located in the place where the cause of action occurred or where either the
plaintiff or defendant resides. It is recommended that small claims in Philippine setting should
encompass only those which involve a sum of up to P150,000.00 excluding interest charges,
damages and cost. The number of small claims cases that can be filed by a party per year must be
limited. In some countries, 13 small claims cases per person per year is the maximum number
allowed.

Cases under the jurisdiction of a small claims court are those which involve the following
issues:

1. Consumer issues such as:

a. The defendant refuses to give the plaintiff goods or services that are legally due
the plaintiff (landlord refuses to return security);
b. Defendant illegally refuses to allow plaintiff to return or receive a refund on an
article bought by him;
c. Defendant refuses to repair an article purchased;
d. Defendant refuses to allow plaintiff to cancel a contract;

2. Miscellaneous issues such as:

a. Controversy over a dent in one's fender resulting from a traffic accident;
b. Tenant causing damages to an apartment (eviction is not within the jurisdiction of
a small claims court)
c. Refusal of a friend to pay his debt/loan; and
d. Bad checks (if BP 22 cases are decriminalized).

Procedure

The docket fee for a small claims action is minimal. It is recommended that the docket
fee for such an action be 1 % of the amount claimed but not to exceed P1,000.00.

To start a case, the plaintiff must complete a Claim and Affidavit Form from the SCC
Clerk of Court, which should detail his cause of action and the relief he wants from the court.
After filing the Claim Form and payment of 50% of the docket fee, the Clerks office will serve

16
notice, either by registered mail or personal service, to all parties concerned to attend a hearing
to be scheduled not later than 30 days from the filing of the case. The defendant must receive the
Claim and Affidavit Form with Notice, at least seven days before the hearing.

During the first hearing of the case, the parties will be asked if they wish to explore
mediation process under a court referred mediator. Suits frequently occur because of the failure
of parties to communicate with each other. Time and money can be saved if both parties reach a
settlement out of court, prior to the hearing proper. Should this occur, a Dismissal Form
obtainable from the SCCs clerk of court, must be prepared and filed. If the settlement is through
mediation and a compromise is agreed, the agreement will be presented to the court for approval.

The defendant may also request, before the plaintiff presents his evidence, that the case
be litigated in a regular court. The SCC then refers the case to the proper court and gives
plaintiff the option to pursue said case by paying an additional docket fee. If the defendant chose
to litigate in the SCC, he cannot ask for a change of venue after the plaintiff starts presenting his
evidence. The Plaintiff must pay the balance of the docket fee (the remaining 50%) before he
presents his evidence.

If the parties will not settle, the trial begins and the court hears both sides of the issue,
evaluate the evidence in the same manner as ordinary courts except that, rules of procedure are
not strictly applied. The judge in this case will simply hear the side of the plaintiff and later the
defendant. After going through the evidence and witnesses presented, both parties may submit
written memoranda in plain and simple language, before the judge decides.

The judgment and orders of the SCC cannot be appealed. However, either party may file
within 30 days from receipt of notice of the judgment, a motion to reconsider the order or
decision (SCC also provides the Motion Form).

If the SCC affirms its judgment, the plaintiff may then proceed with other collection
procedures including garnishment of wages or bank accounts, subject to the rules provided by
law. He has to file a Writ of Garnishment (form to be provided by the SCC Clerk) upon
payment of a fee of .5 % of the value of award. The plaintiff may also file a Subpoena and
Discovery Petition, which will set a hearing at which the defendant will be required to disclose
his income or assets. These fees, however, including the docket fee will be included to the
amount owing on the judgment.

Once the full amount of the judgment has been paid, the plaintiff must file a satisfaction
of judgment form (this Form, like all other forms should be made available by the SCCs clerk
of court as parties to a small claims suit are not represented by lawyers).

It is recommended that the Supreme Court conduct an in-depth study on the nature of
cases being filed in our regular courts, to find out exactly how many of the cases pending before
regular courts are small claims issues. Pending this research however, from experience alone , it
can be safely concluded that almost 30-40% of the cases filed in our courts are small claims
issues. A Small Claims Court, therefore, will drastically reduce the backlog by this number if
fully instituted.

17

The creation of such court will not entail an additional enormous expense from the
government. Strict requirements for judges in regular courts may be waived, since small claims
issue and procedure do not require a lengthy legal experience. There are lots of lawyers in the
Philippines today who would be willing to take on the job of a small claims court judge.
Considering the time, effort and expense being spent by regular courts in small claims issues, the
creation of a small claims court will, in the long run, be more economical and the effect on the
effective delivery of justice, more beneficial.


DECRIMINALIZATION OF BOUNCING CHECKS TO HELP
DE-CLOG COURT DOCKETS

Not every check that bounces should be criminally prosecuted. Criminal prosecution
should only apply when the drawer of the bad check receives something of value in exchange for
the check he draws with fraudulent intent, at the time the consideration is delivered. Fraudulent
intent is present when the drawer knows that the check will not be honored when it is presented
to the bank for payment. He is guilty of the crime of representing a worthless piece of paper as
cash, so that the victim will part with his goods.

It should not be a criminal matter, however, in the case of a pre-existing debt where the
drawer received the goods or consideration in the past and makes payment on his debt with a bad
check. The victim did not part with his goods relying on a fraudulent representation of the
worth of the check. When the check is not honored, it is equivalent to the drawer not making
good on his debt. No one should be imprisoned for not making good on his IOU.

This is also generally applicable to post-dated checks. In this case, there is essentially
an understanding that the check is not good on the date the consideration is received, which
again makes said transaction a loan with the check a mere collateral for the loan. Criminal
intent must be established here.

When the drawer makes a stop payment order on a check he previously issued, criminal
intent to defraud the victim must also be established. There is no crime that automatically results
from such an order. If there was no fraudulent intent on the part of the drawer, again the case is
properly a civil case for damages.

Imposing stiff civil penalties may be more effective than having criminal penalties that
are not actually imposed. In many countries today, penalties amounting to treble the value of the
check is proving to be a successful deterrent in curbing the proliferation of bad checks. The
following are examples of state civil penalty rules on bad checks in the United States :
39


39
(For discussion on when treble amount is granted see Braden Corp. v. Citizens National Bank of Evansville, 661
NE 2d 838,Indiana Ct. App. 1996. For decision on when treble amount is not given, see Commercial & Medical
Accounts v. Mackintosh, 662 NE 2d 659 (Ind. Ct. App. 1996). Examples of state civil penalty rules on bad checks
in the United States are discussed above.


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1. Alaska- The bidder may recover damages in the amount equal to US$ 100.00 or
treble the amount, whichever is greater, except that damages under the bad check law
may not exceed the amount of the check by US $ 1,000.00

2. Arkansas- Amount due, service charge not to exceed $ 10.00. On stop payment, 15
days following the written demand to the drawers last known address, the holder
may collect fees not to exceed $ 15.00. Failure to make restitution and collection fee
will result in liability of twice the amount of the check, but in no case less than US$
50.00;

3. Colorado- Treble the amount of such check but in no case less than US$ 100.00
including reasonable fees;

4. Florida- In the event of a failure to make payment within 30 days after demand, treble
the amount owed in addition to the amount owed together with the bank and court
costs and reasonable attorneys fees, not less than US$50.00 and no more than US$
2,500.00. If payment is made in 30 days, a service charge of $10.00 or 5% of the
amount of the check, whichever is greater, can be added. In stop payment actions,
reimbursement for actual travel expense to the holder or agent for filing papers and
for travelling and providing witnesses to the proceedings will be included;

5. Indiana- Treble the amount of the check not to exceed $ 500.00 plus the amount of
check including attorney's fees of not less than $ 100.00 and interest at 18% per
annum;

6. Washington- Lesser than the of amount of the check or interest of 12% and the cost of
collection not to exceed $ 40.00. If court action is necessary after 15 days, lesser of
reasonable attorney's fees and treble the face value of the check or $ 100.00.

If a criminal intent is absent, decriminalization of the act of issuing a check that
eventually bounced, will not only help unclog court dockets but also rationalize the country's
criminal legal system since only those with criminal intent will be imprisoned for their acts. At
present, the Philippines is one of the very few countries attaching automatic criminal liability for
the issuance of a bouncing check.

Current Situation

The problem however, is that the law on bouncing checks has to be applied until
repealed. Pending the repeal of the law, issuing bouncing checks is still a criminal offense and
BP cases will continue to be filed. In order to help de-clog court dockets of bouncing checks
pertaining to collection cases, steps can be immediately instituted to help minimize the entry of
BP 22 cases with regular courts. The main thrust of solving this problem is input-screening, or
providing for mechanisms to resolve the issue before a court officially takes cognizance of a BP
22 case for pre-existing debt.



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Jurisdiction

BP 22 violations could be filed in a Small Claims Court and the Municipal Trial Court
(MCT), which could be created by Congress for small claims depending on the amount of the
check.

Notice and Demand Regulated by the Prosecutor's Office

The requirement of giving the drawer a notice that his check bounced and demanding
payment (including fines and other penalties) must be a necessary pre-requisite before the
Prosecutors Office conducts a preliminary investigation. Said notice will carry a notation from
the Prosecutors Office to give the demand letter a more serious effect. No case can prosper
unless said notice and demand is proven by the plaintiff. A Notice and Demand Form and
procedure (see Annex A showing a sample for Small Claims Court) can be provided by the
Small Claims Court, MTC or the Prosecutors Office to anybody who plans to file a BP 22 case.
A case can only be filed once the drawer refuses to pay the value of the check or fails to answer
within 30 days from the transmittal through registered mail, of the Notice and Demand.

Mediation and Collection

Once the case is filed, compulsory mediation could be instituted.

The clerk of court will issue summons to the accused to attend mediation proceedings
before a court-designated mediator. The accused is required to attend the mediation process and
thresh out the issue with the plaintiff. The trial only begins upon the failure of the accused to
attend mediation or failure of the parties to reach a settlement in the mediation process.

The mediation process, however, would provide a viable screening device, which should
result in fewer cases filed. With the threat of criminal prosecution, the accused may be
encouraged to attend mediation and settle his debts. If a compromise is reached, the court issues
an order to implement the compromise agreement.

If no settlement is achieved, the trial begins, where the accused has to face a very clear-
cut law, which merely requires the fact that he issued a check, which was later dishonored. This
will make settlement and payment more promising for the accused and mediation or other
alternative dispute settlement mechanisms a better option .

The recommended procedure will not absolutely free regular courts from becoming
collection agents of victims of bouncing checks. However, the compulsory requirements of
Notice and Demand duly approved by the Prosecutors Office and Compulsory Mediation will
spread out the task of collection to the plaintiff himself and in the mediation process, to both
parties.




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CONCLUSION AND RECOMMENDATIONS

It is clear from the discussion that the most effective way of solving the pervasive
problems of judicial delay and clogged court dockets is through instituting reforms under the
Rules of Court. Even Supreme Court Circulars have not been as effective as the Rules of Court.
Procedural reforms through statutes such as the Arbitration Law and the Katarungang
Pambarangay Law have not been very effective.

To summarize, the following are general recommendations to unclog the court dockets:

1. Re-orient law student training, and lawyers attitudes as well as that of the general public on
the need for: (a) preventive lawyering; and (b) prior conciliation efforts before seeking
judicial relief;

2. Call for greater public participation in the recruitment process of court officials - Improving
the recruitment process through appointment of honest, capable and committed individuals
would remedy the situation.
40
This, however, would include raising salaries and benefits that
would attract the kind of personnel that is desired.

3. Make more effective the accountability of judges and other court personnel through
disciplinary action - No matter how effective the screening process may be, however, there
will always be some undesirables that somehow get appointed to the system. Those who
were initially qualified become, in time, tainted by the same undesirable traits they were
originally free from. The next remedy, therefore, would be to make more effective the
administrative disciplinary actions that could deter undesirable acts or ultimately weed out
the incorrigibles.

Finally, specific recommendations to unclog or de-clog court dockets are as follows:

1. I ncrease output or case disposal rate through:

a. Return of specialization of courts (criminal courts and constitutional courts);

b. Strict compliance with set periods for rendering decisions; and

c. The continuance of procedural reforms for simplification of complex rules;
shortening periods for filing of pleadings with due regard to fairness; and
recognition of fax/e-mail filing of pleadings.





40
The 1987 Constitution did away with the need for confirmation by the Congressional Commission on
Appointments of appointments to the judiciary. Instead, the President of the Philippines appoints from among
those recommended by the Judicial and Bar Council.


21
2. Restrict judicial access through:
a. The creation of a Small Claims Court;
b. Placing of a procedural bar as a condition for judicial access (e.g., Katarungang
Pambansa Law and exhaustion of administrative remedies); and
c. The creation of an additional fora for ADR before access.

3. Divert pending cases to ADR or to administrative processing through:

a. Decriminalization of bad or bouncing checks; and
b. Decriminalization of commonly recurring petty offenses; and

4. I nstitutionalizing the ADR System as a court-annexed system and as a separate
institution


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25

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ANNEX A

US jurisprudence on bad checks, the penalties thereto and Small Claims Court rules, is
one of the most advance in the world today. Examples from their experience are cited in this
paper to provide an idea on their rules regarding checks dishonored for insufficiency of funds.

Under the California Civil Code, Section 1719, any person who writes a check which is
dishonored can be held liable for a penalty equal to three times the amount of the check, plus the
face value of the check (minimum of $ 100.00 and maximum of $ 1,500.00)

The following simple steps must first be met in the case of a bad check under the California
Code:

1. You must write a letter to the check writer and mail it by certified mail. Ask to be paid
the amount of the bad check in cash or money order, within 30 days. Your demand may also
include the fee charged by your financial institution to process the bad check, not to exceed $
25.00 for the first bad check and $ 35.00 for each subsequent bad check processed and the
cost of mailing and notice. The Required Form Letter :


BAD CHECK DEMAND LETTER

Date ______
Name of Check Writer
Last Known Address of Check Writer

Dear Check writer

The check you wrote for $ _______, dated ___________, which was made payable to
_________________ was returned by name of bank -- because of (Insufficient funds or
account closed or stop payment)

Unless full payment of the check is received by money order or cash within 30 days of
the date of mailing this demand, together with $__________ (amount charged by the bank to
process bad check) and $ ________ for the cost of mailing, I will file a Small Claims Court
claim against you.

The claim will request damages for the amount of the check $ ________ plus
$____________ damages assessed at three times the amount of the check, for a total of
$_____________ against you.

You may wish to contact a lawyer to discuss your legal rights and responsibilities.




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Please send payment to:
Your name
Address
Signature


2. You must wait for 30 days. If you have not received payment in cash within 30 days from
the date you mailed the demand letter, you may file a claim in a small claims or municipal
court. You may proceed with your suit even though the party has not signed the letter as
long as you submit a proof of mailing by certified mail;

3. At the hearing, you must produce a copy of the demand letter sent to the check writer at
his last known address and a signed certified mail receipt showing delivery or attempted
delivery if it was refused;

4. Take all other documents related to the case to the court hearing. This might include the
notice from the bank, notes of your conversations and copies of any correspondence with the
check writer regarding your effort to collect.

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