The Law on Alternative Dispute Resolution:

Private Justice in the Philippines

language of the locality. It is easy to surmise that

our ancestors practiced ADR.

(Book Summary and Cases)

Hispanic Era-Discontented parties had to resort to

going to the SC of spain which was a 36-day trip.
Procedure for civil action, akthough similar to the
criminal cases, was definitely more costly and
drawn-out. The high cost and unwarranted delays
ensured that only the Europeans and the rich
merchants in the city and the wealthy landowners
in the rural areas could afford the prosecution of
the civil suit.

by: Marian Jane Alumbro

University of Cebu College of Law
Based on the book of Jim Lopez
Caveat: This is merely a summary of the book.
You should read the book at least once. This
reviewer does not contain some essential
definitions because such are already defined in
the law, RA 9285. No copyright infringement is
intended.
CHAPTER 1
The Laws delay: An introduction
History of ADR
Pre-hispanic era-Jose Rizal noted the custom of
the inhabitants of the Philippines before the
Spaniards reached its shores. They submitted the
decision of their elders, which they respected and
carried out. According to Jose Rizal, it was better
that the ..Judges were persons of the locality,
forming a jury, elected by both parties who knew
the case, the customs and usages better than the
gowned judge from the outside to make his
fortune, to judge the case he does not know and
who does not know the usage customs and

Our primitive ancestors were ahead of their times!

Problems of judicial delay according to Marcos
(1967):
1) The misuse of the due process and the

abuse of legal technicalities;

2) The intervention of the political pressure in

the court cases;

3) Sheer weight of the court litigations arising

from development and growth;

4) Dilatory tactics of lawyers;

5) Neglect and laxity on the part of the judges.

The Laws delay according to Florentino P.
Feliciano:
1) An efficient and mismanaged court system
that fails to act promptly on legal issues ;

2) The disorganized state

connected agencies;

of

the

court-

3) The lack of preparation on the part of the

litigants and lawyers;
4) The trigger-happy mind frame of lawyers to
engage in long-winded examinations of
witnesses; and

-Private Courts are managed by private

organizations, called ADR providers to serve those
who need to resolve most types of consumer,
civil, corporate and commercial disputes.
-Parties generally agree to enter the private
court system for one main reason: the public court
system is too chaotic and unwieldly.
-vigilante justice

5) The lawyers propensity to elevate their

cases to the appellate courts and needlessly
filing petitions for mandamus, prohibition
and certiorari for the purpose of reviewing
the interlocutory orders of the lower courts.

-Judges, selected by the parties and are

paid on an hourly or a per session basis, are for
rent not for sale. They are paid for their time and
their expertise, not their expected favors.

But a more serious factor behind the laws delay

in the Philippines involves the billing practice of
lawyers. (Billable hours, number of court
appearances) Delaying tactics to consume time.

CON: Creates a dual court system-one rich

and one poor. No means a perfect system, it
offers enormous savings in time, effort, anxiety,
money in the long haul.

The choice between a litigation and settlement is

clear. He would rather cut through the chase and
solve his disputes swiftly and move on with his
life.
AGAN v. PIATCO (GR> NO. 15501)-SC ordered all
affected parties to comment made by one of the
parties that PIATCO commences arbitration
proceedings by filing a request for arbitration with
the secretariat of the Internation chamber of
commerce, International Court of arbitration.
Private Justice-the concept is fairly recent
development in the administration of justice.

CHAPTER 2
The litigation of conflict: A Confucian
Confusion
Two fundamental reasons for failure of trial courts
according to Ralph Warner and Stephen Elias:
1) Court Rules and Procedures are so
complicated and inefficient that lawyer fees
and other costs end up being a bigger
problem than the dispute itself.

2) Winner take-all sustem defies logic,

encourages lying and generally brings out
the worst in all participants.
The Nature of Conflict
Conflict- clash of divergence of opinions, values
and interests and emotions.
Several phases of the conflict process by Peter
Condiffe (1995)
1) Conflict starts when parties perceive their
differences-they go though feelings of
anziety and frustration.
2) Realization or expression of grievances and
the assessment of all angles in the conflict.
-some parties get afflicted with AVOIDANCE
SYNDROME (disregarding the existence of
the
problem
because
of
relative
powerlessness high risks and costs involved)
3) Parties choose their conflict resolution
methods and select their strategies to settle their
disagreements.

Conflict is a contest and a problem to solve (Bill

Withers)
Modes of Resolving Conflict (Blake and Moulton)
1) Withdrawal-Avoidance behavior on one or
both parties
2) Smoothing-emphasis of common interest
and yielding by one or both parties.
3) Compromising-each side obtains a part of
what it wants.
4) Forcing-forcing the other to acquiesce.
5) Problem solving-involves an agreement in
which both sides meet their objective and
affective needs.
When a person wins through a lawsuit can
compare it as a Pyrrhic victory (pronounced /
prk/) which is a victory with devastating cost to
the victor; it carries the implication that another
such will ultimately cause defeat.
Importance of Litigation (Peter Lovenheim)

4) Evaluation of outcomes and the analysis

of all ramifications of full implementation of the
chosen methods of conflict management.

1) When you need to establish a legal

precedent, such as the validity of the patent
which your company holds;

ADR aims to solve the conflict not win the lawsuit

which is the aim of litigation.

2) When you need to publicy prove the truth,

such as when a customers complaint about
the product quality or safety has received

wide attention in the media products good

name;
3) When your companys legal rights have
been infringed and you stand a good chance
of collecting substantial damages in court;

Which is wrong because litigation should be the

LAST option not ADR.
Limitations of ADR
Cases that involve:

4) When your opponent is unable and unwilling

to participate in ADR; and

1) Constitutional law issues

5) When serious crimes are involved in the

dispute.

3) Probate

CHAPTER 3
The Grand Misnomer: Alternative Dispute
Resolution
Legal Basis of ADR:
ART. VIII, Sec. 5 (5) 1987 Consitution
-Mandating the SC to promulgate rules that
shall provide a simplified and inexpensive
procedure for the speedy disposition of cases.
Rule 18, Sec 2(a) 1997 Rules of Civil Procedure
-Requiring the courts to consider the
possibility of an amicable settle or of a
submission to alternative modes of resolution.
Alternative comes from the word alternate
which means substitute, spare tire, a second
stringer, a fallback position.

2) Anti-trust suits

4) Adoption
5) Precedent-setting cases that involve
punitive damages
6) Actions of equitable relief, and
7) nuisance
are beyond the scope of arbitration.
ART. 2035 of the Civil Code
If related issues of the following are matters in
controversy may not be capable of being referred
to arbitration:
1) Civil Status of persons;
2) Validity of Marriage;
3) And legal separation;
4) Futures support;

5) Future legitime;

do best: solve their client problems and resolve

their disputes with the least amount of time and
expense. The key to decongest the courts is that
students should be trained to be sensitive to their
clients wishes to settle their conflict or dispute
swiftly and without expense to court trials.

6) Jurisdiction of the courts;

7) Future jurisdiction of the courts.
CHAPTER IV
The Settlement of dispute in the Philippines:

Filipino Values

A culture of PAKIKISAMA
Many Filipinos readily overcome conflict through
pragmatic means.
Gini Grahams techniques in Resolving Conflict:

up

2) Pakikisama-Companionship

1) Amor Proprio (self-respect)

2) Applying the appropriate problem solving

techniques:
a. Creative visualization-examine
reasons for the problem

1) Pakikiusap-request and

Keep communication lines open.

1) Identify the source of the problem

b. Brain-storming-come
alternatives

Filipino Conflict Management System

the

2) Pasikaban (one-upmanship)
3) Bahala na (fatalism)
4) Gantihan (retaliation)

with

c. Automatic writing-ask inner self for

reactions of those possibilities
d. Mental Imaging-ask inner expert for
advice in making choices.
Litigation is what many Filipino Lawyers do best.
Students of law are trained to think like lawyers,
but they are not prepared to deal with they should

Impede settlement and plays key roles in

clogging the courts with frivolous suits that are
brought just to Save face or to give a lesson
to the opposing party.
But, positive aspects of Filipino culture that
may tend to mitigate the Filipino propensity to
litigate disputes:
1) Kamag-anak network (close family ties)
2) Tulungan (mutual aid)

3) Bigayan (give and take)

4) Palabra de Honor (Word of Honor)
5) Bayanihan (cooperative endeavor)
6) Hiya (shame of doing something wrong)
7) Utang na loob (recognition of a debt or
obligation)
8) Paggalang (respect or honor)
9) Kompadre (godfather system)
10)

Delikadesa (Being proper)

The Katarungan Pambarangay was seen by

legislators as a means to decongest the courts
dockets, by encouraging the settlement of minor
cases at the barangay level, which will in turn
allow the courts to speed up the adjudication of
already pending cases. This again relates to the
access-to-justice problem in the country.
To ensure that the goal is met, the Local
Government Code makes KP mediation and
conciliation a condition precedent to the filing of
cases in court. 7 Though non-compliance does not
result in jurisdictional defect thereby rendering
the court proceedings void ab initio, such failure,
if seasonably raised, makes the case vulnerable to
a motion to dismiss on the ground of prematurity
(Garces v. CA, 162 SCRA 504). (TAKEN FROM AN
ONLINE
PRIMER
OF
THE
KATARUNGAN

PAMBARANGAY Published by the UP-College of

Law)
Types of Arbitration in the Philippines:
1) Labor Arbitration
The Labor Code of the Philippines makes
arbitration mandatory in cases involving the
interpretation
and
implementation
of
collective bargaining agreements (CBA) and
the interpretation or enforcement of
company personnel policies. The original
and exclusive jurisdiction of which falls with
the
Voluntary
Arbitrators.
(Sanyo
v.
Canizares)
2) Construction Arbitration

The creation of the Construction Industry

Arbitration Commission (CIAC) ushered the
birth of arbitration in the construction
industry.(EO. 1008)
Private or Government-entered construction
contracts can be submitted.
Tesco v. Vera-While it is true that the CIAC
shall have original and exclusive jurisdiction
over disputes connected with contracts
entered into by parties involved in the
construction industry in the Philippines, the
parties must first agree to do so before the
CIAC can acquire jurisdiction to arbitrate the
matter.

3) Consumer Arbitration
Consumer Act of the Philippines (RA no.
7394) provides for the creation of a
consumer arbitration program to handle
consumer complaints. They have original
and exclusive jurisdiction to mediate,
conciliate hear and adjudicate all consumer
complaints xxx.
4) Matrimonial Mediation
Disputes between couples that are civil in
nature may be the subject of court-referred
mediation, subject to the limitations of Art.
2035 of the Civil Code.
The ff. disputes may not be compromised:
a) civil status of persons
b) validity of marriage or legal separation
c) any ground for legal separation
d) future support
e) future legitime
f) jurisdiction of the courts.

5) Corporate Arbitration
Corporation
Code
provides
for
the
mechanism to resolve corporate disputes. The

SEC can exercise its power to arbitrate the dispute

upon written petition by any stockholder. (read
more about powers of the SEC)
6) Partnership Arbitration
The CC states that is beyond the authority
of one or more but less than all the partners
to enter into a compromise or submit to
arbitration a partnership claim or liability.
When it comes to ADR, unanimous consent
of partners is needed to carry out the plant
to resolve partnership disputes without a
court trial.
7) Administrative Arbitration
Doctrine
of
Non-exhaustion
administrative remedies
8) Environmental Mediation
9) Executive Arbitration
10)

Foreign Arbitration

11)

Banking Arbitration

12)

Mining Arbitration

13)

Maritime Arbitration

14)

Insurance Arbitration

15)

IP Arbitration

16)

Securities Arbitration

of

Six-Step Structure of a face-to-face mediation

meeting
(I-H-I-M-I-S)
1) Introduction and agreeing of ground rules
2) Hearing what has happened or summarizing
the facts
3) Identifying the issues
4) Mutual understanding and communicating
feelings
5) Ideal storming of a win/win solution
6) Signing of voluntary agreement.
Causes of Court Delays (Justice Myrna Dimaranan
Vidal)
1) the misuse of the due process and the
abuse of
legal technicalities;
2) the intervention of political pressure
in court cases;
3) the sheer weight of court litigations arising
from development and growth;
4) the dilatory tactics of lawyers;
5) neglect and laxity on the part of judges; and

6) Court vacancies.

Definition of Terms:
Alternative Dispute Resolution
It is defined as any process or procedure
used to resolve a dispute or controversy, other
than by adjudication of a presiding judge of a
court or an officer of a government agency, in
which a neutral third party participates to assist in
the resolution of issues. It includes arbitration,
mediation or conciliation, mini-trial, early neutral
evaluation, or any combination thereof.
Arbitration
A voluntary dispute resolution process in
which one or more arbitrators, appointed in
accordance with the agreement of the parties
resolve a dispute by rendering an award. It is the
reference by mutual agreement or consent of the
parties of a controversy or dispute to selected
persons for an informal hearing and extra-judicial
determination and resolution. The hearing is
usually held in private and the decision of the
persons selected will be a substitute for a court
judgment. This avoids the formalities, delay and
expenses of ordinary litigation.
Mediation

A dispute resolution procedure in which an

impartial third party, mutually chosen by the
parties, acts as the referee to help the contending
parties settle their dispute. The mediator, unlike
the arbitrator, has no authority to make the
parties reach an agreement. He serves as a
clarifier and facilitator without dictating
settlement. The term mediation used under ADR
Lawincludes conciliation.

alternative dispute resolutions. The most common

is the mediation-arbitration (Med-Arb). In this kind
of combination, parties first proceed to mediation
to define the dispute and settle as many issues as
possible, and then they engage in arbitration to
settle issues that remain unresolved by the
mediator.

Mini-trial
A dispute resolution method in which the
merits of a case are argued before a panel created
by agreement of the parties comprising senior
decision makers with or without the presence of a
neutral third person after which the parties seek a
negotiated settlement.

Method of resolving the claims of a huge

class of claimants with the least possible
litigation expenditures and court cost through an
administrative agency in charge of maintaining
and tracking statistical days as well as overseeing
restitution payments, appointed by the court or
chosen by the parties design a set of claims
procedures.

Early neutral evaluation

Voluntary Settlement Conference

An alternative dispute resolution process

whereby parties and their lawyers are brought
together early in a pre-trial phase to present
summaries of their cases and receive a nonbinding assessment by an experienced, neutral
person with expertise in the subject of the
dispute.

just like mediation it is a non binding

hearing; the neutral party is allowed to express
his opinions and views about the case and will be
obligated to formulate an advisory opinion to be
submitted to the parties for review and approval.

Combination of Alternative Dispute Resolution

A particular alternative dispute resolution
may be combined with the other types of

Class Action Administration

Mass Tort ADR Projects (Manville Personal Injury

Settlement Trust and A.H Robbins bankruptcy for
claims of asbestos sufferers and for claims related
to the Dalkon shield, respectively)
Referee or Rent a Judge

a practicing attorney or a retired judge

usually acts as a referee who conducts a trial
that incorporates the formalities of a regular court
trial, complete with a court reporter and the
observance of the strict rules of evidence.

means any mediation process conducted

under the auspices of the court, after such court
has acquired jurisdiction of the dispute

Mock-Jury trial

means mediation ordered by a court to be

conducted in accordance with the Agreement of
the Parties when as action is prematurely
commenced in violation of such agreement.

a mock jury contract sets forth all the

provisions government the dispute resolution
process chosen by them, including how the mock
jury proceedings will be conducted.
Ombudsman
he is a fact finder or referee hired by
businesses to deal with disputes inside the
organization. The objective is to solve problems
and disputes quickly and informally by hearing
and investigating disputes between workers.
Process Consultation
this is used if there is a long-standing
relationship between the parties and they
encounter problems in resolving the disputes.
Process consultants act as counselors who focus
on the process of negotiation, assisting the parties
in enhancing or restoring communication lines .

Court-Annexed Mediation

Court-Referred Mediation

Chapter V
The Mitigation of Litigation:
A Cornucopia of Non-litigative Processes

Motivating Factors that contribute to the rise in

demand ADR processes:
1) Avoidance of high expense of litigation
2) Fear of lawsuit will result in an outcome far
more adverse than reasonably anticipated
3) Need to return workers involved in the law
suit to more productive activities
4) Wish to preserve and re-establish the
business or inter-personal relationship that
was temporarily disturbed by the conflict.
Med/Arb (Already defined in this reviewer) The
parties go through a phase where parties in
crafting a compromise agreement only if this goes
down in flames, the mediator will change colorsmay not render a binding award as an arbitrator
pursuant to the agreement. However, Sec. 20 of
RA 876 states, No Arbitrator shall act as a
mediator in any proceedings in which he is acting
as an arbitrator;xxx is subject to strict
interpretation.
Facilitation is a less active form of mediation.
The neutral third party or facilitator acts as a

moderator in large meetings, acting as traffic

police officer directing the flow of traffic in the
meeting and seeing to it that everyone says his
piece during the forum.
Mini-trials is not a trial but a rational and
voluntary manner in structuring a settlement of
disputes between two big companies that are at
loggerheads over sticky business issues. This is
otherwise known as rent-a-judge.
Besides, mini-trial is a voluntary, confidential and
non-binding procedure that effects a speedy, costeffective resolution of corporate conflict. Lawyers
present summaries of their cases to chief
executives or other key decision-makers
representing both clients. (Linda Singer)
Mini-trial contract This is signed by the parties
that contains provisions governing the conduct of
discovery, how hearing will be handled and a few
more important stipulations.
Class action administration is a sensible
approach at dispute resolution is to have an
administrative agency, that is in charge of
maintaining and tracking statistical data as well as
overseeing restitution payments, appointed by the
court or chosen by the parties design a set of
claims procedures and forms that will be sent out
to all the claimants.
Voluntary settlement conference is where the
neutral party, unlike mediation, is allowed to

express his opinions and views about the case and

will be obligated to formulate an advisory opinion
to be submitted to the parties for review and
approval.
Conciliation uses a neutral third party to clarify
issues in dispute so that the parties concerned
may themselves arrive at a mutually acceptable
agreement.
Mass tort ADR projects
Rent-A-Judge incorporates the formalities of a
regular court trial, complete with a court reporter
and the observance of the strict rule of evidence
but the parties may agree to modify or disregard
most formal rules of procedure, evidence and
pleading with some limitations.
Mock Jury Trial
Ombusdman
Process consultation the process consultants
(PC) differs from the meditator in that there is no
discussion of the specific issues or any attempt to
solve them. Thus, process consultants are often
more like counselors who help parties to get along
better so that they can engage in better
negotiation and problem-solving.
ADR processes in US Government Agencies
International Commercial Arbitration
Small claims courts

Neighborhood dispute centers

Regulatory negotiation
Chapter VI
The sport of Nonadversarial lawyers

Leigh Steinberg, Effective negotiation is

about exhaustive preparation, utter clarity,
heartfelt
communication,
and
a
sincere,
demonstrated desire to fully understand not just
your own needs but the needs of other party.xxx
Jesus and Socrates were two of the best
negotiators of history. One is a form of syllogism,
the other in the form of parables.
Rock and a Hard Place- The rock is litigation,
which as a means of resolving a dispute is
frustrating, time comsuiming, expensive and full
of friction. The hard place is negotiation, which
can often prove unavailing as a means of reaching
accord between two disputants, each of whome
has strong feelings about the matter. (Freund,
Smart Negotiating, 1992)
LITI-GOTATION (Marc Deiner) Litigation is often
used for leveraging. A lawsuit is filed and pushed
to the limit to force a favorable settlement
agreement.
Negotiation is a problem solving operation.
(Romance Languages means to do business)

Lawyers have a role to play in at least two crucial

negotiation schemes:
1) Dispute or litigation settlement
2) Transaction-planning
negotiations

to

preventive

6) Trial Balloon
law

Basic Negotiation Tactics

1) The wince
Well-timed flinch at the exact moment when
the other party announces his terms.
2) Silence
Staying absolutely quiet after making your
offer or when the other party says
something that you find disagreeable
3) Good guy/bad-guy
Working with an actual partner to make it
appear to the other party that accepting the
offer of the good guy is a much better
alternative than giving in the harsher terms
bad guy
4) Limited authority
Buying time to obtain more authority from
an imaginary principal or a real person with
greater discretion
5) Red Herring

Creating distraction to muddle the real

issues

Raising questions designed to peek into the

other partys position without revealing your
true objectives
7) Lowballing-agreeing to the offer made by
the other part and then start chipping away
at the terms of the original offer until the
offer has been severely altered
8) The Bait and switch-advertising one product
to bring people inside the store and finding
excuses to explain the unavailability of the
advertised product then quickly suggest
that a different product be bought instead.
9) Outrageous
behavior-exhibiting
socially
unacceptable demeanor to rattle the other
party
10)
Written
work-presenting
adhesion
contracts to discourage question about the
deal
11)
The vise-applying verbal pressure to
force the other party To do better than
what is being offered and to gain
concessions.
12)
Trade off-splitting the difference and
seeking the midpoint

13)
Nibble-waiting for the major terms of
the deal to be settled then asking for the
minor concessions to be included in the
deal
14)
Funny Money-making mathematical
calculations and dividing the payments over
a period of time to convey the impression
that the other party is getting a good
deal.
Two major types of unassisted negotiations:
1) Combative Negotiator- who will emphasize
only his own gains at the expense of the
other and employ hard line tactics, such as
exaggerating claims or even threatening to
abandon the discussion if he does not get
his way.
2) Conciliatory negotiator-who will assume the
role of a problem solver rather than an
intimidator.
Class of negotiations
1) Position-based negotiations often involves
hard-ball methods because it is premised on
the presumed superiority of ones position.
2) Interest-based negotiation is much more
candid and amiable technique that involves
the willing disclosure of all germane
information to the other party so as to
explore all avenues of satisfying the needs

and interests of the other side of the least

possible cost and at the shortest possible
time.
Leonard Koren and Peter Goodmans dead-lock
breaking techniques (1991)
1) Be positive and dont be put off by the good
word no
2) Agree on easier terms first and skip over the
points that are bogging you down and come
back to them late
3) Emphasize shared goals, get back to
common ground and start building up again
4) Reduce complexity, break down complicated
negotiations into pieces and solve each
piece one at a time
5) Brainstorm with your opponent to generate
various alternatives
6) Fine tune your agreement so that there is
something that both of you can find
acceptable
7) Passing written proposals back and forth for
comment
8) Calling a time out when things get rough
and not going your way.

EXHAUST ADR PROCESSES BEFORE LITIGATION.