Topic 1: Definition and Types of Alternative Dispute Resolution System in the Philippines

Alternative dispute resolution (ADR) refers to ways of resolving conflicts, other than traditional Court
processes or litigation. Three methods of ADR include:

●Negotiation
●Mediation
●Arbitration

1. Negotiation is a process where two parties in a conflict or disagreement try to reach a resolution
together. During a negotiation, the parties or their representatives (lawyers) discuss the issues to
come to a resolution. Before a negotiation, each party should consult a lawyer. Consulting a lawyer
allows each party to be well aware of their rights and duties for the matter they want to resolve.

2. Mediation is a process where a neutral person assists the parties in discussing the matter and
reaching a resolution. A neutral person is a person who does not support either party in the conflict.
This person is called the MEDIATOR, and they help the parties communicate. A mediator ensures that
communication between the parties is fair and honest. The mediator is not a judge or an arbitrator
and cannot take the side of either party, give legal advice, or provide counselling. Mediators can assist
by clarifying issues, identifying concerns, and helping parties understand each other’s interests. The
mediator can assist the parties in reaching an agreement between them but will not force the parties
into a solution during mediation. Mediation takes place in private and the decisions made are private.
Mediation can take place in person where parties meet face-to-face for discussions. Or, the parties
may be placed at separate locations where the mediator communicates information between parties.
After mediation, the parties can sign a Memorandum of Agreement (MOA). A MOA is a cooperative
agreement written between the parties to obey the agreed terms and conditions. The mediator writes
the MOA which outlines details of the solutions reached by the parties. The purpose of the MOA is to
have a written understanding of the agreement between the parties. Each party should have their
lawyer review the MOA.

3. Arbitration is a process where a neutral third party makes a decision. The decision-makers in
arbitration are called ARBITRATORS. There can be one arbitrator or multiple. The arbitrator will
arrange a meeting between the parties to determine what issues need to be resolved during the
arbitration. Each arbitrator hears the parties present their case and their supporting evidence. The
arbitrators may also request each party to provide their case and supporting evidence in writing
(called, written submissions). After hearing both parties’ sides of the story, the arbitrator will make a
decision (in the same way as a Judge would in court). Arbitral decisions are sometimes called
AWARDS. Arbitral awards are generally final and compulsory. An award may be filed in court and
enforced as if it were a court judgment. It can often take a long time to receive an arbitration award.
Arbitration is commonly in commercial disputes, consumer and employment matters, family disputes,
or insurance claim disputes. Arbitration has many advantages over court hearings and litigation. For
example, arbitration can be faster, more flexible, and less argumentative, intimidating, and expensive.

Types of Alternative Dispute Resolution System in the Philippines

1. Katarungang Pambarangay

The Katarungang Pambarangay or Barangay Justice System is a community-based dispute

settlement mechanism that is administered by the basic political unit of the country, the barangay. As
a community based mechanism for dispute resolution, it covers disputes between members of the
same community (generally, same city/municipality) and involves the Punong Barangay and other
members of the communities (the Lupon members) as intermediaries (mediators, conciliators, and,
sometimes, arbitrators). The establishment and operation of the Barangay Justice System is mandated
by Republic Act No. 7160 or the Local Government Code of 1991. Prior to this law, however, the
establishment of the Barangay Justice System had been covered by Presidential Decree 1508 in 1978
and Batas Pambansa Blg. 337 or the 1983 Local Government Code. When PD 1508 first decreed the
setting up of the Barangay Justice System, the law had the following objectives:
●To promote the speedy administration of justice
●To minimize the indiscriminate filing of cases in courts
●To minimize the congestion of court dockets and thereby enhance the quality of justice dispensed by
the courts
●To perpetuate and recognize the time-honored tradition of amicably settling disputes at the
community level

Under the Barangay Justice System, the main strategy for settling disputes is to provide a venue for
the disputing parties to search for a solution that is mutually acceptable. Hence, the primary role of
the system is not to decide disputes and impose a solution on the parties but to assist the parties in
discussing the possible amicable settlement of their disputes. The Punong Barangay and the
community conciliators (Lupon members) do not act as judges or adjudicators of disputes but as
facilitators for the disputing parties’ discussion of possible solutions. For this reason, the personal
appearance and participation of the disputing parties is necessary, while the non-appearance of the
parties will have corresponding sanctions. Also because of the need for the disputing parties’ personal
participation in the conciliation proceedings, disputes involving non-natural persons like corporations
are not subject to the conciliation proceedings of the Barangay Justice System. Simply put, the
Barangay Justice System provides a friendly, inexpensive, and speedy forum for the settlement of
disputes where the parties can freely explore options for amicably resolving their disputes without
resorting to the courts.

All disputes are subject to Barangay conciliation pursuant to the Revised Katarungang Pambarangay
Law (formerly P.D. 1508, repealed and now replaced by Secs. 399-422, Chapter VII, Title I, Book III,
and Sec. 515, Title I, Book IV, R.A. 7160, otherwise known as the Local Government Code of 1991),
and prior recourse thereto is a pre-condition before filing a complaint in court or any government
offices, except in the following disputes:

1. Where one party is the government, or any subdivision or instrumentality thereof;

2. Where one party is a public officer or employee, and the dispute relates to the performance of his
official functions;

3. Where the dispute involves real properties located in different cities and municipalities, unless the
parties thereto agree to submit their difference to amicable settlement by an appropriate Lupon;

4. Any complaint by or against corporations, partnership or juridical entities, since only individuals
shall be parties to Barangay conciliation proceedings either as complainants or respondents (Sec. 1,
Rule VI, Katarungang Pambarangay Rules);

5. Disputes involving parties who actually reside in barangays of different cities or municipalities,
except where such barangay units adjoin each other and the parties thereto agree to submit their
differences to amicable settlement by an appropriate Lupon;

6. Offenses for which the law prescribes a maximum penalty of imprisonment exceeding one (1) year
or a fine over five thousand pesos (P5,000.00);

7. Offenses where there is no private offended party;

8. Disputes where urgent legal action is necessary to prevent injustice from being committed or
further continued, specifically the following:

a. Criminal cases where accused is under police custody or detention (see Sec. 412 (b) (1), Revised
Katarungang Pambarangay Law);
b. Petitions for habeas corpus by a person illegally deprived of his rightful custody over another or a
person illegally deprived or on acting in his behalf;

c. Actions coupled with provisional remedies such as preliminary injunction, attachment, delivery of
personal property and support during the pendency of the action; and

d. Actions which may be barred by the Statute of Limitations.

9. Any class of disputes which the President may determine in the interest of justice or upon the
recommendation of the Secretary of Justice;

10. Where the dispute arises from the Comprehensive Agrarian Reform Law (CARL) (Sec. 46 & 47, R.A.
6657);

11. Labor disputes or controversies arising from employer-employee relations (Montoya vs. Escayo, et
al., 171 SCRA 442; Art. 226, Labor Code, as amended, which grants original and exclusive jurisdiction
over conciliation and mediation of disputes, grievances or problems to certain offices of the
Department of Labor and Employment);

12. Actions to annul judgment upon a compromise which may be filed directly in court (See Sanchez
vs. Tupaz, 158 SCRA 459).
Definition of Terms:

Adjudication is the power of courts or quasi-judicial agencies to decide cases filed before them and
falling within their jurisdiction.

Amicable Settlement is an agreement reached during mediation and conciliation proceedings.

Arbitration is a process wherein the third party from outside the judicial system is chosen by parties
to hear and decide their dispute.

Arbitration Award is the decision reached by either the lupon chairperson or pangkat, as the case may
be, upon prior agreement in writing by the parites to a dispute for the adjudicators to resolve it.

Attachment is a provisional remedy in the form of an order issued by a judge before whom the case is
pending by which the property is taken into legal custody as security for satisfaction of a judgment
obtained by the prevailing party, either at the commencement of the action or any time after the
filing of the case before the final judgment

Complainant — plaintiff Complaint is a concise statement of ultimate facts constituting the plaintiff’s
cause and causes of action.

Conciliation is a process wherein the Pangkat forgoes the power to decide or recommend but assist
the parties to isolate issues and options to reach a settlement by consensus that jointly satisfies their
needs.

Delivery of Personal Property (Replevin) is provisional remedy by which a judge before whom an
action is pending for the recovery of personal property issues an order for the delivery of such
property to the movant or the party filing the petition upon filing of a bond to guarantee its return or
to answer for the damages.

Execution is the process of exacting satisfaction for on or both of the parties through compulsory or
coercive means. It entails the enforcement of the terms of the amicable settlement or arbitration
award in so far as this may enjoin or command any of the parties to perform an act, give something or
refrain from doing some act.
Habeas Corpus is a judicial proceeding for the purpose of releasing a person who is illegally deprived
of liberty or restoring rightful custody to the person who has been deprived of.

Incompetent means a person who is suffering the penalty of civil interdiction; or who is a hospitalized
leper, prodigal, deaf and dumb who is unable to communicate; one who is of unsound mind, even
though he has a lucid intervals and a person not being unsound mind but by reason of age, disease,
weak mind, and other similar causes, cannot, without outside aid, take care of himself and mange his
property, becoming thereby an easy prey for deceit and exploitation.

Jurisdiction is an authority to hear and decide a case and given by law and cannot be agreed by the
parties.

Katarungang Barangay (KP) is a system of justice administered at the barangay level for the purpose
of amicable settling disputes through mediation, conciliation or arbitration among the family or
barangay without resorting to the courts.

Lupong Tagapamayapa (Lupon) is a body organized in every barangay composed of Punong Barangay
as the chairperson and not less than ten (10) and more than twenty from which the members of every
Pangkat shall be chosen.

Mediation is a process wherein the Lupon chairperson or Barangay Chairperson assists the disputing
parties to reach a settlement by consensus that jointly satisfies their needs.

Minor is a person below eighteen (18) years of age.

Next of Kin is an individual who is a relative or a responsible friend with whom the minor or
incompetent lives

Pangkat Tagapagkasundo (Pangkat) is a conciliation panel constituted from the Lupon membership for
every dispute brought before the Lupon consisting of three (3) members after the Punong Barangay
has failed in his mediation efforts.

Preliminary injunction is a provisional remedy in the form of an order issued by a judge before whom
the case is pending at any stage before the final judgment requiring a person to refrain from a
particular act.

Repudiation is an act of rejecting the validity or refusing to accept the terms and conditions of
agreement on the ground of vitiation of consent by fraud, violence or intimidation.

Respondent — defendant

Statute of Limitations is the law which bars or does not allow the institution or filing of an action or
case against another after the expiration of the period prescribe d for such action or offense

Support Pendente Lite is a provisional remedy in a form of an order issued by a judge before whom
the case is pending granting allowance, dwelling, clothing, education and medical attendance to the
person entitled thereof.

Venue is the place where the case is to be heard and decided. This is not fixed by law except in
criminal cases, and can be agreed upon by the parties.

2. The Cooperative Development Authority

Cooperative Development Authority (CDA) was created by virtue of Republic Act No. 6939,
for the purpose of promoting the viability and growth of cooperatives as instruments of equity, social
justice and economic development. The law granted it quasi-judicial power to adjudicate disputes
concerning cooperatives and their activities. Disputes between natural persons who are member of a
cooperative, federation or union that arise from issues like mismanagement, election, protests,
violations of the Cooperative Law, misdemeanors of members and fraud are exclusively within the
jurisdiction of CDA.

Dispute is brought before the CDA either by a written complaint; by a referral from another
government agency; by the Cooperative Development Council; by a federation or union; or by the
court. A legal officer is appointed by the CDA to undertake the resolution process. Written pleadings
are then required of the complainants and the respondents. A conference is then held by the hearing
officer to determine whether the case is within its power to resolve using ADR. If mediation is used,
the case should be resolved within a period of not exceeding three months. If no agreement is
reached by the parties, a Certificate of Non-Resolution is issued and the entire process will be
arbitrated.

All resolutions or agreements become final and executory within fifteen days from the
receipt of the parties of a copy of the resolution and if no appeal or motion for reconsideration is filed
within within the prescribed period. The enforcement of the award is either done by the court sheriff
or the police.

3. Construction Industry Arbitration Commission (CIAC)

Created on February 4, 1985 by virtue of Executive Order No. 1008 (known as the Construction
Industry Arbitration Law). It is one of the implementing boards of the Construction Industry Authority
of the Philippines (CIAP) and under the administrative supervision of the Philippine Domestic
Construction Board (PDCB) under the Department of Trade and Industry (DTI).

CIAC encourages the early and expeditious settlement of disputes in the Philippine construction
industry through arbitration and mediation. It has original and exclusive jurisdiction over disputes
arising from, or connected with, contracts entered into by parties involved in construction in the
Philippines, whether the disputes arises before or after the completion of the contract, or after the
abandonment of breach thereof. These disputes may involve government or private contracts. For the
Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary
arbitration.

The jurisdiction of CIAC may include, but is not limited to, violation of specifications for materials and
workmanship; violation of the terms of agreement; interpretation and, or application of contractual
provisions; amount of damages and penalties; commencement time and delays; maintenance and
defects; payment default of employer or contractor and changes in contract cost. Excluded from the
coverage of this law are disputes arising from employer-employee relationships which shall continue
to be covered by the Labor Code of the Philippines.

4. Department of Agrarian Reform Adjudication Board

An office connected with the Department of Agrarian Reform (DAR), which was created by
virtue of the 1987 Philippine Constitution and Executive Order No. 129-A. DARAB is mandated to
provide a forum for the settlement of agrarian disputes, with the Regional Director as the hearing
officer. Later on, adjudicators were trained and appointed specifically for the purpose. DARAB has
exclusive jurisdiction over disputes arising from agrarian relationships and other land related issues
between landlord and tenants, or among cooperatives and tenants.

Cases are filed either written or oral. The courts are also empowered to refer agrarian cases
to DARAB. Disputes are resolved via mediation and arbitration, before the Barangay Agrarian Reform
Committee, which is composed of ten members representing the DAR, DENR, Land Bank and other
agricultural organizations. The Chairman of BARC is initially tasked to mediate the dispute. When the
mediation fails, the case is brought before the Provincial Adjudicator for arbitration.

After hearing the parties, an agreement or arbitral award is entered as an Order by the
DARAB. An Award issued by PARAD may be appealed to the DARAB Board, which is composed of the
DAR Secretary, two Undersecretaries and one Assistant Secretary. Further appeal may be brought to
Court of Appeals. If no appeal is filed, the order becomes final and executory.

5. Philippine Dispute Resolution Center, Inc.

The Philippine Dispute Resolution Center, Inc. (PDRCI) is a non-stock, non-profit organization
incorporated in 1996 out of the Arbitration Committee of the Philippine Chamber of Commerce and
Industry (PCCI). PDRCI promotes and encourages the use of arbitration, mediation and other modes of
avoiding or settling commercial disputes such as dispute boards, and provides alternative dispute
resolution (ADR) services to the business community. Its membership is composed of prominent
individuals and professionals such as lawyers, former members of the judiciary, academics, architects
and engineers, doctors, accountants, bankers and businessmen.

The PDRCI primarily uses arbitration to resolve disputes arising from contracts in the field of
trade and commerce, intellectual property rights, securities, insurance domestic relations and claims,
among others. The resolution process is commenced by filing a written complaint with PDRCI. In order
for the PDRCI to assume arbitral power, the parties must agree that their dispute be brought before
the PDRCI. After hearings, arbitral award is issued. Under PDRCI rules, the parties must give the prior
consent to resolve their dispute swiftly and abide by the award without delay.

6. National Conciliation and Mediation Board

Created in 1987 by virtue of Executive Order No. 126, and is an agency under the
Department of Labor and Employment (DOLE). Its function is to resolve certain labor issues involving
unionized workers, especially involving issues related to the filing of notice of strike or lockout,
deadlock in the Collective Bargaining Agreement, unfair labor practice and interpretation of company
policies involving personnel.

The resolution process before the NCMB is set into motion when, after the parties failed to
negotiate among themselves, a request for a conference is filed with the NCMB. Such conference
should commence within ten days after its filing. If the dispute is still unsettled, the NCMB, upon
request by either party or on its own initiative, immediately calls for conciliation meetings. If both
failed, voluntary arbitration is encouraged. If the latter is not resorted to, the case becomes ripe for
adjudication by the National Labor Relations Commission. The NCMB enforces its award by a writ of
execution after voluntary compliance by the parties is breached. However, the NCMB has no
mechanism to compel compliance.

7. National Labor Relations Commission

The National Labor Relations Commission is a quasi-judicial body tasked to promote and
maintain industrial peace by resolving labor and management disputes involving both local and
overseas workers through compulsory arbitration and alternative modes of dispute resolution. It is
attached to the Department of Labor and Employment for program and policy coordination. Cases
involving:

●Unfair labor practice cases

●Termination disputes
●If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment
●Claims for actual, moral, exemplary and other forms of damages arising from employer-employee
relations
●Cases arising from any violation of Article 264 of the Labor Code, as amended, including questions
involving the legality of strikes and lockouts
●Except claims for employees compensation not included in the next succeeding paragraph, social
security, medicare, and maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount exceeding Five
Thousand Pesos (P5,000.00), whether or not accompanied with a claim for reinstatement
●Wage distortion disputes in unorganized establishments not voluntarily settled by the parties
pursuant to Republic Act No. 6727
●Enforcement of compromise agreements when there is non-compliance by any of the parties
pursuant to Article 227 of the Labor Code, as amended
●Money claims arising out of employer-employee relationship or by virtue of any law or contract,
involving Filipino workers for overseas deployment, including claims for actual, moral, exemplary and
other forms of damages as provided by Section 10 of Republic Act No. 8042, as amended by Republic
Act No. 10022
●Other cases as may be provided by law

The judgments by the NLRC may be brought to the Court of Appeals and to Supreme Court by
certiorari.

8. Bureau of Labor Relations

Covers the important aspects of labor relations. We set the environment for a healthy relationship by
making both the employer and the employee aware of their rights and obligations (using LEES). We
promote collective negotiations (by advocating the right to self-organization). We provide
mechanisms to fix strained relationships through adjudication. Most of all, we foster an environment
where employers and employees can reach a compromise regarding their issues and contribute in
policy-making (through the TIPC). We are an embodiment of the President’s overarching goal of
promoting industrial peace based on social justice.

The Bureau was established on January 16, 1957 pursuant to Executive Order No. 213 and the
Organization Plan 20-A. It took over the Conciliation Service and the Registrar of Labor Organizations
created under R.A. 875 and served as a planning, policy making, consultative and advisory body in the
promotion and maintenance of industrial peace.

To date the Bureau continues its mandate to develop policies, programs, projects, operation
guidelines and standards relative to labor-management relations.

The Bureau also provides advisory to the Office of the Secretary and the Regional Offices on
administration and enforcement of laws pertaining to labor-management relations including worker’s
organization, registration, and development and resolution of appealed inter- and intra-union
disputes.

MANDATE:

●National registry of unions and CBAs;

●Formulate regulatory and developmental policies, standards, guidelines and programs promoting
the right to organize, including collective bargaining and improvement of the income of workers and
their organizations;
●Lead agency in workers and employers education;
●Adjudicate inter- and intra-union disputes;
●Promote bipartism and tripartism; and
●Formulation and implementation of programs that strengthen trade unionism to achieve industrial
peace.

9. Insurance Commission
To regulate and supervise the insurance, pre-need, and HMO industries in accordance with
the provisions of the Insurance Code, as amended, Pre-Need Code of the Philippines, and Executive
Order No. 192 (s. 2015)
Legal Bases:
●RA No. 10607 entitled, “AN ACT STRENGTHENING THE INSURANCE INDUSTRY, FURTHER AMENDING
PRESIDENTIAL DECREE NO. 612, OTHERWISE KNOWN AS “THE INSURANCE CODE”, AS AMENDED BY
PRESIDENTIAL DECREE NOS. 1141, 1280, 1455, 1460, 1814 AND 1981, AND BATAS PAMBANSA BLG.
874, AND FOR OTHER PURPOSES”; otherwise known as The Insurance Code, as amended.
●RA No. 9829 entitled, “AN ACT ESTABLISHING THE PRE-NEED CODE OF THE PHILlPPlNES”; otherwise
known as the “Pre-Need Code of the Philippines”.
●EO No. 192 (s. 2015) entitled, “TRANSFERRING THE REGULATION AND SUPERVISION OVER HEALTH
MAINTENANCE ORGANIZATIONS FROM THE DEPARTMENT OF HEALTH TO THE INSURANCE
COMMISSION, DIRECTING THE IMPLEMENTATION THEREOF AND FOR OTHER PURPOSES”
OBJECTIVES

●To promote growth and financial stability of insurance, pre-need, and HMO companies
●To professionalize insurance, pre-need, and HMO services, and develop insurance, pre-need, and
HMO consciousness among the general populace
●To establish a sound national insurance market
●To safeguard the rights and interest of the insuring public, pre-need and HMO customers
FUNCTIONS
1.Promulgation and implementation of policies, rules and regulations governing the operations of
entities engaged in insurance, pre-need, and HMO activities as well as benevolent features
2.Licensing of insurance, reinsurance companies, its intermediaries, mutual benefit associations,
trusts for charitable uses, pre-need companies, pre-need intermediaries, and HMO companies
3.Conducting insurance agent’s examinations, as well as processing of reinsurance treaties and
request for investments of insurance companies
4.Examination/verification of the financial condition and methods of doing business of entities
engaged in insurance business, pre-need, mutual benefit associations, trusts for charitable uses, and
HMO companies
5.Evaluation and preparation of statistical reports, studies, researches, annual reports, and position
papers relative to insurance, pre-need matters, and HMO matters
6.Review of premium rates imposed by life and non-life companies, mutual benefit associations;
statistical reports of adjusters to determine compliance with established standards.
7.Adjudication of claims and complaints involving loss, damage or liability incurred by an insurer
under any kind of policy or contract of insurance or suretyship;
8.Review and approval of all life and non-life policies, pre-need, and HMO plans before sale to
prospective clients.

9. Court-Annexed Mediation

CAM is a voluntary process conducted under the auspices of the court by referring the
parties to the Philippine Mediation Center (PMC) Unit for the settlement of their dispute, assisted by a
Mediator accredited by the Supreme Court. The following cases shall be referred to CAM:
1.All civil cases, except those which by law may not be compromised (Article 2035, New Civil Code);
2.Special proceedings for the settlement of estates;
3.The civil aspect of Quasi-Offenses under Title 14 of the Revised Penal Code;
4.The civil aspect of criminal cases where the imposable penalty does not exceed six years
imprisonment and the offended party is a private person; and
5.The civil aspect of theft (not qualified theft), estafa (not syndicated or large scale estafa), and libel.
10. Judicial Dispute Resolution

JDR is a process whereby the judge (called the JDR Judge) employs conciliation, mediation or
early neutral evaluation in order to settle a case at the pre-trial stage. In the event the JDR fails, then
another judge (called the trial judge) shall proceed to hear and decide the case. The following cases
shall be referred to JDR by Judges in areas declared as JDR sites:
1.All cases which were not successfully settled in CAM;
2.All appealed cases from the exclusive and original jurisdiction of the First Level Courts:
oover civil cases and probate proceedings, testate and intestate, under Section 33, paragraph (1) of
the Judiciary Reorganization Act of 1980;
oover cases of forcible entry and unlawful detainer under Section 33, paragraph (2) of the Judiciary
Reorganization Act of 1980;