The Law on Alternative Dispute Resolution: Private Justice in
the Philippines SC of spain which was a 36-day trip. Procedure for civil action,
(Book Summary and Cases)
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 Law’s 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
language of the locality”. It is easy to surmise that our
ancestors practiced ADR.
Hispanic Era-Discontented parties had to resort to going to the
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.
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 “Law’s 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 of the court-connected
agencies;
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
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.
But a more serious factor behind the “law’s delay” in the
Philippines involves the billing practice of lawyers. (Billable
hours, number of court appearances) Delaying tactics to
consume time.
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.
-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”
-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.
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.
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.
4) Evaluation of outcomes and the analysis of all
ramifications of full implementation of the chosen methods of
conflict management.
ADR aims to solve the conflict not win the lawsuit which is the
aim of litigation.
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 /ˈpɪrɪk/) 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)
1) When you need to establish a legal precedent, such as
the validity of the patent which your company holds;
2) When you need to publicy prove the truth, such as
when a customer’s complaint about the product
quality or safety has received wide attention in the
media product’s good name;
3) When your company’s legal rights have been infringed
and you stand a good chance of collecting substantial
damages in court;
4) When your opponent is unable and unwilling to
participate in ADR; and
5) When serious crimes are involved in the dispute.
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 ART. 2035 of the Civil Code
“provide a simplified and inexpensive procedure for the
speedy disposition of cases. If related issues of the following are matters in controversy
may not be capable of being referred to arbitration:
Rule 18, Sec 2(a) 1997 Rules of Civil Procedure
1) Civil Status of persons;
-Requiring the courts to “consider the possibility of an
amicable settle or of a submission to alternative modes of 2) Validity of Marriage;
resolution.” 3) And legal separation;
“Alternative” comes from the word “alternate” which means 4) Futures support;
substitute, spare tire, a second stringer, a fallback position.
5) Future legitime;
Which is wrong because litigation should be the LAST option
not ADR. 6) Jurisdiction of the courts;
Limitations of ADR 7) Future jurisdiction of the courts.

Cases that involve: CHAPTER IV

1) Constitutional law issues The Settlement of dispute in the Philippines:

2) Anti-trust suits A culture of PAKIKISAMA

3) Probate Many Filipinos readily overcome conflict through pragmatic
means.
4) Adoption
Gini Graham’s techniques in Resolving Conflict:
5) Precedent-setting cases that involve punitive damages
1) Identify the source of the problem
6) Actions of equitable relief, and
2) Applying the appropriate problem solving techniques:
7) nuisance
a. Creative visualization-examine the reasons for
are beyond the scope of arbitration. the problem
 b. Brain-storming-come up with alternatives
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 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 client’s
wishes to settle their conflict or dispute swiftly and without
expense to court trials.
Filipino Conflict Management System
Filipino Values
1) Pakikiusap-request and
2) Pakikisama-Companionship
Keep communication lines open.
1) Amor Proprio (self-respect)
2) Pasikaban (one-upmanship)
3) Bahala na (fatalism)
4) Gantihan (retaliation)
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 of 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
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.
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.
Early neutral evaluation
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
non-binding assessment by an experienced, neutral person
with expertise in the subject of the dispute.
Combination of Alternative Dispute Resolution
A particular alternative dispute resolution may be
combined with the other types of 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.
Class Action Administration
 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.
Voluntary Settlement Conference
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.
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.
Mock-Jury trial
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
means any mediation process conducted under the
auspices of the court, after such court has acquired
jurisdiction of the dispute
Court-Referred Mediation
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.
 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 colors-may 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, cost-effective 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 to preventive law negotiations
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
6) Trial Balloon
Raising questions designed to peek into the other
party’s position without revealing your true objectives
Two major types of unassisted negotiations:
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”.
 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 one’s position.
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.

2) Interest-based negotiation is much more candid and

amiable technique that involves the willing disclosure EXHAUST ADR PROCESSES BEFORE LITIGATION.
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 Goodman’s dead-lock breaking

techniques (1991)

1) Be positive and don’t 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