Small Claims Courts in the Philippines

According to former Court Administrator, now Supreme Court Associate Justice Jose P. Perez, 70%
of cases before Metropolitan Trial Courts in Metro Manila are small claims(involving small amounts
of money) and many of the litigants in these cases are poor. The same thing is true, if not more
prevalent, in the provinces and rural areas of the Philippines.
To easily dispose of small claims, the Philippine Supreme Court promulgated the Rule of Procedure
for Small Claims Cases , which will govern the litigation of claims for sums of money not exceeding
100,000 pesos (P100,000.00) and designated certain courts to handle such cases.
Cases Covered by Small Claims Courts
All claims for payments or reimbursements for a sum of money not exceeding P100,000.00 are now
considered small claims and, therefore, may only be filed before Small Claims Courts (SCCs). The
claim may arise from a variety of sources: unpaid loan, purchase price of a product or service, value
of a stolen or damaged property, amount claimed as damages, etc. The amount limit does not
include interests and costs. Thus, an indebtedness of P100,000.00 that earned an interest of
P1,000.00 when due and incurred P200.00 as cost of collection - bringing a total of P101,200.00 will still be within the jurisdiction of SCCs.
The rule did not create new courts but merely designated Metropolitan Trial Courts, Municipal Trial
Courts in Cities, Municipal Trial Courts and Municipal Circuit Trial Courts (known as first-level
courts because they are at the first and lowest level in a hierarchy of courts with increasing
jurisdiction and powers and in the appeals process). Upon the effectivity of the rule on October 1,
2008, only 22 first-level courts were designated to act as SCCs throughout the country, but now all
first-level courts function as SCCs in addition to their regular powers.
Initiation of Small Claims Cases
A small claims case is initiated with the filing before the SCC of a statement of claim, which is a
formal writing that sets forth the facts and circumstances of the claim. A plaintiff (person suing) can

simply secure a ready-made statement of claim form from the SCC and can be guided by court
personnel in preparing it. Under the rule, a statement of claim must be:
Signed by the plaintiff or his/her duly authorized representative;Verified (plaintiff must attest to the
truthfulness, and his or her personal knowledge, of the facts stated in an oath before a notary
public);Be filed in duplicate;Accompanied by a certificate of non-forum shopping (plaintiff must
certify under oath before a notary public that he or she has not filed the same claim before other
courts or tribunals);Accompanied by affidavits of witnesses;Accompanied by certified copies of any
actionable document (i.e., contract or promissory note) or photographs of the subject of the claim
(i.e., photos of a stolen or damaged personal property); andAccompanied by other evidence to
support the claim (i.e., a receipt).Procedure after Filing the Statement of Claim
After the statement of claim is filed the SCC will determine whether it will proceed with the case or
dismiss it outright. If, for example, the claim is not purely for a sum of money and involves
cancelation of a contract, the SCC will have to dismiss it.
If the SCC finds no ground to dismiss the claim it will require the defendant (person being sued) to
answer the statement of claim by filing a response within a non-extendible period of 10 days. The
response must also be signed and verified by the defendant, accompanied by certified copies of any
document/photographs relied upon for defense, and affidavits of witnesses and other evidence.
Unlike in ordinary civil cases, the defendant is not allowed to ask for a dismissal of the claim - except
when the SCC does not have jurisdiction to try the case.

If no response is filed, the SCC will render judgment based on the claim. But if a response is filed
and a copy thereof is furnished to the plaintiff, the SCC will require the parties to appear on a
scheduled date for hearing.
Special Rule on Evidence
Except for good cause shown, evidence that is not attached to either the statement of claim or
response cannot be presented and admitted during the hearing of the case. An example of a good
cause is when at the time of filing the statement of claim the evidence was not available through no
fault of the plaintiff.
Counterclaims
Counterclaims are of two kinds: compulsory and permissive. A compulsory counterclaim is one that
arises out of the plaintiff's claim or is related thereto, while a permissive counterclaim is any other

claim by defendant. (Example: a mechanic sues defendant for his fees in fixing the latter's car.
Defendant rents out the car and earns income from it. If the mechanic failed to fix the car within the
agreed time, thus depriving defendant of rental income for the delay, defendant may file a claim for
unearned rental which will be a compulsory counterclaim).
A compulsory counterclaim must be included in the response or else it can no longer be claimed in
another action, while a permissive counterclaim need not be included.
Rules in Case of Failure to Appear
If the plaintiff fails to appear on the date set for hearing, the SCC will dismiss the claim without
prejudice, which means it can be refiled again. If the defendant filed a permissive counterclaim in
his response, the SCC will render judgment thereon.
If a lone defendant fails to appear the SCC will render judgment based on the claim. Failure of both
parties to appear will result in the dismissal of the claim and counterclaim, if any, with prejudice meaning the case can no longer be filed again.
How Will the Court Hear the Case?
The case will only be heard and decided in one day. Initially, the SCC will try to persuade the parties
to amicably settle their differences by resorting to various alternative means of dispute resolution. If
the SCC fails, it will hear the parties and require them to present their evidence, after which a
decision will be rendered. The decision of the SCC is not appealable.
The strict rules of procedure in ordinary court proceedings, as well as the rules of evidence, are not
observed; the SCC will proceed in a rather informal way. Also, the parties will have to represent
themselves as no lawyers are allowed. A lawyer can only appear in SCC when he is either the
claimant or respondent himself. A party may, however, be assisted during the hearing by someone
who is not a lawyer if he or she cannot present her claim or defense.
Also, a party may be represented by another, provided that the representative is not a lawyer and is
given a special power of attorney which authorizes him or her to settle the case amicably,
participate in any alternative dispute resolution and make admissions of facts and documents.
Observance of Pre-condition for Filing of Suits
The provisions of the Katarungang Pambarangay law set forth in the Local Government Code still
apply in small claims cases. In cases covered by this law, such as when the parties are residents of
the same city or municipality, there must be proof that a conciliation proceeding was conducted at
the barangay (small village) level for the purpose of amicably settling the dispute between the
parties, and that conciliation efforts failed, before a case can be filed in court, otherwise the case is
dismissible for prematurity.
References:
Rule of Procedure on Small Claims Cases (A.M. No. 08-8-7-SC);
Rules of Civil Procedure (Rules of Court);
Local Government Code of 1991 (Republic Act No. 7160).

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