The Law on Alternative Dispute Resolution: Private Justice in the
Philippines
(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 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.
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 “Alternative” comes from the word “alternate” which means
victory (pronounced /ˈpɪrɪk/) which is a victory with devastating cost substitute, spare tire, a second stringer, a fallback position.
to the victor; it carries the implication that another such will
ultimately cause defeat. Which is wrong because litigation should be the LAST option not ADR.

Importance of Litigation (Peter Lovenheim) Limitations of ADR

1) When you need to establish a legal precedent, such as the Cases that involve:
validity of the patent which your company holds; 1) Constitutional law issues
2) When you need to publicy prove the truth, such as when a 2) Anti-trust suits
customer’s complaint about the product quality or safety has
received wide attention in the media product’s good name; 3) Probate

3) When your company’s legal rights have been infringed and 4) Adoption
you stand a good chance of collecting substantial damages in
court; 5) Precedent-setting cases that involve punitive damages

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:
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:

ART. VIII, Sec. 5 (5) 1987 Consitution 1) Civil Status of persons;

-Mandating the SC to promulgate rules that shall “provide a 2) Validity of Marriage;

simplified and inexpensive procedure for the speedy disposition
3) And legal separation;
of cases.
4) Futures support;
Rule 18, Sec 2(a) 1997 Rules of Civil Procedure
5) Future legitime;
-Requiring the courts to “consider the possibility of an
amicable settle or of a submission to alternative modes of 6) Jurisdiction of the courts;
resolution.”
7) Future jurisdiction of the courts.
 CHAPTER IV
The Settlement of dispute in the Philippines:
A culture of PAKIKISAMA
Many Filipinos readily overcome conflict through pragmatic means.
Gini Graham’s techniques in Resolving Conflict:
1) Identify the source of the problem
2) Applying the appropriate problem solving techniques:
a. Creative visualization-examine the reasons for 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 1) the misuse of the due process and the abuse of
court trial.
legal technicalities;
7) Administrative Arbitration
2) the intervention of political pressure
Doctrine of Non-exhaustion of administrative remedies
in court cases;
8) Environmental Mediation
3) the sheer weight of court litigations arising
9) Executive Arbitration
from development and growth;
10) Foreign Arbitration
4) the dilatory tactics of lawyers;
11) Banking Arbitration
5) neglect and laxity on the part of judges; and
12) Mining Arbitration
6) Court vacancies.
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)
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
 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 one’s
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 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
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.