UNCLOGGING THE COURT DOCKETS1

ALFREDO F. TADIAR2 INTRODUCTION Court dockets are heavily and unjustifiably congested as a result of the indiscriminate filing and delayed processing of cases in the courts of justice. Hundreds of thousands of cases remain pending for further action or resolution. The cases pending in all levels of the judicial system keep piling up at an alarming rate. The average judicial disposal of cases annually is only 85.83% (see Exhibit A). The situation is believed to become worst and the backlog will continue to grow rather than diminish unless judges are enabled to dispose of more cases through a systematic and sustained judicial reform program. The slow or delayed processing of earlier cases affects the progress of other following cases. As a consequence, some cases have incredibly taken as long as a generation to resolve. Judges need time to study, analyze and research to come up with persuasive decisions that may somehow even convince the losing party to accept the adverse decision and forego an appeal thereby lightening the docket of the appellate court. Court docket congestion deprives the courts of the essential element of time. The quality of justice is, therefore, adversely affected. Thus, the people have become wary, if not distrustful, of the judicial system as an effective means of violating rights violated and redressing wrongs done. Nonetheless, the crime victim or aggrieved party more often seek the underworld or underground rebel movement to secure the justice they never get from the courts. The swift and deadly “justice” meted out by the dreaded Sparrow Unit of the Alex Boncayao Brigade (ABB) of the NPA or mercenary assassins is the result of this extrajudicial relief. This poses danger to the economic growth and political stability of the country. Social growth and development are also adversely affected. To the business sector, such delays in processing of cases would increase their business cost due to high litigation expenses. It is, therefore, imperative that alternative measures of unclogging court dockets should be explored to help minimize litigation expenses of the business sector. CAUSES OF DELAYS IN THE DISPOSITION OF CASES

Many factors cause delays in the disposition of cases filed with the judiciary. For the purpose of this paper, however, these may be classified into three, namely, (1) those arising from human failures; (2) those caused by the nature of the judicial system itself; and (3)

1 Paper presented in the Symposium on Economic Policy Agenda for the Estrada Administration, June 1, 1999 at

INNOTECH, Commonwealth Avenue, Diliman, Quezon City. 2 Chairman, National Amnesty Commission and former Associate Dean, U. P. College of Law.

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indiscriminate filing of cases in court. The causes of delays in disposition of cases are discussed in detail below.

1. Human Failings

Human failings refer to weaknesses of the men and women administering the judicial system such as judges, lawyer-advocates, court personnel, prosecutors, sheriffs, defense counsel, process servers, and others connected to or with the system. Delayed resolution of cases emanates from inefficiency, incompetence, sloth or laziness, corruption or conflict of interests of these officials.3

2. Constitutional and Procedural Requirements

Factors arising from the adversary nature of the judicial process and the constitutional requirements of due process of law also cause judicial delays. Thus, the constitutional presumption of innocence requires careful screening of criminal charges in the form of preliminary investigations conducted by prosecutors or Municipal Trial Courts performing this function. Only upon an affirmative preliminary finding of merit may the criminal charge be filed in court.4 This is an assurance of protection against hasty and malicious prosecutions. The reform problem that arises here is how to shorten the periods in the different stages of processing without detracting from that socially desirable objective of protecting the legal rights of those drawn into the judicial process.

In both civil and criminal actions, concern with procedural legality requires a net period of time for giving notices and the preparation of pleadings. These periods are however, often extended many times, even for such an amorphous reason that counsel is “indisposed”.5 A more strict judge could avoid such unnecessary cause of delay.

Furthermore, the strict requirements on proof of service of pleadings, judgments and other paers6 taken together with the much-complained of postal service, are major causes of judicial delay. Modern electronic means of communication, such as the use of computers and fax transmission, among others, are not utilized to the fullest. Chief Justice Hilario Davide, Jr. reaffirms that the Philippine legal system “has much catching up to do with the rapid advances in technology”.7

3 It was reported by the Philippine Star in its issue of 29 March 1999 that based on a survey conducted by the

Economist Intelligence Unit – Philippine Corporate Update Program (EIU-PCUP), that a capricious and corrupt judiciary is one of the major deterrents to corporate growth in the Philippines.

4 Section 14 (1), Article 111, Bill of Rights guarantees that “No person shall be held to answer for a criminal

offense without due process of law.” 5 Both trial lawyers and judges are equally guilty of postponements due to that undefined cause of being

“indisposed”. 6 Rule 13, 1997 Rules on Civil Procedure. 7 Phil. Daily Inquirer, 26 April 1999, page 3, at the 7th National Convention of Lawyers in Davao City.

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The Constitution limits the period for rendering decisions: for the Supreme Court, 24 months; 12 months for all collegiate courts; and 3 months for all other lower courts.8 Despite such deadlines, even the Supreme Court has not complied. There is, therefore, a clear need to strictly comply with deadlines set. It is not, however, clear as to what sanctions can be imposed upon the offending court for failing to comply with said deadlines nor what is the effect thereof upon the late decisions. 3. Clogged Dockets Due to Indiscriminate Filing of Court Cases

Chief Justice Fred Ruiz Castro largely blames the overcrowding of court dockets

to what he calls the “over-use, misuse and abuse” of the judicial remedy. This means that a person seeking redress of a grievance has gone directly to court when it probably would have been more practical to have availed of other modes of dispute resolution. The hypothesis of Chief Justice Castro is that litigation prone lawyers have the courts the place of initial settlement rather than the ultimate place of dispute resolution that they were originally meant to be. The solution to this cause must start with the law curriculum to give more emphasis to the “preventive lawyering function” 9 in order to balance the heavy concentration of preparation for litigation. A re-orientation of lawyers along this line seems wanting. 4. Clogged Dockets Due to Filing of Cases Related to the Issuance

of Bouncing Checks

Majority of the cases that clog our court dockets today are those filed under BP 22 or the “Bouncing Checks law”. Under this law, the mere issuance of a check, which is later dishonored, immediately makes the drawer criminally liable. The basis of this law, passed during the time of President Ferdinand Marcos, is to make checks a viable and credible means of conducting commercial transactions. The proliferation of bad checks may have negatively affected the economy during martial law as many Filipinos refused to accept checks in commercial transactions.

With criminal penalties imposed, it was hoped that not only will the issuance of a

bouncing check be deterred, but also payment of the value of the bouncing check by those who issued it, will be enhanced. There is no in-depth study so far on whether there are less bouncing checks now due to this law. Whether or not BP 22 is successful in its declared objective, what is clear though is that, victims of bouncing checks found it convenient to file a criminal case in court as a means of collecting from drawers of bouncing checks. Thus, the volume of cases filed has drastically risen as courts are transformed into collection agencies by creditors who received bad checks. Furthermore, due to the criminal nature of the charges against drawers of bouncing checks, judgment is only rendered upon a process more tedious than that applied in civil cases, further adding to the clogging of court dockets.

8 Section 15 (1) Article III, Constitution. 9 A term used Mr. David N. Smith of the Harvard Law School in a talk to U. P. Law students.

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APPROACHES TO DECONGESTING COURT DOCKETS There are several approaches that can be taken to solve the problem of court dockets congestion. These, among others, are: the output-oriented, input-oriented, and diversion approaches. 1. The Output-Oriented Approach

Directed towards solving the problem of judicial delay, a major cause of clogged court dockets, the approach seeks to enhance the disposition of cases by the courts of justice.

The output-oriented approach is primarily concerned with increasing the number

of cases that a court disposes of in a given period (monthly and yearly). The disposition of a case could take the form of a decision on the merits of the dispute. This assumes that a trial has been conducted, or that trial has been waived and the case submitted for decision on the basis of the pleadings i.e., the Complaint and Answer, submitted by the parties.10 Decisions are usually rendered after the lapse of several years from the date the case was filed in court. This also includes sentencing an accused in a criminal case upon entering a plea of guilty. Other dispositions relate to rendering summary judgment11 based on affidavits, depositions or admissions; dismissals based on demurrer to evidence12 which do not prove that the plaintiff is entitled to the relief prayed for; and dismissals based on technical grounds, such as lack of jurisdiction, improper venue and the like.13

A judge who is unduly concerned with the periodic output of his court may resort

to questionable means to show an increase, such as dismissals of civil actions based on technical grounds (e.g., improper venue, late filing of petition or payment of fees, absence of certification that a copy of the decision appealed from is a true copy), or in criminal actions, cajoling an accused to plead guilty despite his innocence thereby reducing the sentence imposed upon him which may be equal to the period of his preventive detention up to the date of arraignment. Such an offer may be tempting to an accused who has been detained for so long under the inhuman conditions in jail. This questionable tactic is too steep a price for increasing output.

a. Simplification of Procedural Rules

More meaningful efforts to increase the output of judges include simplification of

procedural rules that lawyers unnecessarily argue about and thereby assuring an earlier 10 Rule 34, 1997 Rules of Civil Procedure, providing for Judgment on the Pleadings. 11 Rule 35, ibid. 12 Rule 33. Id. 13 Rule 16, id..

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trial of the case. Along this line was the elimination of the concurrent jurisdiction of the Municipal Trial Courts and the Regional Trial Courts by the Judiciary Reorganization Act of 198014 The rules on original exclusive jurisdiction of the courts have simplified the matter.

Simplified rules for forcible entry and unlawful detainer cases,15 including those

that shall govern the adjudication of small claims proposed to be adopted as part of the judicial reforms undertaken by the Davide Court, as well as rules detailing the number of hours that judges are required to devote in daily court sessions16 are all part of this output-oriented approach. It also includes the Summary Procedure adopted by the Supreme Court17 for Municipal Trial Courts to govern resolution of civil disputes of small value18 and petty criminal cases.19

b. Filling Up Vacancies; Increasing Number of Courts

While the foregoing measures relate to increasing the output of individual judges,

concern for the national output of the judiciary in resolving disputes must also be addressed. Vacancies in courts, prosecutorial offices and support personnel diminish output. Appointments to fill up vacancies must, therefore, be made soon after every vacancy that occurs.

Increasing the number of courts in proportion to corresponding demographic

increases and locating them in centers of population for greater accessibility is another effective measure. Efficiency requires that every trial court should be assigned at least one trial prosecutor. Another prosecutor should be appointed to handle preliminary investigation of criminal cases. The two prosecutors could alternately do trial work or investigative work. In reality, however, this arrangement is far from being attained and results in the delay in the disposition of criminal cases. The resolution of civil cases has consequentially also been adversely affected.

c. Judicial Specialization

Specialization greatly contributes to efficiency and thereby increase output.

Along this premise, the Supreme Court has assigned certain courts to take over the specialized jurisdiction of the defunct Juvenile and Domestic Relations Court. The assignment of courts to try only heinous crimes is also an attempt at specialization. The

14 Batas 16, id.. 15 Rule 70, ibid.. 16 Section 5, Interim or Transitional Rules to the Implementation of BP. Blg. 129. 17 Adopted en banc by the Supreme Court effective 15 November 1991. 18 Not to exceed P10,000.00, exclusive of interests and costs. 19 Violation of ordinances, traffic regulations and the rental law and other offenses punishable by imprisonment not

exceeding six months or fine not exceeding P1,000.00.

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Sandiganbayan’s exclusive jurisdiction over crimes committed by public officials is another example of specialization. Perhaps it is time to consider separating civil cases from criminal cases, and allocate specific courts to try only either civil or criminal cases, but never jointly. This was perhaps one of the intentions in the creation of the then Circuit Criminal Courts. Unfortunately, the specialized courts, except for the Sandiganbayan, have all been abolished. There is, therefore, a clear need for a policy review to evaluate past experience on court specialization as a means for increasing efficiency.

2. The Input-Oriented Approach

Historically, the judicial system for the resolution of disputes was intended or

resorted to by the parties as the final and authoritative forum for disputes that have failed earlier efforts for a private solution or adjustment of differences. The family, the church, the school and neighborhood associations are the traditional counselors for mediating disputes and informally settling them. As these institutions weakened in their mediational role in the course of society’s modernization, disputants have resorted to the courts as the initial forum, rather than the forum of last resort, for settling their dispute. This has resulted in the filing of petty and even trivial cases in court. Some of them have been litigated through all levels of the judicial hierarchy up to the Supreme Court itself.

The use of the term “minor or petty” to describe a class of disputes relating to

common or everyday conflicts may be misleading. For to the disputants personally concerned, the subject matter, no matter how inconsequential to others or to society, is certainly far from being minor or trivial. Even though the dispute may only involve in the last analysis, merely hurt pride from a perceived slight, yet to the party concerned it is of serious importance. It is minor then only in the sense that, by itself, it does not have much financial worth nor social significance.

Partly to blame for this so-called “litigiouness”, therefore, is the lack of access to

any alternative forum for the settlement of these “minor” disputes. The Katarungang Pambarangay Law,20 provides the appropriate forum for the resolution of this class of disputes. It compels disputants to confront each other before the Punong Barangay for mediation of their differences.

Moreover, as a screening mechanism, the KB law imposes as an effective

sanction to disputants who fail to comply with the condition of prior conciliation, that the offending party cannot seek judicial relief. In other words, the KB law imposes a procedural bar to free access to the courts.

20 Presidential Decree No. 1508, s. 1978.

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The 20-year experience of the KB screening mechanism shows that it has effectively screened out of the judicial system cases that would otherwise have been filed in court.21

The idea of restricting the input of cases into the judicial system did not start with

the 1978 KB Law. As early as 1950, the Civil Code of the Philippines had imposed that “No suit shall be filed or maintained between members of the same family unless it should appear that earnest efforts towards a compromise have been made but that the same have failed. . . 22 There is also the settled jurisprudence requiring the “exhaustion of administrative remedies” before judicial relief may be sought. 23 Non-compliance with this condition for judicial recourse will result in the dismissal of the suit or proceedings.

Exhibit B shows the effects of restricted access to court on the disposition of

cases. 3. The Court Diversion Approach

While the input-oriented approach would curtail the generally unrestricted access

to the courts for judicial relief, this third approach seeks to address the tremendous number of cases that have already been filed and are still awaiting for disposition. After several years of inaction, the frustrated parties who have become disillusioned with the efficacy of the judicial mode of dispute resolution, would be ready to end their problem. Diversion to an alternative mode is the desperate answer. Exhibit C shows the effects of diversion of cases on the disposition of cases while Exhibit D presents the effects of the restricted access to court and the diversion of pending cases on the disposition of cases.

The diversion approach originated from the following: a. The Civil Code of the Philippines As in the restricted access approach, the origin of the court diversion of cases may

similarly be traced to the Civil Code which was approved on 18 June 1949. It included a new Title XIV containing two separate chapters on Compromises and Arbitration provide.

Article 2028 defines the term “compromise” and the purpose of entering into one,

as follows:

21 See Report of the BILGS. 22 Article 222, Civil Code. 23 Ortua vs. Singson Encarncacion, 59 Phil. 441.

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“A compromise is a contract, whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.”

For pending cases in court, Article 2029 mandates the judge “to persuade the

litigants in civil cases to agree upon some fair compromise.” For this purpose, Article 2030 directs suspension of judicial proceedings to afford the parties sufficient time to formulate the terms thereof. If the efforts to this end are successful, the compromise agreement is submitted to the court for approval. Judicial approval is necessary to ensure that what was agreed upon does not contravene law, morals, good customs, public order or public policy.24

It is important at this point to distinguish between process and product. A

compromise agreement that would “avoid litigation or put an end to one already commenced” is the product of a process that may be either direct negotiations between the parties or a third party intervention by conciliation or mediation. The mediator may even be the trial judge himself although some critics say that such a dual role may affect the integrity of the judicial process.

Article 2030 further provides: “The duration and terms of the suspension of the civil action or proceeding and similar matters shall be governed by such provisions of the rules of court as the Supreme Court shall promulgate. Said rules shall likewise provide for the appointment and duties of amicable compounders.”

. . It is unfortunate that the challenge posed by the Legislature to the Supreme

Court has not been taken up. Despite the lapse of almost half a century, the personality of an amicable compounder has not even been recognized by the Rules of Court.

On the arbitrational mode of resolving disputes, Article 2046

provides: “The appointment of arbitrators and the procedure for

arbitration shall be governed by the provisions of such rules of courts as the Supreme Court shall promulgate.”

24 Article 1409 declares such contract as “inexistent and void from the beginning.”

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Like the case of amicable compounders who were intended to facilitate the

compromise settlement of disputes and conflicts, the reliance of the Legislature on the Supreme Court to promulgate the necessary procedural rules for the appointment of arbitrators and the procedure for the arbitration has been sadly misplaced. No such rules have ever been promulgated.

b. The Arbitration Law (R. A. 876) On 19 June 1953, four years after enacting the Civil Code, and undoubtedly

frustrated by the inaction on the matter by the Supreme Court, Congress enacted Republic Act No. 876, entitled AN ACT TO AUTHORIZE THE MAKING OF ARBITRATION AND SUBMISSION AGREEMENTS, TO PROVIDE FOR THE APPOINTMENT OF ARBITRATORS AND THE PROCEDURE FOR ARBITRATION IN CIVIL CONTROVERSIES, AND OTHER PURPOSES.

This Congressional effort to divert pending cases in court to an alternative mode

of dispute resolution, however, was to no avail. Arbitration was infrequently availed of by judges or used by practicing lawyers who were perhaps unaware of the existence of this law due in large part to the failure of the Supreme Court to incorporate it in the Rules of Court. Other reasons for its unpopularity are:

1) Lack of or absence of a professional organization of arbitrators, the

integrity and capability of which have been certified to by an official body, such as the Construction Industry Arbitration Commission (CIAC), or the Philippine Association of Voluntary Arbitrators (PAVA). Such body is necessary to provide the requisite training for skills competence in arbitration, to screen those accredited for good moral character and to assure the public of high ethical standards of conduct in the performance of arbitration functions.

2) Outdated straight daily compensation of arbitrators that is still

rigidly fixed to the 1953 rate of P50.00 per day. This is now merely a quarter of the present minimum wage for unskilled workers. A more attractive remuneration should be based on a flexible schedule of professional fees dependent upon the amount or value in controversy, as is currently being followed in construction arbitration.

3) Structural defect, i.e., the unenforceability of the arbitration award.

The necessity of undergoing the cumbersome process of having the award judicially confirmed before it could be effectively enforced against a recalcitrant party, understandably leads to the conclusion of inutility of the process. As a matter of fact, parties who submit to the jurisdiction of the Construction Industry Arbitration Commission routinely waive the provisions of the Arbitration Law and expressly agree to be bound by the rules of procedure governing construction arbitration.

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Pertinent to providing an alternative forum to judicial relief or a forum to which diversion of pending cases may be made is the highly successful arbitration of construction disputes. This forum was added on in 1985 when President Marcos promulgated Executive Order No. 1008 establishing the Construction Industry Arbitration Commission (CIAC) to create an arbitration machinery for the Philippine Construction Industry.

The construction arbitration essentially addresses the failure of the Arbitration Law enacted over 30 years earlier. Its success could be attributed to several factors. Firstly, the law established a SECRETARIAT25 which functions much like a Clerk of Court, to receive complaints and other complaints and other pleadings, charge fees, and give notices. But more than that, it is charged with the important task of providing training of arbitrators and accrediting them for appointment. Secondly, the Commission is authorized26 to collect charges and fees to cover administrative costs, arbitrators’ fees and other charges. It is further “authorized to use its receipts and deposit of funds to finance its operation. . .” Thirdly, the “arbitrators’ fees shall be computed on the basis of a percentage of the sum in dispute”27 and thus the fees became respectable, if not attractive to arbitrators who “shall be men of distinction in whom the business sector and the government can have confidence”28 Fourthly, it is expressly provided that “the arbitral award shall be binding upon the parties (and) shall be final and inappealable except on questions of law which shall be appealable to the Supreme Court” 29 Finally, it authorizes the arbitrators to “issue a writ of execution requiring any sheriff or other proper officer to execute said decision, order or award” 30 that has become final and executory.

The acceptance and growing popularity of construction arbitration among contractors and project owners are shown by the increasing number of cases that have been filed with the Commission, as well as the tremendous value of or amount in dispute that have been submitted for resolution. 31 Multinational construction companies have beneficially availed of this alternative. Furthermore, it must be pointed out that appeals from arbitral awards have generally been unsuccessful thereby affirming the fairness and finality of arbitral awards.

25 Section 11, E. O. 1008. 26 Section 13, ibid. 27 Section 16, second paragraph, id. 28 fourth paragraph of Section 14, id.. 29 Section 19, id. 30 Section 20, id. 31 See attached Report of CIAC.

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c. The Katarungang Pambansa Law Under the Local Government Code

The judicial power to divert pending cases to an alternative mode was given another boost in 1991 when the Local Government Code was enacted into law. Under the Code’s revised Katarungang Pambarangay Law, a trial court judge is empowered to divert or refer a pending civil case for mediation. 32 It is important to note two things. The first one is the diversion or referral is motu proprio, i.e., on the initiative or action of the judge. The second one is the referral may be made at any stage of proceedings.

Significantly, a motu proprio judicial action may be taken without any formal motion being filed by a party and, therefore, does not require consent of the parties. The power of diversion or referral is not confined to the pre-trial stage and, therefore, may be exercised even after the trial has commenced.

d. The 1997 Rules of Civil Procedure

For the first time since the Rules of Court were first promulgated in 1940, an alternative mode of dispute resolution has now been made finally available by the 1997 Rules of Civil Procedure. It must be noted, however, that diversion may be initiated by the trial judge only during the early pre-trial stage of the proceedings.33 There is nothing in the Rules that would indicate judicial empowerment to avail of this mode for cases that have reached a later stage of the proceedings. This could be perceived as excluding the much more numerous cases in the backlog which have already reached trial stage. This is unfortunate.

It must further be noted that aside from requiring the trial court to “consider the possibility of an amicable settlement or of a submission to alternative modes of dispute resolution”, the Rules of Civil Procedure give absolutely no guidelines to follow in making a decision on the matter. The nature of the dispute that may be diverted, the relationship between the parties to the dispute, the particular mode to which it may be referred, e.g., conciliation/mediation, arbitration, early neutral evaluation (ENE), or some other method are essential and important matters that have been completely omitted from the Rules.

In September 1991, the author conducted an experiment upon the endorsement of the then Chief Justice Marcelo B. Fernan and the financial assistance of the Asia Foundation to determine the practicability of using mediation as an alternative means of settling disputes that have already been filed and are pending in court. A 30% success rate was targeted as sufficient to endorse the experiment for possible adoption by the Supreme Court. The experiment was conducted in two sites – one in San Fernando, La Union and the other in Quezon City. Both Regional and Municipal Trials Courts were involved. Pending cases were referred for mediation by trained neutrals for a period of

32 Section 408, last paragraph, R. A. 7160. 33 Section 2 (a) of Rule 18 requires the court to consider the possibility of submitting the case of alternative modes

of dispute resolution.

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one year. The mediators were required to undergo a two-day training course that equipped them with the necessary knowledge, skills and attitude appropriate to their role. A 31.14% success rate was achieved for the provincial project site but fell short of the target for Quezon City. Nevertheless, the project proposed that the Supreme Court should conduct an official validation of the results before making a final decision on the matter. Possible amendments to the Rules of Court were proposed.34

Early this year, five years after submission of the project report, the Philippine Judicial Academy (PHILJA) under the leadership of its Chancellor, retired Supreme Court Justice Ameurfina M. Herrera, became interested in the concept of diversion. The author was taken in as consultant. This was an opportunity to revive the proposal for an official validation of the earlier experiment as a condition for formal inclusion of the reform measure as part of the Rules of Court. A Supreme Court Circular 35 that the author drafted for a pilot test of the court-referred mediation program in the City of Mandaluyong and Valenzuela, Metro Manila, is awaiting approval by the Supreme Court.

THE CONCEPT OF ALTERNATIVE MODES OF DISPUTE RESOLUTION

There are basically two views on the concept of alternative dispute resolution mechanisms (ADRM). One would view it as giving a choice from the well-established judicial mode of resolving disputes. The other restricts the concept to those providing a mode of settling conflicts that is completely different from the adjudicative and essentially adversarial mode of deciding controversies.

The first view broadly includes as ADR, decisions of all quasi-judicial agencies, such as the Securities and Exchange Commission (SEC) and the National labor Relations Commission (NLRC) through the Labor Arbiters. Also included are decisions of the Sole Arbitrator or Arbitral Tribunal on construction disputes filed with the Construction Industry Arbitration Commission (CIAC).36 And, of course, mediation/conciliation is included.

The second view regards as a true alternative only those modes which empower the disputants themselves to arrive at a compromise settlement of their controversy. This then includes conciliation, mediation, early neutral evaluation, rent a judge, and other such schemes. It, however, excludes arbitration.

As a means of unclogging court dockets, the broad view encourages the creation or establishment of specialized agencies such as a Small Claims Court to deal with narrowly confined disputes. Along this line is to decriminalize vagrancy and traffic violations,37 as well as 34 A new rule proposed as Rule 33-A, entitled Referral for Mediation and an amendment of Section 6, Rule 22 of

the Revised rules of Court, are appended to this paper. 35 Attached as annex of this paper. 36 The CIAC was established by Executive Order No. 1008 on 04 February 1985. 37 Traffic violations and tenancy disputes are governed by the Revised Summary Rules of Procedure.

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bouncing checks to mention just three examples, and then to proceed with administrative processing of the offenders. Disputes between landlord and tenant, such as claims for the return of guaranty deposits and advance rentals, could be administratively processed rather than judicially dealt with.

Critics of this broad view, however, state that the dissatisfactions with the judicial system are merely carried over to quasi-judicial processing which does not address the problems.

In a research survey that the Author conducted in 1982-8438 to test the premises of the Katarungang Pambarangay Law, among other objectives, popular grievances against judicial justice were uncovered. These were grouped into: (1) judicial delay, (2) high cost, (3) failure to comprehend the legal process, and (4) perceived unsuitability of the judicial process to the resolution of everyday conflicts.

The causes of and possible remedies for judicial delay have already been discussed earlier.

High costs refer to both financial expenditure and time costs. Lawyer’s fees, docket fees, sheriff’s fees, cost for transcript of stenographic notes and other expenses of litigation, often mount to a level that could be ill-afforded by many disputants including small busnessmen. Time spent with lawyers preparing for court battle and for personal attendance for numerous court hearings that are frustratingly often postponed, detract from the gainful use of time and add to costs.

Popular incomprehensibility of the judicial process refers not only to the use of English as the official language of the formal legal system but also to the use of technical jargon of lawyers. It also refers to highly technical rules of procedure designed to ensure the accuracy of the fact-finding that is the essential basis for judicial decision-making. The rules are also intended to ensure that the judge is a neutral, impartial, objective and fair decision-maker.

Unsuitability of judicial proceedings for everyday interpersonal disputes relates to the nature of the judicial process as essentially punitive and backward looking. It is simply concerned with the issue of “who did what to whom” and not to the why and the wherefore. Only the symptoms are recognized but not the cause of malady.

Many times, however, a complainant is not really interested in punishing the other party with a jail sentence or a fine. This is true in disputes where the parties have some kind of a relationship based on kinship, employment or other working relationship. In these cases, restoration of the disrupted relationship is more important than the imposition of penalties, be it in the form of a criminal sentence or punitive damages. What the complainant is really interested in is an opportunity to ventilate his grievance, explore the cause of the problem and get an assurance that the offending conduct will no longer be repeated. There are several differences between the modes of dispute resolution. It has been aptly observed that the principal distinction between a judge and an arbitrator is that while a judge is 38 Bookbound mimeo Tadiar, Research Survey on the Conciliation of Disputes under the Katarungang

Pambarangay Law, 1984, 215 pages, U. P. College of Law.

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appointed by the President of the Philippines upon recommendation of the Judicial and Bar Council, an arbitrator derives his authority from the consent of the parties to a dispute to have him/her render a decision thereon and agree to accept it as binding upon them It could be inferred, therefore, that a judge and an arbitrator are alike in their function of rendering a decision to resolve a dispute. Although arbitration may be less formal and not as strict in adherence to technical rules of procedure and evidence, both modes follow the same method of adversarial justice. The complainant asserts a claim that is denied by the other. Cross-examination of a witness is the method of ascertaining the truth of the conflicting claims and defenses. The result of the process is that one party emerges the victor and the other the vanquished. One is declared right and the other wrong. An arbitration proceeding, however, has the advantage of being constituted ad hoc or for a particular case. An arbitrator’s attention and study being thus narrowly focused, the controversy is decided much more expeditiously than a judge who must deal with tens if not hundreds of cases at the same time. On the other hand, conciliators and mediators do not render a decision on a controversy. They merely persuade the parties to arrive at making reciprocal concessions that lead to an amicable settlement thereof. The result of a conciliated settlement is mutually beneficial and since no one has been condemned as having acted wrongly, the harmonious relationship between the parties is restored. The succeeding sections of this paper discuss in detail the small claims court and the decriminalization of bouncing checks to help de-clog court dockets. THE ROLE OF A SMALL CLAIMS COURT IN UNCLOGGING COURT DOCKETS One of the means of helping unclog court dockets is to screen out issues, which need not be filed in regular courts, factoring in the nature of the issue and amount of the claim. The creation of a Small Claims Court (SCC) would be an inexpensive way for the government to facilitate the speedy administration of justice. It will also give citizens who find expensive court litigation an impractical solution to a legal problem, which only involves a very small amount, an opportunity for redress of a wrong committed against them.

A small claims court is an informal, simple, and inexpensive forum in which small claims issues are threshed out before a judge. The filing fee in a small claims court is inexpensive and the procedure speedy. The pleadings before the SCC are in Forms, provided by the SCC, which are easy to fill up by non-lawyer litigants. Its jurisdiction is limited to money claims, the total amount of which varies depending on the social setting of the court. Judgment of the small claims court is final and not appealable. The defendant, therefore, is given the option of meeting the issue in a regular court, if he so makes the reservation in the SCC, before the plaintiff presents evidence.

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A small claims court helps in unclogging court dockets and giving regular courts the breathing space to resolve bigger and more substantial issues. Considering the nature of the cases filed in the SCC, no lawyers are allowed nor are highly qualified judges required. Jurisdiction

Small claims court can award monetary damages or equitable relief (limited to orders to

refund, reform, rescind or repair). The SCC has no jurisdiction over criminal cases, cases involving title to real property and cannot issue writs such as injunction or mandamus. It can, however, issue an order of attachment or garnishment to implement its decision. Any person of legal age or legal entities such as partnerships and corporations, may file a small claims suit in the small claims court located in the place where the cause of action occurred or where either the plaintiff or defendant resides. It is recommended that small claims in Philippine setting should encompass only those which involve a sum of up to P150,000.00 excluding interest charges, damages and cost. The number of small claims cases that can be filed by a party per year must be limited. In some countries, 13 small claims cases per person per year is the maximum number allowed.

Cases under the jurisdiction of a small claims court are those which involve the following

issues:

1. Consumer issues such as:

a. The defendant refuses to give the plaintiff goods or services that are legally due the plaintiff (landlord refuses to return security);

b. Defendant illegally refuses to allow plaintiff to return or receive a refund on an article bought by him;

c. Defendant refuses to repair an article purchased; d. Defendant refuses to allow plaintiff to cancel a contract;

2. Miscellaneous issues such as:

a. Controversy over a dent in one's fender resulting from a traffic accident; b. Tenant causing damages to an apartment (eviction is not within the jurisdiction of

a small claims court) c. Refusal of a friend to pay his debt/loan; and d. Bad checks (if BP 22 cases are decriminalized).

Procedure The docket fee for a small claims action is minimal. It is recommended that the docket fee for such an action be 1 % of the amount claimed but not to exceed P1,000.00. To start a case, the plaintiff must complete a “Claim and Affidavit Form” from the SCC Clerk of Court, which should detail his cause of action and the relief he wants from the court. After filing the Claim Form and payment of 50% of the docket fee, the Clerk’s office will serve

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notice, either by registered mail or personal service, to all parties concerned to attend a hearing to be scheduled not later than 30 days from the filing of the case. The defendant must receive the Claim and Affidavit Form with Notice, at least seven days before the hearing.

During the first hearing of the case, the parties will be asked if they wish to explore mediation process under a court referred mediator. Suits frequently occur because of the failure of parties to communicate with each other. Time and money can be saved if both parties reach a settlement out of court, prior to the hearing proper. Should this occur, a “Dismissal Form” obtainable from the SCC’s clerk of court, must be prepared and filed. If the settlement is through mediation and a compromise is agreed, the agreement will be presented to the court for approval.

The defendant may also request, before the plaintiff presents his evidence, that the case

be litigated in a regular court. The SCC then refers the case to the proper court and gives plaintiff the option to pursue said case by paying an additional docket fee. If the defendant chose to litigate in the SCC, he cannot ask for a change of venue after the plaintiff starts presenting his evidence. The Plaintiff must pay the balance of the docket fee (the remaining 50%) before he presents his evidence.

If the parties will not settle, the trial begins and the court hears both sides of the issue,

evaluate the evidence in the same manner as ordinary courts except that, rules of procedure are not strictly applied. The judge in this case will simply hear the side of the plaintiff and later the defendant. After going through the evidence and witnesses presented, both parties may submit written memoranda in plain and simple language, before the judge decides. The judgment and orders of the SCC cannot be appealed. However, either party may file within 30 days from receipt of notice of the judgment, a motion to reconsider the order or decision (SCC also provides the Motion Form). If the SCC affirms its judgment, the plaintiff may then proceed with other collection procedures including garnishment of wages or bank accounts, subject to the rules provided by law. He has to file a “Writ of Garnishment” (form to be provided by the SCC Clerk) upon payment of a fee of .5 % of the value of award. The plaintiff may also file a Subpoena and Discovery Petition, which will set a hearing at which the defendant will be required to disclose his income or assets. These fees, however, including the docket fee will be included to the amount owing on the judgment. Once the full amount of the judgment has been paid, the plaintiff must file a satisfaction of judgment form (this Form, like all other forms should be made available by the SCC’s clerk of court as parties to a small claims suit are not represented by lawyers). It is recommended that the Supreme Court conduct an in-depth study on the nature of cases being filed in our regular courts, to find out exactly how many of the cases pending before regular courts are small claims issues. Pending this research however, from experience alone , it can be safely concluded that almost 30-40% of the cases filed in our courts are small claims issues. A Small Claims Court, therefore, will drastically reduce the backlog by this number if fully instituted.

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The creation of such court will not entail an additional enormous expense from the

government. Strict requirements for judges in regular courts may be waived, since small claims issue and procedure do not require a lengthy legal experience. There are lots of lawyers in the Philippines today who would be willing to take on the job of a small claims court judge. Considering the time, effort and expense being spent by regular courts in small claims issues, the creation of a small claims court will, in the long run, be more economical and the effect on the effective delivery of justice, more beneficial. DECRIMINALIZATION OF BOUNCING CHECKS TO HELP DE-CLOG COURT DOCKETS Not every check that bounces should be criminally prosecuted. Criminal prosecution should only apply when the drawer of the bad check receives something of value in exchange for the check he draws with fraudulent intent, at the time the consideration is delivered. Fraudulent intent is present when the drawer knows that the check will not be honored when it is presented to the bank for payment. He is guilty of the crime of representing a worthless piece of paper as cash, so that the victim will part with his goods. It should not be a criminal matter, however, in the case of a pre-existing debt where the drawer received the goods or consideration in the past and makes payment on his debt with a bad check. The victim did not part with his goods relying on a fraudulent representation of the worth of the check. When the check is not honored, it is equivalent to the drawer not making good on his debt. No one should be imprisoned for not making good on his IOU.

This is also generally applicable to “post-dated” checks. In this case, there is essentially an understanding that the check is not good on the date the consideration is received, which again makes said transaction a loan with the check a mere collateral for the loan. Criminal intent must be established here. When the drawer makes a stop payment order on a check he previously issued, criminal intent to defraud the victim must also be established. There is no crime that automatically results from such an order. If there was no fraudulent intent on the part of the drawer, again the case is properly a civil case for damages. Imposing stiff civil penalties may be more effective than having criminal penalties that are not actually imposed. In many countries today, penalties amounting to treble the value of the check is proving to be a successful deterrent in curbing the proliferation of bad checks. The following are examples of state civil penalty rules on bad checks in the United States :39

39 (For discussion on when treble amount is granted see Braden Corp. v. Citizens National Bank of Evansville, 661 NE 2d 838,Indiana Ct. App. 1996. For decision on when treble amount is not given, see Commercial & Medical Accounts v. Mackintosh, 662 NE 2d 659 (Ind. Ct. App. 1996). Examples of state civil penalty rules on bad checks in the United States are discussed above.

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1. Alaska- The bidder may recover damages in the amount equal to US$ 100.00 or treble the amount, whichever is greater, except that damages under the bad check law may not exceed the amount of the check by US $ 1,000.00

2. Arkansas- Amount due, service charge not to exceed $ 10.00. On stop payment, 15

days following the written demand to the drawer’s last known address, the holder may collect fees not to exceed $ 15.00. Failure to make restitution and collection fee will result in liability of twice the amount of the check, but in no case less than US$ 50.00;

3. Colorado- Treble the amount of such check but in no case less than US$ 100.00

including reasonable fees;

4. Florida- In the event of a failure to make payment within 30 days after demand, treble the amount owed in addition to the amount owed together with the bank and court costs and reasonable attorneys fees, not less than US$50.00 and no more than US$ 2,500.00. If payment is made in 30 days, a service charge of $10.00 or 5% of the amount of the check, whichever is greater, can be added. In stop payment actions, reimbursement for actual travel expense to the holder or agent for filing papers and for travelling and providing witnesses to the proceedings will be included;

5. Indiana- Treble the amount of the check not to exceed $ 500.00 plus the amount of

check including attorney's fees of not less than $ 100.00 and interest at 18% per annum;

6. Washington- Lesser than the of amount of the check or interest of 12% and the cost of

collection not to exceed $ 40.00. If court action is necessary after 15 days, lesser of reasonable attorney's fees and treble the face value of the check or $ 100.00.

If a criminal intent is absent, decriminalization of the act of issuing a check that eventually bounced, will not only help unclog court dockets but also rationalize the country's criminal legal system since only those with criminal intent will be imprisoned for their acts. At present, the Philippines is one of the very few countries attaching automatic criminal liability for the issuance of a bouncing check.

Current Situation The problem however, is that the law on bouncing checks has to be applied until repealed. Pending the repeal of the law, issuing bouncing checks is still a criminal offense and BP cases will continue to be filed. In order to help de-clog court dockets of bouncing checks pertaining to collection cases, steps can be immediately instituted to help minimize the entry of BP 22 cases with regular courts. The main thrust of solving this problem is input-screening, or providing for mechanisms to resolve the issue before a court officially takes cognizance of a BP 22 case for pre-existing debt.

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Jurisdiction BP 22 violations could be filed in a Small Claims Court and the Municipal Trial Court (MCT), which could be created by Congress for small claims depending on the amount of the check. Notice and Demand Regulated by the Prosecutor's Office The requirement of giving the drawer a notice that his check bounced and demanding payment (including fines and other penalties) must be a necessary pre-requisite before the Prosecutor’s Office conducts a preliminary investigation. Said notice will carry a notation from the Prosecutor’s Office to give the demand letter a more serious effect. No case can prosper unless said notice and demand is proven by the plaintiff. A Notice and Demand Form and procedure (see Annex “A” showing a sample for Small Claims Court) can be provided by the Small Claims Court, MTC or the Prosecutor’s Office to anybody who plans to file a BP 22 case. A case can only be filed once the drawer refuses to pay the value of the check or fails to answer within 30 days from the transmittal through registered mail, of the Notice and Demand. Mediation and Collection Once the case is filed, compulsory mediation could be instituted. The clerk of court will issue summons to the accused to attend mediation proceedings before a court-designated mediator. The accused is required to attend the mediation process and thresh out the issue with the plaintiff. The trial only begins upon the failure of the accused to attend mediation or failure of the parties to reach a settlement in the mediation process. The mediation process, however, would provide a viable screening device, which should result in fewer cases filed. With the threat of criminal prosecution, the accused may be encouraged to attend mediation and settle his debts. If a compromise is reached, the court issues an order to implement the compromise agreement. If no settlement is achieved, the trial begins, where the accused has to face a very clear-cut law, which merely requires the fact that he issued a check, which was later dishonored. This will make settlement and payment more promising for the accused and mediation or other alternative dispute settlement mechanisms a better option .

The recommended procedure will not absolutely free regular courts from becoming collection agents of victims of bouncing checks. However, the compulsory requirements of Notice and Demand duly approved by the Prosecutors Office and Compulsory Mediation will spread out the task of collection to the plaintiff himself and in the mediation process, to both parties.

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CONCLUSION AND RECOMMENDATIONS It is clear from the discussion that the most effective way of solving the pervasive problems of judicial delay and clogged court dockets is through instituting reforms under the Rules of Court. Even Supreme Court Circulars have not been as effective as the Rules of Court. Procedural reforms through statutes such as the Arbitration Law and the Katarungang Pambarangay Law have not been very effective. To summarize, the following are general recommendations to unclog the court dockets: 1. Re-orient law student training, and lawyers’ attitudes as well as that of the general public on

the need for: (a) preventive lawyering; and (b) prior conciliation efforts before seeking judicial relief;

2. Call for greater public participation in the recruitment process of court officials - Improving

the recruitment process through appointment of honest, capable and committed individuals would remedy the situation.40 This, however, would include raising salaries and benefits that would attract the kind of personnel that is desired.

3. Make more effective the accountability of judges and other court personnel through

disciplinary action - No matter how effective the screening process may be, however, there will always be some undesirables that somehow get appointed to the system. Those who were initially qualified become, in time, tainted by the same undesirable traits they were originally free from. The next remedy, therefore, would be to make more effective the administrative disciplinary actions that could deter undesirable acts or ultimately weed out the incorrigibles.

Finally, specific recommendations to unclog or de-clog court dockets are as follows:

1. Increase output or case disposal rate through:

a. Return of specialization of courts (criminal courts and constitutional courts);

b. Strict compliance with set periods for rendering decisions; and

c. The continuance of procedural reforms for simplification of complex rules; shortening periods for filing of pleadings with due regard to fairness; and recognition of fax/e-mail filing of pleadings.

40 The 1987 Constitution did away with the need for confirmation by the Congressional Commission on

Appointments of appointments to the judiciary. Instead, the President of the Philippines appoints from among those recommended by the Judicial and Bar Council.

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2. Restrict judicial access through:

a. The creation of a Small Claims Court; b. Placing of a procedural bar as a condition for judicial access (e.g., Katarungang

Pambansa Law and exhaustion of administrative remedies); and c. The creation of an additional fora for ADR before access.

3. Divert pending cases to ADR or to administrative processing through:

a. Decriminalization of bad or bouncing checks; and b. Decriminalization of commonly recurring petty offenses; and

4. Institutionalizing the ADR System as a court-annexed system and as a separate institution

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ANNEX A

US jurisprudence on bad checks, the penalties thereto and Small Claims Court rules, is

one of the most advance in the world today. Examples from their experience are cited in this paper to provide an idea on their rules regarding checks dishonored for insufficiency of funds.

Under the California Civil Code, Section 1719, any person who writes a check which is

dishonored can be held liable for a penalty equal to three times the amount of the check, plus the face value of the check (minimum of $ 100.00 and maximum of $ 1,500.00)

The following simple steps must first be met in the case of a bad check under the California Code: 1. You must write a letter to the check writer and mail it by certified mail. Ask to be paid

the amount of the bad check in cash or money order, within 30 days. Your demand may also include the fee charged by your financial institution to process the bad check, not to exceed $ 25.00 for the first bad check and $ 35.00 for each subsequent bad check processed and the cost of mailing and notice. The Required Form Letter :

BAD CHECK DEMAND LETTER Date ______ Name of Check Writer Last Known Address of Check Writer Dear Check writer The check you wrote for $ _______, dated ___________, which was made payable to _________________ was returned by – name of bank -- because of (Insufficient funds or account closed or stop payment)

Unless full payment of the check is received by money order or cash within 30 days of the date of mailing this demand, together with $__________ (amount charged by the bank to process bad check) and $ ________ for the cost of mailing, I will file a Small Claims Court claim against you. The claim will request damages for the amount of the check $ ________ plus $____________ damages assessed at three times the amount of the check, for a total of $_____________ against you. You may wish to contact a lawyer to discuss your legal rights and responsibilities.

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Please send payment to: Your name Address Signature 2. You must wait for 30 days. If you have not received payment in cash within 30 days from

the date you mailed the demand letter, you may file a claim in a small claims or municipal court. You may proceed with your suit even though the party has not signed the letter as long as you submit a proof of mailing by certified mail;

3. At the hearing, you must produce a copy of the demand letter sent to the check writer at

his last known address and a signed certified mail receipt showing delivery or attempted delivery if it was refused;

4. Take all other documents related to the case to the court hearing. This might include the

notice from the bank, notes of your conversations and copies of any correspondence with the check writer regarding your effort to collect.