Small Claims Courts in the Philippines

Going to court for a small sum of money has just become cheaper and faster with the establishment of small claims courts. A simple procedure makes it easy for everyone. 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); and?

Accompanied 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).