The Law on Alternative Dispute Resolution: Private Justice in the only the Europeans and the rich merchants
chants in the city and the
Philippines
(Book Summary and Cases)
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
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 lawyer’s propensity to elevate their cases to the
appellate courts and needlessly filing petitions for
mandamus, prohibition and certiorari for the purpose of
reviewing the interlocutory orders of the lower courts.
But a more serious factor behind the “law’s delay” in the
Philippines involves the billing practice of lawyers. (Billable hours,
number of court appearances) Delaying tactics to consume time.
The choice between a litigation and settlement is clear. He would
rather cut through the chase and solve his disputes swiftly and
move on with his life.
AGAN v. PIATCO (GR> NO. 15501)-SC ordered all affected parties to
comment made by one of the parties that PIATCO commences
arbitration proceedings by filing a request for arbitration with the
secretariat of the Internation chamber of commerce, International
Court of arbitration.
Private Justice-the concept is fairly recent development in the
administration of justice.
-Private “Courts” are managed by private organizations,
called ADR providers to serve those who need to resolve most types
of consumer, civil, corporate and commercial disputes.
-Parties generally agree to enter the private court system for
one main reason: the public court system is too chaotic and
unwieldly.
-“vigilante justice”
-Judges, selected by the parties and are paid on an hourly or
a per session basis, are for rent not for sale. They are paid for their
time and their expertise, not their expected favors.
CON: Creates a dual court system-one rich and one poor. No
means a perfect system, it offers enormous savings in time, effort,
anxiety, money in the long haul.
CHAPTER 2
The litigation of conflict: A Confucian Confusion
Two fundamental reasons for failure of trial courts according to
Ralph Warner and Stephen Elias:
1) Court Rules and Procedures are so complicated and
inefficient that lawyer fees and other costs end up being a
bigger problem than the dispute itself.
2) Winner take-all sustem defies logic, encourages lying and
generally brings out the worst in all participants.
The Nature of Conflict
Conflict- clash of divergence of opinions, values and interests and
emotions.
Several phases of the conflict process by Peter Condiffe (1995)
1) Conflict starts when parties perceive their differences-they
go though feelings of anziety and frustration.
2) Realization or expression of grievances and the assessment
of all angles in the conflict.
 -some parties get afflicted with AVOIDANCE SYNDROME
(disregarding the existence of the problem because of
relative powerlessness high risks and costs involved)
3) Parties choose their conflict resolution methods and select
their strategies to settle their disagreements.
4) Evaluation of outcomes and the analysis of all ramifications
of full implementation of the chosen methods of conflict
management.
ADR aims to solve the conflict not win the lawsuit which is the aim
of litigation.
Conflict is a contest and a problem to solve (Bill Withers)
Modes of Resolving Conflict (Blake and Moulton)
1) Withdrawal-Avoidance behavior on one or both parties
2) Smoothing-emphasis of common interest and yielding by
one or both parties.
3) Compromising-each side obtains a part of what it wants.
4) Forcing-forcing the other to acquiesce.
5) Problem solving-involves an agreement in which both sides
meet their objective and affective needs.
When a person wins through a lawsuit can compare it as a Pyrrhic
victory (pronounced /ˈpɪrɪk/) which is a victory with devastating
cost to the victor; it carries the implication that another such will
ultimately cause defeat.
Importance of Litigation (Peter Lovenheim)
1) When you need to establish a legal precedent, such as the
validity of the patent which your company holds;
2) When you need to publicy prove the truth, such as when a
customer’s complaint about the product quality or safety
has received wide attention in the media product’s good
name;
3) When your company’s legal rights have been infringed and
you stand a good chance of collecting substantial damages
in court;
4) When your opponent is unable and unwilling to participate
in ADR; and
5) When serious crimes are involved in the dispute.
CHAPTER 3
The Grand Misnomer: “Alternative” Dispute Resolution”
Legal Basis of ADR:
ART. VIII, Sec. 5 (5) 1987 Consitution
-Mandating the SC to promulgate rules that shall “provide a
simplified and inexpensive procedure for the speedy disposition
of cases.
Rule 18, Sec 2(a) 1997 Rules of Civil Procedure
 -Requiring the courts to “consider the possibility of an 1) Civil Status of persons;
amicable settle or of a submission to alternative modes of
resolution.” 2) Validity of Marriage;

“Alternative” comes from the word “alternate” which means 3) And legal separation;
substitute, spare tire, a second stringer, a fallback position. 4) Futures support;
Which is wrong because litigation should be the LAST option not 5) Future legitime;
ADR.
6) Jurisdiction of the courts;
Limitations of ADR
7) Future jurisdiction of the courts.
Cases that involve:
CHAPTER IV
1) Constitutional law issues
The Settlement of dispute in the Philippines:
2) Anti-trust suits
A culture of PAKIKISAMA
3) Probate
Many Filipinos readily overcome conflict through pragmatic means.
4) Adoption
Gini Graham’s techniques in Resolving Conflict:
5) Precedent-setting cases that involve punitive damages
1) Identify the source of the problem
6) Actions of equitable relief, and
2) Applying the appropriate problem solving techniques:
7) nuisance
a. Creative visualization-examine the reasons for the
are beyond the scope of arbitration. problem
ART. 2035 of the Civil Code b. Brain-storming-come up with alternatives
If related issues of the following are matters in controversy may not c. Automatic writing-ask inner self for reactions of
be capable of being referred to arbitration: 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 (I-H-I-M-I-S)
powers of the SEC)
1) Introduction and agreeing of ground rules
6) Partnership Arbitration
2) Hearing what has happened or summarizing the facts
The CC states that is beyond the authority of one or more
but less than all the partners to enter into a compromise or 3) Identifying the issues
submit to arbitration a partnership claim or liability. When it 4) Mutual understanding and communicating feelings
comes to ADR, unanimous consent of partners is needed to
carry out the plant to resolve partnership disputes without a 5) Ideal storming of a win/win solution
court trial.
6) Signing of voluntary agreement.
7) Administrative Arbitration
Causes of Court Delays (Justice Myrna Dimaranan Vidal)
Doctrine of Non-exhaustion of administrative remedies
1) the misuse of the due process and the abuse of
8) Environmental Mediation
legal technicalities;
9) Executive Arbitration
2) the intervention of political pressure
10) Foreign Arbitration
in court cases;
11) Banking Arbitration
3) the sheer weight of court litigations arising
12) Mining Arbitration
from development and growth;
13) Maritime Arbitration
4) the dilatory tactics of lawyers;
14) Insurance Arbitration
5) neglect and laxity on the part of judges; and
15) IP Arbitration
6) Court vacancies.
16) Securities Arbitration

Six-Step Structure of a face-to-face mediation meeting

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 5) Brainstorm with your opponent to generate various
abandon the discussion if he does not get his way. alternatives

2) Conciliatory negotiator-who will assume the role of a 6) Fine tune your agreement so that there is something that
“problem solver” rather than an intimidator. both of you can find acceptable

Class of negotiations 7) Passing written proposals back and forth for comment

1) Position-based negotiations often involves hard-ball 8) Calling a time out when things get rough and not going your
methods because it is premised on the presumed way.
superiority of one’s position.

2) Interest-based negotiation is much more candid and

amiable technique that involves the willing disclosure of all EXHAUST ADR PROCESSES BEFORE LITIGATION.
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