OTHER FORMS OF ADR

The other forms of ADR are mentioned in Section 18 of the ADR Act of 2004 and in
Chapter 7 of its IRR. These are as follows:
(a) Early Neutral Evaluation or the evaluation of a third person;
a. GR: The neutral or early neutral evaluation shall be governed by the
rules and procedure agreed upon by the parties.
b. If the parties do not agree or do not provide the following:
i. The desired qualification of the neutral third person
ii. The manner of his/her selection;
iii. The appointing authority (not IBP) who shall have the authority
to make the appointment of a neutral third person
The parties may request the default appointing authority to make the
appointment. The appointing officer must take into consideration the
nature of the dispute and the experience and expertise of the neutral third
person.
c. Submit position papers: Parties to submit position papers containing
the issues and statement of the relevant facts and appending
supporting documents and affidavits of witnesses. To assist the
person to evaluate better or assess the dispute
d. Address Additional Issues: The neutral third person may request
either party to address additional issues that he/she may consider
necessary for a complete evaluation/assessment of the dispute.
e. Evaluation: The neutral third person may structure the evaluation
process in any manner he/she deems appropriate. In the course
thereof, the neutral third person may identify areas of agreement,
clarify the issues, define those that are contentious, and encourage
the parties to agree on a definition of issues and stipulate on facts or
admit the genuineness and due execution of documents.
f. No Ex-Parte Communication: There shall be no ex-parte
communication between the neutral third person and any party to
dispute without the consent of all parties.
g. Confidentiality of written presentations: All papers and written
presentations communicated to the neutral third person, including any
paper prepared by a party to be communicated to the neutral third
person or to the other party as part of the dispute resolution process,
and the neutral third person’s written non-binding assessment or
evaluation, shall be treated as confidential.

(b) Mini-Trial
a. GR: A mini-trial shall be governed by the rules and procedure agreed
upon by the parties.
b. It may be conducted as:
i. a separate dispute resolution process;
ii. a continuation of mediation, neutral or early neutral evaluation
or any other ADR process
c. Presence of a neutral third party:
i. The parties may agree that a mini-trial be conducted with or
without the presence and participation of a neutral third person.
ii. If a neutral third person is agreed upon and chosen, he/she
shall preside over the mini-trial.
iii. The parties may agree to appoint one or more (but equal in
number per party) senior executive/s, on its behalf, to sit as
mini-trial panel members.
d. As to mini-trial panel members:
i. The senior executive/s chosen to sit as mini-trial panel
members must be duly authorized to negotiate and settle the
dispute with the other party.
ii. The appointment of a mini-trial panel member/s shall be
communicated to the other party. This appointment shall
constitute a representation to the other party that the mini-trial
panel member/s has/have the authority to enter into a
settlement agreement binding upon the principal without any
further action or ratification by the latter.
e. Dispute Summary:
i. Each party shall submit a brief executive summary of the
dispute in sufficient copies as to provide one copy to each mini-
trial panel member and to the adverse party.
ii. The summary shall identify the specific factual or legal issue or
issues. Each party may attach to the summary a more
exhaustive recital of the facts of the dispute and the applicable
law and jurisprudence.
f. Mini-Trial Proper
i. At the date time and place agreed upon, the parties shall
appear before the mini-trial panel members.
ii. The lawyer of each party and/or authorized representative shall
present his/her case starting with the claimant followed by the
respondent. The lawyer and/or representative of each party
may thereafter offer rebuttal or sur-rebuttal arguments.
iii. Unless the parties agree on a shorter or longer period, the
presentation-in-chief shall be made, without interruption, for one
hour and the rebuttal or sur-rebuttal shall be thirty (30) minutes.
 iv. At the end of each presentation, rebuttal or sur-rebuttal, the
mini-trial panel member/s may ask clarificatory questions from
any of the presentors.
v. After the mini-trial, the mini-trial panel members shall negotiate
a settlement of the dispute by themselves.

(c) Mediation-Arbitration
a. GR: Mediation-Arbitration shall be governed by the rules and
procedure agreed upon by the parties.
b. In absence thereof, Chapter 5 on Mediation shall first apply and
thereafter, Chapter 5 on Domestic Arbitration.
c. Arbitrator in a failed Mediation:
i. GR: No Person shall having been engage and having acted as
mediator of a dispute between the parties, following a failed
mediation, act as arbitrator of the same dispute.
ii. Xpn: Unless the parties, in a written agreement, expressly
authorize the mediator to hear and decide the case as an
arbitrator
iii. The mediator who becomes an arbitrator pursuant to this Rule
shall make an appropriate disclosure to the parties as if the
arbitration proceeding had commenced and will proceed as a
new dispute resolution process, and shall, before entering upon
his/her duties, executive the appropriate oath or affirmation of
office as arbitrator in accordance with these Rules.

(d) Costs of Fees in General (optional)

a. The ADR provider before entering his/her duties, shall agree with the
parties on the cost of the ADR procedure, the fees to be paid and
manner of payment for his her services
b. In absence of agreement, the fees for the services of the ADR
provider/practitioner shall be determined as follows:
i. If the ADR procedure is conducted under the rules and/or
administered by an institution regularly providing ADR services
to the general public, the fees of the ADR professional shall
be determined in accordance with schedule of fees
approved by such institution, if any;
ii. In ad hoc ADR, the fees shall be determined in accordance with
the schedule of fees approved by the OADR;
iii. In the absence of a schedule of fees approved by the ADR
institution or by the OADR, the fees shall be determined by
the ADR institution or by the OADR, as the case may be, and
complexity of the process, the amount in dispute and the
professional standing of the ADR professional.
 iv. A contingency fee arrangement shall not be allowed. The
amount that may be allowed to an ADR professional may not
be made dependent upon the success of his/her effort in
helping the parties to settle their dispute.

Office of Alternative Dispute Resolution

Website:
I. Composition:
a. Office is annexed to DOJ
b. Headed by an Executive Director appointed by the President
c. Divisions:
i. Secretariat – shall provide necessary support and discharge such
other functions and duties as may be directed by the Executive
Director
ii. Public information and Promotion Division – shall be charged
with the dissemination of information, the promotion of the
importance and public acceptance of mediation, conciliation,
arbitration or any combination thereof and other ADR forms as a
means of achieving speedy and efficient means of resolving all
disputes and to help in the promotion, development and expansion
of the use of ADR.
iii. Training Division – shall be charged with the formulation of
effective standards for the training of ADR practitioners; conduct of
training in accordance with such standards; issuance of
certifications of training to ADR practitioners and ADR service
providers who have undergone the professional training provided
by the OADR; and the coordination of the development,
implementation, monitoring and evaluation of government and
private sector ADR programs.
iv. Records and Library Division – shall be charged with the
establishment and maintenance of a central repository of ADR
laws, rules and regulations, jurisprudence, books, articles, and
other information about ADR in the Philippines and elsewhere.
 d. Advisory Council:
i. Composition: There is also created an Advisory Council
composed of a representative from each of the following:
1. Mediation profession;
2. Arbitration profession;
3. ADR organizations;
4. IBP; and
5. Academe.
The members of the Council, who shall be appointed by the
Secretary of Justice upon the recommendation of the OADR
Executive Director, shall choose a Chairman from among
themselves.
ii. Role of the Advisory Council: The Advisory Council shall advise
the Executive Director on policy, operational and other relevant
matters. The Council shall meet regularly, at least once every two
(2) months, or upon call by the Executive Director.

II. Powers of OADR

a. Appointing Authority: To act as appointing authority of mediators and
arbitrators when the parties agree in writing that it shall be empowered to
do so;
b. Information Dissemination:
i. To conduct seminars, symposia, conferences and other public fora
and
ii. Publish proceedings of said activities and relevant
materials/information that would promote, develop and expand the
use of ADR;
c. Establishment of Resource Center: To establish an ADR library or
resource center where ADR laws, rules and regulation, jurisprudence,
books, articles and other information about ADR in the Philippines and
elsewhere may be stored and accessed;
d. Establishment of Training Programs:
i. To establish training programs for ADR providers/practitioners, both
in the public and private sectors; and
ii. To undertake periodic and continuing training programs for
arbitration and mediation and charge fees on participants.
iii. It may do so in conjunction with or in cooperation with the IBP,
private ADR organizations, and local and foreign government
offices and agencies and international organizations;
e. Power to Certify: To certify those who have successfully completed the
regular professional training programs provided by the OADR;
f. Collect Fees: To charge for services rendered such as, among others, for
training and certifications of ADR providers;
 g. Accept donations: To accept donations, grants and other assistance
from local and foreign sources; and
h. Other Powers: To exercise such other powers as may be necessary and
proper to carry into effect the provisions of the ADR

III. Functions of ADR:

a. Promotion, development and expansion of ADR: To promote, develop
and expand the use of ADR in the private and public sectors through
information, education and communication
b. Monitoring, studying and evaluating use of ADR: To monitor, study
and evaluate the use of ADR by the private and public sectors for
purposes of, among others, policy formulation
c. Recommend needful statutory changes: To recommend to Congress
needful statutory changes to develop, strengthen and improve ADR
practices in accordance with international professional standards
d. Make studies and provide linkages: To make studies on and provide
linkages for the development, implementation, monitoring and evaluation
of government and private ADR programs and secure information about
their respective administrative rules/procedures, problems encountered
and how they were resolved;
e. Compile and Publish list of accredited local ADR
providers/practitioners:
i. To compile and publish a list or roster of ADR
providers/practitioners, who have undergone training by the OADR,
or by such training providers/institutions recognized or certified by
the OADR as performing functions in any ADR system.
ii. The list or roster shall include the addresses, contact numbers, e-
mail addresses, ADR service/s rendered (e.g. arbitration,
mediation) and experience in ADR of the ADR
providers/practitioners;
f. Compile and Publish list of accredited foreign ADR
providers/practitioners: To compile a list or roster of foreign or
international ADR providers/practitioners. The list or roster shall include
the addresses, contact numbers, e-mail addresses, ADR service/s
rendered (e.g. arbitration, mediation) and experience in ADR of the ADR
providers/practitioners; and
g. Other function as may be directed: To perform such other functions as
may be assigned to it.

Dispute Resolution Mechanisms in the Philippines

Background:
 - A joint research of UP, the Institute of Developing Economies and Japan External
Trade Organization
- Purpose is to determine the underlying problems in the courts and out of court
systems. The study is a comprehensive analysis of both the in and out of court
dispute process is essential

Chapter 1:
Part 1: Court System: How the Court System is used as a Dispute Resolution
Mechanism
I. Current Situation regarding the Use of Courts
1. The courts exercise their duty to settle actual controversies through a
hierarchical organization.
i. First Level Courts (MeTC, MTC, MTCC and MCTC),
ii. Second Level Courts (RTC
iii. Appellate Courts
iv. Supreme Court – the only constitutional court; the court of last
resort
v. Special Courts
1. Sandiganbayan
2. Court of Tax Appeals
2. The hierarchical structure is strictly observed and enforced by the SC who
will not entertain subject to certain exceptions.
3. Filipinos seem to be litigious people which can be based on the heavy
case inflow in the first and second level courts Further, these cases are
often appealed all the way to the Supreme Court thus resulting to the
clogging of dockets.
4. As part of the overall mission to improve effectiveness and efficiency in
the Philippine Judiciary, the SC had prioritized the following goals
i. Dispose exisiting backlog of cases in all courts
ii. Study and address the causes of failure to observed the periods to
decide cases mandated by the Constitution and
iii. Promote alternative modes of dispute resolution

II. Parties’ Viewpoints with regard to the Court System:

1. Despite the high volume of cases filed in court, there is a growing
dissatisfaction among citizens in the use of the courts for settling their
disputes.
2. Among the reasons stated are:
i. The costly and slow process of litigation
ii. Rigidity of the procedural and technical rules
iii. Adversarial nature of our litigation
 iv. Inadequacy of legal solutions or frameworks for resolving intricate
and complex issues involved in commercial transactions amidst
tremendous developments in global trade information techonology.
3. One important consideration which militates against litigation and is in
favor of of-court settlement is the culture of Filipinos that strongly values
the preservation of amicable relationship especially between parties with a
history of kinship and community ties.
4. The parties choice of in-court or out of court settlement of their disputes is
also influenced by the level of trust they repose on the courts. There
lingers an image of inefficiency and corruption in the judiciary involving
judges and court personnel which continue to erode public confidence and
diminish the people’s hope in attaining a resolution through the court.

III. Problems of the Court System

1. The clogging of dockets has been identified as the single most important
problem currently being addressed by the Supreme Court.
2. Delays are due to several factors:
i. Due process mechanics in the Philippine litigation take time as
great care is observed in safeguarding the constitutional rights of
the parties
ii. The appellate system is open-ended so that the litigants refuse to
surrender and tenaciously pursue their appeals all the way up to
the highest court
iii. First level courts are flooded with collection cases due to BP 22
iv. Automatic appeals to SC of death penalties imposed by the trial
courts alone number about 1,500 at present and continuing and the
High Tribunal cannot refuse appeal of cases in which the penalty
imposed is reclusion perpetua or life imprisonment.
v. Apart from reviewing lower court decisions, the SC also handles
appeals of decisions issued by other constitutional bodies like the
COMELEC, COA and the Ombudsman and also adjudicates
complaints against lower court magistrates and lawyers pursuant to
its supervisory and administrative powers over all courts and
lawyers
vi. Other causes:
1. Laziness, inept and corrupt judges
2. Unfilled vacancies in the judiciary due to unattractive
compensation and benefits
3. Propensity of lawyers to misuse and abuse the ROC by
resorting to all sorts of delaying tactics against their
opponents.

IV. Direction of Judicial Reforms (parang na-report na ito ng ibang groups)

 1. ADR has emerged as the key to decongesting court dockets.
2. Section 2(a) of the 1997 Rules of Civil Procedure requires parties to hold a
pre-trial conference whereby the court shall consider the possibility of an
amicable settlement or of a submission to alternative modes of dispute
resolution.
3. For effective implementation, The SC promulgated A.O. 21-2001
designating Philippine Judicial Academy (PHILJA) as its component unit
for court-referred, court-related mediation cases and other alternative
dispute resolution mechanisms and establishing the Philippine Mediation
Center (PMC) for the purpose.

V. Conclusion:
1. The Philippine Judiciary has been gearing itself for the challenges
brought by rapid changes and developments in this era of globalized trade
and e-technology.
Part II: Alternative Dispute Resolution: How Out-of-Court Systems
I. Overview of ADR:
a. History:
i. Dispute resolution machinery already existed in the earliest
communities in the Philippines even before the advent of Spanish
and American. Disputes were brought before the elders of the
community in a conversational fashion to determine the issues and
resolve them
ii. During the Spanish and American regimes, dispute resolution
mechanisms were more rational through inclusion of said function
in the local governmental systems.
iii. In 1958, the Arbitration Law was enacted whose goal is to is to re-
establish the non-judicial forum for dispute resolution in the country.
iv. In 1978, President Marcos decreed the formation of the
Katarungang Pambaranggay by virtue of PD 1508.
v. In 1997, the SC included in the New Rules of ivil Procedure
provision for the possible use of alternative modes of dispute
resolution.

b. Types of ADR (discussed by other groups)

i. Mediation or Conciliation
1. In the Philippines, the two are used interchangeably.
2. It is the whereby a third-party facilitates a negotiation
between two or ore parties in dispute.
ii. Arbitration
1. The third-party, based on the information presented to
him/her by the disputants and based on his/her own
 investigation of the case, makes the final decision on how to
resolve the conflict.

II. Current Situation Regarding Use of ADR

a. The Katarungang Pambaranggay
i. Process of dispute resolution in KP
1. Here the resolution process of any dispute is within the KP’s
jurisdiction by an oral or written complaint given to the
Barangay Chairman.
2. The next working day, the alleged offender is given the
chance to answer the complaint either orally or in writing.
3. A meeting is held to bring together the parties, along with
their witness in order to define the issues.
4. The Barangay Chairman determines whether or not the
disputes falls within the resolutely power of the KP.
5. When an amicable settlement (in mediation) or arbitral
award (conciliation) is reached, it becomes final in ten days
and has the force and effect of a court of judgment.
6. Any party may repudiate the said settlement or award on
grounds of fraud, violence, intimidation, or any factor which
vitiate consent.
7. If no repudiation, parties are given five days to comply with
the agreement.
8. If no compliance, the Barangay Chairman is empowered to
take sufficient personal property from the respondent and
sell same, the proceeds of which is applied for the
satisfaction of the award.
ii. The primary conciliatory-body in the KP is a group of volunteers
called Luong Tagpamayapa (Lupon), led by the Barangay
Chairman.
iii. The KP uses mediation and conciliation. Mediation as the initial
stage, involved the face-to-face confrontation of the parties, with
the Barangay Chairman who acts as the mediator and assists the
parties in the negotiation. If this fails, the conciliation is resorted.

iv. Incidence of cases

1. In general the researchers had difficulty in gathering data
regarding ADR since there is a lack of monitoring and data
recording in almost all institutions concerned in ADR.
There is no way to determine whether the compromise agreements arrived by
mediation or arbitration has been properly complied with.

b. The Cooperative Development Authority

i. The CDA was created by virtue of RA 6939 for the purpose of
promoting the viability and growth of cooperatives as instruments of
equity, social justice and economic development.
ii. It is granted quasi-judicial power to adjudicate disputes between
natural persons who are members of cooperative, federation or
union that arise from issues like mismanagement, election protests,
violations of the Cooperative Law, misdemeanors of members and
fraud are exclusively within the CDA’s jurisdiction.
iii. Process:
1. Dispute is brought before CDA via:
a. Written complaint
b. Referral by another government agency
c. The Cooperative Development Council
d. A Federation or union
e. By the court
2. A legal officer is appointed by the CDA to undertake the
resolution process.
3. Complainants and respondents are requires to submit
written pleadings.
4. A conference is then held by the hearing officer to determine
whether the case is within its power to resolve using ADR
5. If mediation is used, the case should be resolved within a
period not exceeding three months.
6. If no agreement is reached, a Certificate of No-Resolution is
issued and the entire process will be arbitrated.
 7. All resolutions or agreements become final and executory
within 15 days from receipt of the parties a copy of the
resolution and if no appeal or motion for reconsideration is
filed within the prescribed period.

iv. Incidence of Cases

c. The Philippine Construction Industry Arbitration Commission

i. It was created by the E.O. 1008 to resolve the growing number of
litigation cases involving contractual claims within the industry.
ii. The agency has jurisdiction over disputes:
1. arising out of contracts involving the construction industry,
like delays in payment or completion of jobs, claims for
liquidated damages, requests payment of progress billings,
retention, workmanship issues and breahes.
iii. The CIAC’s jurisdiction is determined either by the presence of an
arbitration clause in the contract or by a subsequent agreement
between the parties.
iv. Incidence of Cases
d. The Department of Agrarian Reform Adjudication Board
i. Agency was created by the Constitution and EO 129-A.
ii. It is mandated to provide a forum for the settlement of agrarian
disputes with the Regional Director as the designated hearing
officer.
iii. Incidence of Cases

e. The Philippine Dispute Resolution Center, Inc.

i. This agency is a private non-stock, non-profit corporation organized
in 1996 for the purpose of promoting and encouraging the use of
arbitration, conciliation, mediation and other modes of non-judicial
dispute resolution for the settlement of domestic and international
disputes in the Philippines.
ii. The PDRCI uses arbitration to resolve disputes arising from
contracts especially in the fields of commerce, trade, intellectual
 property rights, securities, insurance domestic relations and claims
among others.
iii. Incidence of Cases

f. The National Conciliation and Mediation Board

i. NCMB was created in 1987 by virtue of EO 126 and is an agency
under the Department of Labor and Employment (DOLE).
ii. Its function is to resolve certain labor disputes involving unionized
workers, especially involving issued related to the filing of a notice
to strike or lock-out, deadlock in the CBA, unfair labor practice and
interpretation of company polices involving personnel.
iii. Incidence of Cases

g. The National Labor Relations Commission

i. It is an agency under DOLE given quasi-judicial powers by law.
ii. Its mandate is to settle or adjudicate labor disputes involving:
1. unfair labor practice,
 2. termination,
3. breach of labor standards with claim for reinstatement,
4. legality of strikes and lockout,
5. money claims arising from Ee-Er relationship exceeding Php
5,000 and other claims arising from damages.
iii. Incidence of Cases

h. Bureau of Labor Relations:

i. Another agency under the DOLE concerning with settling disputes.
ii. BLR’s mandate is limited to resolving:
1. inter-union and intra-union disputes,
2. disputes arising from conflicts in union representation,
3. cancellation of union registration,
4. administration of union funds
iii. Incidence of Cases

i. The Commission on Settlement of Land Problems

 i. It is an agency under DOJ which was created on September 21,
1979 by President Marcos through EO 561.
ii. COSLAP is a quasi-judicial body mandated to settle all types of
disputes involving:
1. land, whether urban or rural,
2. occupants/squatters and pasture lease holders
3. timber concessionaires
4. occupants/squatters and government reservation guarantees
5. occupants/squatters and public land claimants
6. petition for classification
7. release and subdivision of lands of the public domain
8. other similar problems of grave importance
iii. Incidence of Cases

j. The Insurance Commission:

i. It is an independent quasi-judicial body tasked with resolving
disputes in the insurance industry
ii. It has jurisdiction in settlement of claims and other types of disputes
related to the insurance industry, provided the amount of claim
does not exceed Php 100, 000, exclusive of damages.
iii. Incidence of Cases
k. The Bureau of Trade Regulation and Consumer Protection
i. It is a quasi-judicial body under the DTI created to investigate,
arbitrate and resolve complaints from consumers involving
violations of the Consumer Act of the Philippines.
ii. It has exclusive jurisdiction over:
1. Disputes involving untrue, deceptive or misleading
advertisements
2. Sale of paint materials
3. Fraudulent advertising
4. Mislabeling and misbranding
5. Monopolies and combinations in restraint of trade,
6. Importation
7. Disposition of falsely marked articles
8. Price tags
9. Product Standards
iii. Incidence of Cases
 l. The Court Annexed Pilot Mediation Project (has materialized and was
discussed by other groups)
i. Incidence of Cases

III. Conclusion:
a. Access to justice is not confined to access to the judicial system. While
law-mandated ADR mechanisms do not enjoy the trust of the ordinary
citizen who believes that only judicial court can dispense justice. Evidently
there is a need to inform the citizenry and lawyers of this alternative
avenue of attaining justice.
Chapter II. Study on Dispute Resolution Process in Specific Cases

Part I: The Consumer’s Alternative: Dispute Resolution Process in Consumer

Protection

I. Introduction
Aggressive marketing by companies has made it difficult for consumers to
adequately judge the products’ quality. Expert knowledge has become a tool
essential to discern the technical aspects of many modern products, a skill
that ordinary consumers many not possess. To overcome this, consumer
protection laws have been enacted to aid the buyer grapple with the
overweening advantage enjoyed by seller.
Administrative adjudication in the Philippines is adversarial in nature.
Litigants prove their claims before the judge who, after receiving evidence,
renders a decision in favor of one. Reliance on the adversarial process is
based on premise that rightness and wrongness or truth or falsity of the
claims will be eventually established. In reality, however, is that litigation does
not always lead to fair result. It unduly demands much of one’s time and
money as cases are prolonged by appeals procedures.
ADR is the option that leads to earlier settlements. Methods are varied but
they all strive to view problem from perspective interest rather than rights. In
the Philippines, concept of ADR in Consumer Protection is stil undergoing
scrutiny and serious consideration with the intention to duplicate the
conciliation process in Barangay System. A close perusal of the practices
employed by the seller-buyer in settling their disputes vividly evinces ADR in
action. This paper seeks to explore an alternative to litigation to resolve
dilemma of Filipino consumer.

II. Consumer Protection

1. Consumer Transactions
Defined in RA 7394(1991), as “a natural person who is a
purchaser, lessee, recipient or prospective purchaser, lesser or
recipient of consumer products, services or credit.”
He /she enters into consumer transactions either through (i)
sale, lease, assignement, award by chance, or other disposition of
consumer products or (ii) the grant of provision of credit to a
consumer for purposes of credit to a consumer for purposes that
primarily personal, family, household or agricultural; or (iii) a
solicitation or promotion by a supplier with respect to transactions
described in clause
When consumers have cause to complain about a product or
service there is no guarantee that they will obtain satisfaction.
 Large businesses have created consumer relations departments
however, other commercial estblishments are less responsive.
They would not part with it or care whether the consumer is happy
about the purchase.
There is an obvious imbalance power. Purchasers have a
weak bargaining position because of the gross disparity between
the buyer and the seller as regards knowledge of the product and
availability of resources, both legal and financial. Legal remedies
are available but many consumers are still ignorant of their legal
rights. (Inflationary prices, food shortages, unsafe products, etc).
Comprehensive consumer laws enacted provide consumers
tremendous power but remained untapped. Consequently, buyers
are harassed by raising prices of basic commodities, increasing
exposure to merchandise, deceptive advertising and fraudulent
market practices.

2. Settling Consumer Disputes

Law is a method of resolving disputes. It is a set of rules that
are frequently changing. Ideas of what is fair CHANGE- do the
rules.
Laws were amended to allow customers to cancel sales
within a limited period. Product safety or the prevention of product
liability originates not with the company’s legal department but with
the personnel involved in product design, engineering, quality
control, production, packaging, labeling and distribution of the
product.
Particular departments of the government have been vested
with basic authority over mandatory safety standards and consumer
education and the power to saction and impose civil or criminal
penalties for safety violations. Government controls are best
protection for consumers. It is unrealistic to expect business to
introduce measures antagonistic to their interest. Consumers who
receive a faulty product or substandard service must seek redress
on their own, and if a business establishment should refuse a
reasonable settlement, consumers are expected to enforce their
private law remedies by taking court action.

III. The Philippine Context

1. Law and Jurisprudence
Article II of the 1987 Constitution maintains that sovereignty resides
in the people and all government authority emanates from them. It mandates
to promote social order that will ensure prosperity and independence of nation
through policies that provide adequate social services, promote full
employment and improve quality of life for all. The state shall encourage non-
governmental, community –based, or sectoral organization to promote
welfare of nation.
In consumer rights, Article XVI sec. 9 provides “the state shall
protect the consumers from trade malpractices and from substandard or
hazardous products.” Sec. 11 (2) further stated “ the advertising industry is
impressed with public interest, and shall be regulated by law for the protection
of consumers and the promotion of general welfare”
RA No.7394 (Consumer Act of the Philippines), it was declared to
protect the interest of the consumer, promote general welfare and establish
standards of conduct for business and industry.
Objectives: protection against hazards to health and safety and against
deceptive, unfair and unconscionable sales acts and practices; on the
necessity of information and education and of adequate rights and means
of redredd; and on the involvement of consumer representatives.
Arbitration agreement is valid, enforceable and irrevocable like any
other contract (applies to domestic and international arbitration). An award
is valid unless the concurrence of all of them is required by the terms of
arbitration agreement. Arbitration award must be in writing and signed and
acknowledged by majority of the arbitrators. The court may then direct
new hearing either before same arbitrators or before a new set of
arbitrators. At any any within one month after award is made. The court
must grant such order unless award is vacated, modified or corrected.
Notice will then be served to the adverse party.
Jurisprudence shows very thin body of cases dealing with
consumer protection. This is because the cases are lodged and litigated in
the different departments of the government acting as quasi-judicial
agencies and appealed to the Office of the Secretary then to the Office of
the President.
Policy changed with the enactment of the Civil Code of the
Philippines. Arts 2028-2048 treats arbitration agreements as a special
contract to compromise. RA 876, the rules for arbitration are found in the
law itself but the scope of procedural rules is derived from the contractual
relationship of the parties. Courts may intervene during the arbitration but
the extent of its relief is not defined.
Puromines, Inc v. Court of Appeals, 220 scra 281 (1993), “unless
the agreement is such as absolutely to close the doors of the courts
against the parties, which agreement would be void, the courts will look
with favor upon such amicable arrangements and will only interfere with
great reluctance to anticipate or nullify the action of the arbitrator.”
1.1 Barangay System
 Purpose: to serve the criminal justice system more
comprehensively and effectively.
 Secs. 399-422 of the Local Govt Code of 1991 (RA 7160) is
recognized example of ADR. In this scenario:
- there is a lupong tagapamayapa in each barangay which
serves as an organ for alternative dispute resolution;
- the members are appointed by the Punong Barangay from
among persons residing or working in the barangay;
- In all katarungang pambarangay proceedings, the parties
must appear in person without the assistance of cousel or
representative, excpetminors or incompetents.
 No dispute involving indivisuals actually residing in the same
city or municipality may be brought to court without first going
through the conciliation procedure under the lupong
tagapamayapa.
- Sec. 410, the mediation process proceeds with a complaint
with the Lupon Chairman who calls the parties and their
witnesses for mediation of conflicting interest.
- Failure of amicable settlements within 15 days from first
meeting, he shall forthwith constitute constitute a conciliation
panel known as “pangkat ng tagapagkasundo” (consisting 3
members chosen by the parties from members of lupon)
- The pangkat shall hear both parties and their witnesses,
simplify issues and explore possible amicable settlement.
The pangkat shall arrive at a settlement for another period
not exceeding 15 days except in clearly meritorious cases
-Amicable settlements shall be in writing, in a language
known to the parties, signed by them and attested to by the
Lupon Chairman or he Pangkat Chairman.
- Agreement to arbitrate may be repudiated within 5 days.
Arbitration award shall be made after the lapse of the period
for repudiation wihin 10 days thereafter.
- Amicable settlement and arbitration award shall have the
force and effect upon expiration of 10 days from the date
thereof unless repudiated or nullified.
 - If the Pangkat fails to achieve amicable settlement within
15 days from the day it convenes, the Lupon or pangkat
secretary issues a certificate that NO CONCILIATION OR
SETTLEMENT HAS BEEN REACHED. Only then that the
parties may go to court.
 Although not explicit in the law, consumer complaints filed by a
resident of the barangay against a seller who is also a resident
in the same place does not go through this process. This is
deduced from the coverage of the Consumer Act of the
Philippines, which governs all consumer disputes.

1.2 Disposition of Consumer Cases

 Consumer Cases mediated or arbitrated are explicitly outlined in

RA 7394 (Consumer Act) and EO 913.
 Parties in a suit are brought to amicable settlement without
necessity of goin to Court. [ Ex. Mr X narrated a complaint
involving a defective typewriter ribbon. He wrote a complaint
addressed to the manufacturer, but was unanswered. Mr. X
went to DTI-NCR for help. A mediation conference was held and
the manufacturer was compelled to attend. He apologized o Mr.
X and replaced the ribbon with two good ones. The case was
considered closed after just one meeting.]
 However, there are numerous cases filed and pending in their
office subject to litigious proceedings. The majority of the cases
instituted are Consumer Products and Service, and Product
Quality and Safety under RA 7394 and such other cases under
EO 913

1.3 Handling Consumer Complaints

 A joint DTI-DOH-DA Administrative Order No. 1 series of 1993
outline the procedure for consumer complaints.
 In consumer complaints, the complainant must be a natural
person and the subject of the complaint is a consumer product
or service as defined under Consumer Act.
 Concerned department may commence an investigation upon
petition or upon letter complaint under oath from any consumer
for violation of RA 7394.
 The arbitration officer shall notify the parties to appear before
him for ediating and conciliating the controversy.
 The complaint must be filed within 2 years from the consumer
transaction was consummated or the deceptive or unfair and
 unconscionable act or practice was committed and in the case f
hidden defects from discovery thereof.
 When decision becomes final or executor, Arbitration Officer
shall, on motion of the interested party issue an Order of
Execution and Writ of Execution deputizing and requiring the
Philippine NATIONAL Police, the NBI or any other law
enforcement agency of the government, in the enforcement of
any of his decision or orders
 Each concerned department may issue separate rules to govern
the Arbitration of Consumer Complaint within their respective
jurisdiction
 A CONSUMER is advices to follow this procedure if there is a
problem regarding the product that he/she bought:
1. Identify the problem
2. Gather documentation
3. Go back to where you made the purchase
4. Write a formal latter

2. Government and Private Initiatives

2.1 Institution for Dispute Resolution
 RA 73 94 (National Consumer Affairs Council), to improve the
management, coordination and effectiveness of consumer programs.
 The Department of Trade and Industry through the Bureu of Trade
Regulation and Consumer Protection was mandated by law to act as
the primary coordinative and regulatory arm of the government for the
country’s trade, industry and investment activities.
 To facilitate consumer complaints, BTRCP installed Consumer Welfare
Division. The object of the project is to encourage consumers to seek
redress for their complaints directly with the concerned establishment.
 The Department of Agriculture through AO No. 9 outlined its course of
action on Consumer Protection. Several attached Implementing
Agencies were given jurisdiction by the Department over complaints on
particular agricultural commodities.
 The Department of Health through the Bureau of Food and Drugs is
mandated to provide legal advice in the enforcement of food and drug
laws and regulation.
 The Department of Education, Culture and Sports is directed to
develop nd adopt a consumer education program which shall be
 integrated into exiting curricula of all public and private schools from
primary to secondary level. A continuing consumer education program
for out of school youth and adults shall likewise be developed and
undertaken.

2.2 Consumer Groups

 Consumers can exercise a good deal of influence by banding
together into pressure groups.
 They have number of identifiable interest in common:
- economic efficiency;
- diversity of purchasing choice;
- avoidance of monopoly profits and consumer fraud;
- optimal purchasing information; and
- good quality products and services in relation to price
 Local consumer groups linked to an international group with a
membership of more than 260 organization in almost 120 countries
 Consumer International is an independent, non-profit organization
which strives to promote a fair society through defending the rights
of all the consumers including poor, marginalized and
disadvantaged people by supporting and strengthening member
organization and the consumer movement in general and
campaigning at the international level for policies which respect
consumer concerns.
- voice of the international consumer movement in issues
such as product and food standards, health and patients’ rights
- the environment and sustainable consumption
- the regulation of international trade and public utilities.
 The organization seeks to promote ad enhance the rights of the
consumers. These rights are:
1. the right to satisfaction of basic needs
2. the right to safety
3. the right to be informed
4. the right to choose
5. the right to be heard
6. the right to redress
7 . the right to consumer education
8. the right to a healthy environment

2.3 Private Business Establishments

 To assist consumers in their queries

  RA 7394, “the best interest of the consumer shall be considered in
the interpretation and implementation” of the rules. They make sure
that customers are given priority.
 A consumer dissatisfied with a certain product can go to the
Customer Service and speak with the manager. The manager will
assist the consumer and make the ecessary apologies or refund or
exchange if necessary.
 Most consumer complaints are resolved within the managerial
level. Otherwise it is elevated to the Legal Department and
meetings with clients who are accompanied by their lawyers are
held.
 On the average, it takes only 3 -4 meetings before they reach an
amicable settlement and the client eventually drops the case.
 “Ligaw System” or the Pilipino word for “courting”. In this way, they
appease the complaining consumer and personally deliver the
goods and tokens to placate them. Management is convinced that
this is the surest way by which the cases are discontinued and
customer satisfaction is attained.

Part II. Labor Dispute Settlement in the Philippines

I. Policy Statement
II. Methods of Dispute Settlement: Compulsory Arbitration, Collective
Bargaining, and Voluntary Arbitration

Part III. Environmental Dispute and Resolution Techniques in the Philippines

I. Introduction
II. Jurisprudence on Environmental Protection
III. Environmental Laws
IV. Experiences in Dispute Resolution
V. Some Observations
VI. Conclusion
Summary