Dispute Resolution Mechanisms in the Philippines

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Dispute Resolution Mechanisms in the Philippines IDE Asian Law Series No. 18 Dispute Resolution System in Asia (The Philippines) Dispute Resolution Mechanisms in the Philippines Domingo P. Disini, Jr. Elizabeth Aguiling-Pangalangan Rowena E.V. Daroy-Morales Dante B. Gatmaytan Concepcion Lim-Jardeleza University of the Philippines College of Law INSTITUTE OF DEVELOPING ECONOMIES (IDE-JETRO) March 2002 JAPAN PREFACE The evolution of the market-oriented economy and the increase in cross-border transactions have brought an urgent need for research and comparisons of judicial systems and the role of law in the development of Asian countries. Last year, in FY 2000, the Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO) conducted legal researches in Asian countries with two main themes. The first theme was to figure out the role of law in social and economic development and the second was to survey the judicial systems and the ongoing reform process thereof. We organized joint research projects with research institutions in Asia and had a roundtable meeting entitled “Law, Development and Socio-Economic Change in Asia” in Manila. The outcomes of the joint researches and the meeting were published in March 2001 as IDE Asian Law Series No. 1-10. This year, in FY 2001, based on the last year’s achievement, we established two research committees: the Committee on “Law and Political Development in Asia” and the Committee on “Dispute Resolution Process in Asia”. The former committee focused on legal and institutional reforms following democratic movements in several Asian countries. Since late 1980s many Asian countries have experienced drastic political changes by the democratic movements with mass action, which have resulted in the reforms of political and administrative system for ensuring the transparency and accountability of the political and administrative process, human rights protection, and the participation of the people to those process. Such reforms are essential to create the stability of the democratic polity while law and legal institutions need to function effectively as designed for democracy. The latter committee conducted a comparative study on availability of the court system and out-of-court systems (namely Alternative Dispute Resolutions), with the purpose of determining underlying problems in the courts. As social and economic conditions drastically change, Asian countries face challenges to establish systems for fairly and effectively resolving the variety of disputes that arise increasingly in our societies. For dispute resolution, litigation in the court is not the only option. Mediation and arbitration proceedings outside the courts are important facilities as well. In order to capture the entire picture of dispute resolution systems, a comprehensive analysis of both the in- and out-of-court dispute resolution processes is essential. i In order to facilitate the committees’ activities, IDE organized joint research projects with research institutions in seven Asian countries. This publication, titled IDE Asian Law Series, is the outcome of research conducted by the respective counterparts. This series is composed of papers corresponding to the research themes of the abovementioned committees, i.e. studies on law and political development in Indonesia, the Philippines and Thailand, and studies on the dispute resolution process in China, India, Malaysia, the Philippines, Thailand and Vietnam. The former papers include constitutional issues that relate to the recent democratization process in Asia. Studies conducted by member researchers investigated the role of law under those conditions while taking up such subjects as rule of law, impeachment, Ombudsman activities, human rights commissions, and so on. The latter papers include an overview of dispute resolution mechanisms for comparative study, such as court systems and various ADRs, as well as case studies on the dispute resolution process in consumer, labor and environmental disputes. We believe that this work is unprecedented in its scope, and we hope that this publication will make a contribution as research material and for the further understanding of the legal issues we share. March 2002 Institute of Developing Economies ii LIST OF CONTRIBUTORS Prof. Domingo P. Disini, Jr. Professor Disini is Professorial Lecturer in Labor at the University of the Philippines College of Law and Ateneo de Manila Law School. He obtained his LL.B. from the University of the Philippines in 1956 and earned his Master of Science in Labor and Industrial Relations from Cornell University in 1966. He was assisted by Assistant Secretary Ernesto Bitonio, Jr. of the Department of Labor and Employment, Director Hans Cacdac of the Bureau of Labor Relations, Lourdes Velasco, Melissa Velasco, Bella Desamito, Imelda J. Castor and Ms. Roshan Jose. Prof. Elizabeth Aguiling-Pangalangan Professor Pangalangan is Associate Professor at the University of the Philippines College of Law where she obtained her LL.B. in 1983. She earned her LL.M from Harvard Law School in 1989 and was Visiting Scholar in its East Asian Legal Studies Program from 1998-99. She co-authored Conflict of Laws: Cases, Materials and Comments, 1995 and 2000 editions. She was assisted in this research by Winnie R. Lardizabal. Prof. Rowena E.V. Daroy-Morales Professor Morales is Assistant Professor of Law at the University of the Philippines College of Law and presently the Director of the University of the Philippines, Office of Legal Aid. She obtained her LL.B. from the same university in 1993 and she holds the Juan Collas Sr. Memorial Chair in Law and Journalism. Prof. Dante B. Gatmaytan Professor Gatmaytan is Assistant Professor of Law at the University of the Philippines College of Law where he obtained his LL.B. in 1991. He earned his M.S.E.L. cum laude from Vermont Law School in 1995 and LL.M. from University of California Los Angeles in 1996. Prof. Concepcion Lim-Jardeleza Professor Jardeleza is presently the Law Education Specialist of the Institute of Judicial Administration, University of the Philippines Law Center. She earned her LL.B from the same university in 1975. She is Senior Professorial lecturer in Legal Profession, Agency and Partnership at the U.P. College of Law. She was assisted by Atty. Venus Magay in this research. iii TABLE OF CONTENTS Preface i Contributors iii Table of Contents v Introduction 1 Chapter One Overview of the Dispute Resolution Mechanisms Part I: Court System: How the Court System is used as a Dispute Resolution Mechanism Concepcion L. Jardeleza 5 I. Current Situation Regarding the Use of Courts 5 II. Parties' Viewpoints with Regard to the Court System 6 III. Problems of the Court System 8 IV. Direction of Judicial Reforms 10 V. Conclusion 14 Part II: Alternative Dispute Resolution (ADR): How Out-of-Court Systems Are Used as Dispute Resolution Mechanism Rowena Daroy Morales 15 I. Overview of ADR: Types and Functions 15 II. Current Situation Regarding the Use of ADR 17 III. Incidence of Cases before ADR Institutions 27 IV. Conclusion 35 Chapter Two Study on Dispute Resolution Process in Specific Cases Part I: The Consumer’s Alternative: Dispute Resolution Process in Consumer Protection Elizabeth Aguiling-Pangalangan 39 I. Introduction 39 II. Consumer Protection 40 III. The Philippine Context 43 IV. Conclusion 59 v Part II: Labor Dispute Settlement in the Philippines Domingo P. Disini, Jr. 65 I. Policy Statement 65 1. Introductory Statement 65 2. Voluntarism: Preferred Method of Dispute Settlement 65 3. Compulsory Arbitration as a Method of Labor Dispute Settlement 66 II. Methods of Dispute Settlement: Compulsory Arbitration, Collective Bargaining, and Voluntary Arbitration 67 1. Compulsory Arbitration 67 2. Voluntarism – Collective Bargaining, and Voluntary Arbitration as Alternative Methods of Dispute Settlement 89 3. National Conciliation and Mediation Board 101 4. Courts of Law Performing Judicial Functions: Role in Labor Dispute Settlement 104 5. Questions Raised in Project 107 6. Summary 108 Part III: Environmental Dispute and Resolution Techniques in the Philippines Dante B. Gatmaytan 111 I. Introduction 111 II. Jurisprudence on Environmental Protection 112 III. Environmental Laws 113 IV. Experiences in Dispute Resolution 124 V. Some Observations 131 VI. Conclusion 133 Summary 135 vi Introduction Dispute resolution in the Philippines evolved from both indigenous traditions and legal systems adopted from western models. Courts are organized in a hierarchical structure, which provide the primary forum for settlement of controversies involving rights, which are legally demandable and enforceable. Outside of the court system, and in specific instances through institutions and mechanisms established by legislation, parties may also seek adjudication of their rights and interests. The first part of this study presents an overview of in-court and out-of-court systems in the Philippines by describing the current situation regarding the use of the courts as a dispute resolution mechanism, determining the factors which influence the parties' choice between court litigation and other methods of alternative dispute resolution (e.g., arbitration, negotiation, conciliation and mediation), identifying the major problems and difficulties which discourage resort to the courts, and direction of reforms to improve the judiciary and enhance its effectiveness as a dispute resolution mechanism. Upon the other hand, alternative dispute resolution (ADR) as developed and practiced in the Philippines is depicted through
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