Litigation

Court system

What is the structure of the civil court system?

The Philippine judicial system comprises first-level courts (municipal, metropolitan and regional trial courts), the Court of Appeals and the Supreme Court. A single judge presides over first-level courts, while the Court of Appeals comprises 69 justices, who sit in divisions of three members. The Supreme Court comprises 15 justices, which sit en banc or in divisions of three, five or seven members.

The jurisdiction of first-level courts depends on the nature of the proceedings and the amounts involved. A metropolitan trial court has exclusive original jurisdiction over civil actions involving amounts at lower limits. Civil actions involving amounts beyond the threshold of metropolitan trial courts, as well as actions incapable of pecuniary estimation, are handled at the first instance by regional trial courts.

Metropolitan trial court decisions can be appealed to a regional trial court. In turn, regional trial court decisions can be appealed to the Court of Appeals and the Supreme Court.

Judges and juries

What is the role of the judge and the jury in civil proceedings?

The judge presiding over civil proceedings:

  • determines the facts;
  • ensures that the parties comply with the rules of procedure;
  • interprets the applicable laws; and
  • in penning the decision, applies the law.

 

In the performance of their functions, judges must be impartial. Nonetheless, during a trial, judges may adopt an inquisitorial role only for clarificatory purposes.

The Philippines has not adopted the jury system.

Limitation issues

What are the time limits for bringing civil claims?

The time limits for bringing civil claims are as follows:

  • eight years from the time possession was lost for actions to recover movable property;
  • 30 years for actions affecting title to or possession of real property;
  • 10 years for actions involving mortgages, written contracts, obligations created by law and judgments;
  • six years for actions involving oral contracts and quasi-contracts;
  • four years for actions involving injury to the rights of the claimant and quasi-delicts;
  • one year for actions involving forcible entry, detainers and defamation; and
  • five years for all other actions.

 

Actions to demand a right of way or to bring an action to abate a public or private nuisance are not time limited.

Time limits for bringing civil claims may not be suspended merely on agreement of the parties involved. However, such periods may be interrupted if:

  • a relevant action is filed before the court;
  • the creditors produce a written extrajudicial demand; or
  • the debtor issues a written acknowledgment of the debt.
Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

Depositions may be commenced before a civil action has been instituted. However, a proper petition for this purpose must be filed with the court. The petition should indicate that the petitioner expects to be a party to an action but is presently unable to commence said action. The petition must also describe the expected action in which the deposition would be used and the facts to be established in and purpose of the deposition. If allowed, the deposition may be used in any action involving the same subject matter.

All other remedies may be availed of only after a civil action has been instituted.

Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

A claimant institutes a civil action by filing a complaint and paying the proper fees therefor. The responding party will be notified by the court of the complaint through a summons and issued a copy of the complaint.

Owing to greater court accessibility and the relative ease of initiating civil actions, court dockets have become congested. As a response, the Philippine judiciary has actively promoted amicable settlements to resolve civil actions. Thus, after they are instituted and before the trial, civil actions are diverted to mediation over which accredited mediators from the Philippine Mediation Centre preside. Where mediation fails, another chance to arrive at an amicable settlement is available during judicial dispute resolution, presided over by a judge. If mediation fails again and trial ensues until complete resolution of the civil action, a third attempt at mediation is available at the appellate level.

Timetable

What is the typical procedure and timetable for a civil claim?

After the institution of a civil action, the clerk of court is required to issue summons to the responding party within five days from receipt of the complaint. In turn, the summons should require the responding party to answer the complaint within 30 days after a successful service in accordance with the rules of court. If the responding party is a foreign private juridical entity, the answer may be submitted within 60 days. Both periods are subject to a 30-day extension for meritorious reasons. The claimant may file a reply within 15 days of receiving an answer. After all pleadings have been submitted, the clerk of court will set the case for pretrial not later than 60 days from the submission of the last pleading. At least three days before the pretrial, the parties must ensure that the other receives their pretrial brief.

During pretrial, the parties identify:

  • the possibility of an amicable settlement;
  • the admitted facts;
  • the legal issues to be resolved;
  • their respective evidence and witnesses; and
  • the trial dates.

 

The parties are then referred to court-annexed mediation, which should not exceed 30 days. Mediation may fail due to the expiration of the period. However, if amicable settlement is still possible, the court may refer the parties to judicial dispute resolution to be conducted by another court within 15 days from notice of failure of mediation.

If judicial dispute resolution is also unsuccessful, trial before the original court ensues. During trial, the parties present their evidence and witnesses. Each party is allowed to present their witnesses and evidence within 90 days. After trial terminates, the court may require the submission of memoranda. Thereafter, the civil action will be submitted for resolution. The decision must be served on the parties within 90 days therefrom.

The 1987 Constitution requires courts to resolve cases in three months in the first instance, 12 months on appeal (ie, before the Court of Appeals) and 24 months on final appeal (ie, before the Supreme Court). These periods commence after the case is submitted for resolution.

Case management

Can the parties control the procedure and the timetable?

In general, parties cannot control the procedure, as each step in the process is a prerequisite for the next. However, the timetable may be controlled by implication. Parties may request specific deadlines and choose when hearings will be set, subject to the court’s approval. Further, while courts frown on postponements, parties may ask for leave of court to extend reglementary periods for submissions and defer trial dates or hearings for compelling reasons.

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

While there is no express requirement on the matter, diligence dictates that parties preserve their evidence prior to the termination of the trial. After the presentation of their testimonial, documentary and object evidence in open court, parties submit their evidence to the court through a formal offer of evidence. It then becomes the court’s duty to preserve the parties’ evidence until the final disposition of the case.

Parties need not volunteer documents; however, they may seek leave of court to compel another party to produce documents (ie, non-privileged), which are material to the case.

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Communications between the following persons are generally privileged:

  • husband and wife;
  • attorney and client;
  • doctor and patient; and
  • priest and penitent.

 

In-house lawyers are covered by the attorney–client privilege. However, the privilege may be waived by the person in whose favour the privilege was constituted.

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

Parties may exchange written evidence from witnesses prior to the trial proper. In civil actions, and under the Revised Rules of Civil Procedure, parties are required to state in their initiatory complaints or answers:

  • the names of their witnesses;
  • summaries of their witnesses’ intended testimonies; and
  • their documentary and object evidence.

 

It is also required that the parties attach their witnesses’ judicial affidavits to the initiatory complaints or answers. Likewise, documentary evidence to be identified and authenticated by the witnesses are attached to these judicial affidavits.

Only those witnesses with attached judicial affidavits may be presented during trial. The sole exception to this rule is the presentation of additional witnesses who were not able to provide their judicial affidavits in a timely manner for meritorious reasons. Implied in this exception is that the primary witness’s judicial affidavit must be attached to the initiatory complaints or answers.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

Evidence is presented through the presentation of witnesses, who are tasked with identifying and authenticating the parties’ documentary and object evidence. Witnesses may be subject to direct examination, cross-examination, redirect examination and re-cross examination. Moreover, after both parties have concluded the presentation of their evidence, witnesses may be recalled with the court’s permission.

In civil actions, witnesses’ judicial affidavits take the place of their oral direct testimony. Nonetheless, the cross-examination, re-direct examination and re-cross examination of the witnesses are given orally.

If a party wishes to present an unwilling witness summoned by the court through a subpoena, this witness must give oral evidence. The rule on judicial affidavits does not apply to unwilling witnesses.

Interim remedies

What interim remedies are available?

Parties may apply for preliminary attachment, preliminary injunction, receivership, replevin or support as interim remedies. These remedies are available to local proceedings only.

The more common interim remedies are:

  • preliminary attachment, which is available where the applicable fraudulent circumstances are present in a case and the applicant wishes to attach on the opponent’s property as security for the potential judgment award; and
  • preliminary injunction, which is available where:
    • the relief sought in the civil action is the performance or restraining the commission of a certain act;
    • the performance or non-performance of an act will result in injustice or irreparable damage to the applicant; or
    • there is a threat of violation of the rights of the applicant with respect to the subject matter of the action.
Remedies

What substantive remedies are available?

Parties may seek relief in the form of specific performance or rescission of contracts and damages. The damages that may be recovered are as follows:

  • actual damages or the loss capable of pecuniary estimation;
  • moral damages, which compensates the claimant for (among other things) physical suffering, mental anguish and besmirched reputation;
  • nominal damages, which is similar to punitive damages;
  • temperate or moderate damages to compensate for a pecuniary loss where the amount cannot be determined with certainty;
  • liquidated damages or an indemnity or penalty agreed to be paid based on a contract; and
  • exemplary damages, which are imposed by way of example for the public good.
Enforcement

What means of enforcement are available?

As regards judgments for money, the officer of the court may simply demand payment from the judgment obligor. If the judgment obligor cannot pay in full, the officer may levy on the properties of the judgment obligor, which includes debts due the judgment obligor and bank deposits. However, certain properties indispensable to the judgment obligor’s livelihood and those qualifying as basic necessities are exempt from execution.

The execution of judgments for specific performance are straightforward. Failure to comply may result in the court directing the performance of the act at the cost of the judgment obligor, or contempt in some cases.

Public access

Are court hearings held in public? Are court documents available to the public?

In general, court hearings for civil cases are conducted in public, except those concerning children and family cases and adoption proceedings, which are confidential in nature. Similarly, case files are generally available to the public, except records concerning children and family cases and adoption proceedings.

Costs

Does the court have power to order costs?

Yes. The courts may rule that either party pay the costs of an action, or that the same be divided. Costs are calculated in accordance with the Supreme Court’s guidelines.

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

Yes, contingent fee arrangements are accepted in the Philippines as these are beneficial to parties that have meritorious claims but are unable to secure legal counsel owing to insufficient funds. Under contingent fee arrangements, legal fees are usually a fixed percentage of what may be recovered in an action. Hence, a lawyer would be able to collect legal fees only if the litigation succeeds.

A party may commence an action using third-party funding. However, in the strict sense, the court will not recognise the funding arrangement. Hence, the third party may not be able to collect from the judgment award. Instead, the third party may demand payment from the party pursuant to their agreement.

Insurance

Is insurance available to cover all or part of a party’s legal costs?

Yes, legal costs may be covered by liability insurance, including indemnity insurance, director and officer liability insurance and comprehensive general liability insurance.

Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

Yes, the Philippines allows class action suits to be filed in regular courts. The general rule for a class suit to be filed is that:

  • the subject matter is of common or general interest to many persons; and
  • the persons are so numerous making it impractical to bring them all before the court.

 

Class action suits aim to obtain relief for or against numerous persons as a group or as an integral entity, and not as separate, distinct individuals whose rights or liabilities are separate from and independent of those affecting the others.

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

In general, appeals to higher courts are available against adverse decisions rendered by lower courts. The appeal, when available, usually requires the listing of an assignment of errors by the court in rendering the decision on any question of law or fact that has been raised in the lower court and that is within the issues framed by the parties.

Court of Appeals decisions may be appealed to the Supreme Court, which is deemed the final arbiter for all cases.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

The Philippines recognises foreign judgments and allows procedures for the enforcement thereof. This practice is based on generally accepted principles of international law, by virtue of the incorporation clause of the Constitution that considers these principles as forming part of the laws of the land even if they are not derived from treaty obligations.

Although Philippine courts have not laid down the exact boundaries by which foreign judgments can be recognised and enforced, there is no question that this remedy is considered among the universally accepted tenets of international law. States generally accept in principle the need for such recognition and enforcement – albeit subject to limitations of varying degrees – and the Philippines is no exception.

Nonetheless, anyone seeking to enforce a foreign judgment or final order may be prevented by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud or clear mistake of law or fact.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

The Revised Rules of Evidence requires documentary evidence arising from official acts of a sovereign authority, or its official bodies, tribunals or public officers to be proved by:

  • its official publication; or
  • a copy attested by the officer having legal custody of the document and a certificate that said officer has custody.

 

If the document is kept in a country that is a contracting party to a treaty or convention to which the Philippines is a party, or considered a public document under a treaty or convention in force between the Philippines and that country, the certificate of the officer having legal custody of the document must be executed in the form prescribed by the applicable treaty or convention, subject to the doctrine of reciprocity. If the treaty or convention abolishes the requirement for the certificate or exempts the pertinent document from its application, the certification need not be presented.

If there is no such treaty or convention, the certificate may be made by any officer (ie, secretary of the embassy or legation, consul general, consul, vice consul or consular agent) in the foreign service of the Philippines stationed in the pertinent foreign country. The certificate must also be authenticated by the seal of their office. Public documents not covered above must be authenticated at the Philippine embassy in the foreign country. The Philippines recently acceded to the Apostille Convention, which allows for a simplified process in authenticating foreign-made or foreign-kept documents.

As regards oral evidence, depositions and written interrogatories are acceptable modes of preserving testimony of witnesses located outside the Philippines.

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19 May 2020