Many claims go uncollected or unenforced because the system is almost prohibitive. In order to recover an indebtedness one has to be represented by a lawyer who has to be paid. The hearing of the case can go on for months or even years because of technicalities or unintended delays. In the end, even if the plaintiff wins the case, much has been lost from him- time, money, and peace of mind. Not long ago the Supreme Court instituted the procedures on small claims to speed up the process of collecting amounts 100,000.00 and below. Under the procedure no lawyers are involved, in fact they are prohibited from appearing in the proceedings and the claimant or plaintiff and the defendant proceed with the case on their own. Of course 100,000 is not a small value for many of us but the Supreme Court has recently increased this limit to 200,000 since the procedure proved effective.
New Rules on Small Claims
On 08 December 2015 the Supreme Court approved the Revised Rules on Small Claims (AM No. 08-8-7-SC) which took effect las 01 February 2016. This amends the previous rule which has been in effect since 18 March 2010. The rules on small claims apply only to civil cases where the claim is for the payment or reimbursement of sum of money. The claim may be those arising from a contract of lease, loan, services, sale, or mortgage. Barangay amicable settlement or arbitration award involving a money claim may also be under the rules. Under the old rule damages arising from fault or negligence, quasi-contract, or quasi-contract may be recovered. In the new rules only liquidated damages may be recovered since there will be no need of proving the damage incurred and the plaintiff will just present the contract or document stating the liquidated damages. In filling a claim the plaintiff needs to fill out a form and submit the same together with all the contracts or documents and affidavits of his witnesses necessary to prove the claim and he shall also state whether he is engaged in a business of lending, banking or other similar activities and the number of small claims he has filed within the calendar year.
Payment of the filling fee is more complicated under the revised rule because there is an increase on the 6th case filed by a plaintiff for the calendar year. Even a plaintiff allowed to file a case as an indigent has to pay the amount of 1,000 pesos for the service or summons and processes. A motion to dismiss is not allowed but if the court finds that there is a ground then it can dismiss the claim on its own. The plaintiff and respondent have to attach all the necessary documents in their claim and response respectively because no other evidences will be considered during the hearing unless otherwise allowed by the court will allow for good cause.
Lawyers are prohibited from appearing in any of the proceedings except if the lawyer is the plaintiff or the defendant. Even when the claimant is for some reason unable to present his claim, a representative may be appointed by the court who must not be a lawyer. Juridical entities like corporations cannot be represented by a lawyer in any capacity. Appearance of the party through a representative may be allowed for a valid cause and the representative must be related to or next-of-kin.
The hearing is an informal one and the judge will first try to settle the case amicably and the hearing will proceed if it fails. The hearing shall proceed and should be terminated within the same day. Within 24 hours from the termination of the hearing, the judge shall render his decision which shall be final and executory and unappealable.