DISPUTE RESOLUTION & CRISES/INCIDENT MANAGEMENT

PART I. PRINCIPLES AND PHILOSOPHY OF RECONCILIATION, ARBITRATION,

NEGOTIATION, MEDIATION AND THE COURT ANNEXED MEDIATION; AND JUDICIAL
MEDIATION; AND LITIGATION AS MODE OF DISPUTE RESOLUTION.

Dispute resolution or dispute settlement is the process of resolving disputes

between parties. The term dispute resolution is sometimes used interchangeably with
conflict resolution, although conflicts are generally more deep-rooted and lengthier than
disputes. Dispute resolution techniques assist the resolution of antagonisms between
parties that can include citizens, corporations, and governments.

DEFINITION OF TERMS

1. DISPUTE - A conflict or controversy; a conflict of claims or rights; an assertion of a right,

claim, or demand on one side, met by contrary claims or allegations on the other. The
subject of litigation; the matter for which a suit is brought and upon which issue is
joined, and in relation to which jurors are called and witnesses examined. A labor
dispute is any disagreement between an employer and his or her employees
concerning anything job-related, such as tenure, hours, wages, fringe benefits, and
employment conditions.

2. Conflict - A conflict is an activity which takes place when conscious beings

(individuals or groups) wish to carry out mutually inconsistent acts concerning their
wants, needs or obligations. (Nicholson, M., 1992)
Conflict may also refer to a natural disagreement or struggle between people which
may be physical, or between conflicting ideas. It can either be within one person, or
they can involve several people or groups. It exists when they have incompatible goals
and one or more believe that the behavior of the other prevents them from their own
goal achievement. The word “Conflict” comes from the Latin word “conflingere” which
means to come together for a battle.

3. RESOLUTION - A firm decision to do something: made a resolution to get more

exercise. A course of action determined or decided on: His resolution is to get up early.
The act of solving or explaining a problem or puzzle. The resolving or concluding of a
dispute or disagreement.

4. DISPUTE RESOLUTION - refers to a number of processes that can be used to resolve a

conflict, dispute or claim. Dispute resolution may also be referred to as alternative
dispute resolution, appropriate dispute resolution, or ADR for short. Dispute resolution
processes are alternatives to having a court decide the dispute in a trial or other
institution decide the resolution of the case or contract. Dispute resolution processes
can be used to resolve any type of dispute including family, neighborhood,
employment, business, housing, personal injury, consumer, and environmental
disputes.
• The resolution of a dispute between two or more parties.
 • A way of resolving a conflict without having to go to court.
• Also known as dispute settlement.

5. ALTERNATIVE DISPUTE RESOLUTION (ADR) - refers to a range of dispute settlement

methods which help the parties in the dispute to come to a settlement without going
to court, or without litigating on the said matter. These methods usually involve a third
party, who helps them in settling the disputes. In many cases, ADR methods are used
alongside the litigation process as well through court authorization.
It means 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, as defined in this Act, in which a neutral third party participates to assist in the
resolution of issues, which includes arbitration, mediation, conciliation, early neutral
evaluation, mini-trial, or any combination thereof;

BRIEF HISTORY
Dispute resolution is one of the functions of a sound political system. Dispute
resolution machinery already existed in the earliest communities in the Philippines even
before the advent of the Spanish and American colonization. Disputes arising from the
daily affairs of the communities were brought before the elders of such communities in a
conversational fashion for the purpose of threshing out the issues and resolving them
along the principles of justice and fairness. Outside of this forum, no other dispute-
resolving forum existed.
During the Spanish and American regimes, dispute resolution mechanisms were
made more rational through the inclusion of the said function in the local governmental
systems. Gradually, the originally conversational mode of resolving disputes became
more and more adversarial as the western-style judicial systems took over their functions.
However, the values and traditions that were the heart of the carly dispute-resolving
systems were not lost.
The enactment of the Arbitration Law in 1953 supports this fact. The professed goal
of this law was to re-establish the non-judicial forum for dispute resolution in the country,
hence the concept of "alternative dispute resolution" or ADR. The word "alternative" was
used to emphasize that recourse to the regular judicial courts shall still be considered as
primary and arbitration only as secondary or voluntary.
In 1978, President Marcos decreed the formation of the Katarungang
Pambaranggay (Community-based justice system, or Barangay Justice System) by
virtue of Presidential Decree 1508. This law provided for the compulsory use in the
barangay, the smallest unit of local government, of mediation, conciliation and arbitration
in certain types of disputes. The system was later integrated into the Local Government
Code, since its direction and supervision were entrusted to the Department of Interior and
Local Government.
In 1997, the Supreme Court included in the New Rules of Civil Procedure provisions
for the possible use of alternative modes of dispute resolution. (For example, Rules 18 on
Pre-Trial, and Rule 70 on Forcible Entry and Unlawful Detainer) The Rules, however, do not
provide that ADR be mandatory and judges, lawyers, and litigants have not made much
use of these alternative modes.
 At present, studies are being undertaken with a view of developing alternative
dispute resolution mechanisms in order to make justice more accessible to the people
and to unclog the dockets of the courts. These studies, whether publicly funded or not,
gave back much attention to the various modes of alternative dispute resolution which
have been underutilized for so long.
There are at least twelve agencies that use alternative dispute resolution at present.
Ten of the agencies are administrative agencies with quasi-judicial functions, one is the
barangay, a local government unit, and one is a private agency. The different agencies
use different modes of alternative dispute mechanisms.
It should be observed that the court system is one of the main forums for resolving
disputes. However, due to lack of resources to respond to this increasing number of cases
filed, court dockets are clogged, making court processes protracted and expensive. When
disputes fester into open and sometimes violent conflicts, the situation becomes not only
detrimental to growth and development, it also erodes the country's social fabric"
(Supreme Court of the Philippines, Action Plan for Judicial Reform). Because of this
observation, the use of alternative dispute resolution mechanisms was therefore not only
justified, but is also found to be necessary.
In the Philippine context, alternative dispute resolution or ADR refers to several
formal or informal processes for settlement of conflicts, outside of or in the periphery of
institutional judicial process. It is another option to the structured adversarial approach
adopted in court litigation. While ADR may be viewed as an intervention to the court's
burdened dockets, it must be considered on its own merits as an effective system of
resolving disputes. It is less expensive, swifter and more efficient, less or non-adversarial,
thus generating results that can be more satisfying and enduring." (opcit.)

BASIC PRINCIPLES AND PHILOSOPHIES

1. RECONCILIATION- It is, as Karen Broenus has written, “a societal process that involves
mutual acknowledgment of past suffering and the changing of destructive attitudes
and behavior into constructive relationships toward sustainable peace.”

PHILOSOPHIES OF RECONCILIATION
Reconciliation can be seen as a five-step process, including:
1. Developing a shared vision of an interdependent and fair society
2. Acknowledging and dealing with the past
3. Building positive relationships
4. Facilitating significant cultural and attitudinal change
5. Enabling substantial social, economic, and political change. Principles of Reconciliation
can also involve the reframing of identity.

Typically, this also has key elements and steps, often including:
1. Understanding the threat to people’s identity
2. Seeking to move individuals from singular affiliation to multiple identity; e.g., away from
“I am a Serb” to “I am a Serb, a European, a civil rights activist, a trade unionist…etc.”
3. Deconstructing or reconstructing an individual’s identity frames
4. Separating group and individual identities
5. Dismantling of enemy images and misrepresentations that demonize the “other”
6. Looking for a common vision or threat around which to unite.

2. ARBITRATION - Arbitration is a procedure in which a dispute is submitted, by

agreement of the parties, to one or more arbitrators who make a binding decision on
the dispute. In choosing arbitration, the parties opt for a private dispute resolution
procedure instead of going to court.

Philosophies and Principles

1. Arbitration is consensual
2. The parties choose the arbitrator(s)
3. Arbitration is neutral
4. Arbitration is a confidential procedure
5. The decision of the arbitral tribunal is final and easy to enforce

3. NEGOTIATION
Negotiation has been defined as any form of direct or indirect communication whereby
parties who have opposing interests discuss the form of any joint action which they might
take to manage and ultimately resolve the dispute between themFootnote1. Negotiations
may be used to resolve an already-existing problem or to lay the groundwork for a future
relationship between two or more parties.

Negotiation has also been characterized as the “preeminent mode of dispute resolution”,
which is hardly surprising given its presence in virtually all aspects of everyday life, whether
at the individual, institutional, national or global levels. Each negotiation is unique, differing
from one another in terms of subject matter, the number of participants and the process
used.

Philosophies and Principles Negotiation is:

• Voluntary: No party is forced to participate in a negotiation. The parties are free to
accept or reject the outcome of negotiations and can withdraw at any point during
the process. Parties may participate directly in the negotiations or they may choose
to be represented by someone else, such as a family member, friend, a lawyer or
other professional.
• Bilateral/Multilateral: Negotiations can involve two, three or dozens of parties.
They can range from two individuals seeking to agree on the sale of a house to
negotiations involving diplomats from dozens of States (e.g., World Trade
Organization (WTO)).
• Non-adjudicative: Negotiation involves only the parties. The outcome of a
negotiation is reached by the parties together without recourse to a third-party
neutral.
• Informal: There are no prescribed rules in negotiation. The parties are free to adopt
whatever rules they choose, if any. Generally, they will agree on issues such as the
subject matter, timing and location of negotiations. Further matters such as
confidentiality, the number of negotiating sessions the parties commit to, and which
documents may be used, can also be addressed.
 • Confidential: The parties have the option of negotiating publicly or privately. In the
government context, negotiations would be subject to the criteria governing
disclosure as specified in legislation.
• Choice of the parties. The parties can determine not only the topic or the topics
that will be the subject of the negotiations, but also whether they will adopt a
positional- based bargaining approach or an interest-based approach.

4. MEDIATION - Mediation, as used in law, is a form of alternative dispute resolution

resolving disputes between two or more parties with concrete effects. Typically, a third
party, the mediator, assists the parties to negotiate a settlement. Disputants may
mediate disputes in a variety of domains, such as commercial, legal, diplomatic,
workplace, community, and family matters.

Philosophies
1. Conflict prevention - Mediation can anticipate difficulties between parties before
conflict emerges. Complaint handling and management is a conflict prevention
mechanism designed to handle a complaint effectively at first contact, minimizing the
possibility of a dispute. One term for this role is "dispute preventer".

2. Confidentiality - One of the hallmarks of mediation is that the process is strictly

confidential. Two competing principles affect confidentiality. One principle encourages
confidentiality to encourage people to participate, while the second principle states
that all related facts should be available to courts.

3. Without-prejudice privilege - The without-prejudice privilege in common law denotes

that in honest attempts to reach settlement, any offers or admissions cannot be used
in court when the subject matter is the same. This applies to the mediation process. The
rule comes with exceptions.

4. Legal implications - Parties who enter into mediation do not forfeit legal rights or
remedies. If mediation does not result in settlement, each side can continue to enforce
their rights through appropriate court or tribunal procedures. However, if mediation
produces a settlement, legal rights and obligations are affected in differing degrees.

Principles
1. Non-adversarial is based on the actual process of mediation. It treats the parties as
collaborating in the construction of an agreement. By contrast, litigation is explicitly
adversarial in that each party attempts to subject the other to its views. Mediation is
designed to conclude with an agreement rather than a winner and loser.
2. Responsiveness reflects the intent to allow the parties to craft a resolution outside of
the strict rules of the legal system. A responsive mediation process also is informal,
flexible and collaborative.
3. Self-determination and party autonomy allow and require parties to choose the area
of agreement, rather than ceding the decision to an outside decision-maker such as
a judge. This turns the responsibility for the outcome onto the parties themselves.
5. THE COURT ANNEXED MEDIATION AND JUDICIAL MEDIATION

On October 16, 2001, the Supreme Court in line with the objectives of the Action Program for
Judicial Reform (APJR) more particularly, to decongest court dockets, promulgated a
resolution, providing for standards, guidelines and other documents contained in A.M. No.
01-10-5-SC-PHILJA, which institutionalized and implemented the mediation program in
the Philippines.

The same resolution designated the Philippine Judicial Academy (PHILJA) as the
component unit of the Court for court-annexed mediation and other Alternative Dispute
Resolution (ADR) mechanisms, and likewise, established the Philippine Mediation Center
(PMC).

In compliance with the mandates of the Supreme Court, PHILJA, PMC in coordination with
the Office of the Court Administrator (OCA) organized and established PMC units in
several areas in Luzon, Visayas and Mindanao.

The mediation center units established render mediation services in more than five
hundred (500) branches of First and Second Level Courts in those areas.

They are under the operational control and supervision of PHILJA, in coordination with OCA,
through the Executive Judges.

The basis for the establishment of new PMC units are as follows:
1. Density of caseload;
2. Leadership;
3. Requests by Stakeholders.

Court-annexed mediators are recruited, screened, and trained by PHILJA. After

undergoing an internship program under the supervision of PHILJA, qualified mediator
trainees are recommended by the Academy for accreditation by the Supreme Court.

Only mediators accredited by the Supreme Court can validly mediate in a court annexed
mediation program.

Mediators are given expense allowances for their services, in accordance with rates
approved by the Supreme Court taken from the Mediation Fund collected, pursuant to the
provisions of Section 9, Rule 141 of the Revised Rules of Court.

The mediatable cases covered by the program are as follows:

a. All civil cases, settlement of estates, and cases covered by the Rule on Summary
Procedure, except those which by law may not be compromised (e.g., Annulment of
Marriage).
b. Cases covered by the Lupong Tagapamayapa under the Katarungang Pambarangay
Law (P.D. No. 508, as amended by R.A. No. 7160).
c. Civil aspect of Batas Pambansa (B.P.) Blg. 22.
d. The civil aspect of quasi-offenses under Title 14 of the Revised Penal Code.
e. Civil aspect of Estafa and Libel cases where damages are sought. (A.M. No. 0I-I0-5-SC-
PHILJA, dated October 16, 200I. AM. No. 04-2-04-SC, dated July 20, 2004 and effective
August 16, 2004).

Mediation Process
a. Court-annexed mediation in the Philippines, is a part of pre-trial. (A.C. No. 20-2002, April
24, 2002).
b. Upon appearance of the parties during pre-trial in cases covered by mediation, the
Judge shall immediately direct the parties (with or without counsel) to appear before
the Philippine Mediation Center (PMC) unit located in the courthouse or within its
premises for initial mediation conference. The referral is MANDATORY. (Administrative
Circular No. 20-2002, April 24, 2002)

A. If Mediation Succeeds
It is the mediator’s duty to officially inform the court that mediation succeeded.
The court shall be furnished with either:
1. The original copy of the compromise agreement signed by the parties and counsel
for approval by the court. The agreement will be the basis of a rendition of a judgment
by compromise.
2. Withdrawal of the complaint and counter-claim, if any.
3. A satisfaction of the claim.

B. If Mediation Fails
a. The mediator shall immediately issue a certificate of failed mediation returning it to the
court for further proceedings.
b. The court then, shall upon receipt of the notice of failure, set the case for resumption of
pre-trial, and thereafter, try and decide the case on its merits.

6. LITIGATION AS MODES OF DISPUTE RESOLUTION

If the dispute has taken on a level of severity so that the parties are not able even to agree
to some form of alternative dispute resolution, they or either of them may resort to the
courts as the only way forward. For reasons stated below, it is rare that taking the matter
to the county, state or federal court house is better than the alternatives, but there simply
may be no choice.

Litigation (civil, as opposed to criminal) commences with the ‘plaintiff’ filing in court, and
then serving on (presenting to) the other party, the ‘defendant’, a summons and
complaint summoning the other party to respond within a period of time established in the
local law (typically 20 or 30 days), and then ultimately to appear before a judge or a judge
and jury who will decide the matter. But there is a lot of activity between serving the
summons and complaint and the rendering of a decision (by the judge) or verdict (by
the jury).

The threshold question in litigation is the jurisdiction of the court. ‘Jurisdiction’ essentially
means that the court has legal power over the defendant and the subject matter to decide
the matter in question. In the case of a dispute involving a hotel, the obvious place for the
lawsuit is a court in the same location as the hotel.

Primary Benefits of Litigation

• The court system is government funded and, unlike arbitration, the parties do not
have to pay the judge; court costs assessed against the parties are relatively
modest.
• The case will be managed and heard by a professional judge.
• The court can provide for the enforcement of its own decision that becomes an
order, by various means.
• The court has ‘equitable’ as well as ‘legal’ powers whereby it can impose
• mandatory orders (injunctions) to do or refrain from doing certain acts.
• The formality of the proceeding enhances the deliberateness and articulation of
the legal arguments.
• The threat of litigation induces the parties to seek a compromise solution before
heading to the courthouse.
• The judge to decide all matters – that is, questions of law and factual matters.
• The decision has precedential value to other potential litigants; it becomes part of
the common law of the jurisdiction where the court is located, which is good from
the perspective of the winning party.

Primary Disadvantages of Litigation:

• The expense for legal counsel to comply with judicial formality of the pleadings and
other court procedures may outweigh the benefit of having a judge that is paid for
by the tax payers.
• The professional judge may lack any expertise about the industry and industry
standards.
• Quality of the judges, particularly in the lower courts, may vary and ‘luck of the draw’
plays a part.
• Cases get limited attention in short intervals while the courts manage a heavy
workload, and this may affect quality and prolong the process.
• Each party must pay its own legal expenses (except in very rare cases) so the party
with deeper pockets may outlast the other party that eventually is forced into
submission that is, a settlement.
• A judgment-proof party may lose, but the winning party never collects a judgment.
• The decision is not final but is subject to appeal to the same or a higher court.
• The decision has precedential value to other potential litigants; it becomes part of
the common law of the jurisdiction where the court is located, which is bad from
the perspective of the losing party.
• The process of litigation, particularly the pretrial discovery, can cause major
disruption to a business that must meet the requirements for document production
and witness depositions.
• The public nature of a trial may mean that sensitive information is revealed.
• There is likely to be very little hope of salvaging the relationship between adverse
parties in litigation.
• The entire proceeding can cause emotional distress on the persons involved in
 litigation where the formality, strict rules, and potential for perjury is ever present.

Given the very onerous disadvantageous of litigation, the party commencing a lawsuit
must carefully weigh the merits of the case without letting emotion color the evaluation
and the costs involved, financial or otherwise, before embarking down the litigation path
from which it may be difficult to extricate oneself later. Many litigants who initiate lawsuits,
after months of pretrial discovery and mounting legal costs, then seek a settlement on
terms that might well have been available without the lawsuit.

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