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THIRTEENTH CONGRESS OF THE 
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REPUBLIC OF THE PHILIPPINES 
First Regular Session 
INTRODUCED BY HON. MANUEL B; VILLAR, JR. 
EXPLANATORY NOTE 
The judicial system of the country is unfortunately characterized by lengthy 
court room procedures often resulting in the delay in the disposition of cases, 
clogged court dockets, complicated trial procedures and unnecessary legal 
maneuverings. 
The creation and implementation of a Small Claims Court is a step in reforming 
our country’s judicial system as it would address the long standing problem of 
delay in the resolution of case which has eroded the people’s confidence in the 
system. 
Accordingly, the small claims court which shall be chaired by a Judge- 
Arbitrator, shall exercise exclusive original jurisdiction over all civil actions 
where the value of the personal property or amount of the demand does not 
exceed P50,OOO.OO. The hearings and disposition of small claims shall be 
informal and without the strict application of the rules of evidence. 
Hence, swift passage of this bill is earnestly sought. 
n 


THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
. .. . 
S. No. 
t 
INTRODUCED BY HON. MANUEL B. VILLAR, JR. 
AN ACT 
PROVIDING FOR THE CREATION AND ESTABLISHMENT 
OF SMALL CLAIMS COURTS IN THE PHILIPPINES, 
APPROPRIATING FUNDS THEREFOR, AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title. - This Act shall be known as the Philippine Small 
Claims Court Act. 
SECTION 2. Declaration of Policy. - The State recognizes that minor civil 
disputes are of special importance to the parties and of significant social and economic 
consequence collectively. The State therefor makes it a policy to provide a mechanism 
where such minor civil disputes can be resolved expeditiously, inexpensively and 
fairly. For the attainment of this objective, a judicial forum that will enable the parties 
to directly and personally resolve minor civil disputes shall be established. 
SECTION 3. Creation of Small Claims Courts. - There shall be established for 
every two Metropolitan Trial Court, Municipal Trial Court and Municipal Circuit 
Courts a Small Claims Court to be presided by a Small Claims Court Judge-Arbitrator. 
SECTION 4. Qualifications. - No person shall be appointed as a Small Claims 
Court Judge-Arbitrator unless he/she is a natural-born citizen of the Philippines, at 
least thirty (30) years of age, member of the Philippine Bar for at least five (5) years, 
and has been engaged in the practice of law in the Philippines, or has held a public 
office in the Philippines requiring admission to the practice of law as an indispensable 
requisite. 
SECTION 5. Jurisdiction. - The Small Claims Court shall exercise exclusive 
original jurisdiction over all civil actions where the value of personal property or 
amount of the demand does not exceed Fifty Thousand Pesos (P50,OOO.OO): Provided, 
That where there are several claims or causes of actions between the same parties or 
different parties, embodied in the same complaint, the amount of the demand shall be 
the totality of the claims in all causes of tile action, irrespective of whether the causes 


of action arose out of the same or different transactions: Provided, further; That a 
plaintiff can only institute small claims actions to recover a total of One Hundred 
Thousand Pesos (P100,000.000) per annum, but in no case exceeding five (5) small 
claims actions per annum. 
In the exercise of its jurisdiction, the Court may grant equitable relief in the 
form of rescission, restitution, and specific performance whether in lieu of or in 
addition to awards for money or damages. The Court shall exercise jurisdiction over 
the small claims action until there has been full payment, performance or satisfaction 
of its judgment or order. 
SECTION 6. Parties. - Any person who is at least eighteen (18) years of age may 
be a party to a small claims action. A minor or incompetent person may appear by a 
guardian ad litem appointed by a court of competent jurisdiction or by the judge of the 
Small Claims Court where the action is filed. 
SECTION 7. Representation. 
- Except as permitted in this Act, no 
attorney-in-law or any individual other than the plaintiff or defendant may take part in 
the filing, conduct or defense of a small claims action: Provided, That an 
attorney-in-law may, and in hisjher own behalf, defend himself/herself against any 
small claims action that has been filed against him/her: Provided, further; That the 
judgment creditor may avail the services of an attorney-in-law for the enforcement of 
the judgment. Husbands and wives who sue or are sued with his or her spouse may 
represent the other in their claim or defense. 
SECTION 8. Nature of Proceedings. - The hearing and disposition of small claims 
actions shall be informal without strict application of the rules of evidence, the object 
being to dispense justice promptly between the parties. The Rules of Procedure in 
Small Claims Courts, including the tine and duration of sessions, shall be determined 
by the Supreme Court. 
SECTION 9. Mediation Center. - In each Small Claims Court, there shall be a 
Mediation Center to be presided over by the Small Claims Court Judge-Arbitrator or 
by his duly authorized Mediation Officer: Provided, That no person shall be designated 
as Mediation Officer unless he/she holds a Bachelor of Laws degree. 
SECTION 10. Mandatory Mediation Conference. - Prior to any hearing of any 
small claims action, the Small Claims Court Judge-Arbitrator shall order and schedule 
a mandatory mediation conference between or among the parties for the purpose of 
resolving the dispute, or arriving at an amicable settlement, under the supervision of 
the Small Claims Court Judge or Mediation Officer. Any settlement or resolution of the 
dispute arising from the mediation conference shall be reduced to writing and be 


embodied in a legally enforceable resolution to be signed by the Small Claims Court 
Judge. 
In case the mediation efforts fail, the Small Court Judge shall immediately set 
the case for hearing. 
SECTION 11. Judgments and Processes. - All judgment determinative of the 
merits of the case shall be in writing, stating clearly the facts and the grounds on 
which they are based, signed by the Judge and filed with the Clerk of Court. The 
judgments or orders of the Court shall not be appealable, except upon the ground of 
grave abuse of discretion. 
SECTION 12. Honoraria and Allowances. - Judge-Arbitrators of the Small 
Claims Courts shall receive such honoraria and allowances as may be determined by 
the Supreme Court. 
SECTION 13. Study Committee. - The Supreme Court is hereby authorized and 
empowered to constitute a Study Committee composed of a member of the Judiciary, 
the prosecution, the Integrated Bar of the Philippines (IBP), a representative of the 
association of law colleges and law professors, and a member of the public at large. 
The Committee shall undertake a serious study as to the feasibility and 
desirability of setting up a staffing pattern for all courts constituted pursuant to this 
Act, including plans for the establishment of pilot Small Claims Courts in areas as 
may be determined by the Supreme Court. 
SECTION 14. Appropriations. - To carry out the provisions of this Act, there is 
hereby appropriated the sum of Twenty Five Million Pesos (P25,000,000.00) from the 
General Appropriations Act for the current year. Thereafter, the appropriation for such 
funds as may be necessary for the purpose shall be provided for in the General 
Appropriations Acts. 
SECTION 15. Separability Clause. - If any provision of this Act shall be held to 
be unconstitutional or not valid, no other provisions shall be affected thereby. 
SECTION 16. Effectivity. - This Act shall take effect after fifteen (15) days 
following its publication in the Official Gazette or in two (2) newspapers of general 
circulation. 
Approved,