ADR and Mediation

The concept of alternative dispute settlement (ADR) formally originated from American jurisprudence, particularly in dialogues and proceedings before international organizations and tribunals such as the United Nations (UN) way back after First World War. For the UN, ADR was meant to avoid physical confrontations e.g. wars and armed hostilities by resolving opposing claims and interests of contending states through diplomatic channels. The UN employed arbitration, mediation, bilateral and multilateral negotiations and other pacific methods of dispute resolution. The UN ADR system was a success such that it found its way in court system and legal processes worldwide.

In legal parlance, ADR comes to be known as a mechanism for resolving problems, issues and conflicts between contending parties without going through the rigors of court trial and avoiding the heavy cost of litigation. The proceedings thus become less formal, open and more flexible. The parties accordingly do not end up with a win-lose situation. Theoretically, each party wins, thus the principle of “win-win solution” was coined.

In the Philippines, the earliest ADR to be adopted was conciliation-mediation which was applied in labor-management dispute resolutions. One major government agency in fact, the National Conciliation and Mediation Board, was even created in 1987 during the Freedom Government of the late President Corazon C. Aquino.

In 2004, ADR has been institutionalized in the Philippine judicial system by virtue of an order of the Supreme Court. Foremost to this is mediation, where the Court established the Philippine Mediation Center all over the country and consequently trained and appointed court-mediators.

Mediation is designed to arrive at a faster way of resolving disputes between parties, by seeking a middle path, either thru concessions, flexible payment scheme and waiving up of certain costs, interests and surcharges, that will be mutually acceptable to both parties. In the Philippines, in particular, sometimes even a simple case of collection of sum of money or bouncing checks, which were supposedly governed by summary procedures, would take 2-5 years of proceedings. There are so much variable factors to consider which effectively delay court proceedings.

Good thing with mediation the mediator plays a crucial role in the resolution of issues, unlike in conciliation proceedings. A thin line differentiates mediation with conciliation, in that in mediation the mediator is more pro-active in suggesting solutions to the parties, while in conciliation the conciliator simply serves as a referee.

In my practice, mediation has helped in a lot of my clients’ cases, especially those pursuing collection of sum of money and issuance of bouncing checks. The debtor and creditor would have opportunities to bargain at an acceptable amount of the obligation and a payment scheme to settle the same. The common modes of payment are cash instalment payment, stocks, securities or dacion en pago, or a combination of the foregoing modes.

For all its benefits, there is a dilemma with mediation in that you need to pay a separation mediation fee for each check subject of a complaint. If the collectible amount is four (4) times bigger than the mediation fee, the latter becomes easy to bear. But there are instances when the collectible amount or the face of the check is not far from the amount of mediation fee, then pursuing the case however meritorious it is, become a cause of concern to the parties.

Worse, the Court requires the parties to pay mediation fee even if the parties agree to settle the case at the first instance during the preliminary conference of the case or even prior to the first mediation conference. As one lawyer contended, “why pay a mediation fee if the parties were able to settle the issue by themselves?”

It has been five years since mediation became an institutionalized segment of our judicial system, and it has earned its rewards and benefits, apart from simply de-clogging our court dockets. Certainly, many private and juridical entities have obtained “swift justice” in their cases, through mediation, saving them precious time, money and efforts than a protracted legal battle. This country become a better civil society with mediation, I must humbly claim.

Quite recently, the Supreme Court has adopted another set of rules on ADR, albeit the mechanics thereof are still to be operationalized. I don’t know how this new ADR schemes will affect litigants and the practice of law, but with the positive benefits of mediation, it is not far fetch that this new ADR rules will perform in the same way, if not for the better.

My one centavo goes for mediation, and another for the new ADR rules.