In the Philippines, the Small Claims Court offers a simplified, inexpensive, and expeditious procedure for settling disputes involving small amounts of money. Governed by the Revised Rules on Summary Procedure and the Rules of Procedure for Small Claims Cases, this system allows individuals to seek legal redress without the daunting complexities and high costs of regular litigation.

1. Scope and Jurisdiction

The Small Claims Court is not a separate building but a specific procedure handled by Metropolitan Trial Courts (MeTCs), Municipal Trial Courts in Cities (MTCCs), Municipal Trial Courts (MTCs), and Municipal Circuit Trial Courts (MCTCs).

What qualifies as a Small Claim?

As of the latest Supreme Court updates, the claim must be purely for the payment of a sum of money not exceeding P1,000,000.00 (exclusive of interests and costs). These claims typically arise from:

Contract of Lease (e.g., unpaid rent)
Contract of Loan (e.g., personal debts)
Contract of Services (e.g., unpaid fees for repairs or professional services)
Contract of Sale (e.g., unpaid goods)
Contract of Mortgage
Liquidated damages arising from contracts
Enforcement of a barangay amicable settlement or an arbitration award involving money

2. Who May File?

Any individual, corporation, partnership, or other juridical entity may file a case. However, lawyers are strictly prohibited from appearing at the hearing. The parties must represent themselves.

Note: If a party is a corporation, it must authorize a representative (via a Secretary's Certificate or Board Resolution) who is not a lawyer to appear on its behalf.

3. Step-by-Step Filing Process

Step 1: The Pre-condition (Barangay Conciliation)

Before filing in court, most cases require Barangay Conciliation under the Katarungang Pambarangay Law. If no settlement is reached, the Punong Barangay will issue a Certificate to File Action.

Exceptions: If the parties reside in different cities/municipalities (not adjoining), or if the case involves a corporation and an individual, this step may be bypassed.

Step 2: Preparation of Forms

The Small Claims procedure is "form-driven." You do not need to draft a complex legal pleading. You must fill out:

Form 1-SCC (Statement of Claim): The primary document detailing the "who, what, when, and how much."
Verification and Certification Against Forum Shopping: Included in Form 1-SCC, where you swear the facts are true.
Annexes: Attach all supporting evidence such as contracts, promissory notes, receipts, demand letters, and the Certificate to File Action.

Step 3: Filing and Payment

Submit the forms in triplicate to the Office of the Clerk of Court of the appropriate municipality. You must pay the filing fees, though indigent litigants may apply for an exemption from these fees if they meet specific income and property requirements.

Step 4: Action by the Court

The court will examine the claim. It may:

Dismiss the case outright if it clearly has no merit or the court lacks jurisdiction.
Issue a Summons (Form 2-SCC): This directs the defendant to file a Response (Form 3-SCC) within ten (10) days from receipt.

Step 5: The Response

The defendant must file a Response and attach their own evidence. If the defendant fails to respond, the court may render judgment based on the facts alleged in the Statement of Claim.

4. The Hearing and Judgment

The court will schedule a hearing within thirty (30) days from the filing of the Response.

Appearance: Both parties must appear in person.
Judicial Dispute Resolution (JDR): At the start of the hearing, the judge will exert all efforts to make the parties reach an Amicable Settlement.
Decision: If mediation fails, the judge will proceed with a summary hearing and must render a decision within the same day.

5. Key Features to Remember

Finality of Judgment: The decision in a Small Claims case is final, executory, and unappealable. You cannot go to the Court of Appeals if you lose. The only narrow remedy is a Petition for Certiorari under Rule 65 if there was "grave abuse of discretion."
No Lawyers: You cannot bring a lawyer to speak for you. The judge takes an active role in asking questions to uncover the truth.
One-Day Resolution: The goal is to finish the entire hearing process in one day to save time for both the court and the litigants.
Prohibited Pleadings: Motions for extensions of time, motions to dismiss, and other dilatory legal maneuvers are not allowed in Small Claims.

6. Where to File? (Venue)

Individual Plaintiff: File in the court where the plaintiff or the defendant resides, at the option of the plaintiff.
Business Plaintiff: If the plaintiff is engaged in the business of lending or banking, the case must be filed in the court where the defendant resides.