In the Philippine judicial system, the Small Claims Court is designed to provide a fast, inexpensive, and informal method for resolving money claims without the need for extensive legal representation. Governed by the Revised Rules on Small Claims Cases (A.M. No. 08-8-7-SC), this procedure streamlines litigation for everyday financial disputes.

1. Jurisdictional Limits

The most critical aspect of a small claims case is the amount of money involved. As of the latest Supreme Court administrative adjustments, the jurisdictional limit is as follows:

Amount: The claim must not exceed P1,000,000.00, exclusive of interest and costs.
Court: These cases are filed in Metropolitan Trial Courts (MeTC), Municipal Trial Courts in Cities (MTCC), Municipal Trial Courts (MTC), and Municipal Circuit Trial Courts (MCTC).

Note: If the claim exceeds P1,000,000.00, it must be filed as a regular civil action, which involves more complex rules of evidence and longer timelines.

2. Scope of Claims

Small claims procedures apply exclusively to actions that are purely money claims in nature. These typically arise from:

Contracts of Lease: Unpaid rentals.
Contracts of Loan: Borrowed money that hasn't been repaid.
Contracts of Services: Payment for labor or professional services rendered.
Contracts of Sale: Unpaid goods or merchandise.
Liquidated Damages: Claims arising from a breach of contract where the amount is specified.

Exclusions: It does not apply to claims for "incorporeal rights" (like libel or physical injury damages) unless they are part of a liquidated money claim.

3. Key Feature: No Lawyers Allowed

One of the most unique aspects of small claims in the Philippines is the prohibition of attorneys.

Representation: Parties must represent themselves. A lawyer cannot appear on behalf of a litigant or participate in the hearing.
Exceptions: If the party is a corporation, it must authorize an officer (who is not a lawyer) to represent it via a Secretary's Certificate or Board Resolution.

4. The Filing Procedure

Step 1: Pre-filing Requirement (Barangay Conciliation)

Before filing in court, the parties must generally undergo Katarungang Pambarangay (Barangay Conciliation) if they reside in the same city or municipality. A "Certificate to File Action" is required unless the case falls under specific exceptions (e.g., parties reside in different provinces).

Step 2: Filing the Statement of Claim

The plaintiff fills out a standardized, "user-friendly" form called the Statement of Claim (Form 1-SCC). This must be accompanied by:

Verification and Certification of Non-Forum Shopping.
Actionable Documents: Original or certified photocopies of contracts, receipts, promissory notes, or affidavits of witnesses.
Payment of Fees: Filing fees must be paid, though indigent litigants may apply for an exemption.

Step 3: Summons and Response

Once filed, the court examines the claim. If valid, it issues a Summons to the defendant.

Response: The defendant must file a Response (Form 3-SCC) within ten (10) days of receiving the summons.
Failure to Respond: If the defendant fails to file a response or appear, the court may render judgment based on the facts alleged in the Statement of Claim.

5. The Hearing and Mediation

The court will schedule a single hearing date.

Judicial Dispute Resolution (JDR): On the day of the hearing, the judge will first attempt to mediate a settlement between the parties.
Settlement: If the parties agree, a Compromise Agreement is signed and the case is closed.
Hearing: If mediation fails, the judge proceeds with a summary hearing. No formal cross-examination is allowed; the judge asks the questions to clarify facts.

6. The Decision and Finality

The judge is mandated to render a decision within 24 hours after the hearing concludes.

Final and Executory: The decision in a small claims case is final, executory, and unappealable.
Recourse: While you cannot appeal the merits, an aggrieved party may file a Petition for Certiorari under Rule 65 of the Rules of Court if there was a grave abuse of discretion amounting to lack or excess of jurisdiction.
Execution: Once the decision is rendered, the winning party can immediately move for the issuance of a Writ of Execution to collect the money.

7. Prohibitions

To keep the process swift, the following are not allowed in small claims cases:

Motions to dismiss.
Motions for bill of particulars.
Motions for new trial or reconsideration.
Petitions for relief from judgment.
Third-party complaints.