Small Claims Court Rules and Procedures in the Philippines

Introduction

The Small Claims Court system in the Philippines is designed to provide a speedy, inexpensive, and accessible means of resolving minor civil disputes involving monetary claims. Established under the Rules of Procedure for Small Claims Cases promulgated by the Supreme Court, this mechanism aims to decongest regular courts by handling small-value cases through simplified procedures. The rules emphasize informality, with no formal pleadings required beyond basic forms, and prohibit the participation of lawyers to ensure fairness and efficiency for unrepresented litigants.

The system is rooted in Republic Act No. 7691, which expanded the jurisdiction of Metropolitan Trial Courts (MeTCs), Municipal Trial Courts in Cities (MTCCs), Municipal Trial Courts (MTCs), and Municipal Circuit Trial Courts (MCTCs) to include small claims. The Supreme Court has periodically amended the rules to adjust monetary thresholds and refine processes, with the latest significant amendments in A.M. No. 08-8-7-SC (as amended up to 2019 and beyond) increasing the jurisdictional amount to better reflect economic realities.

This article comprehensively outlines the rules and procedures, including eligibility, filing requirements, court processes, remedies, and related considerations, all within the Philippine legal framework.

Jurisdiction and Scope

Small claims courts have exclusive original jurisdiction over civil actions for the payment or reimbursement of money arising from contracts, quasi-contracts, torts, or quasi-delicts, provided the claim does not exceed PHP 400,000 (exclusive of interest, damages, attorney's fees, litigation expenses, and costs). This threshold was raised from PHP 300,000 effective February 1, 2020, under Supreme Court Office of the Court Administrator Circular No. 45-2020, to account for inflation and economic changes.

Covered Claims

Money owed under contracts such as loans, services, sales, or leases.
Damages arising from faulty workmanship, negligence, or quasi-delicts (e.g., property damage from accidents).
Collection of sums due from promissory notes, checks, or other negotiable instruments.
Reimbursement for payments made on behalf of another.

Excluded Claims

The rules explicitly exclude certain actions to maintain the system's focus on simple monetary disputes:

Claims involving title to or possession of real property (e.g., ejectment or forcible entry cases, which fall under summary procedures).
Actions for annulment of marriage, legal separation, or declaration of nullity.
Probate proceedings or estate settlements.
Criminal actions or those involving moral damages as the primary claim.
Claims against the government or its agencies (unless waived).
Actions where the claim exceeds the jurisdictional amount or involves multiple claimants aggregating beyond the limit.
Cases requiring interpretation of complex laws or contracts that necessitate formal trial.

If a claim involves both covered and excluded elements, the court may sever the small claims portion for separate handling.

Venue is determined by the residence of the plaintiff or defendant, or where the contract was executed or the transaction occurred, following the general rules under the Rules of Court.

Who Can File a Small Claims Case?

Any natural person (individual) or juridical entity (e.g., corporation, partnership) may file a small claims action as a plaintiff. However, the rules prohibit lawyers from representing parties in small claims proceedings to keep the process simple and cost-effective. Parties must appear personally or through authorized representatives:

For individuals: The claimant or a duly authorized representative (e.g., spouse, adult child, or agent with a Special Power of Attorney).
For juridical entities: An officer or employee authorized by the board or managing partner.

Minors or incompetents may be represented by guardians. Indigent litigants may seek exemption from filing fees upon certification by the court.

Counterclaims are allowed if they arise from the same transaction and do not exceed the jurisdictional amount. If a counterclaim exceeds PHP 400,000, the case may be transferred to regular procedure.

Filing the Claim

Required Forms and Documents

The process begins with filing a verified Statement of Claim using the prescribed Form 1-SCC (available at the court or downloadable from the Supreme Court website). The form must include:

Names and addresses of the plaintiff and defendant.
A clear and concise statement of the claim, including dates, amounts, and supporting facts.
The amount claimed, broken down if necessary.
Certification that the plaintiff has not filed the same claim elsewhere (to prevent forum shopping).

Supporting documents must be attached, such as:

Contracts, receipts, promissory notes, or affidavits of witnesses.
Computation of the claim amount.
If applicable, evidence of demand (e.g., demand letter) made on the defendant prior to filing, as this is mandatory to show good faith effort to settle.

The plaintiff must file at least two sets of the Statement of Claim and attachments—one for the court and one for service on the defendant.

Filing Fees

Fees are minimal and based on the claim amount:

For claims up to PHP 100,000: PHP 1,000 to PHP 2,000 (scaled).
For claims from PHP 100,001 to PHP 400,000: Higher brackets up to PHP 4,000.
Additional sheriff's fees for service (around PHP 500–1,000).
Indigents may file a Motion for Exemption supported by affidavits of income and assets.

Filing is done at the Office of the Clerk of Court of the appropriate first-level court (MeTC, MTCC, MTC, or MCTC). The court assesses the form for completeness; if deficient, the plaintiff is given time to amend.

Service of Summons and Response

Upon filing and payment, the court issues a Summons (Form 2-SCC) directing the defendant to appear at a scheduled hearing and file a verified Response within 10 days using Form 3-SCC. The Response must admit or deny the claim, state defenses, and include any counterclaim with supporting documents.

Service is primarily by the sheriff or process server, personally or by substituted service (e.g., leaving with a competent person at the defendant's residence or office). If service fails after two attempts, the court may dismiss the case or allow alternative service (e.g., registered mail).

No extensions for filing the Response are allowed, and failure to respond results in the court rendering judgment based on the plaintiff's claim (default judgment).

Pre-Hearing Procedures

Before the hearing, the court may refer the case to mediation under the Judicial Dispute Resolution (JDR) process, where a judge-mediator attempts amicable settlement. If successful, the agreement is reduced to a Compromise Agreement and approved as a judgment. If mediation fails, the case proceeds to hearing before another judge.

Parties are encouraged to settle at any stage, and the court may suspend proceedings for up to 30 days to facilitate negotiation.

The Hearing

Hearings are informal and expeditious, typically scheduled within 30 days from filing. Key features:

No lawyers allowed; parties represent themselves.
No formal rules of evidence apply—affidavits substitute for direct testimony, and cross-examination is limited to clarifications.
The judge actively inquires to elicit facts, may ask questions, and can require additional evidence.
Witnesses may testify via affidavits (Judicial Affidavits Rule applies, using Form 8-SCC).
The hearing is completed in one day unless exceptional circumstances warrant postponement (e.g., illness, not exceeding 15 days).

Absence of the plaintiff leads to dismissal without prejudice (can refile once). Absence of the defendant results in judgment in favor of the plaintiff.

Decision and Judgment

The judge renders a decision within 24 hours after the hearing (or submission of position papers if needed), using Form 13-SCC. The decision is final, executory, and non-appealable, except in cases of grave abuse of discretion via certiorari under Rule 65 of the Rules of Court.

The judgment includes the awarded amount, interest (legal rate of 6% per annum from judicial demand), and costs. If a counterclaim is granted, it offsets the plaintiff's claim.

Execution of Judgment

Since judgments are immediately executory, the prevailing party can file a Motion for Execution (Form 14-SCC) if the losing party fails to comply within 15 days. Execution follows small claims rules:

Writ of Execution issued promptly.
Sheriff's enforcement through levy on personal property, garnishment of debts, or sale at public auction.
No stay of execution unless a supersedeas bond is posted (double the judgment amount).

If the judgment debtor has no sufficient property, the court may issue orders for installment payments.

Prohibited Actions and Sanctions

To maintain integrity:

No motions to dismiss (except for lack of jurisdiction or improper venue).
No interventions, third-party complaints, or dilatory motions.
No postponements except for compelling reasons.
Violations (e.g., groundless claims, evasion of service) may result in contempt, administrative sanctions, or counterclaims for damages.

Forum shopping is penalized under Supreme Court rules, potentially leading to dismissal and contempt charges.

Special Considerations

Electronic Filing and Hearing

Under Supreme Court issuances during the COVID-19 pandemic (e.g., A.M. No. 21-07-14-SC), electronic filing via email and videoconference hearings are allowed in pilot courts, with plans for nationwide rollout to enhance accessibility.

Assistance for Litigants

Courts provide free assistance through the Public Attorney's Office (PAO) for indigents, though PAO lawyers cannot represent in hearings. Information desks and self-help kits are available.

Statistics and Impact

The system has resolved millions of cases since inception, with high settlement rates (over 70% via mediation), reducing backlog in regular courts.

Amendments and Updates

The Supreme Court may issue further amendments; litigants should verify current rules via the judiciary website or court clerks.

Conclusion

The Small Claims Court in the Philippines exemplifies judicial reform by prioritizing efficiency and equity for everyday disputes. By adhering to these rules, parties can achieve swift justice without the burdens of traditional litigation. For specific cases, consulting court personnel ensures compliance with local practices.