PHILIPPINES Law and Practice Contributed by: Elaine A. Atienza and Bianca Georgia T. Paloma, Villaraza & Angangco
mencement of proceedings (ie, upon receipt by the respondent of a request for arbitration, or upon filing with the institution) generally interrupts the running of the prescription period under applicable civil law principles. 4.5 Confidentiality Both mediation and arbitration in the Philippines are subject to confidentiality protections. All information obtained through mediation proceedings is privileged and confidential, and may not be used as evidence in any arbitration, judicial, or quasi-judicial proceeding. Mediators and parties are prohibited from disclosing mediation communications without the consent of all the parties. Arbitration proceedings, including all records, documents, evidence, and the arbitral award, are likewise deemed confidential under Section 23 of the ADR Act. Disclosure is permitted only with the consent of the parties, or to the limited extent neces- sary when judicial intervention is sought (eg, in appli- cations to confirm or vacate an award, where relevant documents may need to be disclosed to the court for the limited purpose of that proceeding). The CIAC Rules similarly impose confidentiality on arbitration proceedings and awards. 4.6 Costs The allocation of ADR costs in the Philippines is pri- marily governed by the parties’ agreement, the rules of the chosen ADR institution, and, where applicable, the discretion of the mediator or arbitral tribunal. In mediation, the costs of the mediator’s fees and admin- istrative charges are typically shared equally between the parties unless they agree otherwise. In PDRCI proceedings, the claimant is initially responsible for the filing fee and a deposit for arbitrator fees, but the final allocation of costs is within the tribunal’s discre- tion. CIAC fees are similarly based on the value of the dispute. Arbitral tribunals generally follow the principle that costs follow the event, that is, the losing party bears the costs of the arbitration, although the tribunal has discretion to apportion costs differently based on the conduct of the parties. 4.7 Courts and ADR The attitude of Philippine courts towards ADR is over- whelmingly supportive. The Supreme Court has been consistent in declaring arbitration and other ADR
mechanisms as favoured instruments of dispute reso- lution, and in limiting judicial intervention to situations expressly authorised by law. The Supreme Court has promulgated its Strategic Plan for Judicial Innovations (SPJI) 2022 to 2027, under which, the expansion and improvement of ADR integration in the judicial system is a key objective, as part of the judiciary’s efforts to make justice more accessible.
5. Costs, Fees and Funding 5.1 Legal Fees
Legal fees in the Philippines are not subject to a fixed statutory tariff. Lawyers and clients are free to agree on the amount, structure and payment terms of legal fees, subject to the general principles of contract law and the professional responsibility rules applicable to Philippine lawyers: that fees must be fair and reason- able. The factors taken into account in assessing rea- sonableness include: • the time and effort required; • the novelty and difficulty of the legal issues; • the skill required; • the likelihood that acceptance of the case would preclude other employment; • the customary charges in the locality; • the amount involved and the results obtained; and • the experience, reputation and standing of the lawyer. 5.2 Third-Party Funding Third-party litigation and arbitration funding exists in the Philippines but is not specifically regulated by law. Champertous contracts, however, are prohib- ited not only under jurisprudence but also under the Code of Professional Responsibility and Accountabil- ity (CPRA), 5.3 Contingency Fee Arrangement Contingency fee arrangements are a well-established and frequently used billing structure in Philippine liti- gation and arbitration practice. Under these arrange- ments, the lawyer’s fee, in whole or in part, is con- ditional on a successful outcome, whether by final judgment, arbitral award, or settlement. Generally, the CPRA mandates charging only “fair and reason-
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