PHILIPPINES Law and Practice Contributed by: Elaine A. Atienza and Bianca Georgia T. Paloma, Villaraza & Angangco
7.3 Relief The types of relief available in Philippine class actions and derivative suits are the same as those available in ordinary civil actions. These include monetary dam- ages (actual, moral, nominal, temperate, liquidated or exemplary), injunctive relief (TROs and writs of pre- liminary or permanent injunction), declaratory relief, and specific performance. In derivative suits, the primary relief sought is recovery by the corporation of damages or property wrongfully taken from it, or annulment of corporate acts that were entered into in breach of fiduciary duties. Since the derivative action is brought on behalf of the corporation, any monetary recovery goes to the corporation itself, not to the indi- vidual stockholder-plaintiff, except for the recovery of litigation costs and attorney’s fees. Damages in class actions are calculated on the same principles as in individual actions: actual or compensatory damages are proved by establishing the amount of loss actually suffered; moral damages require proof of the specific type of suffering listed in Article 2219 or 2220 of the Civil Code; and exemplary damages may be awarded as a deterrent where the defendant acted with malice, fraud, oppression, or wanton disregard of the plain- tiff’s rights. The pro-rated distribution of monetary recoveries among class members is done by the court based on the evidence of each member’s individual loss, subject to the court’s supervisory powers over The ADR Act and the Special ADR Rules do not pro- vide for class action or group arbitration in the Philip- pines. There are likewise no judicial precedents estab- lishing the availability or procedure for class arbitration in the Philippines. This is consistent with the default position in most jurisdictions that arbitration is fun- damentally a bilateral, consensual process, and that class or group arbitration requires express authorisa- tion in the arbitration agreement or applicable institu- the administration of the class judgment. 7.4 Class Actions, Mass Claims and Arbitration
• the parties are so numerous that it is impracticable to bring them all before the court; and • the parties bringing the suit are sufficiently numer- ous and representative to fully protect the interests of all concerned. Once a class suit is properly constituted, the judgment is binding on all members of the class, regardless of whether they were individually named as parties. Members of the class who are not named as parties may intervene to protect their individual interests. In addition to representative class suits, Philippine law also allows derivative suits, where a stockholder files an action on behalf of a corporation to recover for harm done to the corporation when its board of direc- tors has failed, or refused, to act. Derivative suits are a significant feature of corporate litigation, particularly in intra-corporate disputes before the Special Com- To bring or participate in a class action in the Phil- ippines, a party must satisfy both general standing requirements and the specific requirements for class suits under Rule 3 of the Rules of Court. For gen- eral standing, the party must have a real and existing interest in the subject matter of the controversy (ie, the party must stand to benefit or be harmed by the outcome of the case). The party must also be the real party-in-interest, either in its own right or as a rep- resentative. For the specific requirements of a class suit, the representative plaintiffs must be sufficiently numerous and must adequately represent the class. Courts assess whether the representative parties share the same legal or factual issues as the broader class, and whether they can be trusted to prosecute the case diligently on behalf of all the members. In derivative suits, the stockholder-plaintiff must have been a stockholder at the time the act or omission subject to complaint occurred, or that the stockholder became one by operation of law. The plaintiff must also show that the corporation’s board of directors or majority stockholders have failed or refused to act on behalf of the corporation, and that prior demand was made on the board. mercial Courts under the RCC. 7.2 Standing Requirements
tional rules. 7.5 Trends
Class suits in the Philippines have traditionally been prominent in corporate, environmental and consumer disputes. In the corporate context, representative suits and derivative actions by minority shareholders
451 CHAMBERS.COM
Powered by FlippingBook