MEDIATION NOTES

MMSU COL 2018-2019

CHAPTER 2 – MEDIATION
Background
The many Philippine indigenous tribes and communities already had their specific dispute
resolution mechanisms based on local legal systems and practices, primarily by bringing
a dispute before an elder or chieftain for resolution. However, colonisation by Spain from
the 16th century onwards reduced these indigenous dispute resolution mechanisms to
mere customs and traditions, and as such they were replaced by Western legal concepts,
particularly Spanish civil law and later Anglo-American common law. (See Maria Roda
Cisnero, Indigenous Modes of Dispute Resolution and Indigenous Justice Systems.)

Over time, the Philippines developed a vast and complex legal system where legal disputes
are settled in courts, through the adversarial system of litigation. This led to the perennial
problem of clogged court dockets, which causes delays in the resolution of disputes and
contributes to dissatisfaction in the settlement of issues through the courts.

The Civil Code, promulgated in 1949, has a chapter on compromises, although it does not
specifically refer to compromises entered into after mediation. The Arbitration Law (RA
876), promulgated in 1953, provides for domestic arbitration as an ADR method but does
not provide for other ADR methods such as mediation. But, in 1978, Presidential Decree
No. 1508 established a local or community dispute settlement system, known as the
Katarungang Pambarangay of amicably settling disputes at the barangay level (ie, smallest
local government unit), primarily through mediation, conciliation or arbitration before the
Barangay chairman or conciliation panels.

The Katarungang Pambarangay Law was recognized under the subsequent Local
Government Codes, promulgated in 1983 and 1991. However, it was not until the passage
of the ADR Law in 2004 that most forms of present ADR methods, including mediation,
whether voluntary or court-annexed, were recognised and statutorily defined.

In 2001, the Supreme Court designated the PHILJA as its component unit for court-
referred/related mediation and other ADR systems. Thus, the PHILJA undertook to
conduct mediation under pilot projects in specifically designated courts. Further, in
partnership with the Canadian International Development Agency, the Supreme Court
and the PHILJA undertook the Justice Reforms Initiatives Support Project (JURIS) in 2003
to support the then Action Plan for Judicial Reforms Programme of the Supreme Court.
The JURIS project aims to strengthen the use of mediation as an ADR process through
JDR and CAM. Likewise, in 2003, encouraged by the success of CAM, the PHILJA started
the Appeals Court Mediation Project.

WHY MEDIATION?
Mediation is a constructive and effective way to resolve disputes between people.
The premise in empowering the parties is that they know their problems better than
anyone else and can decide best what will work for them. The mediator as an impartial
third party makes sure the disputants can express themselves free from coercion.

No human relationship in an organization or in a community is so smooth that

misunderstanding and gripes will not occur. When all disputes, no matter how trivial,
proceed to litigation, it will clog the court’s dockets, in fact they are now, with so many
cases. These court cases remain unresolved for a long or indefinite period of time.

1
MEDIATION NOTES
MMSU COL 2018-2019

Negotiation and possibly conciliation come to the picture to patch up disagreements.

Things have to be readjusted, or ironed out to come to agreement. When all these steps
stalled, differences continue to linger. Both parties may be planning for a new course of
action in court. But very recently the old concept of tribal mediation is reinvented, using
the power of the third side. The third side, in this set- up is an unbiased neutral person
called the Mediator. But unlike the old one, this new concept is now systemized under the
auspices of the Philippine Judicial Academy of the Philippine Supreme Court.

Out of sheer ignorance, imprudence or negligence and probably other circumstances

which bring about discord are being harmonized through the process called Mediation. In
Mediation the rights of all persons to speedy disposition of their cases is strictly adhered
to. This right is defined in the constitution under the Bill of Rights which states that “all
persons shall have the right to a speedy disposition of their cases before all judicial, quasi-
judicial or administrative bodies.”

Mediation is a process of settling disputes with the assistance of an acceptable, impartial

and neutral third party called a mediator. The mediator helps parties identify issues and
develop proposals to resolve their disputes.

WHEN IS MEDIATION USEFUL

-the issue is complicated by a strong emotional element;
-the parties know each other;
-maintaining a relationship with other party is important;
- one feels uncomfortable confronting the other, unless with a neutral third party;
-the parties work/live together or for some reason cannot afford a conflict;
- a decision must be reached soon;
- the parties doubt their ability to work out the problem;
- many people are directly or indirectly affected;
-One or both parties want to avoid a formal proceeding;
- when confidentiality of the problem is important.

Under RA 9285 ADR Law

Sec. 7. Scope. - The provisions of this Chapter shall cover voluntary mediation, whether
ad hoc or institutional, other than court-annexed. The term "mediation' shall include
conciliation.

IRR Article 3.1-added, “and only in default of an agreement of the parties on the applicable
rules.”
These Rules shall also apply to all cases pending before an administrative or quasi-judicial
agency that are subsequently agreed upon by the parties to be referred to mediation.

"Mediation" means a voluntary process in which a mediator, selected by the disputing

parties, facilitates communication and negotiation, and assist the parties in reaching a
voluntary agreement regarding a dispute.

In essence, mediation is a process where a neutral third party who has no authoritative
decision making power intervenes in a dispute or negotiation to assist disputing parties
in voluntarily reaching their own mutually acceptable agreement.

2
MEDIATION NOTES
MMSU COL 2018-2019

Mediation involves moving parties from focusing on their individual bargaining positions
to inventing options that will meet the primary need of all parties. The concept of self-
determination, which gives parties control over the resolution of their own dispute, is of
major importance to the mediation process. It is thought that self-determination enhances
commitment to the settlement terms because parties make decisions themselves instead
of having a resolution imposed upon them by an authoritative third party.

WHO SHOULD BE MEDIATORS

1.The mediator shall be a neutral third person.
2. he has no personal bias regarding the disputants or the subject matter of the case in
dispute.
3. an individual is not neutral if he or she has a financial interest in the subject matter of
the dispute or a financial relationship with any party to the dispute subject of the
resolution proceedings.
4. If before or during the dispute resolution proceedings, a neutral person has acquired
an actual or apparent conflict of interest the mediator shall inform all the disputants, and
shall disqualify him or herself unless all the disputants consent in writing to continue.

THE ROLE OF MEDIATOR

The mediator is a neutral third person representing the third side, who act as coach,
referee, equalizer, and facilitator. The mediators do not solve the problem, the disputants
do. The disputants are empowered to find acceptable and workable solutions on their own,
worked by them and agreed to by them. Mediation process is a step away from conciliation
and a bar to litigation.

A mediator stands in the middle of a conflict and reduces the tension in

communications. By standing in the middle, a mediator can filter out emotions, insults
and similar problems and help individuals work toward renewing communications without
the personal issues that the individual may have with each other. By this, everyone is
guided to focus on creating solutions.

Mediation may be conducted by private institution or court annexed mediation. In

either case a set of rules and ethics are in place. For private mediation services, they are
guided by the law, while court annexed mediation are governed by a set of circulars and
guidelines issued by the court in compliance with the law.
The mediator is the central figure in the mediation process. The mediator must gain
the trust and confidence of all participating parties since this is a classic scenario where
negotiations have reached a stalemate. It is the task of the mediator to seek common areas
of agreement between the parties. The mediator will assist the parties in devising creative
alternatives and realistic solutions to their dilemma. A skillful mediator will divert the
attention of the parties from the root cause of their negative feelings of anger. He will
instead bring them to the more constructive area of finding acceptable solutions to their
current problems and predicament. Breaking deadlock takes time, patience and
hardwork. Waiting for the other party to blink first creates extraordinary tension. At that
point in time, silence becomes a tool of persuasion and intimidation. Use it to your full
advantage. If the mediator has the requisite knowledge of the subject matter and the
appropriate skills to handle the problem, the opposing parties can reach an agreement
quickly. An effective mediator will help all parties focus on the future of their relationship
instead of simply dwelling on past mistakes.

3
MEDIATION NOTES
MMSU COL 2018-2019

An effective mediator is highly credible, non-judgmental, patient and persuasive. He

has the ability to infuse humor into the discussions which could become severely strained
at times. It is important that the mediator knows the essence of the controversy by his
fingertips.
Mediation will be more attractive than litigation once the parties are convinced that
elevating their conflict to court will be far more expensive and will further escalate their
hostilities. Even if litigation has commenced, the parties could still avail of mediation
especially at the conclusion of discovery proceedings in which parties are finished
responding to each interrogatories, requests for admissions and requests for production
and inspection of documents. Some mediations have been conducted even after the court
has rendered judgment. At this stage, the purpose of mediation is to minimize the risk
and exposure of an appeal and to remove potential roadblocks to the execution of
judgment that could hinder the swift resolution of the case. An appeal or a motion to
vacate may be taken by the losing party to undermine the winning side. Mediation could
provide a safe haven for relief even after the trial.

Selection of Mediator (IRR)

Freedom to Select mediator.
The parties have the freedom to select mediator. The parties may request the OADR to
provide them with a list or roster or the resumes of its certified mediators. The OADR may
be requested to inform the mediator of his/her selection.

Replacement of Mediator.
If the mediator selected is unable to act as such for any reason, the parties may, upon
being informed of such fact, select another mediator.

TYPES OF MEDIATION
There are many types of Mediation, such as: Court-Annexed Mediation, Court- Referred
Mediation, private Mediation, Peer Mediation, Corporate mediation and many others.

The key to a successful mediation is the choice of the mediator. The task of the
mediator is to structure a communication between the warring sides. He should come to
the mediation without any hidden personal agenda or pre judgment on how the case
should be settled or he will jeopardize the faith and confidence of the participants. While
you have to choose among the accredited mediators in court-annexed mediation, in many
instances, there are practically no restrictions on whom the parties may use as mediator.
You may call the local chapter of the IBP or you can get a reputable ADR provider or
mediation service to give you a list of available mediators.

Sec. 3m "Court-Referred Mediation" means mediation ordered by a court to be

conducted in accordance with the Agreement of the Parties when an action is prematurely
commenced in violation of such agreement;
The fact that the court orders the parties to mediate their dispute does not make
the mediation less voluntary. That is clear from sec 3m is that there is a binding agreement
of the parties to mediate their dispute. This normally arises where the parties in their
contract included as part of their dispute resolution clause a prior resort to mediation
before the dispute may be brought to arbitration or filed in court.

4
MEDIATION NOTES
MMSU COL 2018-2019

Under the Rules of Court, a defendant in an action may move the court to dismiss
a complaint on the ground that a condition precedent for filing the claim has not been
complied with. In effect, by filing a motion to dismiss, the defendant implicitly seeks an
order to compel the plaintiff to comply with the pre-agreed dispute resolution process. It
is assumed that the plaintiff and the defendant, as parties to a contract have voluntarily
entered into the contract. Thus, the fact that the plaintiff is compelled to comply with this
process of mediation does not make the mediation any less voluntary. It being voluntary,
it is assumed that the parties intended that their mediation will be governed by the ADR
Act.
Thus, while sec7 of the ADR act expressly excludes court-annexed mediation, it does
not similarly exclude court referred mediation. Otherwise, to exclude court referred
mediation from the scope of the ADR Act is either to treat it as a floating dispute resolution
process or to consider it as if it were a court-annexed mediation in the latter case, the
distinction made between the two in the definition of terms would be rendered
meaningless. The court cannot compel the parties to comply with their mediation
agreement and at the same time flout that agreement by requiring them to follow a
mediation procedure other than that agreed upon by them.

Sec. 9. Confidentiality of Information. - Information obtained through mediation

proceedings shall be subject to the following principles and guidelines:
(a) Information obtained through mediation shall be privileged and confidential.
(b) A party, a mediator, or a nonparty participant may refuse to disclose and may prevent
any other person from disclosing a mediation communication.
(c) Confidential Information shall not be subject to discovery and shall be inadmissible in
any adversarial proceeding, whether judicial or quasi-judicial, However, evidence or
information that is otherwise admissible or subject to discovery does not become
inadmissible or protected from discovery solely by reason of its use in a mediation.
(d) In such an adversarial proceeding, the following persons involved or previously involved
in a mediation may not be compelled to disclose confidential information obtained during
mediation:
(1) the parties to the dispute;
(2) the mediator or mediators;
(3) the counsel for the parties;
(4) the nonparty participants;
(5) any persons hired or engaged in connection with the mediation as secretary,
stenographer, clerk or assistant; and
(6) any other person who obtains or possesses confidential information by reason of
his/her profession.
(e) The protection of this Act shall continue to apply even if a mediator is found to have
failed to act impartially.
(f) a mediator may not be called to testify to provide (confidential-IRR) information gathered
in mediation. A mediator who is wrongfully subpoenaed shall be reimbursed the full cost
of his attorney's fees and related expenses.

Sections 9-13 of the ADR Act contain comprehensive provisions on the nature and scope
of the confidentiality rule in mediation and the effect of violation of such rule.

** The ADR Law treats information obtained through voluntary mediation as

generally privileged and confidential; however, the guarantee of confidentiality may
be waived by the mediation parties

5
MEDIATION NOTES
MMSU COL 2018-2019

The guidelines are set forth in sec. 9. In the law on evidence they are considered privileged
communication.
As confidential information, the source of the information, whether a party, a
mediator, or a non-party participant may refuse to disclose the information in any other
proceeding or prevent any person acquiring possession of such information from
disclosing it. Its disclosure cannot be compelled by judicial process.
Thus, it is not subject to discovery or if offered as evidence in another proceeding,
the ADR Act declares it to be inadmissible. The persons involved in mediation cannot be
required to produce confidential information by sub poena duces tecum or to testify on
confidential information obtained in mediation. These persons enjoying the privilege of not
being compelled to make a disclosure of confidential information are the parties, their
respective counsel, the mediator or mediators, the non-party participants, and any person
hired or engaged in connection with the mediation as secretary, stenographer, clerk or
assistant.
This rule is subject to the exception that evidence otherwise admissible does not
become inadmissible simply through the expedient of offering it as part of the information
provided by a party in a mediation proceeding.
The general rule is that any information shall be privileged and confidential if
obtained through mediation. This means that privileged and confidential information
cannot be used in a subsequent judicial or quasi-judicial proceeding.
The use of the word obtained through mediation would exclude documents
containing information already available or already in existence at the time the controversy
arose such as the contract between the parties and documents made as consequence of
performance or breach since under sec9c of the ADR Act, evidence is otherwise admissible
or subject to discovery does not become inadmissible or protected for discovery (as
confidential info) solely by reason of its use in a mediation.
In short, information in documents that would not exist were it not for the mediation
is confidential and privileged. These documents include, memoranda, notes or work
product of the neutral party or non-party participant in a mediation, or an oral or written
statement made or expressed during mediation or for the purpose of considering,
conducting, participating, initiating, continuing or reconvening a mediation. There is no
reason to exclude from the application of the privilege memoranda, notes or work product
of a party or his counsel.

The confidentiality of the communication arises only if it is made in mediation.

Sec. 10. Waiver of Confidentiality. - A privilege arising from the confidentiality of

information may be waived in a record, or orally during a proceeding by the mediator and
the mediation parties.
A privilege arising from the confidentiality of information may likewise be waived by a
nonparty participant if the information is provided by such nonparty participant. (IRR-
Should be with the consent of the mediation parties)

A person who discloses confidential information shall be precluded from asserting

the privilege under Sec. 9 of this Chapter to bar disclosure of the rest of the information
necessary to a complete understanding of the previously disclosed information. If a person
suffers loss or damage as a result of the disclosure of the confidential information, he/she
shall be entitled to damages in a judicial proceeding against the person who made the
disclosure.
--- A practical problem may arise where a mediation communication is sought to be offered
in evidence in a judicial or quasi-judicial proceeding, but the person who is given the right

6
MEDIATION NOTES
MMSU COL 2018-2019

under the ADR Act to block its disclosure is unaware of the proceeding or of the intent by
a party to offer in evidence a document or communication covered by the privilege.

The ADR Act assumes that the adverse party, if a party to a prior mediation would block
the offer of this evidence. But whether or not the blocking is made or it succeeds, the
person who suffers loss or damages as a result of the disclosure shall be entitled to
damages.

A person who discloses or makes a representation about a mediation is precluded from

asserting the privilege under Sec. 9, to the extent that the communication prejudices
another person in the proceeding and it is necessary for the person prejudiced to respond
to the representation of disclosure.

Sec. 11. Exceptions to Privilege. -

(a) There is no privilege against disclosure under Sec. 9 if mediation communication is:
(1) in an agreement evidenced by a record authenticated by all parties to the agreement;
(2) available to the public or that is made during a session of a mediation which is open,
or is required by law to be open, to the public;
(3) a threat or statement of a plan to inflict bodily injury or commit a crime of violence;
(4) intentionally used to plan a crime, attempt to commit, or commit a crime, or conceal
an ongoing crime or criminal activity;
(5) sought or offered to prove or disprove abuse, neglect, abandonment, or exploitation in
a proceeding in which a public agency is protecting the interest of an individual protected
by law; but this exception does not apply where a child protection matter is referred to
mediation by a court or a public agency participates in the child protection mediation;
(6) sought or offered to prove or disprove a claim or complaint of professional misconduct
or malpractice filed against mediator in a proceeding; or
(7) sought or offered to prove or disprove a claim of complaint of professional misconduct
of malpractice filed against a party, nonparty participant, or representative of a party
based on conduct occurring during a mediation.

(b) There is no privilege under Sec. 9 if a court or administrative agency, finds, after a
hearing in camera, that the party seeking discovery of the proponent of the evidence has
shown that the evidence is not otherwise available, that there is a need for the evidence
that substantially outweighs the interest in protecting confidentiality, and the mediation
communication is sought or offered in:
(1) a court proceeding involving a crime or felony; or
(2) a proceeding to prove a claim or defense that under the law is sufficient to reform or
avoid a liability on a contract arising out of the mediation.

(c) A mediator may not be compelled to provide evidence of a mediation communication or

testify in such proceeding.

(d) If a mediation communication is not privileged under an exception in subsection (a) or

(b), only the portion of the communication necessary for the application of the exception
for nondisclosure may be admitted. The admission of particular evidence for the limited
purpose of an exception does not render that evidence, or any other mediation
communication, admissible for any other purpose.

7
MEDIATION NOTES
MMSU COL 2018-2019

-Section11a enumerates the instances when there is no privilege against disclosure. In

these instances, the privilege can be used as shield against the law itself which is against
public policy.

There are sanctions against unauthorized disclosure of confidential information.

1. A person who discloses confidential information in violation of the ADR Act cannot
bar disclosure of the rest of the information necessary to a complete understanding
of the previously disclosed information.
2. If a mediator is wrongfully subpoenaed and is required to testify to provide
information gathered in mediation, he shall be reimbursed for the full cost of his
atty. fees and related expenses by the party or person responsible therefore.
3. If a person suffers loss or damage as a result of the disclosure of the confidential
information, he shall be entitled to damages in a judicial proceeding against the
person who made the disclosure. It seems that the person who suffers loss or
damage may be any person, not necessarily the mediator, the mediation parties,
their respective counsel, witnesses or other persons who obtained or possessed the
mediation information.
4. The privilege against disclosure of mediation information however does not apply to
information during a mediation concerning a threat or plan to commit a crime or
otherwise to conceal it, or which is offered to prove or disprove a professional
misconduct of a mediator, a party, a non-party participant, or when the privilege
against disclosure is substantially outweighed by the need to promote the public
interest such as, when it is shown during a hearing in camera by the party seeking
to produce it that the evidence is not otherwise available and it is needed to be
offered in a court proceeding involving a crime, felony or to prove a claim or defense
under the law sufficient to reform or avoid liability on a contract. Even in this
proceeding, the mediator may not be compelled to provide evidence or to testify in
such proceeding.
He may however disclose that mediation occurred, or it has terminated or a
settlement was reached.

It will be noted that bad faith conduct of one of the parties participating in a
mediation proceeding is not an exception to the application of the confidentiality
rule.

Sec. 12. Prohibited Mediator Reports. - A mediator may not make a report, assessment,
evaluation, recommendation, finding, or other communication regarding a mediation to a
court or agency or other authority that make a ruling on a dispute that is the subject of a
mediation, except:
(a) Where the mediation occurred or has terminated, or where a settlement was reached.
(b) As permitted to be disclosed under Sec. 13 of this Chapter.

IRR. Article 3.24. Non-Reporting or Communication by Mediator. A mediator may not

make a report, assessment, evaluation, recommendation, finding or other communication
regarding a mediation to a court or agency or other authority that may make a ruling on
a dispute that is the subject of a mediation, except:
(a) to state that the mediation occurred or has terminated, or where a settlement was
reached; or
(b) as permitted to be disclosed under Article 3.23 (Exception to the Privilege of
Confidentiality of Information).

8
MEDIATION NOTES
MMSU COL 2018-2019

The parties may, by an agreement in writing, stipulate that the settlement agreement shall
be sealed and not disclosed to any third party including the court. Such stipulation,
however, shall not apply to a proceeding to enforce or set aside the settlement agreement.

Sec. 13. Mediator's Disclosure and Conflict of Interest. - The mediation shall be guided
by the following operative principles:
(a) Before accepting mediation, an individual who is requested to serve as a mediator shall:
(1) make an inquiry that is reasonable under the circumstances to determinate whether
there are any known facts that a reasonable individual would consider likely to affect the
impartiality of the mediator, including a financial or personal interest in the outcome of
the mediation and any existing or past relationship with a party or foreseeable participant
in the mediation; and
(2) disclosure to the mediation parties any such fact known or learned as soon as is
practical before accepting a mediation.
(b) If a mediation learns any fact described in paragraph (a) (1) of this section after
accepting a mediation, the mediator shall disclose it as soon as practicable.
At the request of a mediation party, an individual who is requested to serve as mediator
shall disclose his/her qualifications to mediate a dispute.

This Act does not require that a mediator shall have special qualifications by background
or profession unless the special qualifications of a mediator are required in the mediation
agreement or by the mediation parties.

The purpose of this provision is transparency on the part of the mediator to convince the
parties that he has no personal agenda to pursue in the course of the mediation.

The mediator is not only required to be neutral and impartial but that the parties should
have no occasion to doubt his neutrality and impartiality.

Before accepting an appointment as a mediator, a person is required to make an inquiry

that is reasonable under the circumstances to determine whether there are any known
facts that a reasonable individual would consider likely to affect the impartiality of the
mediator including a financial or personal interest in the outcome of the mediation and
any existing or past relationship with a party or foreseeable participant in the mediation.

The burden of inquiry is not upon the parties but upon the mediator who must ascertain
whether he has a conflict of interest which legally requires him to make a disclosure to
the parties and leave it to the parties to decide whether notwithstanding such conflict of
interest, he is acceptable to them as mediator of their dispute.
In making a judgment whether or not a mediator made a proper disclosure of relationship
or interest, the mediator is subject to the test of a reasonable individual.
Whether or not as a reasonable individual, a disclosure should have been made by him of
certain matters, will eventually depend upon the circumstances of the case and the
parameters of this duty of disclosure eventually will have to be determined and developed
by jurisprudence.

Refusal or Withdrawal of Mediator.

A mediator may refuse from acting as such, withdraw or may be compelled to withdraw
from mediation proceedings under the following circumstances:
(a) If any of the parties so requests the mediator to withdraw;
(b) The mediator does not have the qualifications, training and experience to enable
him/her to meet the reasonable expectations of the parties;

9
MEDIATION NOTES
MMSU COL 2018-2019

(c) Where the mediator's impartiality is in question;

(d) If continuation of the process would violate any ethical standards;
(e) If the safety of any of the parties would be jeopardized;
(f) If the mediator is unable to provide effective services;
(g) In case of conflict of interest; and
(h) In any of the following instances, if the mediator is satisfied that:
(i) one or more of the parties is/are not acting in good faith;
(ii) the parties' agreement would be illegal or involve the commission of a crime;
(iii) continuing the dispute resolution would give rise to an appearance of
impropriety;
(iv) continuing with the process would cause significant harm to a non-participating
person or to the public; or
(v) continuing discussion would not be in the best interest of the parties, their minor
children or the dispute resolution process.

Ethical Conduct of a Mediator

Competence.
It is not required that a mediator shall have special qualifications by background or
profession unless the special qualifications of a mediator shall:
(a) maintain to continually upgrade his/her professional competence in mediation skills;
(b) ensure that his/her qualifications, training and experience are known to and accepted
by the parties; and
(c) serve only when his/her qualifications, training and experience enable him/her to meet
the reasonable expectations of the parties and shall not hold himself/herself out or give
the impression that he/she does not have.
Upon the request of a mediation party, an individual who is requested to serve as mediator
shall disclose his/her qualifications to mediate a dispute.

Impartiality.
A mediator shall maintain impartiality.
(a) Before accepting a mediation, an individual who is requested to serve as a mediator
shall:
(i) make an inquiry that is reasonable under the circumstances to determine
whether there are known facts that a reasonable individual would consider likely to
affect the impartiality of the mediator, including a financial or personal interest in
the outcome of the mediation and any existing or past relationship with a party of
foreseeable participant in the mediation; and
(ii) disclose to the mediation parties any such fact known or learned as soon as
practical before accepting a mediation.
(b) If a mediator learns any fact described in paragraph (a) of this Article after accepting a
mediation, the mediator shall disclose it as soon as practicable to the mediation parties.

Confidentiality.
A mediator shall keep in utmost confidence all confidential information obtained in the
course of the mediation process.
A mediator shall discuss issues of confidentiality and the extent of confidentiality provided
in any private sessions or caucuses that the mediator holds with a party.

Consent and Self-Determination.

(a) A mediator shall make reasonable efforts to ensure that each party understands the
nature and character of the mediation proceeding including private caucuses, the issues,
the available options, the alternatives to non-settlement, and that each party is free and

10
MEDIATION NOTES
MMSU COL 2018-2019

able to make whatever choices he/she desires regarding participation in mediation

generally and regarding specific settlement options.

If a mediator believes that a party, who is not represented by counsel, is unable to

understand, or fully participate, the mediation proceedings for any reason, a mediator
may either:
(i) limit the scope of the mediation proceedings in a manner consistent with the
party's ability to participate, and/or recommend that the party obtain appropriate
assistance in order to continue with the process; or
(ii) terminate the mediation proceedings.
(b) A mediator shall recognize and put in mind that the primary responsibility of resolving
a dispute and the shaping of a voluntary and uncoerced settlement rests with the parties.

Separation of Mediation from Counseling and Legal Advice.

(a) Except in evaluative mediation or when the parties so request, a mediator shall:
(i) refrain from giving legal or technical advice and otherwise engaging in counseling
or advocacy; and
(ii) abstain from expressing his/her personal opinion on the rights and duties of the
parties and the merits of any proposal made.
(b) Where appropriate and where either or both parties are not represented by counsel, a
mediator shall;
(i) recommend that the parties seek outside professional advice to help them make
informed decision and to understand the implication of any proposal; and
(ii) suggest that the parties seek independent legal and/or technical advice before a
settlement agreement is signed.
(c) without the consent of all parties, and for a reasonable time under the particular
circumstance, a mediator who also practices another profession shall not establish a
professional relationship in that other profession with one of the parties, or any person or
entity, in a substantially and factually related matter.

Promotion of Respect and Control of Abuse of Process.

The mediator shall establish a professional relationship and shall encourage mutual
respect between the parties, and shall take reasonable steps, subject to the principle of
self-determination, to limit abuses of the mediation process.

Sec. 14. Participation in Mediation. - Except as otherwise provided in this Act, a party
may designate a lawyer or any other person to provide assistance in the mediation. A
waiver of this right shall be made in writing by the party waiving it. A waiver of
participation or legal representation may be rescinded at any time.

The issue of legal representation in mediation is sometimes questioned by those who

believe that the presence of lawyers obstructs rather than facilitates mediation. The Act
leaves it to the judgment of each party to decide whether or not he needs assistance by
another person and whether or not such assistance may be or may not be provided by a
lawyer. In some cases, a party may in fact insist upon such legal representation in
mediation as a condition precedent to his participation therein.

In one case, the parties, both of whom were non-lawyers participated in a mediation
without legal representation. The parties agreed that there was an amount due the
claimant from the respondent. It was agreed that this amount shall be paid in cash and
in kind.

11
MEDIATION NOTES
MMSU COL 2018-2019

The settlement agreement merely provided that: “Now Therefore, respondent agrees to pay
claimant the amount of P130, 090.61 in cash and P293, 945.61 in a lot value.” Because
nothing was said about how and when the balance will be paid or when the lot referred to
will be sold so that the unpaid balance will be paid to the claimant, a controversy
eventually developed which resulted in another case being filed by the claimant. If the
parties had been represented by counsel, or the mediator had been a lawyer, it is possible
that a settlement agreement would have been drawn up with more or less complete terms
and providing more certainty of performance.(United resources realty & Devt v.
Quitalan, 10 Feb 2003)

IRR_Role of Parties and their Counsels

Role of Counsel.
(a) The lawyer shall view his/her role in the mediation as a collaborator with the other
lawyer in working together toward the common goal of helping their clients resolve their
differences to their mutual advantage.
(b) The lawyer shall encourage and assist his/her client to actively participate in positive
discussions and cooperate in crafting an agreement to resolve their dispute.
(c) The lawyer must assist his/her client to comprehend and appreciate the mediation
process and its benefits, as well as the client’s greater personal responsibility for the
success of mediation in resolving the dispute.
(d) In preparing for participation in mediation, the lawyer shall confer and discuss with
his/her client the following:
(i) The mediation process as essentially a negotiation between the parties assisted
by their respective lawyers, and facilitated by a mediator, stressing it its difference
from litigation, its advantages and benefits, the clients heightened role in mediation
and responsibility for its success and explaining the role of the lawyer in mediation
proceedings,
(ii) The substance of the upcoming mediation such as;
(aa) The substantive issues involved in the dispute and their prioritization in
terms of importance to his/her client’s real interests and needs.
(bb) The study of other party’s position in relation to the issues with a view to
understanding the underlying interests, fears, concerns and needs;
(cc) The information or facts to be gathered or sought from the other side or
to be exchanged that are necessary for informed decision-making;
(dd) The possible options for settlement but stressing the need to be open-
minded about other possibilities; and
(ee) The best, worst and most likely alternative to a non-negotiated settlement.

Other Matters which the Counsel shall do to Assist Mediation.

The lawyer;
(a) shall give support to the mediator so that his/her client will fully understand the rules
and processes of mediation;
(b) shall impress upon his/her client the importance of speaking for himself/herself and
taking responsibility for making decisions during the negotiations within the mediation
process.;
(c) may ask for a recess in order to give advice or suggestions to his/her client in private,
if he/she perceives that his/her client is unable to bargain effectively;
(d) shall assist his/her client and the mediator put in writing the terms of the settlement
agreement that the parties have entered into. That lawyers shall see to it that the terms of
the settlement agreement are not contrary to law, morals, good customs, public order or
public policy.

12
MEDIATION NOTES
MMSU COL 2018-2019

Sec. 15. Place of Mediation. - The parties are free to agree on the place of mediation.
Failing such agreement, the place of mediation shall be any place convenient and
appropriate to all parties.

What this provision failed to state is that it is the mediator who normally decides the place
of arbitration.
As a rule, it is the mediator, upon consultation with the parties to ascertain their
convenience and after a determination that the place of mediation is appropriate taking
into account all relevant considerations, including the place of business of the parties,
who determines the specific place where mediation proceedings will be conducted.

IRR- Conduct of Mediation

Articles to be Considered in the Conduct of Mediation.

(a) The mediator shall not make untruthful or exaggerated claims about the dispute
resolution process, its costs and benefits, its outcome or the mediator’s qualifications and
abilities during the entire mediation process.
(b) The mediator shall help the parties reach a satisfactory resolution to their dispute but
has no authority to impose a settlement on the parties.
(c) The parties shall personally appear for mediation and may be assisted by a lawyer. A
party maybe represented by an agent who must have full authority to negotiate and settle
the dispute.
(d) The mediation process shall, in general, consists of the following stages:
(i) opening statement of the mediator
(ii) individual narration by the parties;
(iii) exchange by the parties;
(iv) summary of issues;
(v) generation and evaluation of options; and
(vi) closure
(e) The mediation proceeding shall be held in private. Person, other than the parties, their
representatives and mediator, may attend only with the consent of all the parties,
(f) the mediation shall be closed:
(i) by the execution of a settlement agreement by the parties;
(ii) by the withdrawal of any party from mediation; and
(iii) by the written declaration of the mediator that any further effort at mediation
would not be helpful.

Sec. 16. Effect of Agreement to Submit Dispute to Mediation Under Institutional

Rules. - An agreement to submit a dispute to mediation by any institution shall include
an agreement to be bound by the internal mediation and administrative policies of such
institution. Further, an agreement to submit a dispute to mediation under institutional
mediation rule shall be deemed to include an agreement to have such rules govern the
mediation of the dispute and for the mediator, the parties, their respective counsel, and
nonparty participants to abide by such rules.
In case of conflict between the institutional mediation rules and the provisions of this Act,
the latter shall prevail.

In institutional mediation, it is possible that the mediation rules of the institution will
contain either default provisions which shall apply in the event of lack of agreement or
failure of the parties to agree on such, matters related to the mediation, including the
place of mediation.

13
MEDIATION NOTES
MMSU COL 2018-2019

In ad hoc mediation, however, unless the parties had earlier entered into a mediation
agreement containing such provisions, the provisions of the ADR Act will apply to supply
the deficiency. Use rule under Section 15.

Sec. 17. Enforcement of Mediated Settlement Agreement. - The mediation shall be

guided by the following operative principles:
(a) A settlement agreement following successful mediation shall be prepared by the parties
with the assistance of their respective counsel, if any, and by the mediator.
The parties and their respective counsels shall endeavor to make the terms and condition
thereof complete and make adequate provisions for the contingency of breach to avoid
conflicting interpretations of the agreement.
(b) The parties and their respective counsels, if any, shall sign the settlement agreement.
The mediator shall certify that he/she explained the contents of the settlement agreement
to the parties in a language known to them.
(c) If the parties so desire, they may deposit such settlement agreement with the
appropriate Clerk of a Regional Trial Court of the place where one of the parties resides.
Where there is a need to enforce the settlement agreement, a petition may be filed by any
of the parties with the same court, in which case, the court shall proceed summarily to
hear the petition, in accordance with such rules of procedure as may be promulgated by
the Supreme Court.
(d) The parties may agree in the settlement agreement that the mediator shall
become a sole arbitrator for the dispute and shall treat the settlement agreement as an
arbitral award which shall be subject to enforcement under Republic Act No. 876,
otherwise known as the Arbitration Law, notwithstanding the provisions of Executive
Order No. 1008 for mediated dispute outside of the CIAC.

** What is the legal character of the final (settlement) agreement? What are the legal
requirements for the enforceability or the content of the agreement? Is it possible to revise,
withdraw or challenge the final settlement agreement?
--A settlement agreement partakes of the nature of a contract between the parties which
is binding upon them. Under the ADR Law, a settlement agreement following successful
voluntary mediation shall be prepared and signed by the parties together with their
counsels, if any, and by the mediator; the parties and their counsels should have
endeavored to make the terms and conditions thereof complete, with adequate provisions
for the contingency of breach to avoid conflicting interpretations of the agreement. On the
other hand, the mediator shall certify that he explained the contents of the settlement
agreement to the parties in a language known to them.

The ADR Law gives the parties to the settlement agreement the option, if they so desire, to
deposit such settlement agreement with the appropriate clerk of a Regional Trial Court
(RTC) of the place where one of the parties resides. Where there is a need to enforce the
settlement agreement, a verified petition may be filed by any of the parties with the same
court, which shall proceed summarily to hear the petition, pursuant to the Special ADR
Rules (AM No. 07-11-08-SC) promulgated by the Supreme Court.

Finally, the ADR Law allows the parties to agree in the settlement agreement that the
mediator shall become a sole arbitrator for the dispute and shall treat the settlement
agreement as an arbitral award which shall be subject to enforcement under the provisions
of the Domestic Arbitration Law.

14
MEDIATION NOTES
MMSU COL 2018-2019

On the other hand, for CAM and JDR, if full settlement of the dispute is reached, the
parties, assisted by their respective counsels, shall draft the compromise agreement which
shall be submitted to the court for judgment upon compromise or other appropriate action.

A judgment upon compromise may be enforced by execution ordered by the court. Under
the Civil Code of the Philippines (the Civil Code), if a party to a compromise fails or
refuses to abide by the compromise, the other party may either enforce the compromise
regard it as rescinded and insist upon his original demand.

As for the possibility of revising, modifying or challenging a settlement agreement, neither

the ADR Law nor the Special ADR Rules provide for procedures for the withdrawal or
revision of the settlement agreement. But, the Civil Code states that in cases where the
consent of a mediation party to the agreement is vitiated by mistake, violence,
intimidation, undue influence, or fraud the same is considered a voidable contract that
can be annulled by the courts.

One reason why mediation is not often resorted to or why the parties prefer a dispute
resolution mode which is adjudicative is the difficulty of implementing a settlement
agreement.
A settlement agreement is no more than a compromise. Under the law, compromise is a
contract whereby the parties, by making reciprocal concessions, avoid a litigation or put
an end to one already commenced. A compromise has the effect and authority of res
judicata, but there shall be no execution except in compliance with a judicial compromise.
If one of the parties fails or refuses to abide by the compromise, the other party may either
enforce the compromise or regard it as rescinded and insist upon his original demand. In
such a case a new action becomes unavoidable.

As a means of encouraging a recourse to mediation, Sec 17 provides for a means of

enforcing mediated settlement agreements. The conditions precedent are:

a. The settlement agreement shall be prepared by the parties with the assistance of
their respective counsel, if any, and by the mediator.
b. The parties and their respective counsel, if any, shall sign the settlement agreement;
c. The mediator shall certify in writing that he explained the contents of the settlement
agreement to the parties in a language known to them.

In order to minimize the controversy in a later implementation of the agreement, the act
admonishes the parties to endeavor to make the terms and conditions of the agreement
complete and make adequate provisions for the contingency of breach to avoid conflicting
interpretations of the agreement.

This is important because, in case of ambiguity or incompleteness of the settlement

agreement, there is doubt as to whether the persons involved in the mediation as mediator,
counsel or non-party participant can be called to testify to explain or clarify the ambiguity
or to supply the deficiency in the settlement agreement or whether the evidence or other
information produced during a mediation proceeding may be offered for the same purpose
in an adversarial proceeding to enforce the provisions of a settlement agreement.

15
MEDIATION NOTES
MMSU COL 2018-2019

Moreover, Sec 17c provides that the parties, if they so desire, may deposit the settlement
agreement with the appropriate clerk of court of the Regional Trial Court where one of the
parties resides, and where there is a need to enforce it , a petition may be filed by any co-
parties with the same court, in which case, the court shall summarily hear the petition.

Speedy enforcement of the settlement agreement using this mode of enforcement is

possible if the settlement agreement is not only complete but clear in its terms.

In a summary proceeding, all that the Regional Trial court will have to hear and decide is
whether or not the settlement agreement has been complied with and, if not, what the
court needs to enforce it.

The court should not be called upon to decide such questions as to whether the agreement
is valid, or what was intended by the parties by the specific provisions of the agreement.
The act requires merely the deposit of the settlement agreement only for the obvious reason
of establishing the fact that such an agreement was entered into.

One party, however, cannot make this deposit of the settlement agreement. There must
be an agreement of the parties to do so either in the settlement agreement itself or in a
separate document.

What the law has not provided for is whether such an agreement to deposit the settlement
agreement, if executed by the parties in a separate document, or after the execution of the
settlement agreement, requires as well the assistance of counsel.
That the mediator does not have a role to apply in the matter is obvious from the fact that
once the settlement agreement is duly executed, he becomes a functus officio.

The act does not require the assistance of counsel at this stage.
The clerk of the RTC has the ministerial duty to accept the settlement agreement for
deposit. The manner by which the deposit shall be made, whether or not there shall be
due notice to the other party, and what is needed for the clerk of court to do in such a
situation needs to be COVERED BY A RULE OF COURT.

A second mode of enforcing the settlement agreement is for the parties to agree that the
mediator shall become sole arbitrator for the dispute. The mediator cum arbitrator shall
not conduct any hearing to receive any evidence.
The agreement between the parties to appoint the mediator as sole arbitrator comes after
the settlement agreement or at least while they are in the process of negotiating a
settlement.

The Act seems to suggest that the settlement agreement and the arbitral award shall be
two separate documents. It is of course, desirable that it should be so.
At least if, if for any reason one party should seek to vacate the award, it can be shown
that the award embodies the settlement agreement.
The award shall be subject to enforcement under the arbitration Law, It is also subject to
defenses under this law as a basis for rejecting the award.

In a case decided by the Court of Appeals, the parties, unassisted by counsel submitted
their dispute to mediation by a mediator who was an engineer. They agreed to settle their
dispute and the settlement agreement provided that payment of the amount due the
claimant shall be paid by the respondent as follows:
“50% cash and 50% lot.”

16
MEDIATION NOTES
MMSU COL 2018-2019

The settlement agreement concluded with these words:

“Now therefore, respondent agrees to pay claimant the amount of P120,090.61 in cash
and P239,945.61 in lot value.”
Three months later, the claimant reported that the respondents had failed to pay the
balance of P239,945.61. It appeared that the lot had not been sold. The settlement
agreement was undoubtedly ambiguous in failing to indicate among other things, when
the balance was to be paid or whether the unspecified lot( which should have been
described as to location, size, ownership, evidence of title, etc.) was to be delivered to
clamant to sell it in payment of the balance. Since the claimant was not paid the balance,
he initiated arbitration of his claim. The meditation agreement provided that “Should
conciliation/mediation fail, we both agree to elevate the dispute to arbitration”.
The claimant initiated arbitration and insisted upon its original demand. The respondent
raised the defense of res judicata which the arbitrator brushed aside holding that the
settlement agreement had no binding effect. The CA vacated the award and held that the
settlement had the effect and authority of res judicata.

And in so doing, it appeared not to have considered the provisions Art 2041 of the Civil
Code of the Philippines, that if one of the parties fails or refuses to abide by the
compromise, the other party may either enforce the compromise or regard it as rescinded
and insist upon his original demand.

Does a mediation proceeding suspend the limitation period for a court claim?
The ADR Law does not provide that mediation proceedings suspend the limitation periods
for court claims. But, under CAM, since the referral to mediation by the court presupposes
that a court claim has already been lodged, the limitation period is deemed effectively
tolled by the filing of the formal complaint.

WAYS OF ENFORCEMENT OF SETTLEMENT AGREEMENTS IN MEDIATION UNDER

ADR LAW (other than Court-Annexed)
A. The parties may deposit the settlement agreement arrived at during the mediation
process under the ADR Law with the appropriate clerk of a Regional Trial Court of the
place where one of the parties resides. Where there is a need to enforce the settlement
agreement, a petition may be filed by any of the parties with the same court, in which
case, the court shall proceed summarily to hear the petition, in accordance with such
rules of procedure as may be promulgated by the Supreme Court. (A.M. No. 07-11-08-SC,
September 1, 2009, SPECIAL RULES OF COURT ON ALTERNATIVE DISPUTE
RESOLUTION)

B. The other mode of enforcing the settlement agreement is for the parties to agree that
the mediator shall become a sole arbitrator for the dispute and to treat the settlement
agreement as an arbitral award. This award shall be subject to enforcement under RA
876, otherwise known as the Arbitration Law wherein the party wishing to implement the
agreement may apply to the RTC for an order confirming an award. Once granted, a
judgment may be entered which shall have the same force and effect in all respects as a
judgment in an action; and it may be enforced as if it had been rendered in the court in
which it is entered.

17