One consideration in filing a collection case against somebody is the amount of money owed to you. But kudos to the Supreme Court for passing the 2016 Revised Rules of Procedure for Small Claims Cases. Without it, it was impractical to file a suit for collection especially if it involves a measly 4 to 5 figures before. Say, you loaned P20,000 to B. B defaulted in paying. It would be impractical to hire a lawyer to collect the indebtedness from B considering that a lawyer's retainer would usually cost you P20,000 also. Instead of getting back the money, you will find yourself losing some more on account of hiring a lawyer and the cost of litigation.
With the Rules on Small Claims Cases, this immensely helped ordinary Juans to easily collect money because it specifically does not allow representation by a lawyer. All you have to do is to download a readily available form online (just make sure it is the 2016 format) or ask for some forms with the MTC, fill it up, attach the supporting documents and file it before the Municipal Trial Court.
What kind of claims maybe filed under the Rule and how much?
The claim or demand may be for money owed by virtue of contract of lease, loan, services, sale or mortgage; liquidated damages arising from contracts; enforcement of barangay amicable settlement or arbitration award involving money. The amount of money that can be claimed under the rule in 2010 was only P100,000 but now it was increased to P200,000. The increase is a good move to make it coincide to the other jurisdictional amount involving money claims that can be filed before the MTC.
The Revised Rules of Procedure for Small Claims primarily aims to give an inexpensive, simple, and faster way to collect money. However, in my opinion there are still some things that were overlooked by the proponents of the Rule despite the test run back in 2008.
It seems that the proponents forget the fact that most people who will closely look into this rule will be comprised of lay persons or those who have zero knowledge of the law. Let us take for example Section 7 of the 2016 Revised Rules of Procedure for Small Claims Cases, it says: "Sec. 7. Venue - The regular rules on venue shall apply." A street vendor who has an axe to grind against non paying patrons would surely raise an eyebrow in question as to what the hell does venue mean?
Second, I do not understand the logic of raising the filing fee for those succeeding claims after the fifth claim if done in the same calendar year.
Finally, there is nothing in the law on how the creditor will receive the money in cases where there is an amicable settlement between the parties. It left so much room for interpretation that people in the position can easily make up rules along the way. Let us consider as an example when it comes to payment by installment as agreed by the parties in the compromise agreement. One MTC branch requires that the debtor cannot directly pay to the creditor. Payment should be made through the MTC. The court who heard the case will be the one receiving payment from the debtor and handing the money and issuing receipt to the creditor. This is nowhere to be found in the Rule. Moreover, this is impractical especially to one or both of the parties because they will have to go to the MTC to pay or to collect. Why not bank to bank? or such other payment scheme convenient to both sides?
Moreover, there is no provision on how the creditor will go about the compromise agreement in case the debtor once again defaulted. and if for some stroke of luck the creditor was able to discover that a motion for execution is proper and he was able to obtain an order from the court, the rule does not state what will happen next or what to expect upon issuance of the order of execution.
I know a small claim case that was up for execution and the order of execution was referred to the Sheriff of RTC for execution. They asked for some money before it can be executed. The rule did not say anything about paying some more money to have it executed. Remember, a layman will not be correlating this procedural rule to other applicable rules. The creditor did not pay it and thus, nothing happened to his collection case despite a favorable judgment.
The point is, this is a good Rule but still, it leaves a lot to be desired.