The economic approach to litigation: a case of Philippine judicial procedure

Date of Publication


Document Type

Master's Thesis

Degree Name

Master of Science in Economics


School of Economics



Thesis Adviser

Tereso S. Tullao, Jr.

Defense Panel Chair

Dante Sy

Defense Panel Member

Joven Balbosa
Rolando Valenzuela


This study investigates the effect on welfare, income, and wealth of the decision to litigate in the light of the private cost of litigation and uncertainty in litigation. The researcher quantifies or measures the cost of litigation from the commencement of the case until its termination.The litigation process depicting the principal elements of cost/delay and uncertainty is depicted in a simplistic approach of a flowchart. It is shown that the determination of whether there is an increase in the welfare of plaintiff would depend on the ultimate outcome of the case. Ultimate outcome is computed using the formula:[Size of Award - Cost of Litigation]- [Real/Adjusted Value as at time of rendition of Supreme Court Decision=Ultimate OutcomeSelected cases are studied individually by the researcher and, on the basis of facts peculiar thereto each component of cost is quantified and assigned values.The population of the study consist of civil actions decided by the Supreme Court of the Philippines and published in the Supreme Court Reports Annotated (SCRA). Actual cases selected consist of 100 civil actions initiated at least after the effectivity of the 1973 Constitution. The search for the 100 cases started with the most recent volume of SCRA (Vol. 220) and ended up with vol. 164, for a total of fifty-seven (57) volumes.

A decision to litigate does not result to an improvement to an improvement in the welfare of plaintiff principally because of delay in litigation. The passage of time (accompanied by upward movements in prices) cause the value of the money sued upon to lose its equivalence as at the time of rendition of judgment by the Supreme Court. It is not surprising that one of the bigger challenges facing court administrators is being able to reduce the material time devoted to litigation.While there are remedies fashioned under the law to correct this situation, as for example, the award of interest or attorney's fees to plaintiff, the same are hardly enough to compensate for the loss in value occasioned by delay. As had been held by the Supreme Court, litigation is intended primarily to secure the rights of the plaintiff it is not meant to enrich plaintiff at the expense of the defendant.The emerging trend is to set in place devises and mechanisms intended to expedite the resolution of cases.

Abstract Format






Accession Number


Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

[122] leaves


Litigation; Procedure (Law); Law -- Interpretation and construction; Judicial process -- Philippines; xx1 Actions and defenses

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