Justice Acosta Talks on Mediation in the CTA

Justice Ernesto D. Acosta, the Presiding Justice of the Court of Tax Appeals (CTA) and Chairperson of the CTA’s First Division, was the guest speaker during TMAP’s General Membership Meeting (GMM) held last June 25, 2009 at the Mandarin Oriental Hotel. Justice Acosta spoke on the introduction and incorporation of mediation in the proceedings in the CTA, both in the Division and En Banc levels. Justice Acosta said that the adoption and implementation mediation procedures will definitely settle cases much sooner, and thus reduce pending cases in the CTA.

Mediation, which is presently practiced in the regular courts and in the Court of Appeals, is a means of settling disputes before the contending parties resort to judicial action. This is usually part of the pre-trial proceeding before the case is heard in a full-blown trial. Justice Acosta clarified that, in essence, mediation is a form of compromise settlement with the intervention of a professional mediator.

At present, the CTA does not consider mediation, arbitration and other modes of alternative dispute resolution as part of pre-trial although the parties are always encouraged to settle the controversy during the pre-trial conference before trial proper begins. The reason for this, according to Justice Acosta, is that the National Internal Revenue Code (NIRC) and the Tariff and Customs Code (TCC) provide limited grounds for a compromise settlement (i.e., under the Section 204, NIRC: reasonable doubt as to the validity of the claim of the taxpayer, financial position of the taxpayer demonstrates a clear inability to pay the tax, tax appears to be unjustly or excessively assessed and the administration and collection costs involved do not justify the collection of the amount; and under Section 2316, TCC: with the approval of the Secretary of Finance involving fines, surcharge, and forfeiture). However, in a meeting of the Board of Trustees of Philippine Judicial Academy (PHILJA), Chief Justice Reynato S. Puno and Justice Ameurfina Herrera, the Chancellor of PHILJA, opined that even on these limited grounds, the CTA can still abbreviate proceedings by resorting to mediation.

As a result of the opinion of the Chief Justice and the Chancellor, the CTA Rule 11, Sections 1 and 5 was amended to delete the prohibition against referring civil cases to mediation, arbitration and other modes of alternative dispute resolution. The amendment to the CTA Rules was approved by the Supreme Court En Banc under A.M. No. 05-11-07-CTA effective March 20, 2009.

With this development, the CTA has created a mediation committee, headed by Associate Justice Lovell R. Bautista, to conduct a study of the procedures and guidelines for the implementation of mediation in the CTA in coordination with the Philippine Mediation Centre Office.

Justice Acosta also gave a brief survey of recent decisions of the CTA Division and En Banc, and thereafter, gracefully answered questions from the floor.

TMAP Past President Atty. Manny Ortega introduced Justice Acosta, at the GMM hosted by Past President Atty. Catherine Manahan. TMAP Past Presidents, including former BIR Commissioner Jose Mario Buñag, and other TMAP members were present at the very well attended GMM.