Can a Private Right of Action Solve State Capture in the Philippines?: A Skeptical View

Last month, as a part of the LIDS Global initiative (discussed here), a research team at the University of the Philippines (U.P.) put forth an ambitious legal proposal to combat corruption in the Philippines. The centerpiece of the proposal is a private right of action that would allow individual citizens to bring civil claims against public officials for violations of the Philippines’ Anti-Graft and Corrupt Practices Act. The proposal is designed to overcome the problem of “state capture”–the shaping of laws, rules, and regulations through illegal and non-transparent payments to public officials. Because state capture is so severe in the Philippines—reaching even high-ranking officials within the country’s own anticorruption agencies—citizens cannot “rely solely on the political will of government officials to prosecute their peers in the government.” The private cause of action is intended to address (or at least circumvent) this problem by enabling private citizens injured by corruption to go directly to court, without having to rely on public enforcers.

While I agree that state capture presents a huge problem for anticorruption efforts, I’m skeptical that the proposed private right of action will be effective–at least in the Philippines. The roots of my skepticism are threefold:

  • First, the belief that a private right of action would get around the state capture problem is premised on the implicit assumption that the courts will not be susceptible to the same systemic corruption that infects other government agencies and instrumentalities. But is this a safe assumption? Corruption in the judiciary is not unheard of in the Philippines. In fact, in May 2012, on the basis of corruption charges, Renato Corona became the first Chief Justice of the Philippine Supreme Court to be impeached and removed from office. The Philippine anticorruption court has since ordered the temporary seizure of his assets, worth over $2 million. Within the anticorruption court itself, Justice Gregory Ong was recently found guilty of gross misconduct, dishonesty, and impropriety after he was linked with a major discretionary funding scam that also implicated several members of Congress. Although the guilty finding was issued in July, Ong was not dismissed from his post until September 23. Given the susceptibility of judicial officers to corruption and capture, it’s not clear why we should expect that entrusting the anticorruption effort to courts will be more effective than relying on public prosecutors and anticorruption agencies.
  • Second, access to legal talent is limited. The mere existence of the right of action is not likely to be an effective deterrent to wrongdoing unless it is utilized frequently by competent counsel. Although the report notes a potential free rider problem associated with a private right of action, they fail to address how pronounced this problem will be in a country that suffers from extreme disparity of wealth, where the resources needed to successfully litigate a civil claim for corruption are concentrated among the political and economic elite. This means that instances of smaller, local corruption will likely go unchallenged by the poorer individuals most affected by these acts. And while there are undoubtedly members of the elite who would like to rid the government of corruption, many people with the capacity to expend time and money on private suits likely have an interest in keeping the status quo.
  • Finally, a private cause of action could prove difficult to implement if it conflicts with prosecutorial discretion (a topic which has been discussed more generally on this blog here). While it is certainly the stated purpose of the proposal to serve as a check on public prosecutors, the U.P. report gives insufficient consideration to the possible negative effects such private actions could have on the effectiveness of the prosecutorial process. For example, although the report proposes a civil rather than criminal action to “avoid conflict with the well-established procedural rule that criminal action should be initiated and prosecuted under the direction and control of the public prosecutor,” the discovery required to win a civil case may well complicate any parallel criminal action, or bleed into criminal actions against public officials who have some connection to the official implicated in a civil action. This could compromise criminal investigations, including against officials not yet charged, raise issues of state secrecy, and limit the public prosecutor’s capabilities.

I do think that the U.P. report raises some thought-provoking ideas. My sense, however, is that there are significant intermediary issues that should be addressed before a private right of action in the Philippines could realistically advance the fight against corruption.

12 thoughts on “Can a Private Right of Action Solve State Capture in the Philippines?: A Skeptical View

  1. Bea, this is a great post and convincingly lays out a lot of problems with a private right of action approach in a country of wealth disparity with a corrupt judiciary. There’s one potential benefit of such a rule, though, that might deserve further attention. If someone does bring an anticorruption suit, even before a corrupt court, it forces the allegations, and the court’s response, into the public eye. Compare that to a situation where a corrupt prosecutor decides not to bring a case; in that situation no one ever hears about it. At least this way, there would have to be action (rather than inaction), which might make for better news coverage exposing some of the allegations of corruption. I might be being too optimistic, but maybe that could cause some good to come out of this, even with all the problems you mention.

  2. This was a really interesting idea, and I think I’m a bit more in favor if it than you, Bea. My initial reaction to the idea was to look at it as though it were a ‘baby steps’ approach. Step one was just getting corruption claims into court. Step two (which could be addressed with a later proposal/reform) would be to make sure the courts were capable of fairly and honestly dealing with the claim (i.e. your first point). When I look at it that way, while I agree that it doesn’t seem like this would be an automatic fix for corruption as a whole, it does seem like it could be a successful nudge in the right direction. I had a similar response to your third point. I can see how discovery for the civil suit could compromise a criminal investigation, but it also seemed to me that one of the underlying premises of the proposal was that chances are the public prosecutor wasn’t conducting a criminal investigation anyway? So it’s an incremental step, a way to get a modicum of justice, even if it’s not the ideal.

    It was your second point that really stuck with me. Changing the law to grant private rights of action won’t have any effect (even an incremental effect), if it’s never actually used.

  3. Someone more knowledgeable about Philippine civil procedure should probably save me from myself here, and I know I’ve mentioned this before, but could Problem #2 be mitigated by allowing a class action? A quick search revealed that the Philippines does indeed have such procedural rules, and that they are used currently in environmental litigation and indigenous peoples’ defense. It may be too difficult to build a class of similarly situated plaintiffs that would be large enough to motivate the private attorney, but if that is the case perhaps class definitions could be loosened for this type of suit.

    One more idea to mitigate Problem #2: Qui Tam-style litigation is used in the U.S. to incentivize private suits against individuals who defraud the government under the False Claims Act. Private attorneys are rewarded for their efforts to expose fraud by taking a portion of the litigation award. Since the suits would be against government actors here, and it would be improper to give private attorneys an award that comes directly from the taxpayer’s pocket, perhaps this incentive should be restricted to litigation against private entities that have committed corrupt acts in the Philippines.

    All of that said, I know the UP group put a lot of thought into their proposal, so it’s entirely possible they considered and dismissed both ideas.

    • Hey Chris, class actions in the Philippines, as they are framed in the current Rules of Civil Procedure, are very different from the way they are in most other countries so it probably wouldn’t work for this. I may be wrong about the cases you found but the people I know who have been involved in cases of environmental litigation and indigenous peoples’ defense rely on the specific rules that were created for it (Rules of Procedure for Environmental Cases/Writ of Kalikasan or the Indigenous Peoples Rights Act). Given, however, that the Rules are being overhauled it’s interesting to test whether the new Rules could be used to battle corruption.

    • Your idea re: class actions is really interesting, Chris. Although Luisa points out the current limitations to class actions in the system, it could be helpful for a new rule to be created in the corruption context, particularly given the public nature of the interest at stake.

      I don’t necessarily see it as a motivating factor for the attorneys themselves, but I think class actions could play in to one of the authors’ other stated goals– increasing citizen participation. (In that sense I suppose there is an indirect effect on attorneys, anyway.) Perhaps if such actions are taken on collectively, more people will mobilize to make use of a right of action, addressing some of my concerns in problem 2.

  4. A great post Pea that touches upon one of the mainstream debates among the anti-corruption pundits. In fact, I share your plausible concerns though I see private right of action as the best among the worst. There is no panacea that solves entrenched corruption overnight. Proper tackling requires years-long restructuring of institution as well as judiciary in addition to elevating public awareness. Simultaneously with the long-term reform there could be some pain relievers for the flaws of the negative consequence To my mind Civil right of action is one of them, in this context I would like to point out the following :
     For the concern of judicial corruption , one aspect that was left out of account is that judges unlike prosecution does not follow hierarchical administrative chain in rendering their decisions. In the most corrupted system you will find at least 10 percent of such scrupulous judge. So to get 10 % of the cases rightly reviewed better than nothing .
     As for the lack of legal talents, this should be the role of civil society organization if they willing to expand their role beyond screaming and rhetoric they can dedicate some free legal consultancy to litigants.
     Finally, the idea of civil parties taking second guesses on the prosecutorial decision is by no means new. Most civil law systems have long applied this system, where civil parties appeal the prosecutorial decision. Additionally victims, subject to some conditions, can initiate criminal cases directly by filing the suit to the case. This system has been working in France as well as many developing countries and has never jeopardized the prosecutorial work. Noting that according to that system there is no parallel procedures civil party either join the prosecution initiated case where he can challenge the prosecution or the court’s decision, alternatively such a party may initiate an action on his own though the legislative conditions. Moreover, mention should be made to the ICC Stature according to which the ICC prosecutor’s decisions are reviewable by the pre-trial chamber.
    Finally private actions raises another problem for the absence of personal injury in most cases which will make the proposal hard to apply in light of the current standing rules but this is a long, different topic and I shall be posting about soon.

  5. Great discussion – many of my thoughts have already been addressed but to add a couple more:

    I agree with the others that the inability to win cases (or, at least the vast majority of them) in a captured court system is not necessarily a reason to reject the proposal outright. Most potential plaintiffs don’t have the resources to engage in futile lawsuits but that is where advocacy groups can play a role, as Mohamed suggests. In fact, the authors rely on derivative suits as a model for their private action proposal (analogizing citizens to shareholders, the government to the corporation, and the corrupt actor to the third party wrongdoer) so civil society groups, themselves, would have standing to bring claims. In theory, while the obstacles you mention are significant, I don’t believe that they are insurmountable.

    But I do think there are challenging concerns – both with the authors’ innovative suggestion and with the idea of a private right of action, more generally – that you touch upon and that complicate the proposal. First, there are a host of reasons why citizens shouldn’t be allowed to sue derivatively (if they can bring a claim for corruption/fraud, why not gross negligence, ineffective representation, or another, subjective wrong?). Second, as you indicate, implementing a private right of action in a captured state would be highly unlikely. I doubt such legislation would make it out of Congress, much less to the courts. Third, traditional private rights of action in the corruption context raise questions about how to identify and compensate victims. As Mohamed mentions, uncertain injury is problematic for standing. It is also problematic for assessing damages. How would you quantify the damages award? Would it be with respect to the individual plaintiff or for the broader harm committed? If the latter, is there a way you could distribute the money among victims and/or otherwise avoid over-deterrence for the defendant or under-compensation for the other victims in subsequent lawsuits? The idea of qui tam-like litigation in this light is very intriguing.

    • Mohamed and Elizabeth are not far from my suggestion and they have analysed it the way I wanted as far as legal perspective is concerned, but they rather forgive me for being too historical, if I would use one of the ancient greek saying, to further support their ideas, “The Latin line incidit in scyllam cupiens vitare charybdim (he runs on Scylla, wishing to avoid Charybdis)” were both Scylla and Charybdim were hazard sea monster, and According to Homer, Odysseus while crossing the sea was forced to choose which monster to confront while passing through the strait; he opted to pass by Scylla and lose only a few sailors, rather than risk the loss of his entire ship in the whirlpool. I think this should be the case of Philippines, that they should choose where to opt., in situation like this were perfect corruption tackling systems are still nightmares we need to consider to opt a somehow promising methods even though they are not perfect enough.

  6. Thank you, Bea. These are valid points. We in fact considered some of them before and during the course of writing the paper, but refrained from doing so because it will take away the focus of our paper. At the outset, we find it necessary to point out the theoretical nature of our paper. We plan to elaborate on the finer details of the proposal through a subsequent paper and a draft bill prior to approaching a senator willing to support the idea.

    To address your three concerns:

    First, our paper does not ignore the premise that every state instrumentality is susceptible to capture, including the judiciary. In fact, it is the judiciary’s exposure to capture that inspired us to challenge the status quo through a proposal that relies less on structural reform and more on empowering people to pursue their own rights of action should they suffer damages. As emphasized in our paper, relying on criminal prosecution alone leaves anti-corruption in the hands of public prosecution, who are even more susceptible to capture since the standards of oversight are prohibitively high. For example, a public prosecutor’s discretion is subject only to the “grave abuse of discretion” clause which is very difficult to meet. Having wide discretion in terms of choosing which cases to file, the Ombudsman need not explain the reason for its inaction. In comparison, the anti-graft court, also known as the Sandiganbayan, like any other court, is required by the Constitution to clearly and distinctly express the facts and the law on which its decision is based. Moreover, the power of judicial review of higher courts lessens the possibility that a spurious decision of a lower court will be replicated. If these measures are insufficient, at the very least, our proposal brings one’s prayer for damages against an erring official to public light.

    Second, our paper did not include empirical data on available legal talent in the Philippines, but we did explore the issue of system overload which basically says that greater prosecutor resources result in more convictions for corruption. We have also observed increasing citizen participation on matters of public concerns, and we are optimistic this portends the possibility of willing activist-lawyers assisting troubled citizens in their private right of action. This is one of the important points we anchored our claim on.

    Third, this can be addressed by putting safeguards in the proposed law to mitigate the effects on prosecutorial discretion, as well as state secrecy. This is one paper in itself. The idea was: if one can file a separate civil action for other felonies, why not in crimes of corruption? If you meant the concept of a prejudicial question, meaning the resolution of the issue in the civil action will determine the criminal responsibility of the accused in the criminal action, then the criminal proceedings must be suspended and there would be no conflict then.

    We would like to thank everyone for their insights. We find the qui tam suit idea of Chris very interesting and worth looking into. Although our initial idea was to compensate the government instead of the private plaintiff, we can see this idea developing in the near future. That said, we see the need to write another paper to focus on the details. These kinds of discussion will definitely help us in identifying issues that need to be addressed.

    Ron San Juan & Hannah Chan

    • Thanks for these thoughts, Ron and Hannah. Your proposal was very thought-provoking and I’m happy to be contributing to the conversation.

      A few follow-up responses:

      On the second point, my intention in raising this was to highlight a potential barrier to the success of your proposal—but not necessarily an insurmountable one. Litigation is expensive—even for activist-lawyers—and the costs of pursuing a lengthy, costly battle in pursuit of the public good may inhibit many citizens from bringing suit. There are, however, many ways to address this. Qui tams, which many people here have now mentioned, was certainly one idea I had in mind, as well as increased government funding for civil society and legal services organizations.

      But there’s also a concern about scale: if only a few people have the resources or will to pursue a civil action, will citizen participation effectively discourage corrupt acts? Put differently, could this proposal be effective not only in punishing discrete acts of corruption, but also in changing the political culture through deterrence?

      On the third point, my concern was not necessary about prejudice, since, as you point out, separate civil actions for other felonies already exist. Rather, I worry about how to balance the need to effectively litigate and conduct discovery in a civil action with legitimate state interests in maintaining prosecutorial discretion, state secrecy, and the integrity of criminal investigations. I think that there are very good reasons why such interests should be protected. That said, I’d be very interested to hear more about your proposed safeguards as you develop this further.

  7. Hi Bea! Interesting conversation. I have a few comments but the main one is on your first point:

    While there is corruption in the judicial system of the Philippines it isn’t as pervasive as you may think. Working with the courts and filing cases is still a viable option to rid the country of corrupt officers. As someone who has carefully studied the judiciary from the outside and eventually worked within it, I recognize that there are many instances of corruption. But citing the impeachment of the Chief Justice and the dismissal of an appellate court justice distracts from the true state of the judiciary. It is easy to say that since the heads of the institutions were accused of corruption (the cases of the Chief Justice Corona and Justice Ong must be treated separately and that’s another subject matter altogether), then the judiciary is not a viable option for anti-corruption efforts. Yet, the good work of many trial court judges should not be dismissed as products of corruption because of these high-profile cases. The judiciary is composed of thousands of people and I can say with certainty that many of the people at the forefront – trial court judges – will decide a case on its merits. So all hope is not lost!

    On your second point:

    Actually, given the structure of local governments and the culture of the Filipino people. Corruption at the barangay-level is more often spotted and reported than corruption at the higher levels. The small communities are more efficient at correcting the errors of its officials than the larger bodies. While poverty and a lack of access to services is a problem, this is precisely where civil society steps in.

    I would love to go into more detail but I’ve got to go. Great job at starting the conversation though.

    • Your first point is well taken– I certainly did not mean to suggest that the entire judiciary is corrupt, and I agree that focusing on those two cases can be misleading. You’re right to point out that many judges are carrying out their duties free of corruption.

      My intention was really to point out that turning to the courts may present similar problems of “state capture” that the authors recognize in the other branches of government. Just as there are judges properly exercising their obligations to the people, there are also legislators and civil servants in various branches seeking to do the same. And while the cases of Chief Justice Corona and Justice Ong may not be indicative of how judges act generally, I think that it’s important to remain cognizant that an approach which entrusts such cases to the judiciary will not be free from some of the frustrating problems we face in other branches of government with regard to corruption.

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