Comments on the Small Claim Court System in Indonesia

Introduction

Civil Disputes are often one of the problems that occur in society. Civil disputes occur because, for example, there is an imbalance between the rights and obligations of the parties bound in an agreement, causing one party to suffer a loss. The large number of people today who prefer litigation to resolve civil disputes is the main cause of the buildup of cases at the court. The accumulation of cases makes the enforcement of justice ineffective in accordance with the principle of administering judicial power, namely that justice must be carried out simply, quickly, and inexpensively.

In anticipating the occurrence of further problems related to simple, fast and inexpensive dispute resolution, the Supreme Court as a body that has the authority to oversee the administration of justice in all judicial bodies under it, issues a regulation to complement the deficiencies in procedural law, particularly in the settlement of civil disputes, namely regulating it in Supreme Court Regulation of the Republic of Indonesia (“PERMA“) Number 2 of 2015 on Procedures for Small Claim Settlement as amended by PERMA Number 4 of 2019 on Amendments to Supreme Court Regulation Number 2 of 2015 on Procedures for Small Claim Settlement.

The issuance of the PERMA is an effort to optimize the settlement of civil disputes so that it is simpler, faster and inexpensive, and is the right step to fix the problem of accumulation of cases at the court. However, in reality the application of the Simple Claim system is still not an option in the community, because there are still many who do not know or are still unfamiliar with the Simple Claim system, hence many people still choose to use conventional litigation channels.

Settlement Process of Small Claim Court 

There are several stages that must be passed during the legal proceedings in the settlement of a Simple Claim case. The procedures for implementing the procedural law have been regulated in PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019. The stages of procedural law in the settlement of simple claims have been regulated in Article 5 of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019, as follows:

1. A simple claim is examined and decided by a Judge appointed by the Court Chairperson.
2. Small Claim Settlement Stages include:

1. registration;
2. examination of the required [documents] of a simple claim;
3. appointment of judges and substitute registrar;
4. preliminary examination;
5. determination of the hearing day and summons of the parties;
6. examination of hearings and settlement;
7. evidentiary stage; and
8. decision.
9. Simple claim settlement takes no later than 25 (twenty five) days from the day of the first hearing.

Furthermore, under Articles 3 and 4 of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019, several things that need to be considered in submitting a Small Claim to name a few are the classification of cases to be filed through a Small Claim, which are only 2 (two) classifications, namely Default and Unlawful Act (Tort), and the material value of the claim object is a maximum of Rp500,000,000,- (five hundred million Rupiah). Then in terms of the claim object, it may not be about land rights disputes, while from the point of view of court competence, the cases that can be filed are not cases whose settlement is carried out through a special court as regulated by laws and regulations.

Furthermore, for the parties in a Small Claim must be domiciled within the same jurisdiction of the court, if the Plaintiff is domiciled in a different area from the Defendant, the Plaintiff can represent his attorney or representative who is domiciled within the same jurisdiction as the Defendant. In addition, the parties are required to be present at every hearing in person, even if they have granted powers of attorney to their legal counsel or representatives. Furthermore, the Plaintiff is required to attach documentary evidence that has been legalized when registering a Small Claim. If all the requirements in Articles 3 and 4 are satisfied, the case can be resolved through a Small Claim settlement. However, if there are requirements that are not satisfied, the claim will be returned. Regarding the returned claim, the Plaintiff can amend it and resubmit by registering the claim following the procedure for filing a Small Claim from the beginning.

Regarding the Judge’s decision in a Small Claim case, it is closely related to the provisions of Article 5 paragraph (3) of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019 which regulates the period for settlement of Small Claim cases no later than 25 (twenty-five) days from the day of the first hearing. In other words, within 25 (twenty-five) days from the day of the first hearing the Small Claim legal proceedings must end, and the Judge must render a decision.

Regarding the Judge’s decision that is final and binding, the instructions and implementation guidelines are regulated in Article 31 paragraphs (2) and (3) of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019, where the implementation is carried out voluntarily by the parties. However, in the event that the provisions of paragraph (2) are not complied with, the decision is carried out based on the provisions of the applicable civil procedural law.

In fact, the Judge’s decision is often not accepted as a decision that has given and fulfilled a sense of justice for the parties. The Judge’s decision is not always free from negligence, error, or oversight, both technically and in terms of the material used in the proceedings until a decision is made. So that those parties who are dissatisfied with the Judge’s decision are given the right to take legal remedies as stipulated by the laws and regulations. Legal remedies in Small Claim cases are different from those in ordinary Civil cases. Legal remedies in ordinary Civil cases include Challenge (Verzet), Third-Party Challenge (Derden Verzet), Appeal, Cassation, and Judicial Review, while legal remedies in Small Claim cases under Article 13 paragraphs (3a) and (5) of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019 only includes Challenge (Verzet) and Objection.

The objection filed by the objection applicant must be resolved and decided within 7 (seven) days under Article 27 of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019 and thereafter under Article 30, the decision on the objection cannot be filed for any legal remedies, be it an Appeal, Cassation, or Judicial Review. This means that the decision on the objection is final and binding since the decision on the objection is served on and notified to the parties.

Challenges in the Implementation of Small Claim System

PERMA Number 2 of 2015 and PERMA Number 4 of 2019 were made to provide convenience for the disputing parties in resolving problems, particularly in the settlement of civil disputes. However, in addition to the conveniences or advantages, there will always be challenges. Several challenges in the implementation of Small Claim system to be considered are as follows:

1. Timeframe for Completion

The process of settling Small Claim cases according to the provisions of Article 5 paragraph (3) of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019 is a maximum of 25 (twenty-five) days from the day of the first hearing. The application of Article 5 paragraph (3) may not be carried out in accordance with the provisions. The period for the legal proceedings is often very long because it is influenced by the circumstances of the parties themselves during the legal proceedings, such as one party is unable to attend the hearing, and one of the parties requests additional time or postponement of the hearing to prepare documentary evidence and witnesses.

Circumstances that can make the legal proceedings period not in accordance with these provisions, of course become a dilemma for the Judge, besides the Judge must pay attention to the interests of the parties, but also the Judge must carry out the legal proceedings in accordance with the provisions.

2. Legal Domicile of the Parties

Under Article 4 paragraph (3) of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019, the domicile of the Plaintiff and the Defendant must be in the jurisdiction of the same court. This is an obstacle for the Plaintiff in determining the Defendant’s domicile address in his claim and may result in changes to the claim filed by the Plaintiff. The defendant could have changed his domicile address to avoid a claim when he learned that the claim had been filed against him. Even though in the end the Plaintiff can revoke, then amend and re-submit the claim, the Plaintiff will experience a loss in time and materially.

In addition, in Article 4 paragraph (4) it is stipulated that the parties are obliged to attend every hearing even though they have granted their powers of attorney to their counsel or representatives. This is of course very detrimental for the Plaintiff who has a different jurisdiction from the Defendant, particularly those who are on a different island or Province, of course it is very burdensome for the Plaintiff because apart from having to pay for their counsel or representative, the Plaintiff also has to pay for attending every hearing.

3. Implementation of the Decision

Article 31 paragraph (2) of PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019 states that the Judge’s decision that is final and binding is still implemented voluntarily. In other words, the decision can be implemented if the parties to the case, particularly the losing party, are willing to submit to the decision. On the other hand, if the losing party is not compliant with the decision, then the decision cannot be implemented. Furthermore, Article 31 paragraph (3) regulates the implementation of decisions according to the ordinary civil procedural law process as an alternative in cases where voluntary implementation of decisions cannot be carried out.

The implementation of the decision under Article 31 paragraph (2) is in stark contrast to the objective of the issuance of PERMA Number 2 of 2015 and PERMA Number 4 of 2019 which intend to achieve a simple, quick, and inexpensive legal proceedings at court. Because if the implementation of the decision voluntarily is not complied with, the decision will be implemented under Article 31 paragraph (3) which requires an application for execution from the prevailing party in the decision, and this requires additional costs and time.

Conclusion and recommendations

The spirit of issuing PERMA Number 2 of 2015 and PERMA Number 4 of 2019 is to settle cases in simply, quickly, and inexpensively. The PERMA is a new breakthrough in filling the void in the procedural law to resolve simple cases that were previously resolved normally.

The Small Claim system is limitative, in the sense that if one of the predetermined conditions is not satisfied, the case cannot be resolved through the Small Claim system. This is important for justice seekers who choose to settle cases through this system. They must first check the conditions specified in PERMA Number 2 of 2015 jo. PERMA Number 4 of 2019, particularly in Articles 3 and 4, to ensure that the case to be filed is in accordance with the applicable provisions. Even if the case is rejected, it can be filed again, but of course there will be losses in terms of both materials and time.

The period for the settlement of cases which is limited to a maximum period of 25 (twenty-five) days from the day of the first hearing, makes the need for accuracy and consideration from the Judge in evaluating during the hearing examination up until a decision is rendered. Then, regarding the implementation of the Judge’s decision which prioritizes the voluntary principle of the parties it is good to apply, but there needs to be further and clear confirmation regarding the efforts that must be made by the prevailing party if the voluntary implementation of the decision is not complied with.

In the future, the Supreme Court needs to issue specific rules or at least amend the existing rules regarding the implementation of Small Claim decisions that have not been adequately regulated in PERMA Number 2 of 2015 and PERMA Number 4 of 2019. There is a need for further special regulations such as PERMA or the need to amend the existing provisions of the PERMA; therefore, the technical implementation of the Small Claim decision can be further regulated, in terms of implementation of a final and binding decision which is not complied voluntarily by the losing party. Accordingly, it is no longer necessary for the prevailing party to implement the decision under the ordinary civil procedural law which may incur additional costs and time, hence there is legal certainty for the prevailing party in obtaining their rights and the realization of the principle of justice simply, quickly, and inexpensively. Furthermore, PERMA Number 2 of 2015 and PERMA Number 4 of 2019 need to be further disseminated to all parties, both law enforcement officials and the society. So that the public is aware that there is a system and procedure for settling civil cases which is simpler, faster and more inexpensive than the legal proceedings of case settlement through ordinary courts.

References:

1. Regulation of the Supreme Court of the Republic of Indonesia Number 2 of 2015 on Procedures for Small Claim Settlement.
2. Republic of Indonesia Supreme Court Regulation Number 4 of 2019 on Amendments to Supreme Court Regulation Number 2 of 2015 on Procedures for Small Claim Settlement.