Dear Attorney,

I run a business that heavily relies on the internet, and our service provider has failed to fix our connection issues for almost a month. This has resulted in significant business losses. Can we legally demand compensation for our lost income due to their negligence? What actions can we take against the provider?

Sincerely,
Frustrated Business Owner

Insights

In the Philippines, the legal concept of "damages" comes into play when dealing with service providers, such as Internet Service Providers (ISPs), that fail to fulfill their contractual obligations. Damages refer to the monetary compensation that can be claimed by a party suffering loss or injury due to the breach or negligence of another party.

Breach of Contract and Damages
Under Philippine law, particularly the Civil Code, service contracts between an ISP and its subscribers are bound by the principle of obligations and contracts (Article 1156). If the ISP fails to provide consistent service as agreed in the contract, they may be considered in breach of contract. The subscriber, in this case, can demand damages for any financial losses resulting from the ISP’s failure to deliver adequate service, provided that such losses are directly linked to the breach.

Types of Damages
There are generally two types of damages that can be claimed: actual and moral damages.

Actual Damages: This refers to compensation for the specific financial losses incurred, such as lost business revenue due to the inability to operate without an internet connection.
Moral Damages: In some cases, a party may also claim moral damages if the breach caused mental anguish, anxiety, or emotional suffering, although this is more challenging to prove.

Proving Losses
In order to successfully claim actual damages from the ISP, the subscriber must provide proof of the contract, the breach, and the actual losses. For example, documents like the service contract, correspondence with the ISP, and evidence of financial losses (such as profit and loss statements) are crucial in making a strong claim.

Filing a Complaint
If the subscriber has tried resolving the issue with the ISP but the service has not been restored or compensation has not been provided, they may consider the following steps:

Demand Letter: Send a formal demand letter to the ISP requesting immediate action or compensation for the damages. This is usually the first step in any legal dispute.
Filing a Complaint with the NTC (National Telecommunications Commission): The NTC oversees telecommunication services in the Philippines and can mediate disputes between subscribers and ISPs.
Court Action: If negotiations fail, the aggrieved party may file a lawsuit. The amount of damages will determine whether the case falls under small claims, regular civil courts, or special commercial courts. For small claims, the process is simplified, and legal representation is optional.

Conclusion
While ISPs are expected to maintain reliable service, subscribers must be prepared to substantiate any claims for damages with clear evidence of loss and breach. Legal action, such as filing a complaint with the NTC or pursuing a claim for damages, may be necessary if the ISP does not rectify the issue or provide compensation.

To ensure a strong case, seeking legal advice early in the process is recommended.