Civil and commercial litigation in Spain. How does the procedure work?
There is no doubt litigation adds a huge amount of uncertainty to companies and the general public. This uncertainty increases when litigation takes place out of your comfort zone: this is, on a foreign jurisdiction.
Civil litigation in Spain is not an exception. In the following lines, we are going to explain its basic steps and terms of a civil and commercial procedure in our jurisdiction, so that this uncomfortable feeling gets (if possible) a bit reduced.
Here we go
Civil and commercial litigation in Spain follows the same procedure. Depending on the topic discussed, jurisdiction may vary from commercial courts (i.e. insolvency, trademarks, corporate law, patents, etc.) to civil courts (breach of contract, damages, etc.). There are a lot of topics in between and blurred borders. In case the actions to be undertaken are not mutually exclusive and fall beneath the jurisdiction of commercial and civil courts at the same time, commercial courts attract the procedure.
How it all starts
Civil and commercial litigation in Spain mix written and oral forms. It all starts with a written sue in which the plaintiff has to specify all facts, law, and petitions that wants to rise to the courts’ knowledge. As some people say and I like to recall from time to time, being a plaintiff in a Spanish procedure is like an extreme sport.
All responsibility is on you.
The game that is going to be played relies exclusively on your ability to set the terms of the dispute in this initial moment.
This allegation phase is of extraordinary importance. After the sue, the defendant gets his turn and has to reply in 20 working days to the sue also in written form. It is important to rise here the topic of the burden of proof. According to article 217 of the Spanish Procedural Act, the plaintiff has to provide evidence of the alleged facts that sustain its petitions to the court. On the contrary, the defendant has to prove the facts that impede, avoid or exclude the facts or the course of action provided by the plaintiff.
One of the few exceptions to this rule is the proximity to the source of evidence. If one party to the procedure may easily provide evidence regarding a fact, burden of proof is reversed. This is the case, for instance, when defendant is accused of not having paid a debt. Defendant will be the one and only party with enough capacity to proof payment has been made (i.e. Bank excerpt) or to provide reasonable explanation regarding the unpayment.
As a general rule, all documents must be submitted with the written sue and reply. Admission of documents in subsequent phases of the procedure is possible, yet not the general rule and certainly risky.
Intermediate phase. The preliminary hearing
After submission of briefs, the Courts summons the parties to a preliminary hearing (“audiencia previa”). This preliminary hearing has 4 phases:
Phase 1: conciliatory
The Court tries (with more or less enthusiasm, depending on the Judge) to mediate between the parties. If an agreed solution to the controversy is plausible, the parties may suspend the procedure for a maximum 60-day period for negotiation.
Sadly, no success is expected in this phase.
Phase 2: sanatory
In these very first steps of the preliminary hearing, the parties and the Court treat all procedural impediments in order to eventually obtain a Sentence to the material issues of the case. Procedural exceptions such as legitimacy, accumulation, litisconsortium and others are typically addressed in this phase.
In this phase, the parties may have a word regarding complementary or additional allegations to their briefs and correction of mistakes.
It is not possible to alter the petitions contained in the plaintiff’s sue.
Phase 3: demarcation of facts
The parties may fix the controversial and noncontroversial facts of the case, according to their briefs and the complementary allegations of the parties in phase 2.
Phase 4: proof proposal
In this phase, according to the delimitation of facts previously made, the parties propose evidence in order to prove the controversial facts of the case. This is the moment when experts and witnesses are proposed to intervene in the procedure. After this, the date for trial is scheduled.
The trial
On the date of the trial, the evidence proposed and admitted is carried out. Expert and witness depositions are delivered and lawyers conduct their closing arguments before the Court. This typically occurs in unity of act.
The Sentence and the appeals. Challenging the result
After the trial, the Court issues a Sentence deciding the case. This Sentence, if the amount discussed is higher than EUR 3,000, is subject to appeal. An appeal under Spanish litigation rules typically takes place in written form. Appellant writes its brief against the Sentence and appellee replies to this brief.
The Court of Appeal (“Audiencia Provincial”) issues another Sentence. This Sentence may confirm, revoke or partially revoke the Sentence issued by the lower Court.
Depending on the amount discussed (more than EUR 600,000) or the subject discussed, the matter may end before the Supreme Court. Again, the procedure would follow a written form and another Sentence will be issued confirming, revoking, or partially revoking the Sentence issued by the Court of Appeal
Finished? Not yet. Execution
After the procedure is finished in any instance, the plaintiff may need the Court’s support in order to execute the Sentence.
This will take place before the civil or commercial Court that decided the matter in the first place. This procedure is an independent one. Its object consists of enforcing what has been decided in the previous Sentence against the defendant’s will.
This procedure may not be necessary if defendant complies with what it is stated in the Sentence in the first place.
Final considerations
This summary might reflect the essential and most common structure of a civil procedure in Spain. The duration may vary from one place to another, being typical in Madrid a duration of one year for the Court’s first decision and another year for appeal.
Legal expenses are also decided in each case according to who wins the matter. The party who wins normally obtains an amount to compensate lawyers, experts and couriers fees. This is to protect the party who, after all, did not have the obligation to tolerate these fees since the law protected its position from the very beginning of the case.
This amounts widely vary according to the amount and type of procedure developed.
Ignacio López-Hermoso
Corporate M&A Lawyer
➡️For more info you can contact us on 0034 91 415 74 62 or send us an email to info@lopezhermoso-abogados.com