Disputes & Court Cases in Spain

Disputes occur in any country.

Often they are the result of genuine misunderstandings. Even more often they are the result of badly prepared contracts. Occasionally they are the result of bad faith. Very infrequently they are the result of fraud or other criminal activity.

The good news is that Spain has a good legal system that can help you resolve disputes reasonably quickly and at a price that is not too exorbitant.

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This guide covers…

This guide is only about all aspects of dealing with a legal dispute in Spain. It covers preliminary stages, mediation, arbitration and going to court.

It describes, in particular, how to deal with a legal dispute in the area of Andalusia/Andalucía – which contains the Costa del Sol. See a map here. Please note that certain aspects of the law in Spain vary from one “autonomous community” (comunidad autónomalightbulb image - click here for more information on this subject to another.

This guide does not cover advice about the particular characteristics of each type of dispute.

See our other guides for this information.

Introduction

Despite the good points of the Spanish legal system, it is worth bearing in mind that it is so much better to avoid disputes arising in the first place than it is to solve them once a problem presents itself. Any good lawyer will tell you that avoiding disputes is better than dealing with disputes – and that a bad settlement is usually better than a good court case.

Dealing with disputes is always time consuming and expensive. The expense is not just monetary. It includes the distraction and effort required to deal with the dispute – effort that could be much better employed getting on with your life or your business.

Video guide to disputes & court cases in Spain

You can learn about the court process in Spain by watching this full-length interview (below) with Spanish lawyer Antonio Manzanares, or by scrolling down and reading the detailed guide that he has written with us.

The video guide below is a playlist – split into several parts. One part will play right after the other.

Preventing a dispute in Spain

There are four golden rules when it comes to avoiding dispute.

Deal with trustworthy people  

Disputes tend to fall into three categories. Disputes in relation to business – for example, when you buy a car; disputes between neighbours; and disputes with your family.

You can’t often choose your neighbours or your family, but you can definitely choose the people with whom you do business.

Before you enter into any business relationship it’s worth finding out a little bit about the person or company you are going to be dealing with. The internet can help greatly. It’s surprising how often a Google search for the name of the person or company and “problems” will produce some very interesting information.

If the other person or company is engaged in an activity that requires a license or regulation, make sure that they are duly licensed and regulated.

Very often, when you are discussing a project with the other person, you may feel uneasy. There may be something about either the project or the person that you do not like or which just doesn’t seem right. Trust your instincts. Walk away. You will often be right.

Do not be afraid to ask for references. A few words with a previous customer who received good (or bad) service is very reassuring. Giving references is common practice in Spain.

Clear contracts

When you are entering into any business relationship it is worth having a clear contract – almost always in writing – and then making sure that you understand and follow the contract.

The main purpose of the contract is to allow both parties to understand what they have agreed and to remember it many months or years later.

When you read the contract make sure that it covers all aspects of your relationship and the situations which are likely to arise during the contract.

See our Guide to Contracts in Spain for more information.

If your agreement relates to something particularly valuable or important it is worth taking legal advice. It will cost you a great deal less than sorting out any dispute that might arise. The same applies if you are dealing with something – such as the letting (renting out) of your house or apartment – that might occur frequently.

Keep in contact

During the period you are dealing with the other person make sure that you stay in contact. A few telephone calls to check that everything is still in order, that a delivery date is still going to be met, etc, gives the opportunity to deal with any lurking problems quickly and easily before people’s positions have become entrenched. If you don’t speak Spanish – and/or they don’t speak your language, confirm the conversation (briefly) in writing.

It is much more difficult to get involved in a serious conflict with someone if you know them.

During these phone calls (or, better still, face-to-face visits), be friendly, be inquisitive and be prepared to reach common-sense solutions to any problems that emerge. That will, almost always, mean giving something away, but it is better than a protracted dispute.

Nip disputes in the bud

If a dispute arises take immediate action to solve it.

Usually, disputes arise because of the unexpected. Perhaps a cost has arisen in a project that had not been anticipated or the person supplying a service being let down by somebody supplying him. Sometimes there’s a genuine disagreement as to the meaning of the words in your contract.

In any case, you will do yourself a favour by acting as soon as a disagreement appears and before it turns into a full-blown dispute.

Once again, the secret is to discuss the problem with the other party and then to try to find a practical, cheap and common-sense solution to it. This will require flexibility and compromise from both parties, but any cost is likely to be way less than the cost of dealing with a fully-fledged dispute.

Whatever you do, if you reach an agreement, document it thoroughly. Otherwise you’ll find yourself in the same position in six months’ time.

Initial stages of a dispute in Spain

If it seems likely that a dispute is going to arise, the first thing to do is to discuss the problem with the other party to see whether you can find a solution acceptable to both of you. If possible, this meeting should be face-to-face. Failing that, a Skype video call works well. If that isn’t possible, the initial meeting might have to be by telephone. This is a very poor alternative and is likely to be much less productive.

If you really are unable to reach a compromise at that meeting you should write to the other party setting out the problem and asking how they think it should be dealt with. You could also make your own suggestions as to how you think the dispute can be solved.

If you’re writing such a letter you need to think carefully about the balance between protecting your legal position and being open in order to reach an agreement. Lawyers will tell you that you should make it clear that your discussions are non-binding and not to be used in court. There are a number of ways of doing this.  However, this rather legalistic approach can get in the way of doing a deal. You may find that being more open and running the risk that later, in court, the other person says “but he agreed that…” is a better way forward.

You should allow the other person between seven and 14 days to respond to your letter, the length of time depending on the complexity of the problem.

If you do not make any progress as a result of this exchange of letters then you really have little option but to “go legal”.

Ways of solving a dispute in Spain

Mediation in Spain

Mediation was developed as a much cheaper and faster alternative to going to court.

In mediation, the parties agree to an independent person or institution being appointed to help them find a solution to their problem. The objective is the same as when you and the person had your face-to-face meeting but you’re helped by someone who has a lot of experience in bringing people together, bridging gaps and finding workable solutions. They can also help by explaining the legal background to the parties so that they can understand the likely consequences of not reaching a settlement.

The mediator has no legal powers and cannot force either party to accept any solution. The effort will either work or it will not work! Whichever is the outcome, it will have been fast and (relatively) inexpensive. The cost and timescale involved will depend upon the seriousness of the dispute and the value involved.

The mediator will, typically, be a lawyer who has received special training in these skills. Expect to way about €1,500 for a half-day mediation meeting plus the preparatory work that the mediator has to do in order to understand your dispute. This will often involve separate meetings with the two parties before bringing them together for the mediation meeting itself.

You cannot force the other party to agree to mediation – unless this is stated in your contract – and, if they really don’t want to take part – any attempt at mediation is likely to prove unsuccessful.

Arbitration in Spain

Arbitration can be seen as a less formal, more flexible, cheaper and faster alternative to a court case. In Spain arbitration is regulated under Law 60/2003, which you can read about in detail here.

You might have agreed to any dispute being dealt with by way of arbitration when you signed your contract. This is common in Spain. If you have, the contract will probably also say who is to undertake the arbitration and under what rules.

If you have not agreed to arbitration in the contract there is nothing to stop you and the other party agreeing now to the dispute being resolved in this way.

That will involve agreeing which organisation should take responsibility for the arbitration. There are lots of choices. Ideally, you want to choose an organisation with a good reputation and who is familiar with your type of business.

Once that has been agreed, that organisation will appoint an arbitrator.

In Spain, the way of conducting arbitration is a little different from in many countries.

Most arbitration systems in Spain start off with each party supplying a brief statement as to the nature of the dispute, who they think is responsible for the problem and how they think the problem should be solved.

The arbitrator may then interview the two parties separately to learn more about the dispute and/or he may ask the parties to produce certain documents and information for his consideration.

There will then be a hearing during which each party puts forward their side of the case, the arbitrator asks questions to clarify any outstanding issues and any witnesses can be heard. To that extent it is very similar to an ordinary court case but the surroundings and atmosphere are rather less formal.

At the end of the arbitration or, if it’s a difficult case, a week or two later, the arbitrator will make his decision as to what should be done. That resolution is called laudo. This might mean supporting one party’s argument and saying that the other is entirely wrong – or it could involve finding a position part way between the positions of the two parties.

The arbitrator will incorporate his decision in an order which must then be followed.

Those decisions must be made in conformity with the principles of the law in Spain.

Under the law of Spain, arbitration decisions are final. They are not subject to appeal unless you can show that the arbitrator has got the law wrong, in which case the appeal is to the Court in Spain.

The arbitrator will require the parties to pay an amount equal to his expected costs. The costs of arbitration will depend on the organisation that handles it. The minimum fee is usually €500, which will increase depending on the scale and complexity of the matter. In some cases, it can be many thousands of Euro.

At the end of the case the arbitrator will decide how those costs of the arbitration are to be paid. Normally, the person who loses the case will be ordered to pay them. Any sum paid by the other party will then be returned to them. However, sometimes the arbitrator may decide that the just solution is to have each party pay a part of the costs: for example, one party 25% and the other 75%.

The process of a court case on the Costa del Sol

Different courts are used depending on the nature of the dispute. There is:

  • The Labour Court (Juzgado de lo Social) for labour issues
  • The Commercial Court (Juzgado de lo Mercantil) for commercial or business affairs
  • Civil Court (Juzgados de lo Civil) for civil matters
  • Administrative Courts (Juzgados Contenciosos Administrativos) if one or both of the parties is a government – whether local, regional or state
  • Criminal Court (Juzgados de lo Penal) for issues relating to criminal offences

Depending on the type of dispute, and the court that will be involved, the process will differ quite a lot. For this reason it is important to obtain the services of a lawyer who has experience with your kind of case.

The most common type of dispute case is a civil one. This covers issues such as boundary disputes and breach of contract. Even within the umbrella of civil cases there are several types of process (for example, a quick case for a claim of a small amount is called a “proceso verbal” – this often covers things like unpaid invoices).

In this guide we’ll look at how an ordinary civil court case unfolds, which will give us a general idea of the process that applies in any of the tribunals.

To start this process you have to appoint a lawyer and a procurador. In general terms, the procurador is the person who communicates between the lawyer and the court. He informs the lawyer (or, if you don’t have a lawyer, you) about any orders made by the court and, in the other direction, communicates to the judge whatever written documents have been prepared by the you or your lawyer. Incidentally, not having a lawyer is usually a major mistake!

The process starts with the presentation of the demanda – the document making the claim – which sets out the reason for the claim, its basis in law, the proof which will be produced etc. This ‘document of claim’ has to be presented to the court which has legal competence to deal with the matter. That is, usually, the relevant court in the area where the dispute arose or, in some cases, where the defendant lives. Your lawyer, after studying the facts of the case, will prepare a report stating which is the appropriate court for this particular case.

Once the demanda has been presented, the court will confirm that it complies with the formal requirements needed for it to be accepted by the court and, if this is the case, it will communicate all of this to the person against whom the claim is made.

The person against whom the claim is made then has a limited time – usually 20 days – to prepare an answer to the claim. If you are the person who has received the claim, you have to take into account the fact that any delay in the choice of your lawyer can leave him with very little time to prepare the response to the claim, and for the selection of the possible evidence and documents etc to prepare a good defence. For this reason, make contact with a lawyer as soon as you receive a claim.

In both the claim and in the answer, the parties will produce the evidence available to them and set out the extra evidence that they intend to produce at the time of the trial of the case. This could be witnesses, experts and so on.

Note that the language of the court is Spanish and that all documentation that is filed must be in Spanish. If any witness does not speak Spanish to a satisfactory standard the court must be notified and an official interpreter will be appointed. This will be at the expense of the party calling that witness. The same applies if either the claimant or the defendant does not speak adequate Spanish.

In the defence, the defendant must state which parts of the allegations made by the claimant he accepts and which he denies.

He must state his version of events and why he thinks that he is legally justified in taking that position.

He must also notify the court of the identity of any witnesses he would want to call to support his position.

Once a defence has been filed, a judge will be appointed to hear the case.

The first hearing, known as the “preliminary hearing”, allows the judges to ask questions to clarify the issues involved in the case and to hear the opinions of the parties as to which witnesses should be called to give evidence. For this purpose, written statements from the witnesses should be produced.

These witnesses could, for example, be expert witnesses who give evidence as to whether a product was not or was not defective; people who heard being said or saw things being done; or people who can give evidence as to the extent of any damage suffered.

At the preliminary hearing the judge will decide which witnesses should be called, any additional evidence that he requires the parties to produce and the likely length of the hearing. Where possible, a date for the final hearing will be fixed at the preliminary hearing, but this is very often delayed until the availability of witnesses is known.

Most foreigners find the preliminary hearing and the formalities associated with it confusing. Make sure your lawyer explains, in advance, what is likely to happen and,afterwards, what has actually happened!

After the preliminary hearing, the judge will appoint a day and time for the trial to be held.

“The trial”, in Spain may take a form very different from that to which you are accustomed. This dose not mean that it is worse: just different. It may take place in several parts on different days; interviewing witnesses, legal argument etc.

During the trial, the parties will defend their positions and present the evidence that was previously admitted (witnesses, expert testimony etc). Both parties – and the judge – may ask questions and seek clarification from all witnesses produced, even if that witness was produced by the other party.

The trial will end with each party’s lawyer presenting a written summary of the case and their proposal as to the conclusions the judge should reach.

After the trial, the parties wait for the judge’s decision. This usually takes several weeks but this depends on the complexity of the matter. The judge will then serve the sentence and decide who must pay the costs of the proceedings. This is not always the losing party!

Appeals in Spain

Any appeal (these are very common: up to 90% of people losing a court case choose to appeal against the decision) goes to the Court of Appeal. This is, probably, a far higher percentage than you will find in your country. During the appeal it is unlikely that any order made by the court will be enforced but you will probably be able to register the fact that you have a judgement in your favour with (for example) the Land Registry making it difficult or impossible for the other party to sell his assets. Ask your lawyer to explain the likely outcome in your case.

The time from starting a court case to the final hearing is, typically, eight to 12-18 months. The overall time (and cost) clearly depends upon the complexity of the case. Ask your lawyer for an estimate.

If the decision is appealed, both the time and the costs almost double in most cases.

Conclusion

No-one ever wants to get involved in a dispute, but if you have to have one there are worse places than Spain.

Despite that, you should do everything you can to avoid things getting that far. It will be a lot cheaper and easier.

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