Spain
In your jurisdiction, are there any formal ADR procedures available for resolving commercial disputes other than litigating (or arbitrating) to a final hearing?
It is common for parties to bilaterally negotiate before resorting to arbitration or litigation and these negotiations usually continue during the court or arbitration procedure. More formal types of ADR do not have great popularity in Spain, where parties are more prone to litigation than any other dispute resolution method. There are a number of formal types of ADR for commercial disputes, some of which are regulated by the law.
Amongst these types of ADR specifically regulated by law are mediation, out of court settlement and conciliation. “Mediación” (mediation) is a voluntary, private process in which a trained independent person helps the parties to try to reach their own negotiated settlement. The final agreement reached by the parties is a binding contract that is usually executed in a public deed. “Mediación Judicial” (court mediation) is a regular mediation process suggested by a court once litigation has started, whenever the court appreciates there might be room for an agreement between the parties. If successful, the result of the mediation is incorporated into de court proceedings and approved by the court with the same effects of a court ruling. “Transacción” (out-of-court settlement) is a voluntary, private process that takes place once the litigation process has begun, in which the parties reach their own negotiated settlement without the intervention of a neutral third party. The private agreement that puts end to the dispute can be formally approved in court. “Conciliación” (public figure mediation) is a voluntary, private process in which a court clerk, a notary, or a registrar, each in their respective field of expertise, helps the parties to try to reach their own negotiated settlement. The final agreement reached by the parties is a binding contract that takes the form of a court ruling or a public deed.
Amongst the types of ADR not specifically regulated by the law, but generally accepted in Spain is “Informe Pericial Vinculante” (expert determination). This involves the appointment of an expert in the subject matter of the dispute to make a decision which the parties agree beforehand to accept as binding. The final agreement reached by the parties is a binding contract that can be executed in a public deed.
Does engaging in ADR have any effect on potential or existing litigation or arbitration?
The request for any of the ADR methods interrupts the statute of limitations on the actions, regarding the dispute that could otherwise be exercised in a litigation process. If there is already an ongoing litigation procedure, a court mediation would only halt the procedure if both parties requested it, otherwise, the litigation process continues normally until an agreement is reached.
Is ADR compulsory and if so are there any consequences if a party fails to engage in ADR? If it is not compulsory are there any plans for this to change?
ADR is not compulsory, but under the Spanish Civil Procedure Act, the court must always ask the parties at the beginning of the preliminary hearing, whether they have tried reaching an agreement prior to resorting to litigation and whether there is room for a settlement. The court must also suggest a mediation procedure in cases where it considers there are possibilities for this ADR method.
Can the parties agree, in advance of any potential dispute, to engage in ADR?
Yes. The parties can agree in advance that they will or may try one or more ADR methods to resolve any dispute that may arise, although not many commercial contracts include dispute resolution clauses.
When such clauses are included, they are binding for the parties and the courts. This means that if a party decides to resort to the judicial procedures, the other party may oppose by filing a declinatory injunction for submission to ADR, and the court will decide about its own jurisdiction. Courts may also review its own jurisdiction ex-officio.
When does ADR generally take place?
ADR can take place any time from pre-issue to appeal but the optimum timing in any dispute will depend on the particular circumstances. In the case of the court mediation, the suggestion to the parties is only made by the court in the first instance of the litigation procedure.
Is ADR subject to without prejudice privilege and/or confidential? If not, is there any other means to protect confidential information?
Mediation and court mediation mentioned above are legally protected by without prejudice privilege. All communications made and documents shared within the mediation process in writing or verbally are excluded as evidence against the interest of the party which made them, in the event they are presented before a court. Otherwise, non-disclosure obligations do not impede information being accepted as evidence before a court, although the party presenting the evidence can be sued for breach of contract.
Does the output from ADR create precedents?
No, Spanish law follows a Civil Law system in which Case Law is not a source of the law and does not create a precedent. ADR resolutions are no different. In addition to that, ADR resolutions lacks the publicity needed for creating precedent, as only the parties can decide to make them public, if they wish to do so.
Who bears the costs of ADR?
There are no rules in this respect, but this will normally be decided according to the will of the parties.
Is your jurisdiction subject to any specific rules for cross border ADR?
A dispute is considered to have a cross border element when at least one of the parties is domiciled or is a resident in a country other than that in which any of the other parties concerned are domiciled at the time of the mediation. A dispute is also considered to have a cross border element, irrespective of the place where the mediation took place, when one of the parties transfers their domicile and, as a consequence of this, the settlement or some of its consequences are intended to be enforced in the territory of a different country. In cross border disputes between parties residing in different Member States of the European Union, domicile shall be determined in accordance with Articles 59 and 60 of Regulation No 1215/2012 of December 12, 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. Spain is not a party to The United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention).
Are there any particularly unusual features of ADR in your jurisdiction that you are aware are different to other jurisdictions?
Mediators in Spain need to have obtained any degree of higher education and to have participated in at least one specific mediator education course. The mediator must take out insurance or an equivalent warranty covering civil liability that may arise from their intervention in the disputes.
Civil and commercial ADR methods can only be used with regards to matters that are freely disposable by the parties, not mandatory matters.
In addition, Public Figure Mediation cannot be used for disputes regarding minors and people with support measures for the exercise of their legal capacity, nor for civil liability claims against judges and magistrates.
Laws on civil and commercial mediation do not apply to criminal mediation, employment mediation nor to mediation with the public authorities. Each of these matters are regulated by their respective differentiated laws.
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