It was written on 1 June 2016. The law and practice in Spain change all the time. Our guides are updated as frequently as possible - typically every three years - but may be out of date.
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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 autónoma) to another.
This guide does not cover advice about the particular characteristics of each type of dispute.
See our other guides for this information.
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.
Despite this, 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 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.
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 alicense or regulation, make sure that they are duly licensed and regulated.
Very often, when you are discussing a project with the other person, you will 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. You will often be right.
Do not be afraid to ask for references. A few words with a previous customer who received good service is very reassuring. Giving references is common practice in Spain.
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 on the Costa del Sol 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.
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.
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.
It is much more difficult to get involved in a serious conflict with someone if you know them.
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 taking action 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.
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, at least the initial meeting might have to be by telephone.
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. Because of its historic connections with England, the phraseology "without prejudice" (meaning that what you say cannot restrict your later options in legal proceedings) and "subject to contract" (meaning that anything you propose is subject to final agreement) are recognised and widely used. However, these rather legalistic terms 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".
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.
Arbitration can be seen as a less formal, more flexible, cheaper and faster alternative to a court case. In Spain abitration is regulated under Act 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.
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.
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 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.
At the end of the case the arbitrator will decide how those costs 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.
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 "procesos verbales" - 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 about any orders made by the court and, in the other direction, communicates to the judge whatever written documents have been prepared by the lawyer.
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. The lawyer, after studying the demanda, 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 - 20 days - to prepare an answer to 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 must be filed 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.
After the preliminary hearing, the judge will appoint a day and time for the trial to be held.
During the trial, the parties will defence 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 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!
Any appeal (these are very common) goes to the Court of Appeal.
The time from starting a court case to the final hearing is, typically, eight to 12 months.
The overall cost clearly depends upon the complexity of the case.
If the decision is appealed, both the time and the costs double in most cases.
Have you had experience with court cases or disputes in Spain? Tell us about it and share your story by emailing firstname.lastname@example.org.
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.
|The Legal System on the Costa del Sol
This guide explains, briefly, the legal system in Spain and, by extension, in the Costa del Sol. It covers the criminal legal system, the civil legal system, the family law legal system, the administrative law system, the way laws are made and the legal services available in Spain.
|Contracts on the Costa del Sol
This guide is about the form and validity of contracts for use on the Costa del Sol.
We hope you have found this guide useful. If you need any further help, please contact us.Manzanares Abogados S.L. 1 June 2016