ORGANIC LAW 1/2025 ON MEASURES FOR THE EFFICIENCY OF THE PUBLIC SERVICE OF JUSTICE - Bufet Casanovas
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ORGANIC LAW 1/2025 ON MEASURES FOR THE EFFICIENCY OF THE PUBLIC SERVICE OF JUSTICE

16 Jan ORGANIC LAW 1/2025 ON MEASURES FOR THE EFFICIENCY OF THE PUBLIC SERVICE OF JUSTICE

Posted at 12:03h in Bufet Casanovas by

The Spanish legal landscape has taken an important step forward with the recent publication of the new Law 1/2025 on measures for the efficiency of the public justice service, which introduces significant changes in the field of justice. Among the most important new features are the promotion of Appropriate Means of Dispute Resolution (ADR), to favour the resolution of disputes and as a prerequisite for access to the Courts in all civil and commercial matters, as well as a series of organisational changes that seek to improve the efficiency and accessibility of justice. This set of reforms aims to streamline procedures and improve the experience of citizens, as well as to optimise the functioning of the courts as a whole. Below, we will analyse the main changes and their impact on the judicial system.

CHANGES IN THE ORGANISATION OF THE ADMINISTRATION OF JUSTICE

The term “Juzgados” and “Juzgados de paz” are eliminated and renamed as “Tribunales de Instancia” and “Oficina Judicial” respectively.

Each Court will cease to be a single-person body and will be composed of judges and/or magistrates in a collegiate manner. The objective is to guarantee legal certainty by avoiding different pronouncements and/or criteria in the same judicial districts and to homogenise their functioning.

Each Court shall be composed of Sections: COURT OF FIRST INSTANCE:

  1. Civil Section
  2. Commercial Section
  3. Administrative Section
  4. Labour section
  5. Family section
  6. Instruction section
  7. Violence against women section
  8. Minor Section

(…)

According to the first transitional provision of the law, after the transformation of the courts into the section in question: “(…) the judges will take up a post in that section with the same cardinal numbering as the court of origin and will continue to hear all the matters assigned to them” (…). According to the wording, everything indicates that for practical purposes it will not affect the daily management of the proceedings already underway in terms of the presentation of pleadings and the issuing of decisions, as the numbering and courts of origin will be maintained.

APPROPRIATE MEANS OF DISPUTE SETTLEMENT (MASC)

What are appropriate means of dispute resolution (ADR)?

This is any negotiation activity that the parties engage in to try to reach an out-of-court settlement of a dispute, either on their own or with a neutral third party. The parties are free to choose which ADR they will engage in and the terms of the out-of-court settlements they reach as long as they are not contrary to the law, good faith and public policy.

The Law contemplates as ADR:

  • Mediation – Neutral third party intervenes
  • Conciliation – Neutral third party intervenes
  • Confidential Binding Offer – NO neutral third party involved
  • Negotiation directly between the parties or between lawyers under guidelines set by the parties – NO neutral third party involved
  • Collaborative Law Process – NO neutral third party involved
  • Call in an independent expert – Neutral third party intervenes

However, although not expressly provided for in the Law, there are also other suitable means of dispute resolution, such as arbitration, which will be governed by the provisions of Law 60/2003. Likewise, from the wording of the Law on the concept of ADR itself, any other form of negotiation between the parties will be valid

Whose initiative is it to go to ADR?

The initiative to go to ADR can be:

  • Decision of one of the parties
  • Decision of both parties by mutual agreement: If there is no agreement on which ADR to go to, it will go to the one that was proposed in the first place.
  • Judicial decision of magistrates in charge of the administration of justice by derivation

Is it compulsory to go to ADR before going to the Tribunal? And, if so, to what type of disputes does it apply?

Yes, it is compulsory to attend an ADR in all civil and commercial disputes, applying to all ordinary and verbal proceedings as well as to the special proceedings contemplated in Book IV of the Civil Procedure Act, among which we should highlight the order for payment and inheritance division proceedings.

Exceptions

Objective exclusion:

  • Labour
  • Bankruptcy
  • Penal
  • Filiation, maternity and paternity
  • Civil guardianship Fundamental rights
  • Judicial measures to support people with disabilities
  • Summary guardianship of rights of possession
  • Demolition/demolition of dilapidated buildings
  • Admission of minors to protection centres, forced protection measures for minors ….
  • Foreign Exchange Judgment
  • European Payment Order
  • Voluntary jurisdiction
  • Executive action
  • Interim measures
  • Preliminary proceedings

Subjective exclusion:

  • Any matter where one of the parties is in the Public Sector

Is it necessary to attend ADR with a lawyer?

The Law establishes that the intervention of a lawyer is NOT PRECEPTIVE except in cases of confidential binding offers, except in processes of less than 2,000 euros or when a sectorial Law indicates that it is not necessary.

However, whenever possible, the assistance of a lawyer is recommended, in particular in ADR where a neutral third party is not involved.

How is the procedural requirement for admission of the application fulfilled?

In order for the claim to be admissible, the prior recourse to an appropriate means of dispute settlement shall be considered a prerequisite for admissibility. The subject matter of the negotiation and the subject matter of the dispute must be identical.

Must be documented. Difference between whether a neutral third party is involved or not.

Without the intervention of a neutral third party: Any document signed by both parties stating the parties involved (including experts participating and advising them), the subject matter of the dispute, meetings held and a responsible statement that both parties are acting in good faith. By means of a document certifying that the other party has received the request to negotiate or, where appropriate, the proposal and that it has had access to its full content.

With the intervention of a neutral third party: Document issued by the third party at the request of either party containing the parties involved, the subject matter of the dispute, the meetings held, a statement that both parties have acted in good faith.

In the event that one of the parties has not appeared or has refused the invitation to participate in the negotiating activity, this circumstance shall be recorded and, where appropriate, the manner in which the actual summons has been issued, the justification for having been issued, and the date of receipt of the summons.

What are the effects of attending an ADR?

Attendance at an ADR interrupts the limitation period and suspends the limitation period of the action to be brought from the time of the attempt to communicate the request for ADR to the other party at the address given to the applicant or by electronic means used by the parties in their previous relations. The resumption or resumption of the limitation and lapse periods will depend on the rules applicable specifically to that ADR.

Another effect is that if an action is brought on the same subject matter where no prior agreement has been reached through negotiation, the courts will take into account the cooperation of the parties in reaching an agreement and the possible abuse of the public service of justice in the imposition of costs.

How is the agreement formalised through an ADR?

It can affect part or all of the dispute and is binding on the parties (the same subject matter of the dispute cannot be reproduced in court).

It can only be annulled by means of a nullity action on the grounds that invalidate contracts (violence/intimidation – consent defect – falsity of the cause or of the capacity to act – being contrary to public order and the law).

Need to be notarised or to be judicially approved in appropriate cases (judicial referral to ADR or other cases) in order for the agreement to be enforceable or to be recorded in a certificate issued by the conciliator as specified in the Mortgage Act (notaries and registrars).

What if ADR assistance ends without agreement?

It is understood that the process is terminated without agreement:

  • After 30 calendar days from the date of receipt of the negotiation request without a first meeting to reach an agreement.
  • After 30 calendar days from the date of transmission of the settlement proposal and no reply from the date of receipt.
  • If 3 months have elapsed since the first meeting without agreement. Unless otherwise agreed.
  • If either party writes to the other party terminating the negotiations, the attempted communication shall be recorded if that is the will of the other party.

In such a case, the law provides for a time limit for filing a lawsuit:

  • 1 year from termination without agreement or receipt of communication of the negotiation request.
  • 20 days in case interim measures have been requested in the middle of the negotiation process and before the same court, if earlier, this period will be resumed once the negotiation process has been completed.

Confidentiality of the negotiation process and documentation

With the exception of information relating to whether or not the parties attended the pre- negotiation attempt and the subject matter of the dispute, the entire negotiation process and accompanying documentation is confidential. Exceptions:

  • If all parties have expressly waived the duty of confidentiality to each other or to the lawyer or the neutral third party in writing.
  • When a challenge to the assessment of costs and a request for exoneration or moderation of costs is being processed.
  • When required by a criminal court in a reasoned manner.
  • Where necessary for reasons of public order, in particular where the protection of the best interests of the child or the prevention of harm to the physical or psychological integrity of a person so requires.

In the event that confidential information from the prior negotiation process is sought to be provided as evidence in legal proceedings, the Law empowers the judicial authority to reject it and order that it not be included in the file, without prejudice, furthermore, to the liability that such an infringement generates under the terms provided for in the legal system. This is in line with the provisions of the recent Defence Law 5/2024.

What are the costs of going to ADR?

The Law only provides that if a lawyer is present, each party pays his or her own costs, except for those who are entitled to legal aid. For this purpose, the existence of public ADRs with free access for the parties will be ensured, although the Law does not provide any further details about this.

If a neutral third party is called in, his fees shall be the subject of an agreement between the parties. If the invited party does not accept the intervention of the unilaterally chosen third party, the requesting party shall pay in full the fees accrued up to that time.

In conclusion, the cost of attending an ADR will be higher or lower depending on whether a neutral third party is involved or not, and will therefore depend on the fees established by them or their sectoral law, as well as whether or not legal assistance is provided.

And when will it be compulsory to go to an ADR?

It will be mandatory from the entry into force of the law on 3 April 2025.

According to the ninth transitional provision, it will apply to all proceedings initiated after the entry into force of the law. However, as occurred with RDL 6/2023, it will cause practical doubts as to the meaning of the term “initiation”, which gave rise to various agreements of unification of criteria by Provincial Courts resolving to apply the reform to those claims filed after the entry into force of the Law.

What legislation is applicable to ADR?

  • Mediation: governed by Law 5/2012 and applicable regional legislation.
  • Conciliation before a notary: governed by notarial law (Chapter VII, Title VII).
  • Conciliation before the Land Registrar: governed by the Mortgage Act (Title IV bis).
  • Conciliation before the LAJ is governed by the Law on Voluntary Jurisdiction (Title IX).
  • Conciliation before the Justice of the Peace is governed by the Voluntary Jurisdiction Act (Title IX) and LEC article 47.

Special cases related to ADR

Personal Income Tax Exemption: The Personal Income Tax Law is amended with regard to the exemption from taxation of compensation paid by insurers for civil liability for mental or physical damage when it derives from an agreement reached in an ADR in which a neutral third party has intervened and which has been notarised.

Consumers and users: When the businessman does not cooperate in a consensual solution in cases of abusive clauses of identical significance, it is foreseen that the body that condemns the businessman will fix a compensation to consumers consisting of the payment of an annual interest equal to the legal interest of the money in force at the time it is accrued increased by 50%. Moreover, if more than two years have elapsed since the restitution was ordered, the interest cannot be less than 20%. The application of article 1.108 of the civil code and 576 LEC is excluded.

OTHER PROCEDURAL AMENDMENTS INCLUDED IN THE LEC

Reform of the Verbal Judgment procedure

Possibility of oral judgments: Except in cases where no lawyer is involved.

  • The judgment is delivered orally at the end of the hearing and is subsequently drafted by the judge or magistrate.
  • If the parties express their intention not to appeal against the judgment, the judgment shall be declared final at the same time.
  • Otherwise, a written statement must be submitted within 5 days, stating the grounds of appeal and the judgments that are the subject of the appeal.
  • The time limit for appeal starts from the moment of notification of the judgement.

The ninth transitional provision establishes that the reform can be applied to oral trials where the hearing has not yet been held when the law enters into force,

Prior written processing is envisaged for:

  • The resolution of procedural defences
  • Proposition, admission and challenge of evidence

Holding of a hearing: When the judges and magistrates consider that it is not necessary to hold a hearing, they will declare this by means of an order, which can be appealed against, leaving the case ready for judgement.

Reform of procedural costs

Indeterminate amount: The amount of the valuation of the inestimable claims is between EUR 18,000 and EUR 24,000 for the purposes of an order for costs.

Conviction in Costs:

  • The procedure for exemption from costs or reduction of costs even in the case of acquiescence arises if prior to the claim there is an unjustified refusal to attempt to negotiate or settle through ADR where this is mandatory. Motion without costs.
  • The imposition of costs is regulated in the event of non-attendance at an ADR when it was mandatory and then the claim is accepted or the agreement offered and participation in an ADR is rejected.
  • It regulates the imposition of costs in the incident of challenging the excessive/undue costs due to abuse of the public service of justice.

Concept of abuse of the public service of justice

This new concept provides for the possibility of imposing fines for breach of good faith or abuse of the public service of justice. These penalties may be imposed on the parties or even on the professionals representing them if they do not act in good faith or abuse the public service of justice.

This concept is also used to assess the appropriateness of the imposition of legal costs as an exception to the general principle of objective maturity.

Enforcement reform

The possibility is added for the Procuradores (with the prior acceptance of the parties) to carry out acts of communication by delegation of the Courts. This is expressly indicated for the communication of certain types of seizure such as securities listed on the stock exchange, company shares, rights susceptible of being registered in the registry (diligent service of writs).

Amendments are also made to the auctioning of movable and immovable property.

Reform of the domiciliary summons system

For cases in which the electronic summons has been unsuccessful, an attempt at domiciliary notification is required before resorting to edictal notification (TEJU), unlike what has been happening since the entry into force of RDL 6/2023. Article 155 and 399 LEC are thus reformed.

LEGISLATIVE AMENDMENTS:

  • LEC
  • LECrim
  • Law 5/2012 Mediation
  • LOPJ
  • Law on the Demarcation and Judicial Plant
  • Mortgage Law
  • Law on legal aid
  • Notary Law
  • Voluntary Jurisdiction Act
  • Law 35/2006 on Personal Income Tax
  • TRLGDCU