Back to Latin-America Rankings

CHILE: An Introduction to Dispute Resolution: Litigation

Reymond & Cía Logo
View firm profile

The Current State of Civil Justice in Chile

We must begin our discussion of this subject by noting that there has been very little progress with regards to reforming Chile's civil proceedings. The gap between the good and expedient justice offered by arbitration procedures and the State's own cumbersome civil justice system has continued to widen in recent years. On the other hand, the Constitutional Tribunal has recently become a relevant factor in the legal strategy for civil cases.

On these subjects, we offer the following comments:

The Supreme Court's presiding judge has recently stated that Chile's Civil Procedure Code – which has ruled the country's civil and commercial litigation since 1903 – is in dire need of a major update.

Discussion of a bill that sought to accomplish this was halted by the government during the previous administration. The only progress made on the subject has been the enacting of Law N° 20.886, which allows for some litigation processes to be conducted through an online platform. This continues the trend of moving trials towards being mostly oral procedures that still retain some written aspects, which brings them in line with the general European model.

Faced with this outlook, President Sebastián Piñera's newly formed government has renewed the effort to push Civil Procedure reform through Congress, after discussions were suspended in July of 2014. At the time, the Senate demanded that additional administrative and financial proposals were attached to the bill, which caused it to stall.

To that end, a reform advisory committee was formed last March, which includes three Supreme Court magistrates.

These reforms include the introduction of alternative procedures to standard adversarial litigation, a mediation recourse for conflict resolution and a new model of Civil Court with greater attributions than the current District Courts.

However, timing remains a key factor in ensuring that these reforms achieve the desired effect. Delays in the discussions, while diminished, continue to be significant.

Offering a stark contrast, we have the case of the Santiago Chamber of Commerce Centre for Arbitration and Mediation (CAM Santiago). This highly reputable institution and its members effectively fill a void in our legal framework, and they possess the expertise required in the resolution of important disputes.

Another emerging factor with far-reaching effects across all legal procedures is the use of Constitutional Law as it applies to civil matters.

Since 2005, Chile's Constitutional Tribunal (TC) has had the ability to reverse the rulings of any ordinary or special court if they are found to be derived from legal principles that, in any way, run contrary to the constitution. This is the TC's so-called "strict scrutiny": a faculty meant to help the tribunal in deciding if the circumstances surrounding a particular case or ruling that has been deemed unconstitutional are aggravating or extenuating. It essentially grounds constitutional oversight in the basis of real-world legal disputes.

For example, when a party undergoing trial believes that the laws that pertain to their case are in some way infringing on their constitutional rights, they may petition the TC to declare those laws inapplicable on a case-by-case basis.

As a result, 87% of the TC's rulings involve petitions of inapplicability due to unconstitutionality. As coined by the Americans, the term "strict scrutiny test" relates to the exhaustive review of the concrete facts that lead to the application of a norm in a specific case.

An increasing number of parties are resorting to the TC as a component of their legal strategy, looking to dismantle their opposition's game plan by raising the question of inapplicability of the norms pertinent to their case. This new scenario has increased the TC's workload to an unprecedented degree.

Although one of the main reasons for leaving these decisions up to the TC in the first place was the desire for greater legal certainty and a more cohesive jurisprudence, there have been instances in which the tribunal has failed to rule consistently one way or the other in similar cases, making their reasoning for granting or dismissing certain motions hard to understand.

So, how are the TC's decisions incorporated into the original judge's ruling in each case? Usually, the initial judge will make a note of it in the main body of their own final ruling, even if the petition ends up being rejected. That way, even if there's no procedure in place that indicates how to enact it, the TC's decision and the arguments that support it are noted as precedent.

This area of the law has experienced considerable progress in the past few years, and things seem to be moving in the right direction. However, there remains a lot of work to be done. The TC and the ordinary courts must continue to work together to create the legal tools that will ensure a strong judicial certainty in these matters, especially where the principles of Constitutional Supremacy are involved.

In conclusion, the process to reform our Civil Legal system is back on track, after a significant delay. Arbitration continues to provide an excellent alternative method for conflict resolution. CAM Santiago's compromise clauses, for instance, have been widely adopted in general commercial practice at a national level, and are a standard part of major business contracts. And finally, the TC has taken on an increasingly significant role in several of Chile's legal proceedings.

Alfonso Reymond Larraín – Rodrigo Riquelme Yáñez Reymond & Cía.