CHILE: An introduction to Dispute Resolution: Litigation

New Developments in Dispute Resolution

The unification of the Supreme Court

The unification of the jurisprudence of the Supreme Court has been under constant discussion. In Chile, the Supreme Court is divided into four chambers, each one specialised in a different matter (Civil, Criminal, Constitutional and Mixed). In recent years there have been contradictory rulings between the different chambers on very relevant issues.

This has caused significant concern among legal practitioners; due to the uncertainty these precedents have created. One of the most important functions of the Chilean Supreme Court is precisely to unify jurisprudence to provide legal certainty to citizens. A point has been reached where the outcome of the litigation could depend on which chamber of the Supreme Court the case will be heard. It is expected that the Supreme Court, over the course of this year, will review the performance of its different chambers and will begin to duly fulfil its role of unifying jurisprudence.

Remote proceedings

A second relevant development has been the option for some judicial proceedings in Chile to be carried out remotely, by videoconference. Since the COVID-19 pandemic, the possibility for lawyers to plead remotely before the Courts of Appeals and the Supreme Court, through the Zoom platform, has become established. This has been done by means of a legal reform of the rules regulating civil proceedings, which established the right of lawyers to request this form of appearance, complying with certain deadlines and requirements.

However, some Courts of Appeals in the country, such as the Court of Appeals of Valparaíso, have tried to discontinue this practice, issuing orders limiting or even prohibiting this option. The Supreme Court found it necessary to give express instructions, ordering the Courts of Appeals to respect the legislation that contemplates the right to appear by videoconference, noting that it is mandatory for the courts.

The general opinion has been that appearing by videoconference (hearings, witness depositions and arguing cases before higher courts) has strengthened the right of access to justice. Before this legislation, when in trials tried in distant territories, people had to bear higher costs of their defence, forcing parties to hire lawyers from the localities in question to attend the hearings, or having to pay for the travel expenses of their trusted lawyers. However, it is also important that lawyers appearing remotely respect the formalities of any court appearance. Appearing by videoconference in no case implies a relaxation of formalities, including dress code, form of address to the court and the counterpart, among others.

Scandals

In the last year one of the most serious scandals involved two Supreme Court justices who had to be removed from office for acts that could be linked to irregularities in the exercise of jurisdiction, conflicts of interest and corruption.

Such events have generated a real earthquake in the Chilean Judiciary, and in the world of trial attorneys, as it revealed the existence of networks of influence and conflicts of interest within the highest court of the country, giving rise to questions about the impartiality of the Supreme Court justices.

It will be a challenge for the legal and political world to determine the right way to address these issues. This has led to some debate about the process for appointing judges.

An increase in arbitration

The last few years have seen a great increase in the volume of arbitration, which is now at a rate never seen before in Chile.

Notwithstanding the obvious benefits of arbitration, including the confidentiality of procedures, speed and flexibility within the proceedings, there are issues of concern. One of these concerns is related to the inexperience of the arbitrators who have dramatically increased in number in recent years. The question of whether they really have the necessary skills to correctly handle and resolve a dispute remains to be seen.

It is important to consider that it is quite common for parties to waive appeals against arbitral rulings. Thus, in many cases, the arbitrator's decision becomes the only instance of review in the case, and his or her word will be the final decision, without the possibility of a review before a Court of Appeals or before the Supreme Court.

Consequently, it is essential that the increase in the number of arbitrators and arbitration trials goes hand in hand with the expertise of the arbitrators and maintains the same level of formality and compliance applicable to any trial.

Antitrust law

Finally, in Antitrust Law, a recent ruling of the “Tribunal de Defensa de la Libre Competencia” has focused on “interlocking”. The novelty of this ruling is that for the TDLC the simultaneous participation of a person as director or relevant executive in competing companies is sanctioned without the need to prove effects on competition. In other words, the wrongful act is configured, without the need to prove a negative effect on the market in question.

It is certain that this ruling will generate important consequences in the administration of Chilean companies and will imply a great challenge in the area of compliance.