Spain: A Litigation: Highly Regarded Overview

From Voluntary ADR to Mandatory Pre-Litigation Mechanisms: A New Model Of Civil Justice In Spain

Introduction

On 1 April, exactly one year had elapsed since the entry into force of Organic Law 1/2025 of 2 January on measures to enhance the efficiency of the Public Justice Service (Ley Orgánica del Poder Judicial – LOESPJ). Among other measures beyond the scope of this article, the statute promotes negotiation between parties as a means of resolving civil and commercial disputes.

This new framework, inspired by Anglo-Saxon legal traditions, aligns with one of the fundamental maxims of the Enlightenment and codification movements, namely that “before entering the temple of justice, one must pass through the temple of concord”. Nevertheless, only the passage of time will demonstrate the effectiveness of this new model within a legal culture such as Spain’s, which may be characterised as litigation-oriented, bearing in mind that approximately 3 million civil cases are filed annually in Spain.

Conceptual approach and main features

Concept

Pursuant to Article 2 LOESPJ, an alternative dispute resolution (ADR) mechanism shall be understood as any negotiation-based activity recognised by law, to which parties to a dispute resort in good faith with the aim of achieving an out-of-court settlement – either directly or with the involvement of a neutral third party.

This regulation entails a paradigm shift in pre-litigation negotiations, as parties are now required, prior to commencing judicial proceedings, to demonstrate to the court that an ADR attempt has been made unsuccessfully. In other words, this constitutes a procedural admissibility requirement, without which the court must declare the claim inadmissible.

Scope of application

Article 3 LOESPJ determines the matters and proceedings in which recourse to an ADR mechanism is mandatory prior to the filing of a claim. Specifically, it applies to civil and commercial matters, including cross-border disputes. In the latter case, however, where there is no express or tacit submission to LOESPJ, it shall only apply if one of the parties is domiciled in Spain, and the negotiation activity takes place within Spanish territory.

Conversely, recourse to ADR under LOESPJ is not mandatory in labour, criminal or insolvency matters, nor in proceedings of any nature – regardless of jurisdiction – where one of the parties is a public sector entity.

Likewise, prior negotiation is not required as a procedural condition in certain proceedings, such as those concerning the civil judicial protection of fundamental rights or summary possession claims, among others. Nor is it required in certain procedural applications, including enforcement actions, applications for interim measures prior to filing a claim or applications for preliminary proceedings.

Common features of ADR mechanisms

These include the following:

• confidentiality – the negotiation process and all related documentation are confidential, except for information concerning whether the parties attempted prior negotiation and the subject matter of the dispute;
• good faith – parties are required to demonstrate a genuine intention to resolve the dispute and must act honestly and fairly;
• identity between negotiation and claim – the ADR must concern the same subject matter as the subsequent litigation, although the legal claims pursued in court may differ;
• legal representation – parties may be assisted by legal counsel in any ADR mechanism, but legal representation is mandatory only in the case of a binding offer procedure; and
• evidence of compliance – as will be discussed below, the claim must be accompanied by documentary evidence demonstrating that the required negotiation attempt has taken place.

Types of ADR and practical experience after one year

LOESPJ establishes six types of ADR mechanisms:

• direct negotiation between the parties and/or their legal representatives;
• mediation, either by an individual agreed by the parties or by a specialised institution;
• private or public conciliation;
• confidential binding offer;
• opinion of an independent expert; and
• collaborative law process.

Other methods provided for under sector-specific legislation may also be used.

Parties enjoy full autonomy in selecting and structuring the ADR mechanism. However, in the absence of agreement, the ADR initiated by the first party shall prevail. To avoid being compelled into an undesired ADR process, it is advisable that contracts, offers, purchase orders, general terms and conditions, etc, specify in advance the ADR mechanism to be used.

After one year in force, although no official statistics are available, survey data indicates that the most frequently used ADR mechanisms are the binding offer (approximately 45%, particularly suitable for debt recovery disputes) and negotiation between parties and/or lawyers (35%), while mediation accounts for only 8%. Only around 10% of ADR processes result in an agreement.

In summary, the system remains in an implementation phase, and, to date, the mandatory nature of ADR does not appear to correlate with its effectiveness.

Procedural admissibility requirement

The principal innovation introduced by Article 5 LOESPJ is the classification of pre-litigation negotiation as a procedural admissibility requirement. Consequently, if such activity is not conducted in accordance with the statutory provisions, any subsequent claim shall be declared inadmissible.

This new requirement has led to significant amendments to the Spanish Civil Procedure Act (Ley de Enjuiciamiento Civil – LEC). In particular:

• Article 264 LEC now includes, among the documents that must accompany a claim, proof that the required negotiation attempt has been made; and
• Article 399 LEC (content of the claim) and Article 403 LEC (inadmissibility) have been amended accordingly.

While LOESPJ has introduced numerous additional changes affecting preliminary hearings, trials, consumer matters, appeals and more, one of the most practically significant reforms concerns the rules on costs.

In this regard, LOESPJ introduces the concept of abuse of the public justice service, constituting an exception to the general “loser pays” principle. Article 394 LEC now provides that where participation in an ADR mechanism is legally required, no order for costs shall be made in favour of a party who has expressly or implicitly refused, without just cause, to participate in such mechanism.

Conclusion

As demonstrated, LOESPJ represents far more than a cosmetic reform. It introduces a genuine paradigm shift in the handling of civil and commercial disputes by promoting negotiation between parties. This approach is based on the premise that ADR mechanisms reduce social conflict, alleviate the burden on the courts, and can provide an equally effective means of resolving a significant proportion of civil and commercial disputes.