Litigation 2021

Last Updated October 20, 2020

Chile

Law and Practice

Authors



Bofill Escobar Silva Abogados is a leading Chilean law firm that focuses on the resolution of complex and cross-border business disputes, before local and foreign courts, governmental authorities and international arbitration tribunals. The firm is currently active in a wide range of high-profile cases, covering almost all industries and markets, including natural resources, energy, mining, construction, finance and securities. The firm also has vast experience advising clients in white-collar and anti-corruption cases, as well as conducting internal investigations or acting as external advisers of corporate investigations being carried out by in-house compliance teams. The firm has distinctive experience with disputes involving highly technical matters, with multiple parties, in several languages in numerous jurisdictions, and inter-related litigation, working with experts in multiple fields. The diverse backgrounds and skills of Bofill Escobar Silva's lawyers provide a strategic, comprehensive and innovative approach to conflict resolution, particularly valuable for clients when litigation is not the best option available.

Chile has a legal system based on civil law. Court decisions must be based on laws, regulations and customs (when, and if, applicable), but they are binding only on the parties of the specific case in which they are issued. Case law may be consulted as a source of persuasive authority.

Chilean procedural law provides an adversarial model of litigation, conducted primarily through written submissions. Criminal trials and family law disputes, however, are litigated predominantly through oral arguments.

In Chile, the court system has a hierarchical structure. There are lower ordinary courts, located throughout the country, that exercise jurisdiction on civil and commercial, and criminal matters. There are also lower specialised courts that exercise jurisdiction on labour, family, antitrust, tax and environmental matters, among others. While the most populated areas tend to have different courts with jurisdiction in only one of these matters, courts in more rural locations are less specialised and exercise jurisdiction in more than one matter.

There are higher courts that are mostly responsible for deciding appeals. These consist of 17 Courts of Appeal that decide the majority of the appeals filed against lower courts’ decisions and the Supreme Court, which hosts annulment appeals (recursos de casación) filed against decisions of the Courts of Appeal, among other matters. Also, the Supreme Court has, with a few exceptions, directive, corrective and economic oversight of all of the courts within the country.

Finally, outside the judiciary, there is a Constitutional Court, which is mainly in charge of reviewing the constitutionality of laws.

Civil and commercial court filings and proceedings are open to the public online, whereas family and criminal investigations are sealed and solely accessible to the parties.

Records, filings and proceedings can be decreed or petitioned to be private under certain qualified circumstances. Any party can move to limit case access to the public if there is a risk to national security or if personal or sensitive information is involved.

Generally, all parties in a lawsuit must be represented and their cases sponsored by a qualified attorney in good standing. A court will generally not accept a party litigating on their own, unless that party is himself or herself a qualified attorney in good standing.

Law students in their third, fourth or fifth year of studies at a Chilean-accredited law school may represent a party at court but are not allowed to sponsor a party’s case in a lawsuit. The same restricted representation ability is given to law school graduates during the first three years after passing their examinations.

In order to become a qualified attorney, a “candidate” must hold a law degree from a Chilean-accredited law school, pass a six-month pro bono internship at a state legal aid office, and provide witness evidence of his or her good conduct. Once all three requirements are met, the candidate will be sworn into the legal profession by taking an oath of faithful performance at the Supreme Court.

From those three requirements, a qualified foreign law degree may substitute a Chilean law degree if the candidate additionally passes a Chilean law examination that is administered by the Universidad de Chile. A foreign law degree will be “qualified” if it is either issued by an accredited law school from a country with which Chile has a degree recognition agreement and certain authentication requirements are complied with, or the degree successfully undergoes a validation process at the Universidad de Chile.

Third-party litigation funding is allowed. There is no specific regulation that would limit or regulate third-party funding in Chile.

Third-party litigation funding is not limited by the type of lawsuit funded.

The plaintiff and defendant are allowed to seek third-party litigation funding.

Third-party litigation funding is not limited by minimum or maximum amounts.

Chile does not have an established third-party litigation funding industry, making it difficult to construe a rule regarding the types of costs that are funded versus those that are not. Normally, a party in a lawsuit will consider a partial or total assignment of its rights in the dispute in exchange for some form of consideration, either in cash or kind. If the rights are successfully upheld at trial, the assignee will be able to collect on them. 

Contingency fees are permitted under Chilean law, but they are not regulated by law or by another set of binding rules. Varying guidelines on attorney fees have been provided by Bar associations across the country, and these generally include non-binding suggestions on contingency fees. However, enrolment in these organisations is not required to practise law and their limited punitive abilities are restricted to their members.

There is no specific timing requirement provided for third-party funding.

Ordinarily, there are no pre-action steps required by the court to initiate proceedings. No pre-action letter or any other conduct is mandatory to begin a dispute. However, mediation procedures are required before filing an action against health-providers. Before labour and family disputes, and regarding only specific matters, the parties may also be required to submit to mediation. Disagreements regarding public concessions must be arbitrated before an expert technical panel as a prerequisite to entering judicial litigation.

The statute of limitations serves as a defence in litigation, but it must be used prior to any other claim. The statute of limitations varies, depending on the action’s nature and subject of the dispute.

Contractual claims have a statute of limitations of five years counted from the date on which the obligation became enforceable, whereas torts have a four-year statute counted from the date of the offence.

Note that the statute of limitations for initiating an enforcement proceeding is either one or three years. Commercial disputes have a statute of limitations of four years.

For a defendant to be the subject of a suit, Chilean courts require that the defendant be legally able to acquire rights, unless regulation provides otherwise. Most people are, thus, liable, other than specific exceptions explicitly set forth in the law (ie, minors). Legal entities and bodies of public administration can be subject to a lawsuit.

The initial civil and commercial complaint must be made in writing and comply with certain requirements listed in Article 254 of the Civil Procedure Code: mainly, the proper identification of the court, plaintiff, defendant, facts and pleas.

There are only two stages in which the initial complaint can be amended, and with strong limitations at that. Firstly, once the suit has been served and exclusively before the defendant’s response, the plaintiff can amend the initial complaint and notify the new claim to the defendant. In this case, a new response deadline begins as if it were a new procedure and lawsuit. However, after the defendant has responded to the complaint, the plaintiff may no longer modify the prime action of the claim, and can only broaden the scope in the rejoinder.

After the initial claim has been filed, public officials called Receptores carry out the corresponding service of notice, commissioned and paid by the interested party. Generally, the first notice must be served personally to the defendant at his or her home or work address. However, if that address is hard to locate or the endeavour becomes virtually impossible due to the amount of defendants, the claim may be served by publishing the claim in a newspaper, following the corresponding legal procedure.

If the defendant’s address is outside the court’s jurisdiction but inside Chile, the notice is made through a letter rogatory. If the defendant’s address is outside Chilean territory, the laws of the country in which the notice must be carried out predominate.

If the defendant does not respond to a duly notified lawsuit, all the claim’s facts will be deemed denied, as a fictional response. The procedure will continue in his or her absence, and he or she will be deemed notified of all presentations and rulings. Since all facts have been regarded as denied by the defendant, the claimant will have the burden of proving all the facts he or she asserted on the complaint. The defendant can subsequently appear and become part of the proceedings, but he or she must accept the process – as is – up to his or her intervention.

In summary proceedings, a different rule applies. If the conflict's urgency warrants it, the claimant may request provisional granting of his or her claim if (i) the defendant is absent from the first hearing and (ii) the plaintiff offers sufficient evidence for plausible grounds. The defendant may appeal, but the court’s resolution will still be enforced pending a superior court’s ruling.

Law No 19.946 on Consumer Protection has allowed collective actions since 2004. The proceeding set forth therein has been extended to antitrust and construction torts disputes, under Law No 20.169 and Law No 20.443, respectively.

The only persons with legal standing to exercise consumer collective suits are:

  • the National Consumer Service,
  • a consumer association; and
  • a group of no fewer than 50 consumers who share the same interest.

Once the initial complaint has been filed, the court must rule on its admissibility, based on whether:

  • the suit has been filed by a legally entitled person;
  • the reproachable behaviour claimed disturbs a collective or diffuse interest; and
  • the number of potentially affected consumers justifies the claim in terms of costs and benefits. 

In order to ease the procedure, the National Consumer Service will allow the potentially affected consumers to register in an expeditious manner in order to adhere to the collective suit, but it is not mandatory for them to do so. If the National Consumer Service filed the complaint ex officio, it must be notified to the respective consumer association.

In 2019, an amendment to Law No 19.946 expanded the scope of damages from torts to include non-material damages.

There are no legal requirements to provide clients with a cost estimate of potential litigation, but the Chilean Bar Association has issued a Code of Ethics in that regard. Fees must be negotiated without delay, freely and fairly, and reasonably estimated without abuse of privileged position. Furthermore, the arrangement must be put in writing in a precise and clear manner.

It must be noted that becoming a member of the Chilean Bar Association is not mandatory for all lawyers. Nonetheless, the Supreme Court has cited the Code of Ethics as the normative regulation in several rulings in its capacity as the persuasive authority.

In Chile, it is possible to file interim relief motions before trial, and the same may also be requested during the process if the need arises. These are used as remedies to maintain the status quo, preserve the subject-matter of the dispute or simply prevent further injury to the claimant. For these motions to be admitted, (i) sufficient foundational evidence must be provided (fumus boni iuris) and (ii) the measure must be deemed urgent in the sense that further damages are imminent (periculum in mora). A bond will be requested by the court to cover any damages that may result from an unjustified request.

The Civil Procedure Code expressly provides the following remedies:

  • the seizure of disputed property;
  • the appointment of a financial controller;
  • the retention of assets; and
  • a contracting prohibition.

In addition, a judge may decree other remedies if he or she deems them necessary.

An immediate motion to dismiss the suit, without prejudice, may be filed before or during the defendant’s response, but only on certain grounds, namely:

  • lack of jurisdiction;
  • lack of capacity to be sued;
  • lis pendens;
  • breach of formal requirements listed in Article 254 of the Civil Procedure Code for initial complaints;
  • benefit of prior prosecution; and
  • others related to correct the proceeding.

The court’s ruling for early judgment motions can be appealed.

Ordinarily, pre-trial dispositive motions are limited to the motion to dismiss without prejudice based on procedural concerns. See 4.2 Early Judgment Applications.

Any interested party may motion to join an ongoing lawsuit, either for the plaintiff or the defendant, if they have a common stance. If not, the interested party may still join the proceedings, but as a third party, with an independent position, accepting all rulings up to his or her intervention.

The defendant cannot file to obtain a sum of money from the plaintiff as security for his or her costs. Nevertheless, a bond will be requested by the court to cover any damages that may result from an unjustified interim relief motion from the plaintiff. See 4.1 Interim Applications/Motions.

The cost of interim motions is covered by the court’s ruling on costs. See 11.1 Responsibility for Paying the Costs of Litigation.

Motions can always be filed on an urgent basis, and the court will rule in consideration of that urgency, in the exercise of its discretion. In view of the nature of the motions, interim reliefs are dealt with within a smaller timeframe.

When the subject-matter requires a brief and condensed procedure, a summary trial may take place, particularly if the claim is one of those legally listed as urgent. These proceedings also carry a shorter timeframe due to the nature of the claim.

Although Chile does not have discovery per se (as open-ended "fishing-expedition" requests are not allowed), specific evidence may be sought on a pre-trial basis through Article 349 of the Civil Procedure Code. A party can request documents in preparation for trial and during the proceedings, as long as they have a direct relation to the dispute, are not secret or confidential and the petitioning party bears the cost. If the other party refuses to produce the aforementioned documents, they may be sanctioned with fines.

It is not possible to obtain discovery from third parties not named as the plaintiff or defendant, but documents may be obtained from a third party when their exhibition is required in conformity to the guidelines established in Article 349 of the Civil Procedure Code. See 5.1 Discovery and Civil Cases.

Chile does not have discovery per se, but both parties can request specific document disclosure during the proceedings. There is no general rule that allows discovery other than Article 349 of the Civil Procedure Code. See 5.1 Discovery and Civil Cases.

Litigation in Chile provides a limited opportunity to request the production of documents from the future defendant before filing the lawsuit. The sanction for failing to produce the documents is that the future defendant will lose the right to submit them during the proceeding. Also, future plaintiffs can request that the future defendant or third parties present their testimony before filing the lawsuit if there is a legitimate concern that they will not be able to testify during the proceeding. None of these mechanisms is comparable with pre-trial discovery.

In the context of ongoing proceedings, courts can subpoena third parties to produce documents or provide testimony. The parties can request that the court order the arrest of third parties that do not comply with the court’s order. In practice, such drastic sanctions are rarely ordered.

During the evidentiary term of civil proceedings, both parties must offer the entirety of their evidence, except documentary evidence, which can be filed after the initial complaint. In particular, the witness list is to be presented to the court within the first five days of this phase, and their testimony will be taken upon the court’s resolution later on, and not necessarily within this period.

The court may appoint an expert to deliver a report upon the request of either party or on its own initiative. Expert reports, either way, have the same value as witness testimony. As in witness testimonials, failure to appear at the corresponding deposition allows the court to conjecture negative interpretations to all unanswered questions.

The Civil Procedure Code determines the weight of all evidence offered to the court, and judges are not allowed to weigh evidence discordantly. If so, their rulings may be subject to a cassation claim. See 10.1 Levels of Appeal or Review to a Litigation.

The Codes of Civil and Criminal Procedure recognise the right of attorneys not to appear as witnesses in matters involving attorney-client privilege. The Code of Criminal Procedure also protects documents under the control of lawyers from seizure. Although there is no legal provision defining the scope of attorney-client privilege, courts recognise the Ethics Code of the Colegio de Abogados as the applicable standard. The privilege is also applicable to in-house lawyers, as long as Chilean law and jurisprudence have not made distinctions with regard to such lawyers in this matter.

The Chilean judicial norms recognise the concept of legal privilege in the Chilean Bar Association’s Code of Ethics and the Criminal Code.

According to the first body of regulation, which is the most exhaustive, all attorney-client communications are confidential and cannot be disclosed without the client’s precise and prior permission. Furthermore, if those communications regard the entrusted legal assignment, they are deemed a professional secret under the Criminal Code. This protection includes work product, bestowed in Article 64.

The Criminal Code resolves the disclosure of information under attorney-client privilege as a serious criminal offence, sanctioned with fines and permanent banning from the practice of law. In this regard, the Criminal Procedure Code and the Civil Procedure Code contain similar provisions stating that lawyers are exempted from testifying in court against their clients in connection with the information they have received from them.

There is no regulatory distinction between external and in-house counsel.

There are no other rules that allow a party not to disclose a document.

In commercial and civil litigation, a party may request an injunction on an emergency basis, if it is necessary to assure that a future verdict favourable to the petitioner will be enforceable, if issued, and only if there is a prima facie appearance of legitimacy of the petitioner’s claim.

If a pre-trial injunction is granted, the petitioner will be required to file the lawsuit within 30 days. If the lawsuit is not filed within this deadline, the injunction will be lifted and the petitioner will be liable for any damages caused by the injunction.

Injunctions may also be available in the case of constitutional protection claims, which grant emergency relief to parties affected in one or more of their constitutional rights by public or private agencies or persons.

Injunctive relief is also available as a part of a final award. This kind of relief is particularly common in awards issued in cases related to unfair competition and trade-mark infringement.

Normally a lower-tier court will take a few days before acceding to an injunction petition. If the matter threatens constitutional rights, especially habeas corpus rights, an injunction could theoretically be obtained during the course of the day, and be requested by telephone or another form of accepted communication.

In commercial and civil litigation, pre-trial injunctions can be granted on an ex parte basis, without notice or presence of the respondent.

If the lawsuit following a pre-trial injunction is not filed within 30 days, the petitioner will be liable for damages caused by the injunction. It is important to note that the petitioner will be required to provide assurances that cover potential damages which originated from the injunction. See 6.1 Circumstances of Injunctive Relief.

Through the process of exequatur and treaties of mutual co-operation, an injunction can theoretically be enforced in another country, although not all countries will abide by and enforce injunctions issued by a Chilean court of justice.

In civil and commercial litigation, injunctions are generally used to secure disputed goods. If the goods are in the hands of third parties, an injunction cannot be obtained unless the court pierces the corporate veil.

Depending on the nature of the injunctive relief provided, a court may order coercive measures to execute these.

Civil and commercial litigation is carried out mainly in writing. However, there are several oral instances, such as witness testimony and cross-examination, expert’s declaration, and oral arguments in appeals and cassation claims. In criminal litigation, most of the trial is conducted orally, with court secretaries writing and keeping records of the oral proceedings.

In criminal and family law proceedings, there is a trial-preparation hearing where the parties make observations to discovery, lay out the evidence they will present to the court, and decide on facts that they agree on so as to avoid the need to prove those. The defendant then must show whether he or she accepts the charges made against him or her. If he or she does not, the case proceeds to trial.

In a civil law procedure, there is a conciliation hearing where the judge attempts to bring together the parties and reach a settlement. This hearing is required before the court may decree the issues on which the case will be tried. This decree marks the beginning of the period within which parties must present their evidence.

Jury trials are not available in civil cases.

All means of evidence are listed in an exhaustive manner in the law. For most civil and commercial proceedings, Chilean law also provides a set of rules that regulate the admissibility of that evidence (eg, excluding interested parties or relatives as witnesses) and establish the requirements to be met for each type of evidence in order to have probative weight to prove facts (locally denominated prueba legal tasada). This is an adversarial principle, so interested parties themselves bear the main burden of proof, other than exceptional ex officio-obtained evidence.

In civil and commercial proceedings, the Civil Procedure Code regulates the limited grounds on which to challenge documents submitted by the other party (eg, on the grounds of lack of authenticity or integrity). Documents issued by non-litigating parties will only have probative value if they are validated by the witness testimony of the author. Witnesses can also be challenged on specific grounds established by the same code to ensure their impartiality.

Expert testimony is permitted at trial. It can be either presented by the parties as part of their evidence or it can be required by a judge if, after all evidence is presented, it considers it necessary to decide the case.

Hearings are generally open to the public, to the extent that this does not put the private sphere of a person or national security at risk. Other qualified circumstances could warrant that a hearing is private. See 1.3 Court Filings and Proceedings.

In civil litigation, a judge will direct hearings, but decisions and judgments are made in writing after the trial has ended. If, during a hearing, the parties reach an agreement or desist in their case, a judgment may be entered. If a party withdraws its claim, this may begin a judicial incident (a sort of trial within the trial) if the other party opposes the withdrawal.

Civil procedures are lengthy and take an average of four to six years up to when the motion is carried to the Supreme Court. The Supreme Court itself can take up to a year to dictate its final ruling. This is a serious problem in the effectiveness of the Chilean justice system.

With the exception of issues that may concern public policy (eg, family law, antitrust), most settlements do not require court approval.

Settlement agreements can be confidential or not, depending on the agreement reached by the parties. Some settlement agreements are reached during trial and, thus, are publicly accessible. Settlement agreements can also be reached through a contract and they can be confidential if the parties so decide. However, if parties want the settlement agreement to be directly enforceable or executed by a lower court without the need for further proceedings, the agreement must be memorialised in a public deed and will, therefore, be public.

If parties want the settlement agreement to be directly enforceable or executed by a lower court without the need for further proceedings, the agreement must be memorialised in a public deed. See 8.2 Settlement of Lawsuits and Confidentiality.

Settlement agreements produce res judicata and can only be set aside if brought to a civil court in order to seek their annulment on a legal basis.

After a full trial, a ruling may recognise or decree rights for the successful plaintiff, including an award of damages and/or levy the costs of litigation on the defeated party. See 11.1 Responsibility for Paying the Costs of Litigation.

Chilean law allows awards of actual damages, including lost earnings, and moral damages. Moral damages are the pain or suffering produced by an illegal conduct. Chilean law does not consider punitive damages, but certain torts may warrant fines in addition to an award of damages. Note that breach of contract generally does not admit an award for moral damages if the breach does not itself trigger a tort.

Penalty clauses are deemed an advanced contractual assessment of damages by the parties to a contract. Penalty clauses may not exceed twice the value of the obligation breached. If the value of the obligation is impossible to assess or is undetermined, a judge may moderate the penalty in equity if it considers it “enormous”. Penalty interest may not exceed 150% of the current interest rate observed by the Chilean Central Bank. 

A successful party in contractual disputes may collect interest for the period before the judgment is entered, and until the effective payment of the amount recognised as due by the court. In torts, interest may also be collected in this way, but lawyers debate as to the date on which the debt begins to bear interest: either the date on which damages fell due or with the motion’s notice.

Domestic judgments are enforceable by lower courts of justice. The means of enforcement will vary, depending on the type of judgment. For instance, if a party is required to pay a sum of money, the other party may sue for payment in an enforcement procedure. In the event of non-payment, these procedures allow the seizure or foreclosure of assets of the debtor with the help of local police and the auction of the assets to pay the amounts owed with the proceeds.

When a trial ends with the award of an injunction, a breach may derive in an obligation to pay damages, fines, or, when the breach also constitutes a criminal offence, prison.

When a trial awards possession over a certain asset, the award-holder may petition the court for the asset to be seized or vacated, to allow the award-holder to retake possession.

Unless otherwise provided by an enforceable treaty, an exequatur petition for the recognition of a foreign judgment or arbitral award must be requested from the Chilean Supreme Court. If the Supreme Court grants the exequatur, enforcement of the foreign judgment or award may be requested from a lower court.

Most lower court rulings are appealable before hierarchically superior courts, ordinarily the local Court of Appeals, unless there is a specific regulation or the nature of the dispute determines a different bench. When an appeal has been brought to the corresponding higher tribunal, the lower court will usually follow the proceedings up to enforcing its final ruling, without halt. Exceptionally, and only in legally listed circumstances, the lower court will suspend the procedure until the appeal is resolved.

Rulings by the Court of Appeals may, in turn, be challenged by a cassation claim before the Supreme Court, but only in legally listed hypotheses.

Any of the aggrieved parties, on any grounds, and as long as the judgment is appealable under the law according to its nature, may file an ordinary appeal before the lower court that issued the ruling. After examination as to its admissibility, from both lower and higher courts, the hierarchically superior court will process the appeal. Legal requirements for admissibility compel the appeal to encompass (i) the legal and factual ground to the claim and (ii) the wording of concrete demands in order to remedy the grievance.

As to the cassation claim, admissibility requirements are sturdier, for it will only be admissible in legally listed hypotheses deemed so by the Court of Appeals and the Supreme Court. Aggravation from the filing party is also required, but always within the legal premises. Its admissibility will be equally examined by both a lower and higher court.

It must be noted that the cassation claim has two grounds: (i) cassation on the form and (ii) cassation on the merits, which is exclusively processed by the Supreme Court.

Generally, the aggrieved party has a legal term of five days after notice to file an appeal, unless the judgment is a final ruling, in which case the legal term increases to ten days. The aforesaid appeal must explicitly state the party’s grievance and both the factual and legal basis on which it rests. It must be done so in writing, except in oral procedures, in which, when legal requisites are met, it may be formulated verbally.

Regarding the cassation claim, in either of its forms, the aggrieved party has a legal period of 15 days after notice to file. If the grievance covers the provisions for cassation claims on the form and on the merits, they may be filed simultaneously in the same presentation. The two will be known and resolved together by the Supreme Court, but the judge will dismiss the cassation on the merits if the cassation on the form is granted. In addition, appeals and cassation on the form may be jointly filed to the Court of Appeals.

The rule in civil matters is that the second-instance court may not extend beyond the scope of what has been appealed, nor can the ruling further aggravate the appellant. New evidence is limited, for the Court of Appeals will only admit it when (i) it has not been rendered at first instance and (ii) the court deems it strictly necessary for correct trial resolution.

This rule, however, has certain exceptions:

  • the Court of Appeals may hear all defences that were rejected at first instance because of incompatibility with the motion granted;
  • the Court of Appeals can make declarations ex officio that are mandatory to the law (ie, absolute incompetence, implication, etc); or
  • the Court of Appeals can invalidate a judgment ex officio if it does not contain an all-inclusive ruling on the subject-matter, or return the file to first instance so that the court can complete its judgment on that basis.

If the legal requirements for filing the appeal have been judged fulfilled, the court cannot impose any condition on granting it. See 10.2 Rules Concerning Appeals of Judgments.

After both granting and rejecting the appeal, the court returns the file to the lower court for it to be enforced. If the final judgment grants the appeal, the higher court shall issue a new ruling that overrules the original verdict, but may reproduce the initial judgment in that which has not been challenged.

According to the Civil Procedure Code, the party that was completely defeated in the proceedings shall bear all litigation costs, including those of interim motions. Likewise, the defeated party will not bear those costs if he  or she was not completely defeated or if the court deems he or she litigated on sensible grounds and in good faith, in which case each party will bear their own costs.

The ruling that settles costs may be challenged before the same court under incidental procedure parameters.

The defeated party covers all litigation costs if he or she was completely defeated. If he or she was not, or the court deems he or she litigated on sensible grounds and good faith, each party will bear their own costs. See 11.1 Responsibility for Paying the Costs of Litigation.

Interest is not awarded on costs.

Alternative dispute resolution (ADR) mechanisms are often used in Chile. Compulsory mediation procedures are required in labour, health, public concessions and family disputes. See 3.1 Rules on Pre-action Conduct.

However, parties themselves usually include arbitration and mediation clauses in their contracts, which legally bind them to oblige. It is generally acknowledged that the most popular form of ADR in Chile is arbitration. See 12.3 ADR Institutions.

ADR is offered and promoted by various institutions, arbitration being the most popular one. See 12.3 ADR Institutions.

Other than labour, health and family disputes, disagreements regarding public concessions must also be arbitrated before an expert technical panel as a prerequisite to entering judicial litigation. See 3.1 Rules on Pre-action Conduct.

If parties fail to comply with legally or arranged mandatory mediation, they are either prohibited from initiating a judicial litigation process or cannot sue on the same basis that should have been mediated.

Various organisations offer and promote ADR, but the most prestigious is the Arbitration and Mediation Centre of Santiago Chamber of Commerce (CAM Santiago).

Chile does not have a uniform law regulating arbitration. Domestic arbitration is governed by the Organic Code of Courts and the Civil Procedure Code, whilst international arbitration is governed by Law No 19.971 on International Commercial Arbitration.

Law No 19.971 is based on the UNCITRAL Model Law of 1985 and it provides that a court hearing a dispute that is subject to an arbitration agreement shall refer the parties to arbitration if any of the parties requests it, unless it finds the arbitration agreement is null and void.

Arbitration awards are enforced by the local courts of justice as long as they do not contravene Chilean public policy.

Chilean law provides that some matters may not be subject to arbitration (eg, alimony and criminal cases), and that others are subject to mandatory arbitration (eg, a dispute within a partnership or among members of a corporation).

Normally, local courts will enforce all measures available against an award to the extent they are provided in the arbitration agreement or by Chilean law if the parties have not made an express waiver of these recourses. As a matter of public policy, cassation claims based on lack of competence of the tribunal or exceeding the scope of the petition may not be waived in advance. The same applies to complaints against judges for grave abuse or fault.

Unless otherwise provided by an enforceable treaty, an exequatur petition for the recognition of a foreign judgment or arbitral award must be requested from the Chilean Supreme Court. If the Supreme Court grants the exequatur, enforcement of the foreign judgment or award may be requested from a lower court.

There have been plans to reform the civil procedure system but it is not close to being approved.

Civil proceedings have been slowed down, and evidentiary hearings have been restricted for as long as the constitutional state of exception is in place. Also, many hearings are via video conference. 

Bofill Escobar Silva Abogados

Avenida Apoquindo 3472, Piso 19
CP 7550105
Las Condes
Santiago
Chile

+56 2 2483 9000

jbofill@beslegal.cl www.beslegal.cl
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Bofill Escobar Silva Abogados is a leading Chilean law firm that focuses on the resolution of complex and cross-border business disputes, before local and foreign courts, governmental authorities and international arbitration tribunals. The firm is currently active in a wide range of high-profile cases, covering almost all industries and markets, including natural resources, energy, mining, construction, finance and securities. The firm also has vast experience advising clients in white-collar and anti-corruption cases, as well as conducting internal investigations or acting as external advisers of corporate investigations being carried out by in-house compliance teams. The firm has distinctive experience with disputes involving highly technical matters, with multiple parties, in several languages in numerous jurisdictions, and inter-related litigation, working with experts in multiple fields. The diverse backgrounds and skills of Bofill Escobar Silva's lawyers provide a strategic, comprehensive and innovative approach to conflict resolution, particularly valuable for clients when litigation is not the best option available.

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