The Spanish legal system follows so-called civil or codified law, although in certain areas it has increasingly been accepting and has begun integrating aspects of the common law system.

The sources of the law consist of statutory law and, to a lesser extent, custom and general principles of law. Case law is not generally regarded as a source of Spanish law. Nonetheless, judgments issued by the Supreme Court complement the other sources of Spanish law, assisting with the interpretation and application of the law. Precedents from the Constitutional Court and the Court of Justice of the European Union are also relevant for legal interpretations.

Spanish civil legal proceedings are conducted both through written submissions and oral arguments.

The principle of jurisdictional unity is the basis of the organisation and operation of the Spanish courts. The Spanish Constitution also protects judicial independence and the power separation between the judiciary, the government and the legislative. The exercise of judicial authority in any kind of action, both in passing judgments and having judgments executed, lies exclusively within the competence of the courts and tribunals established by law, in accordance with the rules of jurisdiction and procedure within the law.

Spain has five separate jurisdictional orders, which are classified by subject: civil, criminal, administrative, labour, and military. Each jurisdiction has its own substantive and procedural rules.

The civil courts are organised in a pyramid structure, including:

• Peace Courts, for debts amounting to no more than EUR90, and whose functions are extremely limited;
• first instance courts (Juzgados de Primera Instancia) and commercial courts (Juzgados de lo Mercantil) at the lowest level;
• provincial courts (Audiencias Provinciales) and superior courts (Tribunales Superiores de Justicia), which are both above first instance courts; and
• the Supreme Court (Tribunal Supremo), which is located at the highest level of the Spanish court system.

Spanish law provides for the possibility of specialisation of some courts in certain matters (for instance, first instance courts can specialise in family matters, insolvency proceedings or banking products).

As of the writing of this article, a bill is currently being debated in parliament which, if approved, would implement a major transformation in this judicial structure, by way of suppressing traditional unipersonal courts and replacing them with collegiate tribunals divided into sections. 

The Constitutional Court is not part of the judiciary and therefore is not above the Supreme Court; it serves as an interpreter and guarantor of the correct application of the Spanish Constitution.

From the start of the proceedings until the trial usually takes between six months and one year in the case of oral proceedings. In ordinary proceedings, a preliminary hearing is held first, so the period can be more than a year from the start of the proceedings until the trial is scheduled. In any case, these periods are estimates and depend on the workload of the courts.

As a general rule, hearings in civil proceedings are open to the public, as provided for in Section 138 of the Spanish Civil Procedure Act (SCPA). However, some proceedings may be heard in closed session when this is necessary for the protection of public order, or national security in a democratic society, when the interests of minors or the protection of the private lives of the parties and other rights and liberties require this, or when sensitive or confidential matters may be discussed.

According to Section 23 of the SCPA, appearance before the court must be through a court agent (Procurador), who must:

• hold a law degree or any other equivalent university degree; and
• be authorised to exercise their profession among the judicial party in the court which will hear the case. 

In civil proceedings, parties may also appear for themselves in the following cases.

• In oral proceedings (Juicios Verbales), the determination of which is based on the amount (not exceeding EUR15,000) and in order for payment procedures (Procedimiento Monitorio).
• In universal trials, where their appearance is limited to the submission of entitlement credits or rights, or to attendance at meetings.
• In incidents relating to a decision regarding legal aid and where urgent pre-hearing measures are requested.

In Spain, lawyers may conduct cases throughout all Spanish territory and act in all instances. However, they must be an active member of a specific local bar association. 

According to Section 31 of the SCPA, litigants must be advised and represented by lawyers duly authorised to practise law. No applications may be filed without a lawyer’s signature, with the following exceptions:

• in oral hearings where the determination is based on the amount, and this does not exceed EUR2,000; and
• written submissions with the intention of appearing before the court, or to request urgent measures prior to trial, or to request the urgent suspension of hearings or proceedings.

As for the possibility of foreign lawyers appearing before courts, they require special authorisation, which is simplified in the case of attorneys from other EU member states.

In Spain, civil litigation funding by a third party is not excluded (and therefore permitted) but is rare, given the fact that it has not yet been specifically regulated (although there are no significant legal obstacles to its development).

Due to the absence of specific regulation, third parties may be potentially involved in any type of lawsuit in Spain that has a financial element.

Funding by third parties is available for both the plaintiff and defendant.

Pending future regulation, there is no limit regarding the amounts that could be funded by third parties.

Third-party funding could cover procedural costs (lawyers and court agents’ fees), court fees, and potentially the other parties’ fees in the event of dismissal, subject to the agreement entered into between the funded and funding parties.

Contingency fees are allowed in Spain since the Supreme Court confirmed their validity by a judgment rendered on 4 November 2008. Therefore, they may be freely agreed between the parties.

Due to the lack of regulation, there is no time limit when it comes to the obtention of the funding by third parties.

As of today, no pre-action conducts are imposed as a prerequisite for initiating a lawsuit. However, in some special lawsuits, such as in the challenging of corporate decisions (general shareholders meetings and board of directors), the plaintiff is required to have previously voted against the challenged decision.

It must be noted that the bill referred to in 1.2. Court System, if approved, would introduce in some cases the obligation of a preliminary attempt at out-of-court settlement as a prerequisite to filing a lawsuit. Given that the bill is currently under debate and will likely be subject to amendments and revisions, a study of its provisions will not be necessary until the final version of the text is made public. 

Under Spanish law, there are two types of statute of limitations applicable to civil actions. Both are found in the Spanish Civil Code (SCC) and the Commercial Code, and their nature and application have been developed by case law.

The first type of statute of limitations (prescripción) may be interrupted by means of a judicial or non-judicial claim or an acknowledgment by the defendant of the existence of the obligation. 

There are different durations for the period of this first statute of limitations, depending on the action to be brought.

• For actions based on in rem rights (derechos reales) over immovable property, the period for the statute limitation is generally 30 years, whereas the period for actions over movable property is generally six years after possession was lost. 
• Actions based on mortgages last for 20 years.
• The statute for actions brought to protect personal rights is five years. This statute is also applicable to actions arising from contractual obligations.
• The statute for actions based on a tort is one year of the claimant becoming aware of the damages caused.

The second type of statute of limitations applicable to civil actions may not be interrupted (caducidad). This is the case with:

• actions relating to the enforcement of final judgments or awards (five-year period from the date of judgment);
• actions to amend or terminate contracts due to vices in the consent (four-year period); or
• claims brought to the courts within an existing proceeding (a two-year period if there has been no procedural activity at first instance level, and a one-year period at higher levels).

In addition, under Spanish law, special legislation can contain its own limitations. For example, Section 205 of the Capital Companies Act establishes a one-year time limit for challenging company resolutions. In the same way, Section 140 of the Intellectual Property Act grants the holder a period of five years to claim damages for infringed rights.

The SCPA requires a defendant to have the capacity to be a party and the condition of being a legitimate party to the proceeding.

Section 6 of the SCPA determines that the following may be parties to the proceedings before civil courts:

• natural persons;
• legal persons;
• an estate or separated estate which temporarily lacks an owner or the owner of which has been deprived of disposition and administration powers; and
• entities lacking legal personality, recognised by the law as having the capacity to be a party.

Legitimate parties are those that appear and act in court as parties to the judicial relationship or the matter in dispute.

Civil lawsuits are initiated by means of a written claim (demanda), signed by the lawyer and the court agent, which must express with clarity and precision the court at which it is addressed, the facts, the legal grounds on which it is based, as well as the relief sought.

The claim must also include all related documentation that is either known or should be known at the time it is filed. In this regard, no further documents may be added at a later stage, except where these documents are from a later date or could not be provided by the party at the time the claim was filed. However, the plaintiff may, at the preliminary hearing or at the trial proceedings, submit relevant evidence relating to the merits of the case, following allegations made by the defendant in their defence.

The claim can be amended in the sense of modifying the relief sought or the defendants at which it is aimed until the opposition is filed. Once this opposition has been filed, the plaintiff may only clarify aspects that are not entirely comprehensible or include complementary allegations.

As a rule, once the claim has been filed and admitted for processing, the court manages its serving on and notification to the defendant to the address specified by the claimant. The claimant’s court agent may also request to be authorised to personally carry out the notification.

If the claimant fails or is unable to correctly designate a place where the defendant may be located, the court may use any means at its disposal to find the defendant, such as consulting public or official registries.

Under Spanish law, serving a claim abroad requires following the procedure set out in either:

• Regulation (EC) No 1393/2007 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters, if the complaint is being served in an EU member state; or
• the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, if the complaint is being served outside the EU.

If the defendant does not file a statement of defence or opposition within 20 business days after it is served (or ten business days in the case of minor oral trials), the proceedings will continue in its absence. In such a case, the court will declare the defendant in default. Being in default does not imply an acceptance of the claim or an admission of the facts of the claim by the party under such condition as it may appear at any stage during the proceedings.

Spanish law allows for representative or collective actions to be filed:

• to defend the “collective interest” of consumers, which may be brought by a consumer association or other authorised legal entity as long as the claimants are individually identified or are easily identifiable; 
• to protect the “widespread interests” of consumers, which may be brought by a representative consumer association for the protection of the common interests of consumers whose identity is unknown or difficult to determine; and
• to protect the equality of gender or non-discrimination based on gender, sexual orientation or other personal characteristics.

Additionally, pursuant to Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers’ interests, public prosecutors and certain qualified bodies of any EU member state are allowed to seek injunctions for the protection of consumers’ interests in Spain.

The Spanish legal system provides that individual consumers can freely “opt in” but they cannot “opt out” of the proceedings, as once joined, they will be bound by the final judgment. 

Section 15 of the SCPA guarantees that all individual consumers are aware of the proceedings and have the opportunity to join:

• once the admission of the complaint is published in the media of the territory where the damages occurred; and
• if the members of the group are identifiable, the claimant could send an individual letter to all of them prior to filing the complaint.

Lawyers must provide clients with estimated fees as soon as possible, usually in written form. 

The Code of Ethics of the Spanish Legal Profession (CESLP) establishes the proper behaviour of lawyers in Spain. These duties can be summarised in two types of action: identification and information. These actions are established in Section 87 of the General Statute of the Spanish Legal Profession (GSSLP).

Relationship Between Lawyer and Client

Section 87 regulates the relationship between lawyer and client, together with the lawyer’s obligations. In addition to those obligations arising from their contractual relationship, lawyers are obliged to fulfil the defence mission entrusted to them with the utmost caution and diligence, as well as keep their legal privilege. Lawyers are also required to diligently carry out the professional activities needed for the defence of the matter entrusted to them, complying with the technical, ethical and deontological requirements appropriate to the legal protection of the matter. In doing so, lawyers may be assisted by collaborators and other colleagues who act under the lawyers’ responsibility. Lastly, lawyers shall identify themselves to the person they are advising or defending, even when they are doing so on behalf of a third party, in order to assume the civil, criminal and ethical responsibilities that may be applicable.

Lawyers’ Obligations

In the exercise of the profession, lawyers must take into account the requirement of “lex artis”. This concept refers to the proper conduct of professionals and can be defined as a set of technical rules of conduct in the exercise of their profession. 

Lawyers undertake an obligation of means in the sense that they are obliged to carry out their activities with due diligence and in accordance with the lex artis, without guaranteeing or committing to the result.

Furthermore, the Supreme Court of Spain, in its judgment of 23 May 2001, Appeal No 914/1996, included among lawyers’ obligations the obligation to inform the client of the “pros and cons”, the risk of the case or the convenience or otherwise of judicial access, together with the costs, the seriousness of the situation and the probability of success or failure.

Parties may initiate pre-trial proceedings in order to prepare a future legal action. These pre-trial proceedings consist of a request for measures known as preliminary proceedings (diligencias preliminares), whose essential aim is to assist the party in gathering relevant documentation and which are subject to the payment of a caution.

The possibility of early judgment or cases being struck out before the substantive hearing is not contemplated in Spanish legislation.

Frequent dispositive motions include preliminary proceedings (see 4.1. Interim Applications/Motions) or the seeking of injunctive relief.

The SCPA provides for the possibility of third parties joining the proceedings if they have a direct and legitimate interest in the outcome of the proceedings.

The possibility of either party requesting an order that the counterparty be compelled to pay a security for the former’s costs is not contemplated in Spanish law.

As a general rule, and unless the case presents legal or factual doubts, the party whose position is dismissed shall be ordered to pay the counterparty’s legal costs in the interim applications.

No estimate can be provided of the timeframe for a court to deal with an application, since it will mainly depend on the workload of the court and the complexity of the case.

The Spanish legal system does not provide for discovery. 

If the petitioned party refuses to exhibit a document, the court may give evidentiary value to the copy provided by the petitioner, or to the version of the document’s content given by the petitioner, which will be assessed jointly with the other available evidence. Alternatively, the court may issue a court order so that the requested documents are included in the file of the proceedings. 

Nevertheless, this injunction is limited to specific cases, for instance:

• an application against the future defendant to declare under oath or promise to tell the truth concerning their capacity, representation or legal competency required to be known for the case, or to exhibit the documents proving such capacity, representation or legal competence;
• an application against the future defendant to exhibit the object in their possession that will be referred to at the hearing; and
• an application by a partner or joint owner for the exhibition of documents and accounts of the company or condominium.

Additionally, since the implementation of Directive 2014/104/EU, the SCPA regulates a specific proceeding regarding the disclosure of evidence in order to bring legal actions for damages arising from infringements of competition law. 

The Spanish courts will not allow fishing expeditions and will only accept precise and justified requests for particular documents. 

The party that requests the preliminary injunction will bear the costs incurred by the individuals who participated in the referred proceeding, as well as any damages that may arise while executing the measure. A party may request the other party to exhibit certain documents that the petitioner does not have, as long as these documents refer to the subject matter of the proceedings or the effectiveness of other means of evidence. This petition may be requested before filing the complaint or at a later stage, during the evidentiary phase. 

If the petition is filed at the evidentiary phase, the petitioner must provide a copy of the documents. This is why the party has to provide security when filing the preliminary injunction.

The exhibition of documents and other pieces of evidence can also be requested from third parties (including the public administration).

As mentioned at 5.1 Discovery and Civil Cases, discovery is not allowed in the Spanish legal system. However, it is possible to ask for documents or information in order to prepare for the trial (see 5.1 Discovery and Civil Cases and 5.2 Discovery and Third Parties).

The parties are not obliged to disclose documents that have not been requested by the other party and admitted by the court in an injunction proceeding or proposed and admitted during the evidentiary hearing.

See 5.1 Discovery and Civil Cases, 5.2 Discovery and Third Parties and 5.3 Discovery in This Jurisdiction.

In Spain, attorneys are legally, contractually and ethically bound to keep secret all information, facts and issues known to them due to their professional activity and they cannot be compelled to testify about them. In fact, it is a criminal offence to reveal information that is subject to client-attorney legal privilege. 

In Spanish law, the GSSLP develops legal privilege. This includes all the facts, communications, data, information, documents and proposals that a lawyer has known, issued or received in their professional practice. The lawyer must also maintain this duty of confidentiality among their collaborators and associates. Legal privilege continues even after the attorney’s services to the client have ceased, without being limited in time.

A party is obliged to disclose a requested document if required to do so by the court. According to Section 261 of the SCPA, if the summoned party fails to comply with the request and does not provide convincing arguments for not complying, the court can:

• consider the fact to be proved by the requested document as having been admitted; or
• issue an order to enter and search the premises of the non-compliant party.

If the required documents are found during the entry and search, the court will put them at the disposal of the applicant at the court premises.

The competent court to deal with applications for injunctive relief is the first instance court of the domicile of the defendant or the court where the main claim is going to be heard. If the relief is intended to protect a foreign action, the competent court is the court of the place where the assets are located or of the place where the relief must have an effect. 

Section 726 of the SCPA determines that the court may order an injunctive relief: 

• when it is exclusively aimed at guaranteeing the effectiveness of the judicial protection that may be granted in a potential judgment, to ensure that it cannot be prevented or hampered by any situation that occurs while the relevant proceedings are still pending; and
• when it cannot be replaced by another measure that is equally effective for the purposes of the preceding paragraph but less burdensome or damaging for the defendant.

Section 727 of the SCPA sets out specific reliefs that may be requested by any plaintiff, for example:

• freezing of assets;
• judicial intervention of productive assets;
• deposit of movable assets;
• preventative registrations in public registries;
• judicial orders to provisionally cease any specific conduct; and
• suspension of any corporate resolutions.

This list is nevertheless open as Spanish law grants the opportunity to request any relief necessary to secure the potential enforcement of the future judgment.

For the relief to be granted, the applicant for any injunctive relief has to meet the following three requirements (Section 728 SCPA).

• The petitioner has to provide good standing of its position (fumus boni iuris), with evidence of the asserted right or legal interest so that it appears to be plausible, eg, sufficient for it to be foreseeable so that the main decision will declare the right in favour of the party requesting the interim measure. This results in the need to ensure the effects of the interim measure by means of appropriate precautionary measures.
• The petitioner has to provide the court with solid arguments about the need for injunctive relief due to a potential risk in the course of the proceedings (periculum in mora). This entails that if the measures are not adopted, the effectiveness of the protection that could be granted in an eventual favourable judgment would be prevented or hindered.
• The petitioner has to deposit a bond (caución), which will be determined by the court but must be enough to cover the possible damages that the defendant may suffer if the claim is dismissed. Therefore, the purpose of the bond is to bear the risk of possible damages the interim measure may cause to the defendant’s wealth.

The Spanish legal system allows injunctive relief to be requested at the time the statement of claims is filed.

Nevertheless, Section 730.2 of the SCPA allows injunctions to be sought prior to the main proceeding. This is possible if, at the relevant time, the applicant alleges and evidences reasons of urgency or need. If this is the case, the measures adopted on an urgency basis will cease after 20 days if the main claim is not filed before the court. The applicant would then be bound to pay all related costs (including the potential loss caused to the party that suffered the effects of the injunction). 

In exceptional cases, if the applicant properly justifies the existence of urgency, the court may order an injunctive relief in the following five days without hearing the defendant (Section 733.2 SCPA).

The possibility of injunctive relief being granted ex parte or inaudita parte only applies in extremely exceptional circumstances where the knowledge of the proceeding by the defendant could gravely prejudice its efficacy. After its adoption, it must be notified to the concerned party, who may then file allegations.

Once the injunctive relief has been adopted – unless revoked due to the defendant’s opposition – the main process will continue until there is a final judgment on the merits of the case. If the judgment is granted in favour of the defendant and those measures have already been enforced and executed, the applicant for the injunction will be held liable for damages suffered by the party who requested and executed injunctive relief (Section 74 SCPA).

Therefore, and unless expressly decided otherwise, Section 728.3 of the SCPA requires the applicant for the injunction to post a deposit in a sufficient amount to cover the potential damage to be caused to the party suffering the injunction as well as to compensate, in a speedy and effective manner, the damages that the adoption of the injunction may cause to that party.

Injunctive relief may be granted against any assets of the respondent, regardless of their location.

Injunctive relief may only be obtained against the defendant and therefore not against other parties.

Once granted, an injunction is automatically enforced by the court using any means necessary. Actions taken by the defendant aimed at hindering its application may even result in criminal liability due to the obstruction of justice.

Trials in Spain start with the statement of claims, which is filed by the claimant, followed by the written statement of defence (or opposition), filed by the defendant within a ten or 20-day period after the notification of the statement of claims, depending on the nature of the trial. The defendant may also include in its opposition an additional claim against the original claimant or third parties (reconvención).

At a later date, parties are summoned to attend a preliminary hearing. During this stage the parties may reach an agreement.

If the dispute persists, the preliminary hearing continues, and the parties will normally ratify the contents of their respective statements. The court will then examine if there are any circumstances which may impede the proceedings from being validly conducted, for example:

• the res judicata effect;
• additional or clarifying submissions to those made in their written proposals; and
• the existence of a legal defect in the way the claim or the statement of defence has been filed.

During the preliminary hearing, the parties may also propose additional evidence to include in their respective statements, as well as oppose the admission of evidence proposed by the opponent party. Lastly, the court will determine the date the trial will be held.

The trial begins by hearing the parties and continues with the taking of evidence admitted, chiefly the examination of witnesses. During the taking of evidence, the parties as well as the experts of the reports will be questioned and will also be allowed to produce any images or videos approved beforehand.

Lastly, the parties present their conclusions orally. The judgment is subsequently issued in writing.

Spanish law contains no provisions for case management hearings.

Jury trials are not available in civil cases conducted before Spanish courts.

Evidence must be relevant and related to the dispute subject to litigation and must have been obtained respecting the counterparty’s fundamental rights. In addition, evidence must be presented at the appropriate procedural moments.

Expert testimony is permitted in civil trials. As a general rule and subject to exceptions, a written expert report must be produced beforehand and included with the claim or the opposition.

At the trial, the author of the report can and will usually appear before the court in order to explain its contents and offer clarifications.

Any of the parties may ask the court if they can appoint an independent expert. The request will be accepted if the court considers the testimony to be useful and pertinent to the matter under decision. If this is the case, the petitioner will bear the cost of the expert testimony, unless the court dismisses the other party’s claims and orders it to pay all costs. 

Moreover, the court may seek expert testimony or guidance ex officio in certain proceedings, such as, filiation, maternity, paternity, legal capacity or in matrimony proceedings.

Civil hearings are usually open to the public, although this may be restricted to protect public order or basic rights. Hearings are filmed and recorded but not transcribed. The content of the recordings is generally not released to the public.

The level of intervention by a judge depends on the stage of the proceedings.

At the preliminary hearing, the judge leads the lawyers from one stage to another (Sections 414 and 429 SCPA). 

At the trial, the judge may question the witnesses or experts summoned to testify in order to obtain clarification or additional information. The court may also question the experts regarding the conclusions reached in their reports.

In civil proceedings, all judgments are issued in writing at a later date as Section 210.3 expressly forbids oral judgments.

While the SCPA provides some timeframes that are theoretically mandatory, they are rarely respected and, in practice, courts summon hearings and render judgments at their convenience. The duration of proceedings depends on several factors, including the complexity of the case and the workload of the court, meaning that it can range between one to three years in the first instance.

Court approval is not required for the settlement of a lawsuit, but it is advisable, since the approval renders it automatically enforceable in the event of a breach.

Parties to a proceeding may opt for the settlement of lawsuits to remain confidential by including a confidentiality clause in the settlement agreement.

As explained in 8.1 Court Approval, if the settlement has been validated by the court, it may be automatically enforced within the same proceeding. On the other hand, it the agreement has not been subjected to the court’s approval, a new lawsuit must be initiated in order to compel the fulfilment of its covenants.

Under Spanish law, settlement agreements are not treated differently from regular contracts. 

If the court has validated a settlement and a party does not comply, the aggrieved party may ask the judge to enforce the settlement by using all the means possible until the agreement has been completed.

A successful litigant may request and be granted: 

• a declaratory judgment (ie, the acknowledgment of a right); 
• a judgment that confirms or denies a party to perform a specific act; 
• a judgment including an obligation to pay; 
• a judgment including an obligation to hand over something other than an amount of money; and 
• a judgment including a penalty.

Punitive damages are not contemplated in Spanish law. Compensation for damages – either material or moral damages – is the general rule in Spanish law. Damages are calculated on the basis of the actual harm caused to the aggrieved party and include both the actual loss (damages) and the loss of profit that the party suffered which is duly evidenced. Spanish law does not allow compensation for future damages. 

The Spanish legal system allows the parties to agree on liquidated damages by the introduction of penalty clauses in contracts. However, when a penalty clause is included in a contract, the party that benefits from this cannot request additional damages compensation, as its compensation is limited to the amount agreed in the penalty clause plus any accrued interest, unless otherwise expressly agreed in the penalty clause.

These clauses can be moderated by the court if deemed excessive and this allegation is made by the affected party.

The party whose monetary claim has been upheld may collect interest accrued before and after the judgment is rendered.

Interest accrued before the judgment is rendered is calculated on the basis of the rate set out by the parties in the contract, or where there is no agreement on this, by applying the legal interest rate fixed annually by the Spanish government. 

Regarding interest accrued from the date the judgment is rendered (also known as procedural default interest), this is calculated by applying an extra 2% over the legal interest rate to the claimed amount, up until the compensation is paid.

The enforcement of a domestic judgment may be enforced by several means depending on the relief granted.

In the case of orders of payment or other forms of monetary sums, it may be enforced through direct seizure of the defendant’s liquid assets (cash, bank deposits) or public auction of other goods, with the proceeds being given to the creditor.

The enforcement of judgments is governed by three different sets of rules, depending on whether the judgment comes from an EU member state.

• Regulation 1215/2012/EU on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters will apply if the judgment is rendered by the courts of an EU member state.
• If the judgment has been issued by a non-EU member state, the recognition and enforcement of the judgment should follow the rules included in the relevant bilateral or multilateral treaties signed between the states of origin and Spain.
• In the event that there is no international treaty between Spain and the country where the judgment was issued, then Act 29/2015 on International Judicial Co-operation on Civil Matters will apply.

In broad terms, these procedures share as a common phase the necessity of recognition of the foreign judgment to be enforceable in Spain, which is known as an exequatur.

In civil trials, first instance rulings (rendered by courts of first instance or Commercial Courts) may be challenged if they amount to at least EUR3,000.

The challenge may be based either on purely legal grounds (an erroneous application of the law) or an incorrect interpretation of the facts.

If either of these is the case, a provincial court will re-examine in full the proceeding held before the first instance court.

In addition, and under certain special circumstances (the decision of the appeal has reversal interest), appeal rulings may be subject to a further challenge before the Supreme Court.

See 10.1 Levels of Appeal or Review to a Litigation. In addition, the Supreme Court has recently issued an instruction, dated July 2023, on the maximum number of pages of the appeal (25 pages) and other formal requirements. 

Appeals must be filed within 20 working days of notice of the unfavourable ruling. The challenge is filed in written form before the provincial court, after which the counterparty will be granted ten working days to submit its opposition to the statement.

Once both allegations have been duly submitted, the case must be resolved by the provincial court.

The provincial court will only consider the issues raised by the parties in their respective statements of challenge and opposition.

Normally, new evidence is not admitted by the appeal court. Nevertheless, according to Section 460.2 of the SCPA, the parties can seek:

• any evidence that was unduly rejected for admission by the first instance court, as long as the decision dismissing such evidence was appealed or challenged at the hearing in the first instance;
• any evidence proposed and admitted by the first instance court which was not finally presented, for reasons not attributable to the applicant; and
• any evidence referring to relevant facts for the decision of the case that may have occurred after the hearing took place, as long as the party can prove it became aware of such evidence subsequently.

The filing of an appeal is subject to a deposit of EUR50, which is reimbursed to the party in the event the challenge is upheld in part or in full.

The provincial court may confirm, dismiss or reverse, either partially or fully, the judgment issued by the first instance court. The judgment issued by the appeal court cannot be more harmful to the appellant than the judgment issued by the first instance court.

According to Section 394 of the SCPA, in declaratory proceedings, the costs that arise during the proceedings will be borne by the party whose claims have been rejected, unless the court considers that there are reasons to decide otherwise.

These reasons may include a legal or factual complexity of the case. 

The costs the losing party has to bear are court agents’, lawyers’ and experts’ fees (limited to one third of the amount in dispute, unless the losing party’s conduct is deemed imprudent, in which case the aforementioned limit does not apply). Expenses for copies of documentation, judicial notifications, faxes or notices may also be included.

Section 245 of the SCPA allows parties to challenge the amount of the costs to be paid within a period of ten days from when the costs are set, if that party considers the amount to be inappropriate or excessive.

When awarding costs, the court considers the extent of the upholding or dismissal of the pleas, the complexity of the case and the eventual imprudence of the parties.

Interest awarded on costs is a controversial issue in Spanish jurisdiction. Some courts consider that interest is applicable to costs while others disagree. 

Some authors and case law consider that the decree approving the costs (Article 244.3 SCPA) constitutes an enforceable title. The party that must bear the costs is granted a 20-day period from the date the costs are fixed to voluntarily pay. If it does not, accrued interest will be added to the amount of the costs.

While it is true that over the past few years mediation and other ADR methods have gained popularity with many experts advocating for a wider use, they are still regarded as somewhat “exotic” and not a feasible alternative to traditional court litigation.

Arbitration is more common in commercial litigation involving companies.

Aside from mediation, other forms of ADR accepted in Spain and regulated by law are conciliation and arbitration.

While there are laws that regulate mediation and arbitration, as of today they are not a compulsory requisite for a subsequent court lawsuit. This entails that parties are free to pursue judicial actions without a prior attempt at ADR.

Spain has several institutions that offer and promote ADR. Aside from the Arbitration Tribunal of Barcelona, the most relevant are located in Madrid and are focused on arbitration – the European Arbitration Association, Court of Arbitration of Madrid (CAM); the Civil and Commercial Court of Arbitration (CIMA); and the Spanish Court of Arbitration (CEA). 

On 16 October 2019, the constitution of the International Arbitration Centre of Madrid (CIAM) was announced. The CIAM is the result of the merger of the international activities of the three most prominent arbitration institutions in Spain – CAM, CIMA and the CEA. 

As of 1 January 2020, the CIAM is competent to administer two types of international arbitrations arising from new arbitration agreements: firstly, those arising from agreements in which the parties directly designate CIAM as the administering court, and secondly, those arising from agreements between parties to submit to arbitration administered by CAM, CIMA or the CEA.

In 2020, CAM created the Centre of Mediation of Madrid, which is focused on promoting mediation in Spain.

Arbitrations conducted in Spain are regulated by the 2003 Act on Arbitration (SAA), which applies only in the absence of provisions by the corresponding court’s rules.

The enforcement of arbitral awards rendered in Spain is carried out in accordance with the SCPA in the same terms as a court judgment.

Lastly, regarding foreign arbitral awards, their enforcement in Spain is subject to their prior recognition in the country through the procedure set out in the New York Convention of 1958.

Arbitration in Spain only can extend to civil and private matters within the free will of the parties. It is understood that this limitation excludes arbitration in labour, administrative and criminal matters, as well as in civil issues where the public interest is at stake (family law, competency, etc).

Arbitral awards in Spain may only be set aside (annulled) in very specific circumstances, if the challenging party alleges and duly proves that:

• the arbitration agreement does not exist or, if it does exist, is null and void;
• the applicant has not been notified about the appointment of an arbitrator or about any order, or the applicant has not been able to exercise its rights;
• the arbitrators have ruled on matters beyond the scope of their power;

• the appointment of the arbitrators and/or the proceeding is in breach of the parties’ agreement or, failing the parties’ agreement, is contrary to the SAA;

• the arbitrators have decided on matters that may not be subject to arbitration; and/or
• the award is contrary to public order.

For details on the enforcement of arbitral awards, both foreign and domestic, please see 13.1 Laws Regarding the Conduct of Arbitration.

As of the writing of this article (November 2024), as mentioned in 1.2 Court System and 3.1 Court Filings and Proceedings, there are is currently an ongoing legislative initiative for dispute resolution reform regarding, inter alia, the transformation of the judicial structure and the introduction of mandatory attempts at out-of-court settlements prior to filing a civil lawsuit.

Since this bill is still in an early stage of parliamentary debate, the proposed text will be subject to in-depth amendments and revisions, as the political parties introduce reforms.

In view of this, an analysis of this proposed reform is not considered necessary until the bill is approved and its definitive version takes full effect.

Lately, there has been a rapid increase in cases relating to electronics payments, crypto-assets claims and disputes, and, broad speaking, digital fraud. Consumer litigation against local banks is likely to increase with a new and massive wave of claims for the reimbursement of notarial costs and charges for mortgages granted to consumers including non-Spanish consumers. Aside from the foregoing, the recovery of the real estate market is also leading to an increase in construction claims between lessors and lessees where recent changes in rental law have made eviction more difficult in certain areas of Spain, leaving aside the everlasting problem created by illegal squatters, in respect of whom courts are struggling with the efficient enforcements of their decisions.