Antonio Flores’ Blog

It was not that long ago that Jeffrey Archer was convicted for perjury and perverting the course of justice for lying in a libel case, when disputing allegations that he had paid for sex.

Archer had made two mistakes:

1. To think that lying in Court was a preferable option than to admit he had performed -in the words of Justice Caulfield- ‘cold, unloving, rubber-insulated sex in a seedy hotel’.
2. To lie in a UK Court, as a plaintiff.

Because had Mr. Archer’s strayed in Spain, or rather had he chosen to lie in a Spanish Court, no conviction could have ever been passed since, unlike most common-law systems, Spanish laws do not contemplate perjury as a criminal offence. In fact, quite the contrary: claimants and defendants are entitled, in fact expected, to lie in Court.

The key legal precept is article 24.2 of the Spanish Constitution that states, inter alia, the following: “…Likewise, all persons have the right to…no make self-incriminating statements…to not declare themselves guilty.”

But make no mistake as to who can lie in Court: witnesses will be prosecuted if they do so for ‘false testimony’ (falso testimonio), a charge that carries prison terms. Also, you can be charged with falsely reporting a crime if you employ deceit (denuncia falsa) and likewise, be convicted of a crime.

In everyday judicial practice, the above distinction can be easily noted: claimants and defendants are not required to give their statements under oath whereas witnesses will have been previously sworn (warned too).

In my opinion, creating two types of liars (those who are allowed to and those who aren’t) causes Court cases to become protracted because defendants will be less prone to admit liability, even if wrongdoing is obvious, just because there are no legal consequences to prevaricating.

A recently example about this relates to two Luxembourg-based bankers who were deposed in Court: they lied shamelessly about their involvement in an Equity Release case and so did the representative for the bank, who was close to denying that their own publicity that was no longer available (yet still traceable via www.waybackmachine.com) was ever produced. I doubt these bankers would have chosen to mislead if they were tried in English Courts.

Antonio Flores Legal Practise Danske Bank Equity Release, False TEstimony, Perjury, spanish courts

On the subject of Spanish litigation, in my experience, there seems to be quite a bit of confusion in respect of several aspects related to the way justice works in Spain, such as how long court cases take, what sort of costs you expect to face, etc. I have found some interesting statistics which I will sum up in a few bullet points below.

• Duration of court cases According to a report issued by the supervisor for the judiciary (CGPJ), courts issued rulings in the following average time:
  • Civil cases: 7.7 months
  • Civil appeal cases: 4.9 months
  • Divorce mutually consented: 1-3 months
  • Administrative cases: around 15 months

• Number of court cases in a year In all of Spain, last year  just over 9 million court cases were filed, around the same amount were finalized and just over 1.6 million rulings were passed. Andalusia is the most belligerent regional community in 2010, with 230 court cases per 1.000 inhabitants. The least is La Rioja, with 136, no doubt the wine would have something to do with it!

• Compensation granted for courts responsibility for defective operation in 2010, approximately €5 million were awarded in compensation for defective or dysfunctional dispensation of justice.

• Number of complaints In 2010, a total 16,650 complaints were lodged in relation to the dispensation of justice. Of these, 200 complaints were received in the Law Societies.

• Money lodged within court bank accounts At the end of 2010, Banesto bank (the officially appointed by Spanish courts) had a balance in its accounts of €3.3 billion. I have a client with 1.4 million sitting there since June last year.

• Number of Prison Inmates In 2010 75,000 people were confined in Spanish prisons. Of these, 35% were foreign.

Average Length of Court Cases in Spain in 2010

A note on the Cost of Justice in Spain

Firstly, justice is free in Spain as such, as court action does not cost money, except for a symbolic deposit and a higher sum when you go to the Supreme Court.

It is the lawyers that make up for the costs, and this is what we would call Court costs in Spain. Many people believe that when you lose a case, you have to pay the other parties lawyers’ fees to be calculated depending on the hours of work of the lawyer, the professional prestige of the lawyer in question, what other costs these lawyers may engage when litigating (private investigators, detectives, technical reports etc.), so that in the end, these are often far beyond the actually monetary worth of a case. However, in Spain the Law Societies stipulates what sort of costs are to be awarded, on the basis of a number of rules which, generally, are based on the value of the claim.

Antonio Flores Litigation spanish courts

My previous post on the matter (Part 1) would have not been complete if no mention was made to contracts with developers and bank guarantees so below are a list of classic legal fairy tales on the subject.

On Courts/Litigation

1. Court costs are very high in Spain. Not at all, there are no Court costs because court proceedings are free (it’s called “justicia gratuita”) except if you decide to go the Supreme Court (these magistrates are a bunch of snobs and so may request you pay a deposit). It is the lawyers who will charge you the money together with the procurators (who inexplicably have yet not been eliminated as they are totally superfluous and have the habit of falling asleep in Court hearings). But if you have a good case and you win it is likely that legal fees will be awarded on the losing party and therefore you will be reimbursed. Obviously the contrary may happen if you lose in which case fees can double.
2. You will lose if you litigate against a Spaniard or a Spanish company because the system protects them: TOTAL RUBBISH. Yes, I can see the black continent from my terrace but this does not mean that we live in a banana African republic (not yet though). Never have I heard, been told or read any complaints from anyone to the effect of denouncing the judiciary system for judging on patriotic grounds.
3. Never litigate in Spain, it will take 10 years: yes, if you decide to go all the way to the Supreme Court. But the average for a Court of First Instance ruling is 14 months and we all know that time flies…

On Contracts with Developers and Bank Guarantees

Lately, a very popular topic on legal-gossip websites:

1. I have a contract with a developer, don’t want to proceed and I have been advised by someone with a zillion posts on an expat website forum that a particular lawyer will succeed because he/she is an expert in Consumer Protection Law: run away, would not touch it with a barge pole! The reason is simple: no decent lawyer will want this type publicity because it is immoral. Lawyers should never give sweeping legal advice on a particular subject without reading a contract and analyzing all elements. Those who fail to follow this principle are regarded as ambulance chasers.
2. I have a bank guarantee/insurance policy and therefore can just cash it and walk away: NO, this would defeat the purpose of the bank guarantee which is to protect the investor from a failed property investment and not serve as a getaway facility. You can however cancel and try to execute, directly or through the Courts, where notoriously a delay has taken place. Results are varied, from banks/insurers paying happily to refusing point bank, with similar results when going to Courts (recently Banesto has accepted to pay 80% of 11 deposits they were guaranteeing in a Court case we filed against them and their client, Promaga).
3. Statutory Force majeure and Acts of God are not applicable in Spanish law: WHY NOT? Article 1.105 of the Spanish Civil Code, in force since the 19th century, says the contrary. Developers can excuse themselves for not completing on time if they can prove that the delay was caused by events catalogued as any of the two.
4. The developer has delivered my property one month late and therefore they are at default and have to return my money, by law: NO judge will accept this unless specifically written into the contract and no developer is stupid enough to have done that. The exact amount of days or months of delay will depend on the wording of the contract, the reasons for the delay, the judge ruling the case (some say that 3 months is enough and others say that 9 months does not defeat the economical purpose of the contract and so it is insufficient).
5. I bought a new property, I could not complete, the developer delivered on time and summoned me for completion, after which they cancelled. I have lost my deposit and cannot do anything. Not always. It is quite possible that the contract was a one-sided agreement because it was entered with the developer at a time when they had (limited) precious properties for seemingly endless numbers of keen property investors (i.e., property boom) and so it was a case of take-it-or-leave sort of agreement. The consequence of this is that clauses which can be considered as unequal, could not be negotiated at the time of buying, are not reciprocal and are not proportioned are null and void. This includes the clause where the buyer loses the deposit if he does not complete if the developer does not include one where he will refund twice the deposit if he too fails.
6. I have bought a property from a developer and therefore I am a consumer, which gives me the right to cancel the contract if I wish: No, careful! Being a consumer does not mean that you have every right, if you wish to pull out, to cancel your contract and demand your monies back. There are times where developers have fully complied with the contract and there is little hope in successfully winning a case for contractual default, in fact they are open to enforce completion of the transaction, both in Spain and in your own country if they deem it appropriate.
7. I wish to cancel my off-plan contract and I’ve been told I have a “Solid Case”. You may well have one, a very strong one in fact, in which case cashing that bank guarantee is a plausible option and alternatively a Court case. But once again be cautious: there are some pseudo-legal website forums where you are told pretty much that no matter what you have done and/or the developer has done you always always have a ‘strong case’. To put a comparison it’s like a doctor telling a moribund terminally ill patient that no matter how serious the ailing is they will make a quick recovery (I could not find a less graphic comparison but it is how I see it). Examples of this are for example fallacies such as the one that says if you don’t get a mortgage you can pull out in any case, or that one whereby if the developer is late by 1 month you can pull out.

This list is by far comprehensive so if you come across anymore do let us know!

Antonio Flores Litigation, Property ambulance chasers, legal gossip, litigation against spanish developers, spanish courts