Organic Law 1/2025 will come into force on April 3, introducing as one of its most important changes the mandatory use of so-called appropriate Alternative Dispute Resolution (ADR) methods before filing a lawsuit in civil and commercial matters. The stated objective of this legislation is to reduce litigation, but it will have to overcome a Spanish legal culture that has been little inclined toward consensual conflict resolution until now.
The law defines ADR (Alternative Dispute Resolution) methods as “any type of negotiating activity, recognized in this or other laws, that the parties to a conflict engage in good faith to find an extrajudicial solution, either on their own or with the intervention of a third party (the ‘neutral third party‘),” and specifically regulates:
- private conciliation;
(ii) binding confidential offers;
(iii) the opinion of an independent expert regarding the subject matter of the dispute;
(iv) a collaborative law process, which is a negotiation process in which the lawyers involved waive the right to represent their clients in court if a full or partial resolution of the dispute is not reached. - (v) direct negotiation between the parties and/or their lawyers;
(vi) mediation.
The main mechanism to ensure the effectiveness of ADR methods is to establish as a requirement for proceeding that an ADR method has been used before filing a lawsuit in civil and commercial matters. As an exception, ADR will not be required in certain special processes, such as those concerning the judicial protection of fundamental rights, requests for preliminary proceedings or precautionary measures before filing a lawsuit, voluntary jurisdiction proceedings, bill of exchange trials, procedures to recover possession, or enforcement claims.
From the entry into force of the law, the plaintiff must provide credible evidence in their claim of the ADR method they have previously resorted to, as failure to do so may result in the claim being inadmissible. The use of ADR is also reinforced by taking into account the parties’ behavior during the process when imposing costs in the judicial procedure, as well as for reducing the amount of costs, or even the imposition of sanctions on those who have acted in bad faith during this new phase prior to the judicial procedure.
The submission of a request to initiate a negotiation procedure through an ADR method has the effect of interrupting the prescription or suspending the expiration deadlines for actions. This effect takes place from the date when proof of the attempt to notify the request to the other party is provided, and it will remain in effect until the agreement is reached or the negotiation process concludes without reaching an agreement.
The ADR process will be considered concluded without agreement in the following cases:
- 30 calendar days after the date of receipt of the initial negotiation request, if there has been no contact or no first meeting has taken place, or if no written response has been received from the other party.
- If 30 calendar days pass after one party makes a proposal, without reaching an agreement or receiving a written response.
- 3 months after the first meeting if no agreement has been reached.
In addition, either party may terminate the negotiations at any time.
The ADR process attempted between the parties, and its termination without an agreement, must be documented, with the method of proof varying in different situations.
- Without the intervention of a neutral third party: The negotiation will be considered proven by any document signed by both parties that includes the identification of the participants, their identity, the date, the subject of the conflict, the dates of the meetings held, and a declaration confirming that the negotiation took place in good faith. If the negotiation did not take place, it will be sufficient to prove that the opposing party received the request or proposal, indicating the date and confirming that they had access to its content.
- With the intervention of a neutral third party: At the request of either party, the third party must issue a document stating that both parties negotiated in good faith or, if not, the attempt to negotiate and the manner in which the effective summons was carried out.
To safeguard the confidentiality of the negotiations, it will not be necessary to disclose their content to the judges, but only the existence of the attempt and its outcome. This protects the conciliatory purpose of ADR methods, preventing the parties’ attitude in the negotiation from being influenced if the content were to be later disclosed.
It is important to note that, if an agreement is reached, it will become an enforceable title after its judicial approval, the issuance of a registration certificate of the conciliation, or the formalization in a public deed.
There is no doubt, therefore, that the implementation of this reform requires a change in mindset from all legal practitioners. Now more than ever, it is essential to adapt our clients’ legal strategies from a comprehensive approach that considers both the judicial and extrajudicial aspects of any dispute. This is a profound transformation that will require constant monitoring of the effects of ADR methods and the correction of any inefficiencies that may arise in their application. In this context, it is also crucial for our courts to adopt a legal interpretation that goes beyond formalism, actively promoting the culture of agreement and discouraging unnecessary litigation.
David del Valle
Senior Manager Corporate Law
dvd@uhy-fay.com
