Organic law 1/2025: “ADRM” and main changes to the Spanish civil procedure act.

On 3rd January 2025, the Official State Gazette (BOE) published the Organic Law 1/2025, of 2nd January, on measures relating to the efficiency of the Public Justice Service (OLPJS), which, among other aspects, (i) establishes organizational changes in the public justice system, (ii) adds the obligation to attempt, prior to judicial proceedings, an out-of-court settlement of the dispute through the so-called Appropriate Dispute Resolution Means (ADRM) provided for in said Law, and (iii) modifies certain procedural laws, including Law 1/2000 on Spanish Civil Procedure.

In this article we will focus on ADRM and the main changes to the Spanish Civil Procedure Act 1/2000.

Appropriate Dispute Resolution Means (ADRM)

Chapter I, Title II, of the OLPJS introduces into our legal system the Appropriate Dispute Resolution Means (ADRM) in non-jurisdictional proceedings, as a requirement of admissibility prior to litigation in civil and commercial matters (expressly excluding litigation in labour, criminal and bankruptcy matters, as well as those in which one of the parties is a public entity).

In particular, ADRM is defined as any type of negotiation activity that the parties to a dispute resort to in good faith in order to find an out-of-court solution. These include direct negotiation (by the parties or through a lawyer), mediation, conciliation, or confidential binding offers, among others.

Below we detail certain aspects of ADRM, especially with regard to the process of direct negotiation through a lawyer, and its implications in judicial proceedings:

- The requirement for admissibility to go to ADRM is understood to be fulfilled, among other things, when a negotiating activity is carried out between the lawyers of the parties, under their instructions and with their agreement, it being sufficient to have attempted such negotiation.

- Time limits are established for the ADRM, it being understood that the negotiation process has ended without agreement in certain cases (for example, if thirty calendar days have elapsed since the receipt of the request for negotiation without a response, if three months have elapsed since the date of the first meeting, or if either party terminates the negotiations in writing).

- The negotiation process and the documentation used will be confidential, except in certain cases specified by law (among others, the dispensation of all parties expressly and in writing).

- The agreement reached will be binding on the parties, who may not file a lawsuit with the same purpose. In the event of a lawsuit with the same purpose, the Courts may rule on the legal costs phase, on their assessment or on imposing fines for abuse of the public service of justice.

- In cases where it is not possible to reach an agreement between the parties, or no response is received, it is established that the lawsuit must be filed within one year, with documentary proof of the negotiation attempt (or any other ADRM) provided for by law.

- Certain cases are regulated in which it will not be necessary to resort to an ADRM, expressly excluding the cases of filing an executive lawsuit, the request for pre-lawsuit injunctive relief, or the request for preliminary investigation proceedings (among others).

Main amendments to the Spanish Civil Procedure Act:

The OLPJS also modifies certain procedural laws, including Law 1/2000 on Spanish Civil Procedure. As regards the latter, we highlight the following procedural changes:

- It establishes the need to include in the lawsuit writ a description of the prior negotiation process (ADRM), the provision of the document proving that such negotiation activity has been attempted (when it is a requirement for admissibility), or the responsible declaration that negotiation has not been possible.

- The Judicial Authority is allowed to propose to the parties, at any time during Court proceedings, the possibility of referring the dispute to an ADRM. The parties' right of disposal is limited, as they cannot withdraw, waive, acquiesce or compromise when the day for deliberation and ruling on the cassation appeal has been set.

- For expert opinions, in addition to the official title corresponding to the subject matter of the opinion, the experts are required to be accredited experts in the field.

- Included in the enforcement phase, is the possibility of suspending proceedings to go to the ADRM and the regulation of certain procedural aspects is modified.

- In proceedings on recovery of legal costs, a new regulation is established in relation to ADRM and the possibility of requesting exemption or moderation of legal costs is extended, eliminating the awarding of legal costs in the challenge procedure, except in the case of abuse of the public service of Justice (for example, for not having resorted to ADRM).

- The regulation on the termination of Court proceedings due to extra-procedural satisfaction or supervening lack of object in terms of appearance and payment of costs, is modified.

The above changes are applicable from 3 April 2025 to civil and commercial proceedings (excluding those in bankruptcy matters) initiated after that date. With regard to ongoing legal proceedings, the parties may, by mutual agreement, submit to any ADRM.

These regulations will be applicable when at least one of the parties is domiciled in Spain and the negotiating activity takes place in Spanish territory.