Law and policy

Definitions

Is there any legal definition in your jurisdiction of the terms ‘ADR’, ‘conciliation’ and ‘mediation’?

Mediation is defined in the Spanish Act on mediation in civil and commercial matters (Spanish Act 5/2012) as a ‘dispute resolution method, however named or referred to, whereby two or more parties to a dispute attempt by themselves, on a voluntary basis, to reach an agreement on the settlement of their dispute with the assistance of a mediator’.

ADR is understood in the milieu and used in conferences and programmes but even its version in Spanish (MASC) is commonly used. In any case, when the acronym is used it often includes arbitration as an alternative to court proceedings.

Conciliation as a legal term has a long history in Spain. Nowadays, in civil and commercial matters the ruling on conciliation is to be found in the Spanish Act on the affairs of voluntary jurisdiction (2015) and in the Civil Procedure Code. The former provides for both voluntary conciliation that can be done with the assistance of a legal operator (eg, a public notary) and conciliation previous to court proceedings where the conciliator is either a justice of the peace or a judicial secretary. The latter provides for two different stages in the proceedings when parties are invited by the court to consider the possibility of reaching an agreement. This is first done at the hearing held at the court once the defendant and respondent have exchanged submissions. It can also be done once the controversial facts have been fixed. In none of these cases is there a legal definition of conciliation.

Mediation models

What is the history of commercial mediation in your jurisdiction? And which mediation models are practised?

The Spanish government using the urgency process passed Royal Decree-Act 5/2012, of 5 March 2012, on civil and commercial mediation, which implemented Directive 2008/52/EC. Royal Decree-Law 5/2012 was passed as an Act on 6 July 2012 (Act 5/2012, of 6 July 2012, on mediation in civil and commercial matters). This Act was later developed by royal decrees.

As the business activity deals both with civil issues and commercial issues, it is worth mentioning here that the Statute of Autonomy of Catalonia assigns exclusive power over civil law matters to the Catalan government with the exception of those assigned to the Spanish government by the Spanish Constitution. As the Catalan government is empowered to issue specific rules of procedure that result from the particularities of Catalan substantive law, the Catalan legislator passed Act 15/2009 regarding mediation in the sphere of private law (Catalan Act 15/2009), which was later developed by decrees and orders.

It should be mentioned also that the Spanish Act 14/2013 on support for entrepreneurs introduced a new Title X in Bankruptcy Act to regulate bankruptcy mediation.

An account of the history of commercial mediation in Spain would not be complete without reference to the Code of Best Practices in Mediation launched by the Spanish Club of Arbitration in 2013 to further the sound development of mediation and promote awareness of mediation among the business and legal communities.

In terms of mediation procedure, style and approach of the mediator, the aim of both the Spanish and the Catalan legislators was to establish a simple and flexible mediation procedure to allow the parties to freely determine the essential stages.

This said, the mediation style for commercial disputes is predominantly facilitative. According to the Spanish Act of 2012, mediators will act in such a way that allows parties to reach an agreement on their own. Moreover, it states that mediators have to facilitate communication between the parties and be proactive to bring the parties closer together.

The Catalan Act of 2009 stipulates that mediators must help participants to reach agreements and decisions on their own, without imposing solutions or specific measures. It states that mediators carry out their role by encouraging appropriate communication among the parties and therefore:

  • facilitate dialogue, promote understanding and help parties to find solutions to their disputes;
  • see that the parties take their own decisions and have sufficient information and advice so they may reach their agreements freely and conscientiously; and
  • help the parties to remain aware of the most important interests at stake.
Domestic mediation law

Are there any domestic laws specifically governing mediation and its practice?

See question 2.

Singapore Convention

Is your state expected to sign and ratify the UN Convention on International Settlement Agreements Resulting from Mediation when it comes into force?

Although there have been discussions at EU level about whether there is a need for a specific instrument only for mediation settlement agreements, it seems clear that article 3 of the Treaty on the Functioning of the European Union renders the EU competent to ratify the Singapore Convention on behalf of its members. The issue of signature and ratification of the Convention goes, therefore, beyond the scope of action of the Spanish legislator.

Incentives to mediate

To what extent, and how, is mediation encouraged in your jurisdiction?

The use of mediation in Spain is mainly encouraged by profuse legislation aiming to include the possibility of having recourse to mediation in many situations and conflicts.

Sanctions for failure to mediate

Are there any sanctions if a party to a dispute proposes mediation and the other ignores the proposal, refuses to mediate or frustrates the mediation process?

Recourse to mediation relies exclusively on the parties’ choice. In the same way, that there are no direct incentives for the use of mediation, there are no sanctions if a party refuses to mediate when the other party has proposed it. There are no requirements for parties to participate in mediation if there is no prior agreement to mediate.

Prevalence of mediation

How common is commercial mediation compared with litigation?

If we compare commercial mediation cases to litigation, one necessarily concludes that mediation is not that common yet in Spain.

There are two sources of official public data available: the statistics released by the General Council of the Judiciary and those released by the Mediation Centre of Private Law of Catalonia that depends on the Catalan Department of Justice.

According to the statistics of the General Council of the Judiciary, the relationship in Spain between civil and commercial cases started each year and the number of court-ordered mediations has increased from 0.01 per cent (2012 to 2015) to 0.02 per cent (2016 to 2018). However, there is no real increase in the number of court-ordered mediations. Between 2012 and 2015, Spain was still going through the consequences of the financial crisis of 2008 and the number of claims started each year was very high. From the 8,478,731 new cases started in 2015 there was a decrease to 5,813,170 in 2016, a number that remained much the same in 2017 and 2018. This is the explanation for the increase in the percentage of court-ordered mediations, which were 1,166 in 2012 and 1,289 in 2018.

According to the statistics of the Mediation Centre of Private Law of Catalonia, which include both family and private law mediation cases, 82.91 per cent of all the mediation cases initiated in 2018 were voluntary, while the remaining 17.09 per cent were court-ordered mediations. It is interesting to note that this is the lowest ratio of court-ordered mediations in the nine years included in the statistics made public, the highest having been in 2013 (33.1 per cent).

One must bear in mind that there are also voluntary mediations either ad hoc or administered by other centres, but there are no data available.

Mediators

Accreditation

Is there a professional body for mediators, and is it necessary to be accredited to describe oneself as a ‘mediator’? What are the key requirements to gain accreditation? Is continuing professional development compulsory, and what requirements are laid down?

According to the Spanish Mediation Act (article 11), three requirements must be fulfilled by individuals to be able to act as a mediator:

  • they must be free to exercise of their civil rights;
  • they must have an official university degree or superior professional training as well as specific mediation training; and
  • they must take out civil liability insurance or an equivalent guarantee.

Legal entities that include mediation among their functions can also be mediators if they appoint individuals that fulfil the requirements foreseen by the Act.

A Registry of Mediators and Mediation Institutions overseen by the Ministry of Justice has been created in 2013 by Royal Decree. The registration is voluntary except for bankruptcy mediators. This Registry coexists with the Registry of Mediators of each Autonomous Community.

Bankruptcy mediators must be individuals or legal entities that fulfil the requirements foreseen by article 11 of Act 5/2012 and are registered in the Registry of Mediators and Mediation Institutions. Since bankruptcy mediators will become trustees in bankruptcy if debtors and creditors are not able to reach a settlement agreement, mediators must be - or must include if they are legal entities - lawyers, economists or auditors with at least five years of professional experience.

According to the Catalan Mediation Act, any individual may act as a mediator if he or she has an official university degree and is able to provide proof of completion of specific mediation training and professional proficiency, duly updated to the standards established by regulation. Individuals must belong to an official professional mediators association, to a professional association accredited by the department responsible for civil law matters, or to a mediation service provider for the public administration.

According to the Spanish regulation, mediation training programmes will have a minimum duration of 100 hours and they will include both theoretical and practical content. Practical content will take at least 35 per cent of the mediation training programmes.

Regarding Catalan regulation, mediation training programmes must be divided into two parts: (i) general mediation training must have a minimum duration of 110 hours, including practice; (ii) specific mediation training for different areas in the sphere of private law must have a minimum duration of 60 hours, including practice.

Both the Spanish and the Catalan legislators have provided for mandatory continuing professional training for registered mediators. According to the Spanish system, any registered mediator needs to fulfil 20 hours of continuing professional training every five years. In the Catalan system the requirement is 40 hours every two years.

Liability

What immunities or potential liabilities does a mediator have? Is professional liability insurance available or required?

According to the Spanish Mediation Act, article 11(3), mediators shall ‘arrange for an insurance policy or equivalent surety that covers civil liability arising from [their] conduct in any dispute in which [they take] part’. This civil liability insurance or equivalent guarantee must cover damage arising from, among other things, lack of impartiality and breach of confidentiality, professional errors or loss of documentation.

The Spanish Mediation Act provides that the amount guaranteed must be proportional to the complexity of the mediation processes conducted by the mediator.

Allegedly aggrieved parties would be entitled to take direct action against the mediator and, if applicable, against the mediation institution.

Mediation agreements

Is it required, or customary, for a written mediation agreement to be entered into by the parties and the mediator? What would be the main terms?

As is explained later in more detail in question 15, the Spanish Mediation Act provides for minutes of the constitutive session to be recorded and in principle the basics of the mediation should be included there. That said, experienced mediators have parties enter into a prior written mediation agreement to set the tone right from the beginning and help parties work together in a more effective way.

The terms of these agreements include a description of the dispute, the names of parties and their representatives, as well as that of the mediator, commitment of the parties to confidentiality and to participate in good faith, the place and time of the mediation, the mediator’s remuneration and any agreed questions on cancellation and postponement, as well as any other question deemed appropriate.

Appointment

How are mediators appointed?

There are no specific characteristics for the appointment of mediators. In institutional mediation, that is, administered by a centre be it public (eg, those depending on chambers of commerce and bar associations) or private, mediators are appointed according to the rules of the centre.

The Spanish Club of Arbitration Code of Good Practices in Mediation has a specific section for mediation institutions. Among other recommendations, two make reference to the appointment of mediators. On the one hand, there is a need for these institutions to act independently and neutrally, and furnish full and transparent information about, among other things, the system for appointing mediators. On the other hand, there is a need to ensure that the choice of a mediator is by mutual agreement of the parties, and proceeds with the appointment of mediators as, according to their rules and regulations, it falls to them to make judgments on the basis of objective, transparent criteria, adapting said appointments to the specific needs of each case and, wherever possible, respecting the mutual preferences of the parties.

Experienced mediators are also often appointed by the parties on an ad hoc basis.

Conflicts of interest

Must mediators disclose possible conflicts of interest? What would be considered a conflict of interest? What are the consequences of failure to disclose a conflict?

Regarding the duty to disclose conflict of interests, the explanatory statement of the Spanish Mediation Act makes express reference to the European Code of Conduct for Mediators. Later on, article 13 provides that prior to initiating or continuing their task, mediators must disclose any circumstance that may either affect their impartiality or generate a conflict of interests. Such circumstances shall, in every case, include:

(a) all manner of personal, contractual or business relationships with one of the parties; (b) any direct or indirect interest in the outcome of the mediation; and (c) the fact that the mediator, or any member of their firm or organisation, has previously acted in favour of one or more of the parties in any circumstance other than the mediation.

In such cases, mediators shall only be able to accept or continue the mediation where they can give an assurance of their ability to mediate with total impartiality, provided that the parties consent thereto and place such consent expressly on the record.

The duty of disclosing such information persists throughout the mediation process.

Acceptance of mediation places mediators under the legal obligation to loyally fulfil the task entrusted to them. Failing to disclose a conflict of interest would be a failure of this duty and mediators would incur liability for any damage that they may cause.

Fees

Are mediators’ fees regulated, or are they negotiable? What is the usual range of fees?

In principle, mediators’ fees in civil and commercial matters are not regulated in Spain and it is parties that negotiate them.

The Spanish Act states that mediators’ fees shall not depend on the outcome of the mediation. This principle is also taken up by the Spanish Club of Arbitration Code of Best Practices in Mediation. This basically excludes the use of success-based fees in Spain. The practice that is more extended is neither a percentage of the sum in dispute nor a lump sum but an hourly or daily rate.

The range of fees advertised in the market varies a lot, from €80 per hour to €400 per hour. One must keep in mind that all the existing legislation on mediation in Spain has not translated yet into a significant number of cases. This means that there are still many mediators offering their services in the market with no real experience and they propose to charge accordingly.

Unless otherwise agreed, the general rule is that fees will be shared equally between the parties.

Procedure

Counsel and witnesses

Are the parties typically represented by lawyers in commercial mediation? Are fact- and expert witnesses commonly used?

Since the Spanish Act foresees that mediation agreements can be signed by the parties or their representatives, it is possible to conclude that decisions about the presence of representatives are up to the parties and the mediator.

The Catalan Act foresees that, in mediation, the parties and the mediator shall attend meetings personally and shall not appoint representatives or intermediaries. Nevertheless, mediators shall inform the parties that it is advisable for them to receive legal assistance during mediation and that it is necessary for an attorney of their choice to draw up the settlement or an alternative appropriate legal document, based on the outcome of the mediation. Where applicable, the attorney may be a court-appointed lawyer, at the request of the parties involved. Moreover, depending on the circumstances of the case, the mediator may advise the parties to pursue specific counselling outside the legal sphere.

Nevertheless, in both complex commercial and cross-border disputes the presence of lawyers is common practice.

The Spanish Club of Arbitration Code of Best Practices in Mediation includes a specific section for counsel in mediation insisting on the importance of the prepared and proactive participation of lawyers in the process.

There have not yet been enough commercial mediation cases to have fact- and expert witnesses become normal practice in mediation, but nothing would prevent them from taking part in a process, provided they sign a confidentiality commitment.

Procedural rules

Are there rules governing the mediation procedure? If not, what is the typical procedure before and during the hearing?

The Spanish Mediation Act provides for some rules governing the mediation procedure.

When ad hoc mediators or mediation institutions receive a request for mediation, they call the parties for an initial session with the object of informing them about any issue that may eventually compromise the impartiality of the mediator, the main characteristics of the mediation process and procedure, the cost of the mediation and any deadline involved.

Once this informative session has taken place, the mediation procedure commences with a constitutive session in which parties shall agree on the subject matter of the dispute submitted to mediation, the proceedings calendar and the deadline for the mediation completion. All this shall be recorded in the corresponding minutes. If no agreement is reached on any of these issues, the minutes of the constitutive session shall record it accordingly and, if the case may be, state that the mediation was not successful.

The Spanish Act stresses that the procedure shall be as brief as possible and the different stages be condensed into the fewest possible sessions.

The final minutes drafted at the end of the procedure shall include any agreements reached.

There are not yet enough commercial mediation cases being conducted to talk about a typical procedure, but experienced mediators certainly ask for early submissions to prepare for the case, hold pre-mediation caucuses either in person or on the phone to assist parties in preparing for the mediation and starting building rapport with them and hold join sessions and caucuses during the mediation as appropriate to make the process as efficient as possible.

Tolling effect on limitation periods

Does commencement of mediation interrupt the limitation period for a court or arbitration claim?

According to the Spanish Act (article 4), the commencement of mediation suspends limitation periods from the date the referral is received by mediators or mediation institutions. Limitation periods will resume should the record of the initial joint session not be signed within 15 calendar days of the receipt of the request for mediation.

The suspension of limitation periods will continue until one of the following happens:

  • the final mediated settlement agreement is reached;
  • the record of the final session is signed or the mediation process terminates for a different reason (whether because some or all of the parties exercise their right to treat the proceedings as having come to an end and notify the mediator thereof, or because the maximum period agreed by the parties for the duration of the process has concluded, as well as where the mediator should reasonably deem the positions of the parties to be irreconcilable or there should be any other cause that brings about the conclusion thereof).
Enforceability of mediation clauses

Is a dispute resolution clause providing for mediation enforceable? What is the legal basis for enforceability?

In contrast to mediation legislation in other European countries, the Spanish Act directly addresses the question of the enforceability of mediation clauses, stating in its article 6(2) that:

[w]here there is a written agreement expressing an undertaking to submit any disputes which have arisen or may arise to mediation, the process agreed in good faith must be attempted before resorting to the courts or any other extrajudicial solution. This clause shall have this effect even where the dispute turns on the validity or existence of the contract.

Additionally, article 10(2) of Act 5/2012 states that ‘the agreement to submit to mediation . . . bars the courts from hearing any dispute submitted to mediation during the time it is conducted’.

As a consequence, defendants are entitled to ask the court to decline jurisdiction and declare the action inadmissible if a mediation clause exists. In this regard, the Civil Procedure Code regulates the way in which the court should declare lack of jurisdiction (declinatoria) on the grounds of the existence of a mediation clause.

The declinatoria action shall be filed within 10 days of the term allowed to contest the complaint or within five days of the summons to appear at the hearing and shall have the effect of suspending the principal proceedings.

Despite the existence of this provision, some case law exists that could indicate that the courts might not always take this approach. In a case before the Madrid Superior Court, parties had entered into a multi-tiered dispute resolution clause where mediation was to be attempted first. Even before the first mediation session, the claimant submitted a request for arbitration on the basis of the need for interim measures. The court found that, ‘while the mediation provisions in the contract had been breached, the arbitration agreement had not been invalidated, because the agreement anticipated the possibility of the parties seeking interim relief through arbitration proceedings’.

Confidentiality of proceedings

Are mediation proceedings strictly private and confidential?

Confidentiality is one of the guiding principles of mediation in Spain. The Spanish Act imposes a general duty on mediators, mediation institutions and parties to keep information disclosed in mediation confidential. The Spanish Club of Arbitration Code contains similar requirements.

The content of the mediation process and all documents used therein are confidential. As a consequence, mediators, mediation institutions and parties cannot disclose information arising out of or in connection with a mediation process. Breach of the duty of confidentiality will result in general civil liability.

Unless expressly authorised by the parties, mediators are not entitled to communicate or distribute information or documentation provided by the parties in private sessions. A breach of this duty would result in general civil liability.

Success rate

What is the likelihood of a commercial mediation being successful?

It is difficult to assert on the likelihood of a commercial mediation being successful is Spain in terms of having all or some of the issues resolved by agreement because the number of cases is not relevant yet.

In any case, according to the statistics of the General Council of the Judiciary, the percentage of court-ordered mediations in civil and commercial cases having concluded with agreement has increased from 8.66 per cent in 2012 to 11.48 per cent in 2018.

According to the statistics of the Mediation Centre of Private Law of Catalonia, which include both family and private law cases, between 2010 and 2018 the lowest percentage of mediation cases administered by the Centre concluded with agreement took place in 2014 with 50.05 per cent and the highest in 2011 with 61.3 per cent. In 2018, the ratio was 50.7 per cent.

Among the settled cases, the higher percentages belong every year to voluntary cases, while the court-ordered ones are, not surprisingly, those that settle in lower percentages: 18.95 per cent (2010), 15.94 per cent (2011), 25.1 per cent (2012), 33.11 per cent (2013), 26.16 per cent (2014), 18.11 per cent (2015), 21.41 per cent (2016), 24.26 per cent (2017) and 19.8 per cent (2018).

Settlement agreements

Formalities

Must a settlement agreement be in writing to be enforceable? Are there other formalities?

Settlement agreements must be in writing. They are usually considered as standard civil contracts and, as such, are not automatically enforceable.

For out-of-court mediations, mediated settlement agreements may become enforceable once public notaries incorporate them into public deeds.

If a judicial process is pending prior to the mediation and the case settles, parties may request judicial approval of the agreement so that it becomes enforceable.

Foreign settlement agreements that are not contrary to the Spanish public policy rules will be enforceable in Spain if foreign authorities that perform functions equivalent to those performed by the Spanish authorities certified their enforceability. A foreign settlement agreement resulting from mediation that has not been declared enforceable by a foreign authority will only be enforceable in Spain upon its formalisation as a public deed before a Spanish public notary, either by all parties involved or by one of them with the express consent of all the others.

Challenging settlements

In what circumstances can the mediation settlement agreement be challenged in court? Can the mediator be called to give evidence regarding the mediation or the alleged settlement?

Settlement agreements resulting from mediation may be challenged before the courts with an action seeking annulment based on the causes for the annulment of contracts according to Spanish law.

Mediators and those involved in the administration of mediation cannot be compelled to give evidence in civil and commercial judicial or arbitration proceedings regarding information arising out of or in connection with a mediation process, except where the parties have expressly waived this in writing. The only exception to this would be if this information were requested by a criminal court.

Enforceability of settlements

Are there rules regarding enforcement of mediation settlement agreements? And on what basis is the mediation settlement agreement enforceable?

See question 20.

Stays in favour of mediation

Duty to stay proceedings

Must courts stay their proceedings in favour of mediation?

There is no legal obligation for courts to stay their proceedings in favour of mediation. As a matter of fact, most often when it is the judges that invite the parties to consider mediation and the mediation does occur, it is scheduled in a way that takes advantage of the time lag before the oral trial.

It is only the parties who, when deciding to attempt mediation, may apply for an interruption of the judicial or arbitral proceedings.

Miscellaneous

Other distinctive features

Are there any distinctive features of commercial mediation in your jurisdiction not covered above?

Conducting mediation proceedings through electronic means is encouraged. This is especially the case for disputes submitted to mediation based on monetary claims not exceeding €600, unless recourse to such means is not possible for any of the parties.

In terms of mixed modes, some local arbitration institutions have incorporated in recent years an independent mediation service and are consequently promoting multi-tiered clauses. This might open the door in the future to med-arb or arb-med-arb practices.

Update and trends

Opportunities and challenges

What are the key opportunities, challenges and developments which you anticipate relating to mediation in your jurisdiction?

Opportunities and challenges 25 What are the key opportunities, challenges and developments which you anticipate relating to mediation in your jurisdiction?

Although there is not yet a strong mediation culture in Spain, this might be changing in the near feature. There is currently a proposed legislation aimed to promote mediation. The draft law provides for mediation to be a pre-condition to litigation for several family matters and also many civil and commercial ones such as, among others: professional negligence liability; inheritance; conflicts between partners or companies’ board executives; some non-contractual liability matters; condominiums; contracts for distribution, agency, franchise and supply of goods and services; some construction defects; and protection of the rights to honour, privacy or one’s own image.

This draft law, together with the establishment in April 2019 by the Ministry for Justice of a Forum for Mediation composed of representatives of both the public sector and the private sector, are steps that offer fresh hope.