An extract from The Asset Tracing and Recovery Review, 8th Edition

Seizure and evidence

i Securing assets and proceeds

Chilean law considers precautionary measures to seize the assets of the accused.

Despite being regulated in the Chilean Code of Civil Procedure, precautionary measures may be requested both in civil and criminal proceedings to protect the economic interests of the victim.

Precautionary measures extend to any act that ensures or protects the claim deduced or the favourable sentence that could be pronounced. The Code regulates four measures in particular:

  1. the sequestration of the good that is the subject of the lawsuit. This measure consists in the deposit of the property in the hands of a third party, which is obliged to keep it to prevent its loss or deterioration and to return it at the termination of the trial to the person determined by the judge;
  2. the appointment of one or more auditors. This is the appointment of a person by the court who will ensure the legality of the administration of the assets that are the subject of the lawsuit, keeping track of the entries and expenditures of the objects intervened and giving notice of any embezzlement or abuse noted in the acts of the accused;
  3. the retention of certain goods. This measure seeks to ensure effective enforcement of the judgment by seizing property and preventing its sale. The seizure can be of a legal or material nature (in this case, the goods pass to the claimant or a third party); and,
  4. freezing of assets: The prohibition on carrying out actions or contracts over certain assets. This is court-ordered in order to prevent the defendant from validly doing any legal act in relation to movable or immovable property owned by him.

Broadly speaking, petitioners must fulfil two requirements for a judge to enact these measures. First, the plaintiff must present proof that constitutes at least a serious presumption of the claimed right. Additionally, he or she must provide the evidence of the existence of a danger in delay, which could result in the impossibility of enforcing the judgment. Courts are very strict in the appreciation of these requirements.

All of these measures may be requested to a judge at any stage of the trial even before the plaint is filed.

In criminal proceedings, it is possible to request these measures, but only once the prosecutor has pressed formal charges against the defendant, which can be too late. This is why in cases where there is no expectation that the public prosecutor will present formal charges in a short period, it may be advisable to request the pertinent precautionary preliminary measure in a civil court in the first place.

In criminal proceedings, it is also possible that the public prosecutor seizes assets with a judge's order. These objects may be subject to the penalty of confiscation in the final ruling. As mentioned above, interveners or third parties may file claims to obtain the restitution of objects collected or seized. As a general rule, they will not be returned until the procedure has been finalised. The exception to this rule is the seized goods that come from fraud, which will be delivered to the owner at any stage of the procedure once the ownership of the good has been proven by any means.

ii Obtaining evidence

Chilean law does not contemplate a general discovery system as known in common law systems. In connection with civil actions, the facts of the claim must be introduced and proved by the party that alleges them. The burden of proof is generally in the charge of the person who claims the positive act, as the judge in this system is limited to issuing orders to proceed.

However, the Civil Procedure Code establishes certain limited measures that can be ordered by the court upon request by means of which certain evidence can be obtained from another party, in some cases even prior to filing a civil action and as a way to be able to prepare the action. In this context, a court can order the exhibition of accountancy books of the defendant or any specific document that might be of interest in the matter. The exhibition of documents that are held by the counterpart or by third parties can be also be ordered during the trial, to the extent they have a direct relationship with the matter under discussion and that they are not confidential.

In criminal proceedings, the public prosecutor has more tools at his or her disposal to gather evidence, which is another good reason to file in cases of fraud not only a civil action, but also a criminal action in order to have access to evidence to prove the fraud.