Bringing civil claims in Panama

Litigation

What are the time limits for bringing civil claims?

Different time limits apply depending on the nature of the claim.

The general time limit provided by the Civil Code for the filing of a personal claim for actions that do not have a particular time limit is seven years.

The general time limit for the filing of a claim for tortious damages is one year.

Real estate claims have a 15-year time limit.

The time limit for claims to seek payment of overdue leases is five years.

Claims to seek payment of civil services rendered by lawyers, notaries, experts, custodians, interpreters, arbitrators, services provided by pharmacists, medical doctors, engineers, chemists, teachers and professors, as well as lodging and food, and the sale of provisions to non-merchants or those merchants practising in another activity, are limited to two years.

It is not permitted for the parties to agree to suspend time limits; however, individuals with the capacity to dispose of assets can waive the acquired time limit.

The above are Civil Code-governed claims.

Note that civil proceedings also include claims governed by the Code of Commerce, where the default time limitation is five years.

Claims governed by the Code of Commerce subject to civil procedure include: claims for retail sales, claims for agents’ wages, claims for transportation contracts, broker’s liability claims and insurance claims where the time limitation is one year.

Claims related to corporations and resulting relations and liabilities between shareholders or partners, as well as vis-à-vis the company, liability of liquidators or managers of corporations, interest due on leases when charged yearly or lesser periods, for collection of negotiable instruments, wholesale activity, financial leasing and banking facilities, have a time limitation of three years.

Are there any pre-action considerations the parties should take into account?

Considering the formal nature of civil proceedings, the plaintiff must verify that documents serving as evidence comply with the requirements of the governing law as well as for their admissibility (for example, signatures have been acknowledged before a notary, documents granted abroad have been legalised, documents have been signed by individuals with authority, certificates have been obtained within the legal timeline for their validity, etc).

The plaintiff can try to secure or produce evidence that may otherwise not be available during the proceedings, through pre-judicial petitions that may include witness statements, inspections of places, objects or documents with the assistance of experts, special disclosure of accounting or financial records, and reports from private or public institutions. A security deposit (in the range of US$100 to US$1,000) for damages is generally required for the order to be effected.

A plaintiff can try to secure the claim through the pre-judgment attachment of assets, such as cash in banks, movable assets, property recorded with the Public Registry, credits, inventories and others. A security bond for damages that may be caused, representing an estimated 25-40 per cent of the attachment amount or claim amount (the attachment amount cannot exceed the claim amount), is required, in the form of cash deposited with the National Bank in the relevant court’s account, insurance or bank guarantees, mortgages or public debt instruments; the amount is set by the court at its discretion. The pre-judgment attachment is an ex parte application; once the order has been effected, the plaintiff has to file the complaint within the following six days and serve the defendant with proceedings within the following three months; otherwise, the complaint may be dismissed.

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Proceedings commence through the filing of a complaint. Once the complaint is admitted, the court instructs service on the defendant. The defendant is personally served through the judiciary. If the defendant is a corporation, then its legal representative would have to take service. If the defendant or its representative is not within Panamanian jurisdiction, letters rogatory have to be sent to the foreign jurisdiction through diplomatic channels. The defendant has to be provided with a copy of the complaint and order of admission, and will be required to sign the order of admission. At such moment, the term for answering the complaint shall commence. If the defendant cannot be located, an absentee party defendant shall be appointed.

The Panamanian judiciary’s caseload is significant and the allocated budget restricted, and as a result, the progression of proceedings is slow.

What is the typical procedure and timetable for a civil claim?

The timeline for an ordinary civil claim is as follows:

• Filing the complaint.
• Answer to complaint: to be filed within 10 days after service of the order of admission of complaint.
• Filing of evidence: takes place 15 days after term for answer of the complaint, and has to be filed within the following five days.
• Counter-evidence: has to be filed within three days after filing of evidence term.
• Objections to evidence: has to be filed within three days after filing of counter-evidence term.
• Taking of evidence: the court may set a calendar of up to 30 days. The order for taking of evidence may take an estimated one to two years or more.
• Closing statements: filed within five days after the conclusion of the taking of evidence stage.
• Decision: one to three years or more.
• Appeal: to be taken three days after service, filed within the five following days; one to two years.
• Cassation: two to three years or more.

Can the parties control the procedure and the timetable?

The duty to keep the impulse or pace of the proceeding falls on the judge. However, there are mechanisms that allow the parties to control certain aspects of the procedure and its timetable: the parties can agree to stay the terms of proceedings for periods of up to three months, and they can also ask the judge to eliminate, modify or have as effected certain parts of the procedure.

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

Yes. Class actions exist in connection with consumer protection claims. In addition, the Judicial Code has a special chapter on international private law conflict procedure, which allows the judge to group or consolidate actions whenever a great number of plaintiffs or defendants exist.