Litigation

Court system

What is the structure of the civil court system?

In Ecuador, civil courts are primarily divided by territory and hierarchy. Both divisions overlap at the third level of hierarchy, where there is only one national court for the whole country. Regarding that hierarchy, there is a first level of civil courts that handles all the cases from a specific territory within the province. At this level, only one judge manages each case.

Additionally, there is the court of appeals or provincial court, with one of each per province, except provinces that do not handle many claims, such as the Galapagos Islands. In the court of appeals, three judges sit and handle each case, and a ruling is issued by majority vote. Similar to the first level, the number of judges varies on the amount of claims each province handles with a minimum of three per nature.

Finally, at the third level of hierarchy, there is the National Court, which is located in Quito. Similar to the court of appeals, three judges sit to manage each case and all claims are split between judges specialised in a specific matter. For the National Court, by law, there should be 21 judges in total. Not all civil claims may reach the National Court, as this level is reserved for special breaches in the law.

In Ecuador, there is no subdivision inside civil claims, whether for the nature or size; however, at a larger level, claims and therefore courts are divided between the different areas of the law, one of them being  civil claims. There is also no specialist commercial or financial courts in Ecuador.

Judges and juries

What is the role of the judge and the jury in civil proceedings?

There is no jury in Ecuadorian judicial proceedings.

The role of the judge depends on the individual judge. As per article 3 of the Organic General Code of Procedure, the judge shall direct and control the process, avoid any unnecessary delays, and if necessary, the judge can interrupt any party to request any clarification or to promote further debate. The role of the judge lies between an inquisitorial and a passive role, meaning that the parties are responsible for driving the process forward; however, the judge has the power to request further evidence of witnesses or parties if he or she sees fit.

Limitation issues

What are the time limits for bringing civil claims?

The general time limit for filing a civil claim is 10 years; however, there are certain exceptions to this time limit. Some examples for shorter time periods are tort claims that only have four years to file the claim; the collection of some accounts that meet specific requirements, for example, promissory notes, being only five years; and some others that are less frequently used.

As per the possibility to agree the suspension of time limits, legislation does not allow such agreements, being the parties bound by what is established in the law.

Pre-action behaviour

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

There are no pre-actions that parties should take into account to file a civil claim. However, since the enactment of the Organic General Code of Procedure, the claim should be filed along with all evidence and experts’ reports to support the arguments. This benefits the filing party since it has more time to prepare a claim.

Starting proceedings

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?

Civil proceedings commence with the submission of the claim to the court, which assigns the claim to specific judge by using a draw system. The judge verifies that the claim complies with the formal requirements mentioned in the Organic General Code of Procedure. If there is nothing to complete, then the judge orders the court to serve the claim to the defendant, who has 30 days to provide a response to the claim or counterclaim. According to legislation, the summons process is the sole responsibility of the court, meaning the parties do not interfere in this part of the process being able only to request the court to move the summons process forward through written petitions.

Since the enactment of the Organic General Code of Procedure in 2015, which established an oral litigation system, courts have gained more effectiveness and court processes are faster. However, there is still a need for more judges to handle the caseload. There have been a couple of changes in the law with the intention to relieve caseload from the judges; however, they are still responsible for handling too many cases.

Recently, the judges of the National Court were evaluated and many were removed from their positions increasing the caseload and making timetables longer.

Timetable

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

There are various civil claims, all of which with different procedures and timetables, but the most common form of civil claim will follow the following procedure and timetable. As the timetable established by the Organic General Code of Procedure is rarely met owing to the caseload, the following timetable is in practice what applies:

  • The claim is filed.
  • A judge is assigned to the claim and admits the claim (30 days).
  • The claim is served (between one to six months). Parties are often required to file written petitions to move the process forwards. There are multiple ways to serve a defendant, the most common of which being postage to the defendant’s residence. As for the documents for serving, a copy of the claim will be delivered to the defendant.
  • The defendant has 30 days to answer the claim or file a counterclaim.
  • Once the defendant files a response, the judge will set a date for the preliminary hearing (timing depends on the availability of the judge, usually four to 12 weeks). At the preliminary hearing, the parties will make their opening statements, state their preliminary defences and announce the evidence that will be practised in the trial hearing.
  • Afterwards, the judge will set a date for the trial hearing (the time between a preliminary hearing and a trial hearing varies between two weeks to four months). In the trial hearing, the parties will practice all admitted evidence and closing statements.
  • At the end of the trial hearing, the judge issues its ruling orally, and then the judge has 10 days to notify the parties with the written ruling. With the notification of the written ruling, parties have the possibility to file an appeal within the following 10 days (only if they expressed their will to do so orally in the trial hearing). The counterparty will have another 10 days to answer the appeal.
  • After the appeals have been filed, they will be remitted to the Court of Appeals, who will set a date for the hearing (between three to five months).
  • After the hearing, parties have the chance to file a cassation appeal before the National Court, within 30 days of the issuance of the written ruling.
  • Once the appeal has reached the National Court, it will be submitted for the review of alternate judges, who will verify the cassation appeal meets a special form of requirements.
  • If admitted, the National Court will set a date for a hearing and will issue the ruling at the end of that hearing (three to six months)
Case management

Can the parties control the procedure and the timetable?

No, parties cannot control the procedure or the timetable. The procedure is a fixed procedure established in the law that cannot be changed, even with agreement of the parties. This is with the exception of the parties being able to differ a hearing when in mutual agreement.

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

There is no duty to preserve documents before trial; however, there is the possibility that a judge orders the exhibition of evidence before (through preparatory measures) or during trial

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Our legislation does contemplate that certain documents are privileged like the ones shared by lawyers, doctors and psychologists. In this sense, the advice of an in-house lawyer will be protected under a privileged document. 

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

There is no obligation to exchange written evidence from witnesses and experts prior to trial, and it is uncommon under Ecuadorian law; however, parties may disclose certain evidence when they are trying to settle prior to trial. Regarding written evidence and expert reports, these shall be submitted along with the claim or response to the claim.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

When filing a claim, all written evidence and experts reports shall be submitted along with the claim or response to the claim. During trial, written documents should be exhibited and practised during the trial hearing, reading the relevant sections that support the claim.

Regarding witnesses and experts, they must provide their testimony in court for the other party to cross-examine their testimony as per the contradiction principle set in the Organic General Code of Procedure; however, witnesses do not present a written statement, but oral statement only. In the claim or response to claim, the parties should include a brief description of what the testimony of such a witness will bear.

Interim remedies

What interim remedies are available?

The Organic General Code of Procedure does establish the possibility of filing some injunctive relief measures with the objective to safeguard the interest of the plaintiff. Depending on the nature of the claim to be filed, the injunctive relief measure will vary but all have the same objective described before. The interim remedies available under our legislation are the following:

  • asset seizure;
  • the freezing of accounts ;
  • restrain in transfer of property; and
  • prohibition to leave the country

 

The remedies are available in support of foreign proceedings. However, owing to the procedure of validating foreign orders taking too long, remedies often defeat their purpose. Prior remedies will only be applicable when the claim is filed in Ecuador, as they require a claim to be filed within a certain period of time.

Remedies

What substantive remedies are available?

Available remedies include restitution, damages and specific performance. However, the judge is not allowed to order more than what is asked by the plaintiff in the claim, meaning that the plaintiff is the one that calculates what should be received for the damage occurred. These calculations include the interest payable in a money judgment, which shall be calculated according to the rates established by the central bank.

Regarding punitive damages, that concept does not apply under Ecuadorian legislation. In damage claims, the plaintiff is only entitled to the direct damage and loss of profit.

Enforcement

What means of enforcement are available?

Unfortunately, in Ecuador, if a court ruling is disobeyed, another procedure must be initiated. These procedures are usually a lot shorter in time than an ordinary civil procedure; however, they need to follow a specific procedure, which can take up to a year. It is through this process that the court will order the compliance of a ruling.

There are other types of orders different to a ruling where the court may use the police to enforce a special request. The judge may impose fines or order costs to the attorneys or parties when certain orders are disobeyed.

Public access

Are court hearings held in public? Are court documents available to the public?

Yes, regarding civil claims, all court hearings are public. The same occurs with all documents such as pleadings, witness statements and court orders. Anyone can access the web page of the judicial system to search for an specific case, where they can find specific details of the case, such as: plaintiff, defendant, matter of the case, court case number, the date on which the case was filed, and a summary of the case history. With this information, anyone can request the court of physical copy of the entire case file.

Costs

Does the court have power to order costs?

The court has the power to order costs for either party, whenever a party litigates in an abusive manner or in bad faith. The costs ordered by the court may not exceed 10 basic salaries (US$400 a month for 2020) and will be ordered taking into consideration the procedure, the value of the claim, the actions taken by the parties among other factors.

For the costs, the applicable legislation is the Constitution of Ecuador, the Organic General Code of Procedure and the cost-setting rules.

The parties are not required to provide security for the defendant costs.

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

The Organic General Code of Procedure does not establish any type of arrangement between lawyers and their clients; the parties being free to agree on the conditions for the representation in a claim.

As per a third party investing in a claim and taking part of the proceeds of the claim, Ecuadorian legislation does not prohibit those actions. However, legislation does contemplate the possibility to purchase litigation rights.

Insurance

Is insurance available to cover all or part of a party’s legal costs?

In Ecuador, there is no specific insurance to cover legal costs; however, legal costs may be insured when they are part of a bigger insurance contract, such as a car insurance or a general civil responsibility insurance.

Class action

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

Ecuador does not have the possibility of filing class action lawsuits, except for claims filed for harming the environment. Even though this is a possibility, this is not a proper class action lawsuit; however, all Ecuadorian citizens are entitled to file a suit on behalf of the environment for environmental damage.

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

Parties may appeal against the final decision on the merits of the case issued by a trial judge. There is no limitation on the grounds and circumstances for this appeal; they are allowed to challenge procedural issues, evidence or legal arguments.

Parties may also appeal other court’s decisions, for example, the decision to admit or reject preliminary defences, such as lack of jurisdiction, improper venue, lack or improper joinder or arbitral clauses. Also, a party may appeal the court’s decision to admit or reject evidence during the hearing.

Appeal is not available against the decisions of the Tax and Administrative Tribunals.

There is a right to further appeal before the National Court, a cassation court, which will not review the facts of the case but has the power to review matters of law. Decisions of the Tax and Administrative Tribunals may only be challenged in a cassation proceeding before the National Court.

Additionally, parties may initiate a constitutional action if they believe that the final decision of any court has violated their constitutional rights, where parties are required to exhaust all previous ordinary and extraordinary remedies in order to access the Constitutional Court.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

Article 105 of the Organic General Code of Procedure establishes the procedure for recognition and enforcement of foreign judgments. This is an expedited process that requires the following steps:

  • The requesting person shall file an application for recognition before the competent tribunal of the provincial court.
  • The court will serve the person against whom the judgment was rendered with the process.
  • The defendant will have five business days to file a response arguing any of the available defences.
  • Within 30 days from the date on which the response was or should have been filed, the court must decide whether to recognise and enforce the foreign judgement.
  • If a properly substantiated and accredited defence was filed and the complexity of the case warrants it, the court will set a date for a hearing. The hearing must be convened within the 20 business days from the date when the response was filed.
  • The court will issue its decision in the same hearing.

 

There is no appeal available to challenge the decision of the provincial court.

Unless there is an international convention to which Ecuador is a signatory, and which does not require reciprocity, reciprocity is essential. The Ecuadorian National Court has established that, if the decision was issued by a country that does not admit, recognise or enforce Ecuadorian judgments, the enforcement of any decision from that country will not be admitted in Ecuador.  

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

Ecuadorian law does not provide a procedure for obtaining oral or documentary evidence for use in proceedings in other jurisdictions.

Law stated date

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8 April 2020