Marco Tulio Venegas, Litredi SC
This is an extract from the fourth edition of GAR’s The Guide to Advocacy. The whole publication is available here.
The role of the written form
In Latin American countries, the written form is the cornerstone of legal proceedings. The reason for this is that Latin American culture generally mistrusts oral evidence. It is fundamentally assumed as a premise that a witness, or a party to the process, is likely to distort the truth to obtain a favourable result (regardless of the potential and ineffective threat of committing perjury). The written form is so important that notaries public play an essential part in validating the authenticity of documents and signatures. In fact, the number of licences available for appointing notaries are limited and the threshold to become one requires substantial preparation. Notably, the fees charged by notaries are exceptionally high as compared to the materiality of their work and usual practice in common law countries.
Although the written form prevails, in recent years there have been efforts to implement oral proceedings with the aim of hastening the resolution of disputes. However, the transition has been very slow, at least in judicial proceedings.
Form over substance in the resolution of disputes
In procedural law, there are still numerous formal requirements that must be met and considered before filing a case. The correct compliance of these requisites is crucial since a mistake in matters such as the names of the parties, the documents evidencing their legal representation, or even their taxpayer identification may compromise the success of the case. In fact, on average, more than 70 per cent of cases are lost not because of deficiencies in the substantive arguments, but because of some omission in the filing or a mistake in the proceedings relating to compliance with the almost ritualistic procedures for preparing evidence. For this reason, attorneys in Latin America become almost obsessed with meeting deadlines and formal requirements. Old school attorneys also tend to present their substantive arguments in a style that is not necessarily persuasive, but rather by merely providing the basic factual information and emphasising the law and precedents quoted, and avoiding saying too much and trying not to introduce any mistakes. In contrast, younger attorneys who have been exposed to training in both civil and common law, have started to introduce new structures in the rigid forms of written briefs and even try to tell a more extensive factual history, rather than focusing solely on the applicable legal provisions. This new trend has elevated the quality of the debates in private disputes.
Conscious of the excesses of the formal approach, some Latin American countries, such as Mexico, have amended their legal system to mandatorily establish that in resolving a dispute, courts must always give preference to the substance of a case over the matter or procedural aspects. However, this reform has yet to bring about that changes that were expected and it may take a few years for it to have a more noticeable effect on legal practice.
Human rights, amparo and its effect on disputes
The enforcement of the broadest scope of human rights through amparo and constitutional proceedings alike has had a significant effect on the way in which both private disputes and disputes with government entities are ruled. Traditionally, controversies between private parties would only include discussions about disposable rights. However, a recent more progressive approach has introduced concepts such as adequate and fair compensation to the rigid system of damages and losses. In this regard, there are several precedents across the region that recognise the importance of applying a more flexible approach in assessing damages arising from illicit conduct or a contractual breach.
Enforcement of human rights has also had a strong effect on disputes arising from contracts entered into between private companies and public entities. Although the administrative regulation that governs this type of contract grants extensive powers to the government entities, courts have increasingly adopted human rights-based principles, making it possible for private companies to be properly compensated in the event of a breach of contract or abuse of power by a government entity.
All these changes, of course, require administrative attorneys to be not just a specialist in private law, but also to have a broad knowledge and practice of constitutional and administrative law. In a way, the increasing complexity of Latin American legal systems goes against the trend of the über specialisation that exists in other countries.
Hearings and ‘meetings’ with the judge
A curious feature of hearings in many Latin American countries is that, in practice, the court proceedings are not attended by the judges. In most cases, the court clerk in charge of the file directs the hearing, the main purpose of which is simply to obtain a written record of testimonies and depositions, rather than to hear and understand the position of the parties.
Another practice that may seem strange to other regions is that once a proceeding is formally closed, it is very common for the parties’ attorneys to hold meetings with the judge on an ex parte basis, to present informal oral arguments summarising their case. The position adopted by judges in these informal meetings varies greatly from judge to judge. There are judges who merely listen to the arguments and remain silent, while others ask a lot of questions and others again who ask just a few, and their moods vary from hostile to friendly. Experienced attorneys view this type of meeting as a useful tool to gain an impression of how their case is likely to be perceived by the courts and, depending on the outcome, they weigh up the option of approaching the other party to seek a settlement.
Litigating through the media
Another specific feature that characterises large disputes in Latin America is the use of the media by attorneys in an attempt to put pressure on the opposing party. This is usually the case in high-profile disputes that involve large corporations (those usually listed on the stock market) with the aim of jeopardising their reputation or even to disclose information that may affect the perception of their shareholders. The whole point of this type of strategy is to force a quick settlement whenever possible. However, in many cases, the company under attack will hit back through the media either with a formal communication clarifying the facts, or informally through a news reporter conveying other types of messages in response.
Litigating by using the media is particularly useful in disputes involving a government entity, since it is sometimes the only way to inform the public of the damage they may have incurred or even to disclose to higher levels within the government the potential risks in the decisions taken by less senior officials that should be corrected.
Arbitration in Latin American countries
Although Latin American countries were late arrivals in the arbitration arena, developments in both domestic and international practice during the past two decades has been extensive in both investment and commercial arbitration. A civil law background is a strong basis for legal argumentation; however, Latin American attorneys have also been compelled to understand and learn how to build a persuasive story about their case. To do so, attorneys have implemented prior due diligence to investigate the facts surrounding a case, and new skills have been developed to that end. Cultural instincts for discerning the truth and even for uncovering suggestions of potential corruption that may appear irrelevant to common law attorneys have proven to be very useful and even to give a competitive advantage over common law opponents.
The dynamics of arbitration hearings have also compelled Latin American practitioners to develop strong skills in oral advocacy and cross-examination, which are not typically used in court litigation. However, these skills have not merely been imported from common law countries, but they have been regionalised and even improved in a sense. Latin American arbitrators, in this regard, do not necessarily rely too much on witness testimonies for proving facts, but use them as a means to understand the context and circumstances of the documentary evidence presented.
Typical arbitration proceedings in the region will most likely involve parallel judicial proceedings or intervention of national courts in support of arbitration. As most established Latin American practitioners have developed a dual practice in court litigation and arbitration (often with an emphasis on court litigation), there is a tendency in the region to overlitigate arbitration cases by involving the judiciary. Overly litigated arbitration cases may include the filing of parallel claims before national courts prior to or during the arbitration proceedings, arbitration control and intervention in cases specifically regulated as judicial assistance, such as provisional measures, challenge of arbitrators, etc. While established Latin American practitioners seem to feel more comfortable about involving national courts, this litigious practice has forced the courts to become more familiar with arbitration, and they have generally shown deference to arbitration proceedings when the circumstances have been appropriate. Therefore, it is crucial for the new generation of Latin American attorneys to expand their practice beyond arbitration and to be more knowledgeable about court litigation, as a comprehensive practice will prove indispensable to arbitration lawyers in the region.
As regards the production of documents, unfortunately, Latin American attorneys and their clients are not as strict as common law attorneys, who usually treat this phase as if it were a discovery in their countries. Owing to the fact that discovery is not a practice established in Latin American procedural codes, the adoption of the production of documents stage in arbitration has led to the manipulation of the process to a certain degree. Attorneys are seldom likely to encourage clients to provide documents that may harm their case and may oppose disclosure for reasons relating to confidentiality or even arguing to the extent of alleging that a specific document may not exist or has become lost within the company files. Of course, although potential negative inferences may be drawn by the arbitral tribunal in these cases, Latin American attorneys are often willing to take the risk of failing to disclose documents using formal excuses. In practice, Latin American arbitrators who are aware of this approach have not normally made explicit negative inferences (to avoid potential challenges to the award) but they certainly consider these circumstances in deciding a case if other evidence supports their conclusions.
Another advantage that Latin American attorneys have in international arbitration in the region is that they are bilingual, with fluency in both English and Spanish, or even trilingual (when considering Portuguese speakers in Brazil). Since most common law attorneys who usually handle cases in the region only speak English – with a few exceptions – there are many cases in which the advantage in language has proven to be decisive. Specifically, when an arbitration is conducted in English but many of the underlying documents are written in Spanish the ‘lost in translation’ effect may affect the correct understanding of an argument to the detriment of common law attorneys.
Finally, it is important to highlight that, although in the early 1990s there was a general mistrust of local courts with regard to arbitration, nowadays courts at all levels regard arbitration with respect and support it. In many Latin American countries, a real partnership has developed between arbitration and the judiciary. One aspect of this could be reflected by the fact that the percentage of awards that are set aside is very low. Moreover, there have been recent cases in which the supreme courts of several countries have upheld the validity of awards against government entities, proving the independence of the judiciary and reinforcing the efficacy of arbitration within the region.
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