Madrid court rooms are becoming slightly less busy as a result of the introduction of the Law of Court Fees, according to Santiago Gastón de Iriarte, President of AC&G Asesores Legales.
“Under the old system it was free for most entities, other than large corporations, to launch litigation so the process was cheaper,” he says. “This caused issues with high numbers of cases, costs and court time wasted.”
The new regime – introduced a year and a half ago – has fixed-fees ranging from €300 to €1,200, depending on the court and the proceedings, as well as a fee of 0.5 percent in cases valued up to €1 million. This drops to 0.25 percent in cases valued more than €1 million, although there is a cap of €10,000.
Gastón de Iriarte says Madrid has seen a reduction in the number of court cases brought as a result of these costs: “This has really changed minds and there is less unjustified civil litigation.”
However, the decrease in litigation has not resulted in an increase in alternative dispute resolution, which had been anticipated due to the fact the Act enables a 60 percent refund of fees paid in cases that settle. Guillermo Gastón de Iriarte, Director of the Corporate Department at AC&G, adds: “While arbitration has been encouraged in Spain, the mechanism has not got a strong reputation and has often been seen as expensive and not fully impartial. Mediation is also not a common way of resolving disputes, mainly because of enforcement issues.”
Meanwhile, Guillermo Gastón de Iriarte says the transactional market in Madrid seems to be recovering. “A lot of new investment is coming into the city, particularly in real estate and venture capital. Foreign buyers see strong assets at a good price as well as Spain as a gateway to Latin America.”