New dependency on litigation – Squire Sanders

Spanish companies are currently forgoing prosecuting debtors in favour of concentrating on purely commercial matters, says Fernando González, Head of Dispute Resolution and Intellectual Property at Squire Sanders, Madrid. “When the financial downturn began in Spain, we were seeing cases such as breach of obligations, unpaid debt, insolvency matters and foreclosure. But as companies look to develop their businesses and generate financial income, they are now concentrating on purely commercial matters such as trademark infringements.”

This shift in commercial focus has led to a new dependency on litigation, a trend that González thinks is down to larger companies being more aware that while arbitration is good for certain disputes within an international context, it is expensive and takes a long time with no possibility of appeal. Therefore, for those companies wanting to settle purely domestic commercial matters, litigation works better, he says.
The current preference for litigation is also indicative of increased confidence in the Spanish courts, in a country that is now managing commercial matters in a much more efficient way, González explains. He highlights the Community Trademark Court in Alicante, which facilitates and provides an essential legal security role. This coupled with the experience of the agents, such as lawyers and judges that are intervening in the marketplace has meant that Spain is now rivalling other legal systems around the world.
“I believe that our legal environment is much more sophisticated than it was,” says González, referring to the Spanish procedural reform over ten years ago, where initial doubts have now given way to faith in the efficiency, continued investment and clarification of the courts.
Clients know that they can resolve commercial disputes in Spanish courts much more efficiently, he concludes, and this is aiding commercial matters so that companies can continue growing.