Procedures for collecting payment in Spain
To collect outstanding debts, it is always advisable to reach an out-of-court settlement because lawsuits in Spain can be very lengthy, arduous and costly.
The first action should be to obtain the precise details of the debtor, including legal status, full address, and identification numbers – Taxpayer’s Number, N.I.F. (in the case of natural persons) and Business Identification Number (C.I.F.) in the case of companies (ES + 9 digits).
To obtain the payment of arrears in Spain, it is necessary to submit the original of all documents, particularly of countersigned delivery notes. Care must be taken to ensure that carriers, for example, request the relevant countersignature on delivery documents.
Monitory proceedings
The Spanish Civil Procedure Act establishes that judicial monitory proceedings may be held before commencing ordinary proceedings, to claim the payment of debts up to 30,000.– Euros. However, it is not essential for these monitory proceedings to be held.
Monitory proceedings can only be initiated, when a monetary debt in arrears, claimable and explicit, is concerned. The claim must be filed at the relevant court according to the address of the debtor, and it is also necessary to submit any documents signed by the debtor, invoices, evidence of delivery or other documents that substantiate the existence of the debt.
In the event that the court accepts the claim in question, it will issue a court order, against which the debtor may appeal within 20 days, and ordinary proceedings will then commence. The creditor should then file the claim at the court within one month.
In the event that the debtor does not appeal against the court order, the court will automatically execute an enforcement order. Practice has shown that monitory proceedings lead to a positive outcome in the case of indisputable debts, and leads to an enforcement order in a relatively short space of time.
Ordinary proceedings
Given the expenses incurred in ordinary proceedings, we only recommend this course of action for debts over 3,000.- Euros.
Whenever judicial action becomes necessary to collect a debt, the above-mentioned monitory proceedings or an ordinary claim is called for. Originals of all relevant documents (order, order confirmation, evidence of delivery, invoices, receipts, etc.) must be submitted. In addition, the solicitor will need a detailed power of attorney signed by the client before a public notary. International law firms can usually provide model powers of attorney.
In Spain, court proceedings are entrusted not only to a solicitor, but also to a so-called “procuradores” (similar to a barrister), who files the claim and signs it along with the solicitor. Such barrister is not appointed by the lawyer, but by the claimant. In practice, when a law firm is engaged, it is allowed to choose on behalf of the claimant a barrister authorised to act in court. The mediation of a barrister is compulsory if the amount claimed is more than 900,- Euros.
In the event of a total victory, the convicted party will have to bear the fees of solicitors and barristers; exceptionally, the judge may waive the award of costs but, based on experience, this regulation is very rarely applied. For a total success, it is advisable to word the application for costs and interests moderately.
Given that courts in Spain are usually overwhelmed with their workload, we must estimate that the proceedings will take from 9 to 18 months. The length of time of proceedings varies greatly between the different courts, even amongst those in the same provincial region. Expectations that amendments to the Civil Procedure Act of 2002 would speed up proceedings have only been partially fulfilled.
Karl H. Lincke
Tags: cour proceeding, court order, enforcement order, Eurojuris España, judicial monitory proceeding, Laura Bernat, lawsuits Spain, monitory proceedings, ordinary proceeding, out-of-court settlement, payment of arrears
