SPAIN Law and Practice Contributed by: Alfonso López-Ibor, Pablo Henriquez de Luna, Virginia Jover and Carmen Serrano, López-Ibor DPM
2.7 Time Limit for Obtaining Third-Party Funding Due to the lack of regulation, there is no time limit when it comes to obtaining third-party funding.
prior to trial, or to request the urgent suspension of hearings or proceedings. As for the appearance of foreign lawyers before courts, they require special authorisation, which is simplified for attorneys from other EU member states.
3. Initiating a Lawsuit 3.1 Rules on Pre-Action Conduct
2. Litigation Funding 2.1 Third-Party Litigation Funding
Following the reform introduced by OL 1/2025, it is now mandatory to resort to an ADR prior to the initia- tion of judicial proceedings. Although the use of ADR mechanisms was increas- ingly encourages before the entry into force of the reform, since 3 April – the date of entry into force of OL 1/2025 – it has been necessary to attempt one of the ADR mechanisms provided under OL 1/2015 as a conditio sine qua non. Moreover, if compliance with this mandatory requirement is not proven, any claim that may be filed will not be admitted for process- ing (Section 5.1 of the OL 1/2025 and Section 403.2 SCPA). Among the ADR methods included in the law are, inter alia, mediation, conciliation, and public or private negotiation (either directly or through legal representa- tion), and the so-called “binding offer” ( oferta vincu- lante ). This binding offer is the most widely used to date and consists of a prior communication in which the claimant makes an offer to the opposing party with a view to avoiding litigation (Section 17 of the OL 1/2025). Under Article 7 of the Organic Law, the submission of a request to initiate a MASC procedure interrupts the limitation period applicable to the underlying claim. Once the MASC attempt concludes, the limitation period resumes from the point at which it was inter- rupted. In any case, the content of the negotiations, regard- less of the chosen modality, is confidential and may not be used by either party in subsequent litigation. It should also be noted that this requirement applies mainly to civil proceedings – criminal, labour, and administrative jurisdictions being exempt. Never-
In Spain, civil litigation funding by a third party is not excluded (and therefore permitted) but is rare, given the fact that it has not yet been specifically regulated (although there are no significant legal obstacles to its development). 2.2 Third-Party Funding: Lawsuits Due to the absence of specific regulation, third parties may be potentially involved in any type of lawsuit in Spain that has a financial element. 2.3 Third-Party Funding for Plaintiff and Defendant Funding by third parties is available for both the plain- tiff and defendant. 2.4 Minimum and Maximum Amounts of Third-Party Funding Pending future regulation, there is no limit regarding the amounts that could be funded by third parties. 2.5 Types of Costs Considered Under Third- Party Funding Third-party funding could cover procedural costs (law- yers and court agents’ fees), court fees, and poten- tially the other parties’ fees in the event of dismissal, subject to the agreement entered into between the
funded and funding parties. 2.6 Contingency Fees
Contingency fees are allowed in Spain following the judgment of the Supreme Court on 4 November 2008 confirming their validity. Accordingly, they may be freely agreed between the parties.
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