The recent Organic Law 1/2025, of 2 January, introduces a significant change in civil and commercial proceedings in Spain: before filing a lawsuit, companies must first attempt to resolve disputes through alternative dispute resolution methods, such as mediation, conciliation, or direct negotiation.
What does this mean for your company?
If your company frequently resorts to litigation, particularly for debt recovery, it will now be mandatory to attempt to reach an agreement with the other party before initiating legal action. This means:
- Attempting a negotiated solution: Before taking the matter to court, you must prove that a good-faith negotiation attempt has been made.
- Documenting the negotiation attempt: The lawsuit must include proof that efforts were made to reach an agreement with the other party.
- Waiting 30 days in case of no response: If the debtor refuses to negotiate, you may proceed with the lawsuit, but only after a one-month waiting period from the date the negotiation request was sent.
Consequences of non-compliance
- If you fail to provide evidence of a negotiation attempt, the court will reject the lawsuit.
- Additionally, a party that refuses to negotiate without a legitimate reason may lose the right to recover litigation costs (such as solicitors’ and court representatives’ fees), even if they ultimately win the case.
How to comply with this new requirement?
The simplest way to comply is by sending a formal letter to the debtor, proposing a negotiation before initiating legal proceedings. To ensure the debtor cannot dispute the content of this letter, we recommend sending it via “burofax” with acknowledgment of receipt and certified content, in either physical or electronic format.
Be proactive: we are here to help
At AGM, we are already providing our clients with letter templates to ensure compliance with this requirement. Although the law comes into effect on 3 April 2025, it is crucial to prepare now to avoid delays or rejections in future claims.
If you have any questions regarding the implementation of this new regulation, AGM Abogados team is available to assist you. Contact AGM Abogados.
