In the case of Ordinary Proceedings the lawyers acting for the parties must attend two court hearings ( preliminary hearing and hearing).
The preliminary hearing is described by the LCP as the pre-trial hearing. Matters that can be dealt with at this preliminary hearing, at which all the parties should be represented, include reaching agreements or settlements, remedying defects of procedure, specifying the questions in dispute and questions of admission of evidence to be decided then and there by the Judge.
Further, at this preliminary hearing, if no additional proof of evidence is required, the Judge may proceed to order judgement. In any other case the Court will set down the day and time for the trial.
The object of the trial is to hear the evidence that has been judged admissible and the summing-up of the advocates based on the evidence and the legal arguments. After that the Judge issue the judgment. This judgement is not definitive and can be appeal.
The 'Juicio verbal' is a similar although oral procedure which can be initiated for claims below EUR 6,000. This proceeding has been modified last October 2015.
The 'juicio monitorio' procedure, in addition, only requires common commercial documentation. If the buyer recognizes the debt (or fails to appear within twenty days from the claim notification), the process becomes an attachment proceeding against the debtor goods. If the buyer doesn't recognize the debt, however, the process becomes in an ordinary process.
This special procedure (known as the "proceso monitorio") started in Spain in 2000 with the LCP. This is designed to take the form of quick proceedings leading to summary judgement and execution (Arts 812 to 818). In brief a plaintiff is entitled to use these proceedings provided the debt is pecuniary, due, payable Proceedings are commenced by lodging with the court a simple application accompanied by simple documentary evidence of the debt (i.e. invoice, CMR, delivery note etc.,). Once the application and the accompanying document(s) have been accepted by the Judge, he or she will order the debtor to make payment. If the debtor fails to pay and does not oppose the application, the Judge will immediately order execution. On the other hand if the defendant lodges a defence the proceedings will then change into an Ordinary or Oral Proceedings depending on the amount of the claim.
The Monitorio was originally created for claims up to EUR 250,000 but this threshold has now been deleted. In any case, the procedure must be transformed into a normal lawsuit if the debtor fails to pay or brings a defence. When the debtor company has assets in other EU Member States, a European Payment Order procedure facilitating the recovery of undisputed debts (under Regulation EC No 1896/2006) may furthermore be triggered. In this case, the demanding party may request a domestic court to issue an Order to Pay which will then be enforceable in all European Union countries (except Denmark) without exequatur proceedings.
Proceedings on Negotiable Instruments If the debt is certain and undisputed, fast-track proceedings may help solving the issue with limited courts. The 'Juicio cambiario' procedure aims at obtaining a Payment Order for the recovery of debts documented by a promissory note, cheque or bill of exchange. The process is very short (eight months to a year) and starts with an attachment proceeding against the debtor goods.
Arts 819 to 827 of the LCP provide for a legal process that, without either being ordinary or executory, offers the plaintiff certain judicial protection from allegations relating to the fundamental cause of the dispute. In effect the articles of the Law of Negotiable Instruments and Cheques that refer to summary proceedings have been amended and from now on the recovery of amounts owed on cheques, promissory notes or bills of exchange (provided that they comply with the requirements of the Law of Negotiable Instruments and Cheques) shall be by way of the Court Proceedings on Negotiable Instruments as established by the LCP.
Proceedings shall commence with the lodging of a statement of claim with the negotiable instrument annexed. The plaintiff must demonstrate that he is the legal holder of the negotiable instrument and expressly declare what he proposes (i.e. that court should require the defendant to pay, order that his assets be provisionally attached and issue the order for execution). Then the Judge, once he has accepted the legal validity of the plaintiff's title to the negotiable instrument, will simultaneously order the defendant to pay and the provisional attachment of sufficient of the defendant's assets to secure recovery without the need of a guarantee.
The defendant's statement of defence can be only based on:
- Failure to comply with the formalities established by the Law of Negotiable Instruments and Cheques.
- Defects in the holder's title (e.g. problems with the endorsement or possession).
- Invalidity of its representation as a valid negotiable instrument (falsification of the signature, lack of authority of the person signing), and
- Cancellation of the debt owed on the negotiable instrument (prior payment).
Afterwards a copy of the defendant's statement of defence will be supplied to the plaintiff following which a date and time will be set down for the court hearing to which the rules governing Oral Proceedings shall apply as provided by Art. 443 of the LCP.
The insolvency procedure is subject to a liquidity test (insolvencia actual) aiming at establishing whether the debtor is permanently unable to settle its due debts. The Spanish Insolvency Act (as amended by Law 38/2011 of October 2011 and some other amendments) provides for insolvency proceedings (concurso). These proceedings s normally commence upon notification of financial difficulties to the court by either the debtor or its creditors, and include a common phase in which the judge will appoint, as a general rule, one or more Receivers (depending on the firm's turnover) in charge of managing the business and of determining the debtor's estate / outstanding debts. The bankruptcy can lead to a creditors agreement or to the liquidation of the company.