Spanish Legal System

Another wonderful idiosyncrasy of the Spanish Legal System

Our Community recently won a case against the building developer for building defects NOT structural.

Apparently this too was covered by an insurance policy but the developer employs lawyers etc. to fight it.

The claim was for just over €400,000 to carry out essential repairs and alterations.

Judge awards the Community €395,000 a good result you would say.

But according to Spanish Law unless you are awarded exactly 100% of your claim, each party is responsible for its own costs.

The Community had agreed to a NO Win NO fee option to protect its owners, so having been awarded most of the claim, the owners have to deduct the fees from their award to pay their lawyer, leaving the owners still well out of pocket.

Its not surprising that so many legal cases are defended IF there is no deterrent of increased costs against losing.

No point in pre court negotiation.

Apparently the average for awards in such cases is around 90% of the claim, surprise, surprise.

Hugh.    Looks like your getting completely done over!!!

The no win no fee lawyers must have the same stats through experience that you have found out to your cost.   So it’s a licence for them to stick you for more money at the end.    They have won so you must pay?    

Lawyer are always the winners, UK, Spain, probably everywhere.

You may be right Brian, nothing surprises me here anymore, however I have no reason to believe the assertion.

The claim is made to cover the cost of repairs and has to be justifiable,  I don’t believe you can make an initial claim stating cost of repairs plus legal costs, unless perhaps you agree a fee for the case, regardless of result.

I would love someone to deny that costs are only awarded against the defendant IF 100% is achieved.

John zx 

I most certainly would not disagree but fair play there are inherent risks in NO win NO fee so rewards are naturally higher.

Lawyer did do a lot of work prior to hearing in this case.

My thoughts however are more about how the legal system is geared to almost ensure the winner pays their own costs even if almost all the compensation claim is decreed.

This seems to be unfair on any claimant and absolutely NO deterrent to the defendant to take it to court.

At least No Win No Fee can now permit this to happen, whereas previously claimants would often pull out of gold case because of high potential costs.

I may be wrong but I thought in U.K. that if claimant won they were offered costs of both parties and vice versa.

Hugh,   in UK, and maybe in Spain too, the largest group in parliament are lawyers.  

 I wonder why the laws they pass are so often left with holes big enough for a coach and horses to be driven through, by none other than lawyers arguing their meaning and interpretation whilst getting paid huge sums.

Or maybe it’s just a weird coincidence !

No John, I  do think there’s more than a grain of truth in that sir.  

At first sight this sounds ridiculous 

However another view could be if the court thought the claim was excessive for the work needed then maybe this mechanism has a place in law to discourage excessive claims

Hugh_Man, this sounds like building project had a Decennial insurance which is a 10 year insurance in joint names to cover buidling defects on a strict liability basis.   Effectively it's a 10 year product guarantee, issued in joint names to avoid any dispute regarding "blame" between the builder and architect etc.   

It's unusual to have any disputes and I would be interested to know the reason that a court case was necessary.  Also the basis upon which the judge saw fit to reduce the amount paid. 

But on the face of it your legal people would seem to be remiss by allowing this situation to happen.  They and the judge will be aware of the consequences.   To me, this is another example of Spanish lawyers putting their own interests first, knowing they will benefit from a "no win no fee" arrangement but their client will lose out.
 

Acer, once again, I think you are correct re type of insurance.

It came about after a number of Communities on the resort had independent surveys completed prior to carrying out expected routine maintenance to repaint and repair their buildings.

Design and build defects such as lack of waterproofing, and inadequate water drainage was identified as the main cause for staining and eventual cracking of masonry on facades and some leaks in basements.

Repainting over the stain etc. covers up the problem but dies not make it go away.

Legal cases were suggested as the developer refused to respond to requests and in court it did not appear that the developer tried to deny the problem except suggest the Community should maintain the buildings every 3 years as they wrote in the bye laws.

3 years is unreasonable request, plus its difficult to maintain water proofing of garages IF none was put in in the first place.

In court, it would appear the developer and their architect were not denying the presence of the faults but arguing of the costs to redress.

I have no idea why the judge chooses to award less than claimed or even in one Communities case actually reduced the compensation after an appeal.

You could well be right that we should have been aware of this but the attitude is that it’s a success receiving 310k thatvwe did not previously have.

I would hold the view that any claim has to be costed and itemised to reach a claim, from what I understand the fee is normally deducted from the award rather than added on, but I may be wrong as I’m advised by Administrators.

Dazza, yes amount of claim appeared to be contentious than claim itself.

When the communities arranged an independent surveyor, what was the purpose of that and how did it impact on an existing service agreement for the complex?  

When the properties were handed over and the maintenance agreements made (and we should reflect on the word agreement), what was the arrangements at that time.

The building should be built to the regulations at the time and any issues about inadequate water drainage or poor design, if later accepted, become part of the sale and the hand over.    The only maintenance required would be on the existing design, alterations to the building to deal with issues over time are additions or alterations and are different from maintenance.   

With regard to how frequently maintenance takes place, ie 3 years etc.   It’s true that some maintenance should be ongoing and inspections should take place by residents and owners all the time.   You would expect that gutters cleaning out and drain gullies clearing should be seasonal but that window frames maintenance etc should not be required for many years.  Painting walls as a maintenance agreement is one thing but painting walls because of staining through poor design is another and can be looked on as an extra cost to bear (by both parties)   

What did the community have written into the service agreements and what expectations were not being met, that is likely to be the difference in judgement.    The amount awarded sounds really large, the use of a no win no fee lawyer sounds a bad choice!  

Going forward, has a better service or maintenance agreement been put in place because if not, I reckon the no win no fee lawyers have probably lost in this instance.

Not sure I understand what you refer to in service agreements on handover.

When the Community was formed, immediately the developer and builders hand responsibility to the Community of Owners.

Snagging for 2 years is offered to private owners and presumably the Community if required.

Buildings are covered by a 10 year Structural Warranty, No problem with structure.

Over the years it was noted that after the rare rains in Murcia more and more leakage occurred in garages, stains and cracks appeared on buildings slowly getting worse.

A survey was commissioned to advise exactly what Maintenance was urgent and should be carried out.

We were advised that quite a number of changes to the design of water drainage and waterproofing were necessary but far too expensive for the Community  it’s to undertake, so we did commence a basic program of filling cracks and painting facades, covering the problems with s sticking plaster if you like.

It was latter discovered that this type of insurance that Acer mentioned was in place and we were advised that a legal challenge was the correct approach IF the developer refused to act.

The Legal claim was put in place with an estimate from the architects of the cost of repairs.

The developers lawyers in court challenged the supposed lack of Maintenance and the estimated cost of repairs to ensure the buildings were sound, yes it was @ccdpted that the Community bears the cost of repainting and general maintence, which is why the total cost is mush higher than the claim, This I accept.

My concern is if the courts award even 97% of a claim the costs are borne by both parties so there is NO deterrent for a defendant NOT to challenge a claim against him as he will carry the costs or repair either way and may hope to get a reduction from a sympathetic judge.

A no brainier for the defendant.

The more I think about it, the more ridiculous this seems - the claimant is never going to get proper justice. 

But that seems par for the course when "foreigners" are involved.

My point precisely.

The courts are full of claims being defended because there is possibility of a sympathetic judgement and there  is literally nothing more for the defendant to lose unless he is unlucky enough to get a 100% judgement against him, which I’m to,d is very rare, surprise surprise.

The more I learn in Spain the more I despair.

4 different Coomunities have taken the developer to court over this Insurance cover with similar but diffent problems

The first received the full claim with No court appearance

Thecsecond received a reduced claim after an appeal.

Ours was the third and received 97% of claim less costs

The fourth settled out of court with an offer of around 70%

/Different Court Rooms, different judges, NO precedent.

There is an obvious solution to this by establishing specialised courts in Spain alongside an effective reporting and monitoring system, so I have to ask the question why are the powers that be not recognising this?

Would love to hear Maria’s take on this.

Provision of the Civil Procedure Act on costs is in article 394

Article 394 Costs in First Instance

1. In declaratory proceedings, the costs of the first instance proceeding will be imposed on the party whose claims have been fully rejected, unless the court appreciates, and so it reasons, that the case presented serious doubts in fact or law.

In order to assess, for the purpose of sentencing costs, that the case was legally doubtful, the case law relapsing in similar cases will be taken into account.

2. If the estimate or dismissal of the claims is partial, each party shall pay the costs incurred at its instance and the common costs by half, unless there is merit to impose on one of them for having litigated recklessly.

3. When, in application of the provisions of paragraph 1 of this article, the costs are imposed on the defeated litigant, the latter will only be obliged to pay, on the part corresponding to the lawyers and other professionals who are not subject to the fee or tariff, a total amount not exceeding one third of the amount of the process, for each of the litigants who obtained such a ruling; to these sole purposes, the invaluable claims will be valued at 18,000 euros, unless, because of the complexity of the matter, the court provides otherwise.

The provisions of the previous paragraph shall not be applied when the court declares the recklessness of the litigant condemned to pay the costs.

When the person sentenced in costs is the holder of the right to free legal assistance, the latter will only be obliged to pay the costs incurred in defense of the opposing party in the cases expressly indicated in the Law on Free Legal Assistance.

What form of actions would be deemed as reckless litigation Maria? Ignoring Supreme Court Doctrine?

Yes, for instance

M

Thanks MARIA, still somewhat confusing.

1, Appears to confirm that only on Claims 100% upheld will costs be awarded.

97% of compensation requires the plaintiff to pay his own own costs, even though his case is accepted.

Of course there should be a deterrent to litigate recklessly but the costs borne by the plaintiff surely ensure that defendants are not punished further by defending recklessly.