Litigation & ADR annual report
Portugal : What have been the major developments and trends in litigation and ADR in the last 12 months ?
“ Following the sovereign debt crisis and the intervention of the IMF in Portugal , foreign and national investment has decreased and that led to an increase of litigation and debt collection matters . Today , the levels of confidence in the Portuguese market are increasing and the measures taken to attract foreign investment are resulting in an increase of multijurisdictional litigation . The collapse of one of the major Banks in Portugal , BES , contributed to a long-term litigation trend as there are a significant number of lawsuits involving auditors , regulatory bodies and board members that are still pending .” João Caiado Guerreiro , managing partner , Caiado Guerreiro
“ There are more and more cases related to the resolution measures applied to BES and Banif . Other financial firms are still struggling and this will also increase litigation . Arbitration continues to grow even though problems related to the independence of arbitrators are raising more and more issues .” José Jácome , partner , AAA Advogados
“ The implementation of the new Civil Procedure Code , and the significant change in the Portuguese court structure .” Gonçalo Malheiro , partner , pbbr
“ The reform of the Justice System performed by the Judicial System Organisation Law ( Law Decree No . 86 / 2016 ). Major changes made by this law affect the courts ’ territorial jurisdiction . Civil disputes are addressed in first instance at the district courts . These courts are organised in chambers and some of them include specialised chambers for commercial and civil matters . The judgments of the district courts may be appealed to the Courts of Appeal , whose area of competence is defined by reference to the district courts . Finally , the Supreme Court of Justice , a state court , may review the decisions of the Courts of Appeal in matters of law .” Vitor Marques da Cruz , founding partner , MC & A
“ As clients become more aware of the advantages of ADR , they increasingly resort to these instruments .” Pedro Carreira Albano , partner , Pares Advogados expensive , but it can be difficult to convince clients to pay double the fee because they are receiving better advice .”
The need to say ‘ no ’ There is also a perception that Spanish clients are more likely to negotiate hard with law firms in Spain than they would with international law firms . “ Spanish clients don ’ t discuss fees with US or UK firms ,” says one partner . Another partner adds : “ It ’ s a case of Spanish clients knowing the marketplace in Spain , they are scared in the US market , there they think that if they choose [ and pay for ] the best , if things go wrong it won ´ t be their fault .” Some lawyers say there is a difference between Spanish clients and international clients when discussing fees and that it is often “ easier ” to deal with international clients .
Other lawyers argue that law firms need to be prepared to turn down work if the proposed fee is too low . “ Sometimes clients want you to be innovative , but you need to say ´ no ’ sometimes . Clients may say they know another firm that is offering their service at half the price , but dumping prices harms the whole sector ,” says one partner . As another partner remarks , when clients ask their legal advisers to be “ innovative ” it generally means they want their legal advisers to reduce their fees . Meanwhile , another partner at a leading law firm in Spain says some international companies “ choose three law firms and put them under an umbrella contract and then say , for example , ‘ if we give you more than € 1 million of work , you will then give us a discount ’ – this creates a conflict ”.
However , some lawyers claim that declining rates an opportunity for law firms . “ This is an represent opportunity to know ourselves better – law firms need to criticise and study their business model ,” says one partner . A leading Madrid-based litigator adds : “ In some cases , lowering fees might be justified , for instance if it is a new client , but generally when it comes to law firms working for a lower price , they should instead drop cases .”
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New products will be found to claim against .
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Javier Mendieta Allen & Overy
Mendieta says he expects litigation to grow , particularly consumer-related claims . “ New products will be found to claim against ,” he says . Meanwhile , Mendieta says there will also be an increase in restructuringrelated disputes in the coming year . Gómez-Acebo & Pombo partner Javier Izquierdo says he is optimistic that work will increase in the next 12 months . “ There will be work representing financial entities and probably also real estate litigation ,” he adds . Virgós says that events such as Brexit mean we are in “ times of change ”, but he adds : “ The uncertainty they [ such events ] bring about , though bad for society , is creating new opportunities for the legal profession .”
There will be less restructuring and banking-related litigation and more disputes relating to M & A and
40 • IBERIAN LAWYER • January / February 2017 www . iberianlawyer . com