Litigation & ADR annual report
Professional liability claims increasing in the Portuguese banking and telecoms sectors
Directors and officers litigation is generating significant fees for law firms in Lisbon as the European trend for suing company directors begins to sweep Portugal
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An increase in professional liability claims is one of the current trends in the Portuguese market , according to Nuno Líbano Monteiro , partner at PLMJ in Lisbon . “ It is important to stress that banking and finance litigation was very important in 2016 ,
but I also saw an increase of D & O [ directors & officers ] litigation related to the liability of directors of companies ,” he explains . “ I wouldn ’ t say it ’ s a massive trend , but it is very important and high-value litigation .”
Auditor liability Given that such claims are already common elsewhere in Europe , Líbano Monteiro says he is not surprised that there have been significant professional and civil liability disputes in Portugal – he adds that it goes beyond the massive cases related to the liability of directors of banks , having extended to the telecoms sector as well . Líbano Monteiro also anticipates that increasing litigation related to the liability of auditors of major companies in Portugal will represent an opportunity for law firms . He adds : “ If law firms adapt themselves to the new trends in the market , as well as the new demands of the market , I think 2017 will be an important year .”
Court rulings on mortgages causing wave of litigation
Eduardo de León
A series of court rulings have overhauled the Spanish mortgage market and created the “ biggest litigation issue ” in Spain , according to Eduardo de León , partner at Araoz & Rueda .
Following the aftermath of the 2008 financial crash , legal judgements from a number of courts - including the European Court of Justice – have found that Spanish lenders exercised “ unfair ” terms and undermined consumer rights , De León explains . He adds that this culminated in this year ’ s Royal Decree ordering Spanish banks to repay consumers ’ past mortgage overpayments . De León says the next major issue related to mortgages will be the question of “ the mortgagee ’ s fees charged to the debtor as well as the general liability of the mortgagor not limited to the value of the mortgaged property ”.
Litigators are preparing for a fight . “ The problem is that some of the banks have decided they are not going to accept [ the decree ] because they maintain the terms of the mortgage were clear enough , were not unfair and were very well explained to consumers ,” says De León . “ The Spanish mortgage market is changing , not because the banks or lenders want it to , but because the court officials are changing the system .” He adds : “ There ’ s a clear evolution . It ’ s now not enough to have an agreement between both parties . It ’ s about how banks - and companies - can obtain an understanding with the consumer .”
Another growing area of work for litigators stems from Spain ’ s 2003 bankruptcy act . De León says : “ When the crisis started , we realised the [ bankruptcy ] system was not perfect .” De León explains that , consequently , there have been amendments to legislation , with some impacting on refinancing , “ especially pursuant to the additional fourth provision of the Spanish Bankruptcy Act ”.
46 • IBERIAN LAWYER • January / February 2017 www . iberianlawyer . com