Litigation & ADR annual report
Cooling things down
There are signs that attitudes
to ADR are changing with
more clients adopting such
methods to avoid
heated courtroom
battles
While law firms
report some
growth litigation,
the increase
in arbitration
has been much
more dramatic.
Traditionally, Iberian
clients have taken a
litigious approach to
commercial disputes, but
there is a feeling that a “cultural
shift” is taking place as clients
awareness of the benefits of
various types of alternative dispute
resolution (ADR) grows. However,
improving client awareness of
ADR remains one of the biggest
challenges facing law firms.
Alfonso Iglesia, partner at
Cuatrecasas, Gonçalves Pereira,
says that, while there has been
moderate growth in litigation and
domestic arbitration, there has
been an increase of international
commercial arbitration cases and
an “explosion” in investment
arbitration, much of it relating to
renewable energy. Meanwhile, Uría
Menéndez partner Álvaro López
de Argumedo says there has been
an increase in financial litigation
as investors become “more aware
of their rights”. According to
Squire Patton Boggs partner
Fernando González, there has been
a tremendous increase in criminal
litigation with “corruption affecting
more corporations” as well as a
lot of insolvency-related litigation.
Iglesia adds that there is a tendency
to criminalise shareholder conflicts.
Araoz & Rueda partner Cliff
Hendel says he has seen, as
both counsel and arbitrator, a
significant number of disputes as
a result of the “fall-out from the
financial crisis”. He adds: “There
are a lot of shareholder and joint
venture-related disputes and M&A
disputes of all types, especially
involving price adjustments and
claims for breach of representation
and warranty. In the boom years,
38 • IBERIAN LAWYER • January / February 2015
when deals went sour, things
were sometimes not bad at all for
either party. When deals go sour in
today´s environment,
things are really
bad, sometimes
even for both
parties.”
Cultural change
not seen a Spanish client ask for
mediation yet, but mediation is
something to be considered in
the future. He adds that banking
litigation will continue and that
litigation lawyers will become
even more involved in refinancing
matters. Iglesia says that methods
of alternative dispute resolution
have been created “bottom up”
by clients in the “common law
countries”. He adds: “It´s a less
expensive way of resolving
disputes, it has clear advantages
and companies need to understand
that this can be useful. If Spanish
companies are exposed to these
methods, it is likely that they will
be keener to use them.”
Rodríguez says that clients are
concerned about confidentiality in
that they are worried the opposing
party may use information they
have acquired if the matter is
not resolved at the mediation.
According to López de Argumedo,
large international corporations
tend to welcome mediation. He
adds that while mediation is more
efficient and cheaper, Spanish
culture is “very adversarial”.
Linklaters partner Francisco Málaga
says the issue with some clients is
that, when their lawyer suggests
going to mediation, they interpret it
as the lawyer thinking they would
lose the case in court. “I believe
parties should be compelled to go
to one session of mediation,” he
adds.
On the issue of the
use of arbitration,
Freshfields
Bruckhaus
Deringer partner
Vicente Sierra says a
process of “cultural
change” is taking
place as arbitration is
more widely accepted by clients
in Spain. He adds that progress is
being made and there are now more
arbitration clauses in contracts.
Meanwhile, Sierra says litigation
is also on the increase: “We are
seeing more and more since the
economic downturn – there is a
lot of insolvency litigation and
shareholder disputes.”
Pérez-Lorca partner Guillermina
Ester says insolvency-related cases
are starting to decrease although
there are still many insolvency
proceedings ongoing as well as
many cases relating to restructuring
and refinancing.
Meanwhile, López de Argumedo
says there are more instances of
clients in the hospitality sector
seeking a reduction of rents in lease
agreements, and
highlights the
recent judgment of
When deals go sour in
the Supreme Court
today´s environment, things
of 15 October, 2014
in relation to this.
are really bad, sometimes
One partner says
even for both parties.
it will be difficult
Cliff Hendel
for businesses in
Araoz & Rueda
the hotel sector
to review rents
because the
crisis has passed,
but he says that insolvency and
Hendel argues that the most
restructuring-related matters
effective changes [in attitudes to
create a lot of litigious work.
mediation] come from society.
González says that there needs to
“Legislation is not the answer,
be amendments to the legal cost of
the most effective changes are
mediation, so that it will be more
bottom up, not top-down. In the
“broadly used” in Spain.
US, institutions like CPR [the
Gómez-Acebo & Pombo partner
International Institute for Conflict
Javier Izquierdo says that he has
Prevention and Resolution] have
“
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