Spain judicial reform: DR Madrid office

Authored by the DR Madrid team

On 3 January 2025, the Official State Gazette published the Organic Law 1/2025, of 2 January, on measures regarding the efficiency of the Public Justice Service (hereinafter, “Law 1/2025” or “Law”), which came into force on 3 April 2025.

Law 1/2025 transforms single-judge courts into courts of first instance and establishes the obligation to turn to appropriate means of dispute resolution like negotiation, conciliation or mediation (among others and grouped under the Spanish acronym “MASC”) before resorting to court, as well as contemplating other reforms, with the aim of modernizing and streamlining justice mechanisms in Spain. Law 1/2015 applies to matters filed after its entry into force, which means that this reform will not affect ongoing proceedings. [1] The purpose of this article is to provide high-level guidance on (1) the judicial organization reform; (2) the MASC procedural requirement; (3) oral trial; (4) procedural costs; and (5) future perspectives, to help navigate these uncharted waters. 

1. Judicial organizational reform 

Law 1/2025 profoundly alters the organizational structure of courts of all jurisdictional orders to ‘simplify’ access to justice. To achieve this, the reform puts an end to the traditional single-judge courts to replace them with courts of first instance and their sections. Below we set out the main changes to the organizational structure of the courts:

• Creation of the courts of first instance (Tribunales de Instancia), which are replacing the current single-judge courts (Juzgados de Primera Instancia e Instrucción). This promotes a collegiate model to improve efficiency and promote specialisation (minimal structure consisting of a single section encompassing civil and instruction or, where appropriate, a civil section and an instruction section). The structure of the First Instance Court is that of collegiate bodies, though each body maintains its independence in rendering decisions.
• The aim is to reduce the 3,800 existing courts to 431 courts of first instance. 
• The structure of the judicial office is undergoing reform; a dedicated office now exists for each court, and one will soon be established for every tribunal.
• The Juzgados de la Paz (magistrates’ courts) will disappear into Justice Offices of the municipalities (Oficinas de Justicia en los municipios). The new law aims for them to function as direct links between citizens and the justice administration, facilitating the management and completion of procedures both in person and online, avoiding the need for citizens to travel to the court of first instance.
• Courts of first instance can be made up of one or more of the following sections: (i) Family, Children and Legal Capacity; (ii) Commercial; (iii) Violence against Women; (iv) Violence against Children and Teenagers; (v) Criminal; (vi) Minors; (vii) Prison Surveillance; viii) Contentious-Administrative; and (iix) Labor.
• Creation of the Central Court of First Instance, based in Madrid, and with jurisdiction throughout the national territory, with specific competences and the following sections: (i) Instruction, (ii) Criminal, (iii) Minors, (iv) Prison Surveillance, and (v) Contentious-Administrative.

The creation of the new courts of first instance, through the transformation of the current courts into sections of the courts of first instance that correspond to the matters they are hearing, will be carried out in the following staggered manner:

• On 1 July 2025, the former courts of first instance and courts of instruction and the courts dealing with violence against women, in those judicial districts where there are no other types of court, will be transformed, respectively, into single unified civil and instruction sections, and violence against women sections. 
• On 1 October 2025, courts of first instance, courts of instruction and courts dealing with violence against women, in judicial districts where there is no other type of court, will be transformed, respectively, into civil sections, instruction sections and violence against women sections. 
• On 31 December 2025, the remaining courts not included in the above cases will be transformed into the respective sections in accordance with the provisions of this new law.

2. MASC procedural requirement

The cornerstone of the reform brought by Law 1/2025 is, without doubt, the introduction of the MASC procedural requirement. Parties will now have to go through some MASC before resorting to the courts. According to the Law, a suitable means of dispute resolution is understood to be any type of negotiation activity, recognized in this or other state or regional laws, to which the parties to a conflict can turn in good faith to find an out-of-court solution, either by themselves or with the intervention of a neutral third party. Suitable dispute resolution would include (i) mediation, (ii) conciliation -the role of the conciliator closely resembles that of the mediator; however, the key distinction lies in the conciliator’s responsibility to actively propose potential solutions to the conflict and encourage the parties involved to do likewise-; (iii) a neutral opinion of an independent expert; (iv) a confidential binding offer being made; (v) any other type of negotiating activity recognized in law; (vi) negotiating activity carried out directly by the parties or between their lawyers, under the parties' guidelines and with their agreement; or (vii) a collaborative law process comprising structured negotiation between the parties assisted by their advisers and, where appropriate, by neutral third-party experts. 

The MASC procedural requirement will apply to all civil and commercial disputes except for disputes concerning matters that may not be subject to private agreement (materias no disponibles), such as: proceedings for the civil judicial protection of fundamental rights, the processes of filiation, paternity and maternity, the summary protection of possession, or requests for pre-lawsuit interim relief or preliminary proceedings.

Along with the statement of claim parties must submit proof that a negotiation activity has been attempted (that is to say, that there have been conversations but without a final agreement) or a declaration that an attempt to settle has been made. The negotiation attempt may be accredited by means of any document that proves that the other party has received the request or invitation to negotiate or, where appropriate, the proposal, on what date, and that it has been able to access its full content. Difficulties could arise if the defendant refuses to receive the communication or if there is no reliable means of proving the negotiation attempt. Law 1/ 2025 does not provide conclusive stipulations regarding the validity of electronic communications, which could lead to differing interpretations in the courts. In cases where it is not possible to prove receipt of the communication, the doctrine of the Constitutional Court must be applied (see Judgement of the Constitutional Court 82/2000, 27 March (LA LEY 5415/2000), 145/2000, 29 May (LA LEY 8971/2000) and 6/2003, 20 January (LA LEY 1120/2003). According to this doctrine, ‘acts of communication produce full effects when their frustration is due solely to the express or tacit will of the addressee, or to the passivity, disinterest, negligence, error or incompetence of the person to whom they are addressed’.

The consequences of non-compliance with this condition of admissibility are straightforward: the claim will not be allowed to proceed. That is, the claim will not be processed if not accompanied by a description of the negotiation process or a statement of its impossibility together with evidentiary documentation, except in those cases where not legally mandatory (art. 403.2 of the Spanish Civil Procedure Act, hereinafter “SCPA”). A further controversial issue is the scope of the power of judges to verify compliance with the formal and material requirements of MASC. The question arises as to whether a judge could dismiss a claim on the grounds that the binding offer presented by the plaintiff was not serious or concrete enough. The lack of uniform criteria could lead to inconsistent decisions between courts, affecting legal certainty. The absence of a clear framework could turn the MASC into a new litigation front, instead of an effective solution for reducing court backlogs.

The request by one party to the other to initiate a MASC process brings the interruption of the statute of limitations (interrupción de la prescripción) and suspension of the time bar (suspension de caducidad) (art. 7.1 and 2 Law 1/2025). The statue limitation or time bar is interrupted or suspended when the other party is requested to engage in a MASC, or when the mediator is requested, or the expert is appointed. The interruption or suspension will be extended until the date of the signing of the agreement or the termination of the MASC without agreement. The process will be considered terminated without agreement under the following conditions (i) 30 calendar days elapse from the date of the receipt of the invitation to negotiate, without a response or the holding of a meeting; (ii) once the negotiation has commenced, 30 days have passed from the date on which one party submits a specific proposal for agreement to the other party, without an agreement being reached or a written response being received; or (iii) 3 months have passed from the first meeting, without an agreement being reached. 

The settlement agreement (if any) reached must be formalized in a document stating the identity of the parties, the lawyers and the neutral third party involved, the place and date of signature, and the obligations assumed by each party, as well as a statement that a negotiation procedure has been followed in accordance with the provisions of law. The agreements reached should be formalized by public deed or be approved by a court in order to make them enforceable.

3. Oral trials

The Law envisages important changes for oral proceedings which are the proceedings related to small amount claims, individual actions relating to general contracting conditions, claims for payment filed by owners associations and actions for the division of common property as well as others addressed under art. 250 SCPA.The main new features in relation to oral proceedings are: (i) the creation of a written procedure for the proposal and challenging of evidence, and for allegations regarding procedural exceptions (art. 438.8 and 9 SCPA); (ii) the resolution by order of all the issues raised (challenge to the amount of the claim, procedural exceptions and admission of evidence); and (iii) the holding of the hearing being conditional on the court's decision even if the parties have requested one (art. 438.10 SCPA).

Law 1/2015 also introduces the possibility of oral judgements being handed down in the context of oral trials, except in proceedings in which a lawyer is not involved. In summary, this new form of resolution would be articulated as follows: (i) the oral judgement will be delivered at the end of the hearing in the presence of the parties, without prejudice to its subsequent drafting by the judge (art. 210.3 SCPA); (ii) if all the parties express their decision not to appeal, its finality will be declared there and then; and (iii) where the parties have indicated their intention to appeal, the period for lodging an appeal shall commence upon service of the duly reasoned judgment .

4. Procedural costs

Regarding procedural costs, the classic criterion of costs follow the event is maintained, introducing important nuances related to the behavior of the parties in relation to the MASC. Thus, even when all the claims of one of the parties have been rejected, ‘there will be no award of costs in favor of that party who has refused expressly or by conclusive acts, and without just cause’, to participate in an ADR, when it is mandatory (art. 394.1 SCPA). Conversely, when the claim is only partially upheld, costs may be imposed, ‘in a duly reasoned decision’, on the party that has unjustifiably failed to engage in a MASC procedure, in circumstances in which it was mandatory to do so (art. 394.2 SCPA). In any case, the party ordered to pay costs may seek exemption from payment or a reduction in the amount owed, provided it has made a settlement proposal to the opposing party, which has been rejected (art. 245.5 SCPA).

The notion of “abuse of the public service of justice” is added to sanction the unjustified use of judicial proceedings when there are feasible consensual alternatives for the parties to turn to.

5. Final remarks

What does this mean?

With the recent entry into force of Law 1/2025, it is now a mandatory step to turn to appropriate (alternative) means of suitable dispute resolution mechanism before filing any court proceedings. This means that the claim you bring to court must first be addressed through a MASC, and the subject of that negotiation must match the subject of the dispute you intend to bring before a judge.

Whether you are the one initiating the claim or the one responding to it, it is important to carefully consider which method of dispute resolution is most appropriate for your case.

If you are filing the claim (the plaintiff), you must make a genuine effort to propose negotiation (or any other ADR mechanism) with the other party. If you do not, the court will not even register your case. If you are on the receiving end of the claim (the defendant), and you choose not to participate in the negotiation or MASC process, the judge may take this into account when deciding who should bear the legal costs of the proceedings.

What are the effects of MASC?

When one party formally invites the other to initiate a negotiation process, this interrupts the statute of limitations and suspends the time limits for bringing legal action. This effect starts from the date the attempt to notify the other party is recorded. However, challenges may arise—particularly when the communication is contested by the other party or when that party cannot be reached, making proper notification impossible.

What options do the parties have?

Upon receiving a proposal to engage in MASC, the other party can:

• Accept the proposal;
• Accept, but suggest a different dispute resolution method. In the event that the parties propose resorting to different appropriate means of dispute resolution and fail to reach an agreement on which method to employ, the one proposed initially on a provisional basis shall be adopted;
• Decline, providing a reason (e.g., lack of legal standing); or
• Ignore or delay the response (although this may have consequences).

What are the consequences?

If you are the claimant and fail to fulfil the procedural requirement to attempt MASC, your case will not be registered by the court. As the defendant, if you unjustifiably refuse to engage in MASC, the court may take this into account when deciding who should bear the costs of the proceedings. While the law outlines general rules, judges also consider how reasonably each party behaved throughout the process.

Are the discussions and proposals confidential? 

Yes—negotiations and the documents exchanged during the MASC process are confidential. However, the mere fact of whether MASC was attempted or not is not confidential. Judges can consider each party’s willingness—or refusal—to engage in good faith negotiations when ruling on the allocation of costs.

As initially pointed out, the aim of Law 1/2025 is to enhance specialization and improve workload distribution. The obligation to engage in MASC seeks to reduce litigiousness and the high number of judicial disputes. The response by the legal community has been mixed. For instance, the Spanish General Council of Lawyers has underlined that imposing alternative dispute resolution as a mandatory procedural requirement could lead to the opposite effect. There may be incentives for parties to delay the proceedings or make them even more expensive which could lead to a clash with the constitutional guarantee of access to justice. Different views on the new law’s implementation have given rise to differing interpretations among legal practitioners, generating uncertainty and potential inequality in its practical application. The National Association of Legal Officers of the Court have published a proposal for the unification of criteria on the impact of the MASC on civil jurisdiction and the ways of proving them. For example, they consider that with two reliable attempts to notify the negotiations prior to the lawsuit, the condition of admissibility would be met. They are asking for this proposal to be approved by judges and other professional bar associations. Similarly, various Boards of Judges of First Instance in different regions have also approved several proposals aimed at unifying the criteria regarding the impact of MASC on civil jurisdiction. We will have to see how this evolves, but we foresee that the main objective of unblocking the judiciary will not be met, at least in the short term.
 

[1] There are two exceptions to the application of the Law 1/2025. First, in legal proceedings already underway at the time the Law enters into force, the parties may, by mutual agreement, submit the dispute to any appropriate means of dispute resolution. Second, in proceedings where no hearing has been held as of the Law’s entry into force, judges have the possibility of delivering oral judgments in oral proceedings.