Spain's ambitious judicial office reforms to introduce ADR as a procedural requirement

Organic Law 1/2025 introduces important and wide-ranging reforms that affect the traditional structure of the judicial office and entails a profound reform of the different procedural laws.

As far as civil jurisdiction is concerned, single-member courts have been replaced by Courts of First Instance, the alternative dispute resolution (ADR) process strengthened – to the point of making it a procedural requirement – and streamlining measures approved to modernise the judicial office, favour extrajudicial solutions and reduce litigiousness.

The regulation, published in the Official State Gazette on 3 January 2025, will enter into force on 3 April.

Courts of Instance introduced

The single-member courts are replaced by Courts of Instance in each judicial district. These courts will be composed of specialised divisions and presided over by a magistrate. Each court shall have at least one civil division and one criminal investigation division. In addition, they may be made up of more specialised divisions: commercial, social, criminal, contentious administrative, etc.

Each Court of Instance shall maintain in its divisions as many magistrates as there are currently judges in the judicial district.

Thus, the 3,800 single-member courts will be transformed into 431 Courts of Instance. The aim is to favour specialisation, the unification of criteria and a better distribution of the workload. Therefore, it is expressly envisaged that the board of judges of each division will meet to examine and evaluate criteria when there are differences in interpretation in the application of laws in identical cases.

The Justice of the Peace Courts are also replaced by Justice Offices and their competences are increased.

This transformation will be staggered, with final completion scheduled for 1 December 2025.

ADR requirement

ADR, as defined by the law, is any type of negotiation activity undertaken by the parties in good faith to find an out-of-court solution to the dispute, either on their own or with the intervention of a neutral third party.

The new law establishes ADR as a procedural requirement for the admissibility of claims (with some exceptions) in the civil courts. Thus, the claim must be accompanied by the document justifying the use of ADR and, where appropriate, a brief description of the negotiation process.

For these purposes, the following ADR procedures are foreseen as valid for the fulfilment of the procedural requirement: mediation, conciliation, independent expert opinion, confidential binding offer or any negotiation activity recognised by law.

New rules have also been created for abusive clause procedures with the aim of promoting out-of-court solutions. These rules seek to penalise institutions that reject consensual solutions in disputes over clauses identical to those already declared null and void by the Supreme Court or the Court of Justice of the EU.

Changes in oral proceedings

Oral proceedings are also subject to modifications and their processing in writing, the reduction of the number of hearings and the reduction of the time to issue a judgement are promoted. Thus, the proposal and admission of evidence, as well as the decision on procedural exceptions, will now take place in writing. In addition, the possibility is incorporated of the judge being able to decide at his discretion on the holding of a hearing, even when the parties have requested it.

The possibility of oral judgements is included and the power to conduct final proceedings is added (which, in practice, may end up frustrating the objective of speeding up these proceedings).

Parties to pay costs

Changes are introduced in the area of costs with the aim of sanctioning refusal to participate in ADR and "abuse of the public service of justice".

To this end, the party ordered to pay costs is allowed to request exoneration or moderation of these costs when it has made a proposal to the opposing party, the latter has rejected it and the judgement has a similar content to that of the proposal.

Refusal to participate in ADR is expressly introduced as a factor in the assessment of costs.

Furthermore, the concept of "abuse of the public service of justice" is added to sanction the unjustified use of jurisdiction when there are viable consensual alternatives.

Enforcement and auctioning changes

In the area of enforcement, important new features have been introduced, especially in the auction. These include the possibility of suspending the enforcement proceedings at any time in order to resort to ADR, provided that both parties so request.

In addition, the amount that bidders must deposit to participate in the auction is increased from 5% to 10% for movable assets and 20% for immovable assets. The claimant wishing to purchase the property must participate as an additional bidder and may no longer improve the price once the auction has ended or request the award of the property in the event of a void auction. However, he may participate without making a prior deposit.

The effects of an auction with bidders and auctions without bidders are also unified. Following auctions without bidders, the attachment will be lifted at the request of the foreclosed party, except in certain specific cases.

Finally, if the claimant does not pay the difference between his claim and the amount offered, he will be penalised by deducting from the amount of his claim the amount that the other bidders were required to deposit.

Osborne Clarke comment

Organic Law 1/2025 aims to radically transform the judicial office in order to enhance specialisation and improve the distribution of the workload. Likewise, the obligation to resort to ADR seeks to reduce litigiousness and reduce the high number of judicial disputes.

However, as the Spanish General Council of Lawyers has pointed out in several reports, considering ADR as a mandatory procedural requirement could in practice have the opposite effect, delaying the (already lengthy) procedure and even making it more expensive, and could even clash with the constitutional guarantee of access to justice.

The reform is ambitious and aspirational. Its real impact will depend first on the allocation of financial resources to implement the reform and then on the effective reduction of judicial procedures and the reduction of the workload of the courts. This is a laudable objective, no doubt, but one that previous legislative initiatives have failed to achieve.