- Getting the Deal Through - Dispute Resolution 2012 - Chile
- August 31, 2012 | Author: Florencio Bernales
- Law Firm: Cariola Díez Pérez-Cotapos & Cia. Ltda. - Santiago Office
1 Court system
What is the structure of the civil court system?
The structure of the civil court system is as follows:
• Supreme Court: according to the Chilean Court Organisation
Code, the Supreme Court is composed of 21 members and
operates in the capital of Chile. It works in specialised sessions
or in full. The Supreme Court has jurisdiction throughout the
• Courts of appeal: these courts have regional jurisdiction and currently
there are 17 courts of appeal around the country.
• Civil courts: these are the courts of first instance and are specialised
by matter (tax, civil, criminal and labour) and they are distributed
all over the country.
2 Judges and juries
What is the role of the judge and the jury in civil proceedings?
Chile does not have a jury system.
The parties take the initiative in proceedings. Thus, in accordance
with this principle, the parties have responsibility for the trial
progress (mainly the plaintiff). Therefore the role of the judge in
civil matters is rather passive. Once the parties have filed evidence in
court, the judge must decide the case according to the evidence.
3 Limitation issues
What are the time limits for bringing civil claims?
The general rule is in article 2514 of the Civil Code (there are several
exceptions and special cases):
• ordinary actions: five years; and
• enforcement actions: three years.
The time limit also depends on the matter:
• contractual liability: five years; and
• tort: four years.
There is also a commercial statute of limitations: four years.
4 Pre-action behaviour
Are there any pre-action considerations the parties should take into
The general rule is that there is no obligatory pre-action behaviour
that the parties should take into account.
Notwithstanding the foregoing, there are some cases provided in
law whereby the parties could request pre-action measures to prepare
the action, obtain evidence and guarantee the results of the trial.
These situations are set forth in title IV of the second book of the
Civil Procedural Code. Basically these measures seek to prepare the
trial (eg, the exhibition of documents or recognition of signatures);
obtain evidence in advance (eg, testimony of witnesses); and to guarantee
the results of the trial (such as the prohibition to execute acts
or contracts over certain assets).
5 Starting proceedings
How are civil proceedings commenced?
According to article 253 of the Civil Procedural Code the proceedings
start when the plaintiff files its claim, notwithstanding the preaction
measures mentioned above. These measures do not interrupt
the statute of limitations set out in question 3.
What is the typical procedure and timetable for a civil claim?
Chilean law establishes an ordinary proceeding (second book of the
Civil Procedural Code) and some special proceedings. According to
the ordinary proceeding (written proceeding), the main stages are
discussion, evidence and judgment. Within these stages are:
• Filing the claim: the place in which the claimant has to file the
claim depends of the place where the court is located.
• Response of the defendant: the defendant has 15 business days
(general rule) to file the response and also file a counterclaim if
appropriate against the claimant.
• Reply and rejoinder: the claimant has six business days to file the
reply against the response filed by the defendant and after that
the defendant has the same period of time to file its rejoinder
against the reply.
• Conciliation stage: after the discussion stage and before the evidence
period, there is an obligatory conciliation hearing.
• Evidence stage: in this period the parties have to file all the proofs.
It lasts 20 days and the parties may request an extraordinary
extension. At the end of this period the parties could observe the
• Judgment stage: according to Chilean law, the court has 60 days
to render its decision (this deadline is not final).
• Appeal and annulment: once the court has made its judgment,
the parties can file an appeal or request for annulment before the
court of first instance, which will be resolved by the respective
court of appeal. The parties can further file an annulment before
the court of appeal, which will be resolved by the Supreme Court
Considering all the stages of the trial (court of first instance, court
of appeal and Supreme Court), an ordinary proceeding can exceed
five years in total.
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44 Getting the Deal Through ¿ Dispute Resolution 2012
7 Case management
Can the parties control the procedure and the timetable?
As noted in question 2, the parties take the initiative in the procedure,
therefore if they do not make efforts to advance the trial,
it will remain inactive or passive. Under this scenario the parties
(principally the plaintiff) are responsible for the progress of the trial,
and the law provides for the abandonment of proceedings after six
months of inactivity.
Pursuant to article 64 of the Civil Procedural Code, the parties
can suspend the proceedings for up to 90 days. This right may be
exercised only once in each instance.
8 Evidence ¿ documents
Is there a duty to preserve documents and other evidence pending
trial? Must parties share relevant documents (including those
unhelpful to their case)?
The parties do not have a duty to share relevant documents, but the
parties have the right to request documents from the other party,
unless the documents are confidential. In fact, according to Chilean
law, one of the measures that the parties can request is the production
of specific documents. This can be requested as a pre-action measure
and also in the evidence period.
Civil law does not impose a duty to preserve documents, but
commercial and tax law does, pursuant to which certain documents
must be kept at least for the time prescribed by law.
9 Evidence ¿ privilege
Are any documents privileged? Would advice from an in-house lawyer
(whether local or foreign) also be privileged?
There is no obligation to produce confidential and reserved documents
In 2011, the Chilean Bar Association published a new code of
ethics (which is not mandatory). According to this code lawyers have
a duty of professional secrecy. Based on this duty and right, lawyers
must maintain the confidentiality of all information that they have
known. Also, lawyer¿client relationships and communications must
be kept confidential and cannot be interfered with by the authorities
or third parties. Professional secrecy is protected by the Constitution
and Criminal Code. Nevertheless, there have been cases where public
opinion has discussed the true scope of this protection.
10 Evidence ¿ pretrial
Do parties exchange written evidence from witnesses and experts
prior to trial?
11 Evidence ¿ trial
How is evidence presented at trial? Do witnesses and experts give
• Documents: this kind of evidence should be physically filed at
• Witnesses: they should give oral testimony; however, the courts
always keep a written record of the testimony.
• Statements by the representatives of the parties (who are not
witnesses): they give oral answers; however, the court must keep
a written record of these answers.
• Experts: they provide a written report for the court and they
must acknowledge it and answer any questions that the parties
12 Interim remedies
What interim remedies are available?
To guarantee the results of the trial, especially the effects of the judgment,
the law provides precautionary measures. One goal of these
measures is to avoid the transfer of any asset (for example, the prohibition
to execute acts or contracts over certain assets).
The measure will be conceded by the court if the requesting party
complies with some requirements, such as submitting evidence showing
at least serious presumption of the right claimed.
All these measures are essentially provisional. Consequently,
these should be halted if the danger disappears.
What substantive remedies are available?
The prevailing party is entitled to recover direct damages including
lost profit (loss of future earnings) and also moral damage. This
moral damage could be defined as the suffering that the prevailing
party experienced as a result of the behaviour of the counterparty.
A money judgment could include money devaluation and
Punitive damages are not recognised in our legislation.
What means of enforcement are available?
If a court order is disobeyed the judge could impose any measure
that he or she could deem reasonable to obtain the fulfilment of the
court order. The law expressly gives the judge the power to impose
fines and also to order the arrest of the person that is disobeying the
15 Public access
Are court hearings held in public? Are court documents available to
In civil matters, hearings, files and documents are public.
Does the court have power to order costs?
The final judgment should resolve the allocation of costs, if any, at
the parties’ request. The court can only order the losing party to
pay costs; in addition, the court can release the losing party from
the duty to pay costs if the court considers that it was reasonable to
bring the action.
The judge will fix the costs according to the nature of the trial,
and the parties are not allowed to ask for the real costs of the litigation.
In civil matters the amount fixed by the court is usually much
less than the real cost of the litigation.
17 Funding arrangements
Are ‘no win, no fee’ agreements, or other types of contingency or
conditional fee arrangements between lawyers and their clients,
available to parties? May parties bring proceedings using third-party
funding? If so, may the third party take a share of any proceeds of the
claim? May a party to litigation share its risk with a third party?
Contingency and conditional fees are available to the parties. Success
fees are usually added to an hourly-based fee or a fixed fee. The ‘no
win, no fee’ arrangement is not extensively used.
Parties may bring proceedings using third-party funding, but
according to the ethics rules (that are not binding), lawyers should
not finance the parties.
Once the litigation has started some rules that apply to the
assignment of or investment in claims could affect the purpose of
Cariola Diez Pérez-Cotapos Chile
the investment. These rules are contained in article 1911 et seq of
the Civil Code.
Is insurance available to cover all or part of a party’s legal costs?
Liability insurance is usually available for companies and, depending
of the type of coverage, the policy could cover legal costs.
19 Class action
May litigants with similar claims bring a form of collective redress?
In what circumstances is this permitted?
Class actions are contemplated in the Consumer Protection Law.
This law allows consumers’ associations, the Consumer Protection
Agency and 50 or more consumers to bring a collective action in
cases of an infringement of the Consumer Protection Law.
In other cases, the Civil Procedural Code allows the filing of a
lawsuit by several claimants, but the action must be the same or must
be based in the same facts.
On what grounds and in what circumstances can the parties appeal?
Is there a right of further appeal?
In almost all civil proceedings there is a right of appeal against the
judgment of the first-instance judge. The court of appeal could
review the merits of the case and also any formal issues if they were
queried by the parties. In most cases the court of appeal will issue a
new judgment that could confirm, modify or reverse the first-instance
As the court of appeal can review the merits of the case, the
reasoning and the law applied by the lower court, the grounds for
filing an appeal are very broad.
Some non-final orders or resolutions of the first-instance court
can also be appealed.
21 Foreign judgments
What procedures exist for recognition and enforcement of foreign
According to the Civil Procedural Code, a foreign judgment will be
enforceable as set forth by the corresponding international treaty.
If there is no treaty with a specific foreign country, the enforcement
of the judgment is subject to reciprocity criteria.
If there is no international treaty with the foreign country nor
reciprocity, the foreign judgment will be considered enforceable in
the following circumstances:
• that the foreign judgment does not infringe Chilean law or
• that the action has been duly served on the losing party;
• that the losing party had the opportunity to present its case;
• that the foreign judgment is final.
22 Foreign proceedings
Are there any procedures for obtaining oral or documentary evidence
for use in civil proceedings in other jurisdictions?
Chile is a signatory of the Inter-American Convention on Letters
Rogatory, applicable to letters rogatory, issued in conjunction with
proceedings in civil and commercial matters held before the appropriate
judicial or other adjudicatory authority of one of the parties
of the convention, that have as their purpose:
• the performance of procedural acts of a merely formal nature,
such as service of process, summonses or subpoenas abroad; or
• the taking of evidence and the obtaining of information abroad,
unless a reservation is made in this respect.
In our experience, the same kind of letter rogatory is applicable with
countries which are not part of the convention.
23 UNCITRAL Model Law
Is the arbitration law based on the UNCITRAL Model Law?
Yes, the International Arbitration Law issued in 2004 is based on the
UNCITRAL Model Law.
24 Arbitration agreements
What are the formal requirements for an enforceable arbitration
The formal requirements for an arbitration agreement to be enforceable
are established in article 7 of the International Arbitration Law
and are the following:
• the arbitration agreement must contain the agreement by the
parties to submit to arbitration all or certain disputes which have
arisen or which may arise between them in respect of a defined
legal relationship, whether contractual or not; and
• the arbitration agreement needs to be in writing and it may be
in the form of an arbitration clause in a contract or in form of a
25 Choice of arbitrator
If the arbitration agreement and any relevant rules are silent on the
matter, how many arbitrators will be appointed and how will they
be appointed? Are there restrictions on the right to challenge the
appointment of an arbitrator?
Under the International Arbitration Law, if the parties fail to determine
the number of arbitrators, the arbitrators shall be three.
In connection with the right to challenge the appointment of an
arbitrator, article 12 of the International Arbitration Law states that
an arbitrator may be challenged only if circumstances exist that give
rise to justifiable doubts as to his or her impartiality or independence,
or if he or she does not possess the qualifications agreed to by
In the case of an arbitrator appointed by the party itself or with
its participation, the arbitrator may be challenged only for reasons
the party becomes aware of after the appointment has been made.
26 Arbitral procedure
Does the domestic law contain substantive requirements for the
procedure to be followed?
Chilean law establishes a dual system in connection with arbitration.
Therefore, all the substantive requirements to be observed in an
international arbitration procedure are contained in the International
Arbitration Law, not in the domestic law.
27 Court intervention
On what grounds can the court intervene during an arbitration?
As a general rule, article 5 of the International Arbitration Law states
that ‘in matters governed by this law, no court shall intervene except
where so provided in this law’.
Under article 6 of this law, the court can intervene during arbitration
for certain functions of assistance and supervision, namely:
• appointment of the arbitrators when parties fail to do so or when
the procedure of appointment agreed upon by the parties fails;
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46 Getting the Deal Through ¿ Dispute Resolution 2012
• if a challenge under any procedure agreed upon by the parties or
under the procedure established in the International Arbitration
Law is not successful, the challenging party may request, within
30 days after having received notice of the decision rejecting the
challenge, the court to decide on the challenge, which decision
will not be subject to appeal;
• if an arbitrator becomes de jure or de facto unable to perform his
functions or for other reasons fails to act without undue delay
and there is a controversy concerning any of these grounds, any
party may request the court to decide on the termination of the
• if the arbitral tribunal rules as a preliminary question that it
has jurisdiction, any party may request the court to decide the
• the arbitral tribunal or a party with the approval of the arbitral
tribunal may request from a competent court assistance in taking
• the court can also intervene if any party requests an interim
measure directly to the court during arbitration; and
• last, the court can also intervene in matters of recognition and
enforcement of the final award issued by the arbitral tribunal.
28 Interim relief
Do arbitrators have powers to grant interim relief?
The arbitral tribunal is entitled to grant interim relief. However, the
decisions issued on this regard are not enforceable if any party is in
contempt of the arbitrator’s order.
When and in what form must the award be delivered?
There is not a specific term for the issuance of a final award.
In connection with the form of the award, article 31 of the International
Arbitration Law sets forth the following requirements:
(1) The award shall be made in writing and shall be signed by the
arbitrator or arbitrators. In arbitral proceedings with more than
one arbitrator, the signatures of the majority of all members of
the arbitral tribunal shall suffice, provided that the reason for
any omitted signature is stated.
(2) The award shall state the reasons upon which it is based, unless
the parties have agreed that no reasons are to be given or the
award is an award on agreed terms under article 30.
(3) The award shall state its date and the place of arbitration as
determined in accordance with article 20(1). The award shall be
deemed to have been made at that place.
(4) After the award is made, a copy signed by the arbitrators in
accordance with paragraph (1) of this article shall be delivered
to each party.
On what grounds can an award be appealed to the court?
Article 34 of the International Arbitration Law establishes the ‘application
for setting aside’ as the exclusive recourse against an arbitral
award. There is no right of further appeal.
What procedures exist for enforcement of foreign and domestic
The procedure to enforce a foreign award is the exequatur before the
Supreme Court of Chile.
It is important to point out that Chile is a signatory of the New
York Convention on the Recognition and Enforcement of Foreign
Arbitral Awards and also to the Panama Convention regarding the
Domestic awards do not need any specific enforcing proceeding.
Can a successful party recover its costs?
According to our experience in Chilean domestic arbitration practice,
even though not forbidden by law, it is not usual to recover actual
costs and expenses incurred in arbitration, but a nominal amount per
concept of arbitration expenses.
In international arbitration, in principle, it would be feasible to
recover actual costs and expenses as it is usual in this type of proceeding.
However, to date we do not have enough information to give
assurance that an arbitral tribunal composed of Chilean arbitrators
would grant full relief to a party in connection with the costs of the
Alternative dispute resolution
33 Types of ADR
What types of ADR process are commonly used? Is a particular ADR
Even though domestic arbitration is frequently used in disputes
between companies, other forms of ADR such as mediation are not
yet extensively used in civil matters, but the trend is to increase the
use of mediation before the initiation of arbitration or litigation
In civil proceedings courts are obliged to conduct a conciliation
process among the parties (usually performed in one very brief hearing),
but in practice it is not seen as a real opportunity to settle the
Florencio Bernales [email protected]
Raimundo Moreno [email protected]
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