This country-specific Q&A provides an overview to Litigation laws and regulations that may occur in Chile.
What are the main methods of resolving commercial disputes?
Commercial disputes are mainly resolved by ordinary trials before Chilean Civil Courts and increasingly used during last years- by alternative dispute resolution mechanisms, such as mediation, negotiation processes and specially arbitration.
What are the main procedural rules governing commercial litigation?
The main procedural rules are the ones applied to the Civil procedure, which is essentially written and ruled by the Civil Procedural Code (“Código de Procedimiento Civil”, hereinafter the “CPC”), the Law Regulating the Jurisdiction of Chilean Courts or Courts Statute Code (“Código Orgánico de Tribunales”, hereinafter the “CSC”) and complementary laws. In turn, arbitration centres –such as the Mediation and Arbitration Centre of the Chilean Chambers of Commerce (hereinafter the “CAM”)- have their own procedural rules which govern proceedings under their control. Finally, Law 19,971 of International Commercial Arbitration set out some procedural rules following the UNCITRAL guidelines.
What is the structure and organisation of local courts dealing with commercial claims? What is the final court of appeal?
The court system organisation dealing with commercial claims basically consists of singlejudge trial courts, several intermediate appellate courts sitting in panels, and a single high collegiate court.
The first level comprises the first instance courts, which may include one or more districts. First instance courts are divided according to the matter they know into civil courts, family courts, criminal courts and labour courts.
The second level comprises the Courts of Appeal, which act as second instance courts (normally they have jurisdiction over a region of the country or part of it).
The Supreme Court is the last level and it has jurisdiction over the whole national territory. The Supreme Court is divided into several courtrooms specialised in particular matters and it is only possible to file exceptional remedies before it.
How long does it typically take from commencing proceedings to get to trial?
Under Chilean procedural civil system proceedings commence by filing a claim and its service to the defendant by court’s ancillary clerks, called “Receptores”. As soon as a claim is served the trial starts with defendant’s fillings or hearings depending on the sort of proceeding. Just by promoting preliminary objections or “incidents” the commencement of the proceeding may be delay a few.
Are hearings held in public and are documents filed at court available to the public? Are there any exceptions?
In Chile, civil and commercial proceedings are mainly written at first level courts. Hearings are an exception and they are not held in public since they are limited to certain specific matters (e.g. witnesses’ interrogation, appointment of expert witnesses).
Before second instance courts, oral proceedings are the general rule and hearings are held publicly.
The documents filed at court are accessible to the public in both first and second instance courts. The case file is public and access is available at the courts and also electronically via internet, since it is uploaded to the Justice Administration website.
Documents submitted to the court will be public unless law stipulates otherwise under express text of law. Exceptionally, parties could request privacy and non-public access for some documents because of confidentiality or other justified reasons.
In the arbitration procedures rule absolute privacy either for filings, hearings and documents.
What, if any, are the relevant limitation periods?
Several limitation periods apply in Chilean law depending on the class of action to be undertaken. For instance, the general limitation period that applies to civil claims is 5 years counted from the date the obligation is enforceable.
In turn, for commercial claims, the statute of limitation is 4 years as per the Chilean Commercial Code (“Código de Comercio”). The same statute of limitation set out for torts under the Chilean Civil Code (“Código Civil”), but it is counted from the date when the offence occurred.
In addition, the statute of limitation for requesting an enforcement proceeding is 1 or 3 years depending on the nature of the title.
Finally, there are special short-term statutes of limitation for certain matters, such as collecting taxes, certain fees and professional fees, among others.
What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
Unlike the common law, there are no pre-action conduct requirements in the Chilean legal system for civil or commercial matters. Exceptionally, our law entitles the future plaintiff to
request, before commencing the proceeding, certain specific interim measures specified in the law either to prepare the proceeding commencement, to exceptionally ensure evidence if there are reasons to believe that it might disappear or to guarantee the results of a final sentence accessing a claim.
To request this type of measure, the future plaintiff shall inform the court of the action he intends to file with a brief explanation of the claim’s grounds and he would also have to prove the necessity to request the specific measure. In case of interim measures seeking to ensure the results of a favourable final decision, the plaintiff could be requested to pay a bond.
How are commercial proceedings commenced? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
As answered in question 4, commercial proceedings commence with the filing of a claim and its service of notice, which is carried out by court´s ancillary clerks, (“Receptores”).
First notice of a claim must be served in person to the defendant. However, if he is not found personally, but the “receptor” could confirm on two different days –as certifying officer- that (i) the address where the defendant is sought is correct (defendant’s domicile), and (ii) that the defendant is currently in the city where the proceeding will take place; service of the claim can be made just handing to an adult –not necessary the own defendant- a copy of the plaintiff’s filing and the courts orders.
Exceptionally, in cases where the defendant’s address is difficult to determine or service is difficult due to the number of defendants, Chilean law allows the service to be accomplished by publishing ads.
How does the court determine whether it has jurisdiction over a claim?
In Chile, the court determines if it has jurisdiction over a claim by following the rules of “Competence”, which is defined as the power of each judge or court to adjudicate those matters which the law has placed within its sphere of authority.
The court’s competence is often defined by the subject matter in litigation, its economic value and the venue or location.
The subject matter will determine whether the civil courts, family courts, criminal courts or labour courts will have jurisdiction to deal with the matter.
The domicile of the defendant, main office of a company, location of real estate, and location where a contract is executed are several of the bases for determining the appropriate judicial district for filing a claim.
Once a case commences in a competent court, all others lose their competence as to that case. Chilean legislation allows the question of competence to be raised by the defendant and decided by the court right away.
How does the court determine what law will apply to the claims?
As a general rule Chilean law will be applied, but the parties may incorporate choice of law provisions to the contract and those provisions will be recognized in Chile as long as they do not go against Chilean public policy.
In what circumstances, if any, can claims be disposed of without a full trial?
Claims can be disposed of without a full trial in several ways, among others:
a) Conciliation (Conciliación): In first instance, after the statement of defense, the judge may call the parties to a conciliation hearing and propose them bases of settlement. In practice, judges never act proactively suggesting basis for an agreement. In fact, this hearing is just a formality. However, a claim may be withdrawn as a result of an agreement reached –and pursued- by the parties during this conciliation period (or even at anytime);
b) Agreement (Avenimiento): settlement reached by the parties without an active intervention of the judge;
c) Withdrawal of the claim;
d) Abandonment of the proceeding after 6 months without any relevant procedural act;
e) Transaction: by celebrating a contract in which parties agreed a pending litigation (or prevent an eventual one) by making reciprocal concessions in an extrajudicial way (signing a public deed).
f) Existence of an arbitration clause and the recognition by a judge of the arbitration jurisdiction (claimed by one of he parties).
What, if any, are the main types of interim remedies available?
Under Chilean law, plaintiff can request interim remedies even as pre-actions before submitting a claim. These remedies are known as “precautionary pre-action remedies” (“medidas prejudiciales precautorias”) and are specified – in a non-restricted manner – in article 290 and subsequent of the CPC. The remedies listed in such article are the following and they can be requested at any stage of the proceeding:
Preventive attachment over the thing that shall be the subject matter of the proceeding. Appointment of one or more controllers. Retention or attachment of certain assets. Prohibition to execute acts or contracts over certain assets.
In general, plaintiff must submit a written request indicating the action that he intends to file and a brief explanation of its grounds, submitting enough evidence supporting –as a serious presumption– the right claimed, as well as the urgency and necessity of the remedy, notwithstanding other special requirements. If the requested remedy is not expressly stated in the law, the court also has the authority to require an adequate bond to the future plaintiff.
The purpose of such remedies is to ensure the effectiveness of the action and they only reach that amount of defendant’s property necessary to achieve that object.
After a claim has been commenced, what written documents must (or can) the parties submit and what is the usual timetable?
The parties may submit all documents deemed appropriate to support their claim. Written documents are freely admitted even with the submission of the claim itself, and they are classified as:
a) Public instruments: documents and copies thereof which fulfil legal formalities and are certified by authorized public officials.
b) Private instruments: those granted by anyone and not authorized by any public officials, whose authenticity can be proven at trial.
Documents shall be submitted from the filing of the claim until the end of the proof-taking term (which lasts for 20 days from the time that the judge set out the facts that have be proven by the parties -“points of proof”-. A reduction of this term is possible if all the parties agree on it and some extensions are also possible in cases where proof taking occurs outside the court’s territory.
In certain situations, the Court may allow the parties to submit documents at a later stage of the proceeding if it is shown that they could not be handed earlier, its existence was ignored or if the submission becomes necessary to the proceedings.
What, if any, are the rules for disclosure of documents? Are there any exceptions (e.g. on grounds of privilege, confidentiality or public interest)?
Under Chilean law, there is only one special case where the parties, or even a third party, can be enforced to exhibit documentation on trial. The documents whose exhibition is requested shall be directly related to the discussed issue and they shall not be secret or confidential
(article 349 of the CPC).
However, disclosure in Chile is not as effective as in other jurisdictions since: (i) a party may not exhibit documentation that could be considered confidential, and (ii) the court does not have sufficient authority to sanction the non-disclosure.
Finally, article 348 bis of the CPC states a special rule concerning the disclosure of electronic documents, by which the court will summon the parties to a documentary perception hearing.
The interested party on including such documents as evidence shall provide the electronic devices or the necessary means for its proper perception, otherwise, they shall be deemed not filed.
How is witness evidence dealt with in commercial litigation (and, in particular, do witnesses give oral and/or written evidence and what, if any, are the rules on cross-examination)? Are depositions permitted?
Witness evidence must be requested within 5 working days counted from the beginning of the proof-taking stage by submitting a list where the witnesses are duly individualized. The judge will schedule a hearing where witnesses will give their oral depositions regarding the questions submitted by the parties(direct-examination and cross-examination).
Witness’s interrogation is carried out by a “Receptor”, who transcripts questions and answers given by witnesses. Such transcription is finally signed by the witness, the judge, and the attorneys attending to the hearing.
As a general rule, only the witnesses included in the list can be examined in a proceeding in oral hearings. In the event that a party fails to provide the list of witnesses within the abovementioned period of time, that party will lose its right to do so.
As a general rule, under Chilean law witnesses must attend the court and make a deposition if they were summoned.
On a regular basis, written witnesses’ statements and witnesses’ depositions via videoconference are not admissible.
Is expert evidence permitted and how is it dealt with? Is the expert appointed by the court or the parties and what duties do they owe?
Expert evidence is one of the means of evidence allowed in the Chilean legal system.
Expert witness reports can be mandatory or optional in civil proceedings.
Expert’s testimonies are used for fact questions that require special knowledge of an art or science, as well as questions of legal aspects of a foreign law. At a hearing, the court determines the number of experts needed, their qualifications, and the questions on which they will report. The experts are appointed by agreement of the parties and in case there is no agreement, by the court. The parties will have 3 days to oppose to the court’s appointment. The expert owes his/her duties to the court.
Parties can submit their own experts’ reports, but they shall be deemed as documentary evidence and the experts who signed those reports must appear before the court as witnesses.
Can final and interim decisions be appealed? If so, to which court(s) and within what timescale?
Under Chilean law, as a general rule, final and interim judgments pronounced by first instance civil courts can be appealed before the Courts of Appeal.
An appeal remedy against final judgments must be filed within the term of 10 working days (5 working days in case it is submitted against a non-final decision). An appeal remedy must be well-grounded and it must contain the accurate petitions submitted to the second instance court. Otherwise, the appeal remedy shall be declared inadmissible.
Against the first instance judgment, the parties may file a remedy of appeal and, in addition, a remedy requesting the nullity of the sentence due to formal defects (“recurso de casación en la forma”).
Against the second instance judgment, the parties may file a nullity remedy that is known and decided by the Supreme Court. In this case, the nullity remedy can be based on procedural defects, as well as errors in the application of the law (“recurso de casación en el fondo”).
The first instance of a civil proceeding may take from one to two years. The second instance remedies and those before the Supreme Court may last from 6 months to a year.
Usually, final decisions made by arbitrators are not subject of appeal remedies (because parties can waive remedies against awards before arbitral jurisdiction).
What are the rules governing enforcement of foreign judgments?
The enforcement of foreign judgments (article 242 and subsequent of the CPC) is subject to an “exequatur” (authorization) by the Supreme Court. The party seeking enforcement must submit a certified copy of the award with, if necessary, an official translation into Spanish. As Chile has signed the New York Convention, the exequatur may only be denied for the reasons provided in article V therein. The award must be final and binding and it also must respect
Chilean public policy. Once the exequatur is granted, the foreign judgment is as enforceable as any domestic award and, therefore, it can be enforced under the general rules. Enforcement must be sought before the court that would have been competent to hear the proceeding if it would have been brought before Chilean courts.
Can the costs of litigation (e.g. court costs, as well as the parties’ costs of instructing lawyers, experts and other professionals) be recovered from the other side?
Court proceedings in Chile are free of cost. The parties must only pay service of notice of some acts within the proceeding and experts’ fees. Attorneys’ fees are paid by each party.
In their sentences, judges may order the party completely defeated in the trial to pay the costs of a civil proceeding, provided that it lacked of any actual reason for bringing on such proceeding (articles 138 to 147 of the CPC). However in most cases such order only works to cover a minor portion of the total costs incurred.
What, if any, are the collective redress (e.g. class action) mechanisms?
Collective redress mechanisms under Chilean law are given by some class actions or collective proceedings in the context of litigation related to certain specific subjects such as consumer protection (Law 19.496 on Consumer Protection), unfair competition (Law 20.169 on Unfair Competition) and quality of construction (Decree in Force of Law 458 DFL on Construction and Urbanism).
What, if any, are the mechanisms for joining third parties to ongoing proceedings and/or consolidating two sets of proceedings?
The CPC contains provisions that allow a third party to join ongoing proceedings in the following cases:
Article 21. If the claim is filed by one person and the action submitted also corresponds to another person or persons, the defendants can request to the court that any plaintiffs not joined be notified of the suit. Those other plaintiffs must decide within a short period of time whether or not they shall join the ongoing proceeding. If they do not do so, the court decision shall affect them with no further notice.
Article 22. This allows a third party whose rights are incompatible to those of the other parties over the object of the action to join the proceeding admitting the current status of the proceeding.
Article 23. This allows a third party to join the proceeding in order to support any of the parties’ positions in the trial and it also allows the intervention of a third party that invokes
an independent interest to the one alleged by the other parties.
Exceptionally, Chilean law establishes certain cases where a defendant can force a third party to take part in a proceeding, such as the following cases: (i) the purchaser of an estate being sued by a third party who claims rights over that estate, may legally summon the seller to defend it in the proceeding (article 1843 of the Civil Code); and (ii) a guarantor can request that the plaintiff has to sue the main debtor in the first place (article 2357 of the Civil Code).
As for the consolidation of two sets of proceedings, Article 92 of the CPC allows the joinder of proceedings, only if the following requirements are fulfilled: (i) there are closely connected claims based on identical legal actions, or when the proceedings arose from the same facts; (ii) there are closely connected claims based on a similar subject matter between the same parties, notwithstanding the fact that the legal actions are not identical; or (iii) in general, whenever the sentence that should be issued entitles to file res judicata as a defence in another proceeding.
Are third parties allowed to fund litigation? If so, are there any restrictions on this and can third party funders be made liable for the costs incurred by the other side?
In Chile there are no particular rules about funding litigation.
Although, there is one rule related to assignment of litigious rights that limit the credit of the assignee to the amount paid in the assignment.
What, in your opinion, is the main advantage and the main disadvantage of litigating international commercial disputes?
The main advantage is having the possibility to submit international commercial disputes to arbitration. There has been a great development of international commercial arbitration in Chile since the enactment of Law 19,971 that follows the UNCITRAL model arbitration law. The CAM has made available arbitration and mediation at the resolution of disputes. The arbitrators of CAM have the skills to deal with complex disputes and they are prepared to render their decisions according to the modern trends, providing legal certainty and efficient solutions in an affordable way.
One the other hand, a disadvantage might be that there are still some remnants of the Chilean civil procedure in the proof taking stage, such as the way in which expert witnesses’ reports are conducted, the opportunity given to submit evidence, or the value assigned to the evidence of witnesses. Likewise, in complex arbitration the role played for an expert witness may be prevailing, even replacing in some cases the reasoning of the arbitrator (when this one lies blindly in the expert witness´s opinion).
What, in your opinion, is the most likely growth area for disputes for the next five years?
We think the most likely growth areas for disputes would be energy and construction. The development of these markets will surely increase the controversies surrounding them.
We have also seen an increase in litigation regarding insurance controversies which were usually solved by reaching agreements but nowadays they are being subject of litigation as well.
What, in your opinion, will be the impact of technology on commercial litigation in the next five years?
Chile has already adopted digital systems at courts; case files are now available via internet at the Justice Administration website. The same path has been followed by CAM Santiago, the institution that provides arbitration and mediation assistance aimed at the resolution of domestic and international disputes. Also in evidence technology should have a relevant impact during next years both in the sort of new evidence that can it be offered as in the way of some evidence may be submitted (e.g. witnesses’ interrogation via digital platforms or apps).