In Portugal, traditional Courts are the primary method for resolving disputes. However, there is also the option of utilizing “Julgados de Paz,” which are smaller Courts with the jurisdiction to handle disputes up to EURO 15,000.00 Additionally, alternative dispute resolution methods such as arbitration and mediation have gained traction as individuals and companies seek to resolve their disputes effectively.

The primary procedural rules governing litigation in Portuguese jurisdiction are outlined in the Portuguese Civil Procedure Code and other special provisions.

The Portuguese civil procedure is based on the concept of due process, as stated in the Constitution of the Portuguese Republic. Provisions must be in place to ensure that the legal process is carried out fairly. Several principles must be followed during the process. Firstly, there is the principle of the right of access to justice, which ensures that everyone has the right to take legal action to protect their rights and interests.

The dispositive principle, outlined in the Code of Civil Procedure, stipulates that the parties involved bear the responsibility of alleging and proving the facts. This principle limits the scope of the case, as the facts presented by the parties are binding on the judge. However, the judge is not obligated to follow the legal reasoning presented by the parties and can correct them. This demonstrates the inquisitorial principle (Articles 6 and 411 of the Code of Civil Procedure), which also empowers the court to take any necessary evidentiary measures to establish the truth. This right establishes that the judge is responsible for managing the procedure within the bounds of the facts alleged in the initial petition.

The principle of equality of arms is crucial in civil proceedings, ensuring that both parties have the same procedural responsibilities, obligations, and rights. Lastly, the adversarial principle stipulates that a decision cannot be issued by the competent Court without first allowing an opportunity to the counter party to contest any opinion, request or proof presented by the opposing party.

In Portugal, the judicial system is organized into two jurisdictions: common and administrative jurisdictions. The common jurisdiction will adjudicate most criminal and civil issues that do not involve state prerogatives or public interests. The Administrative and Tax Courts jurisdiction will adjudicate issues between the private parties and the State, ranging from licensing-related issues to taxation and public procurement issues. In terms of hierarchy, the common jurisdiction is in three levels: Courts of First Instance, Courts of Appeal, and the Supreme Court of Justice. The Courts of first instance are divided into judicial districts and can be divided into specialized sections – civil courts, criminal courts, family and minors’ courts, labour courts, commerce courts, enforcement courts and small claim courts. There are also courts of extended territorial jurisdiction, such as the Maritime Court, the Intellectual Property Court, the Execution of Sentences Court, the Competition, Regulation and Supervision Court and the Central Criminal Investigation Court.

Administrative jurisdiction is divided into Administrative and Tax Courts. In administrative courts, the main issues discussed will range from licensing issues to public career progressions, public procurement, and other issues where State powers and prerogatives have been deployed. The Tax Courts will adjudicate tax-related issues between the Tax and Customs Authority companies and enterprises.

Hierarchically, Public Jurisdiction is divided into first-instance courts, typically Administrative and Tax Courts, and can sometimes be divided into Circle Administrative Courts and Taxation Courts. There are two appeals Courts, the Administrative North-Central Court and the Administrative South-Central Court. Finally, the Supreme Administrative Court is the last instance of appeal.

In some cases, appeals filed in the Supreme Court of Justice and the Supreme Administrative Court will be appealable to the Constitutional Court, which is the court with final jurisdiction to adjudicate issues related to the interpretation of the Portuguese Constitution.

It entirely depends on the matter’s urgency and the Court’s territorial competence in adjudicating the issue. The general average that a proceeding will take is 11 months. However, the time of the proceedings will also increase depending on the jurisdiction. Courts in places with a greater population density will likely conduct slower proceedings. For example, the average time for civil proceedings to end in the Lisbon Judicial Court is 17 months.

As a general rule, hearings are open to the public, and violating the principle of the publicity of the final hearing may result in a mistrial. There are some exceptions to this principle in place to protect people’s privacy and dignity, public morals, or to ensure normal Court proceedings functions.

The general public is not able to access Court documents. However, they may be disclosed following a reasoned request where the public interest is deemed justified to release general information to the public.

The standard limitation period is 20 years, starting when the right could be exercised. In addition, Portuguese law establishes other time limitations, such as, for example, three years for non-contractual liability.

Civil liability will have a statute of limitation of three years. The prescriptive period will start running at the time when the Plaintiff becomes aware that his or her right has been infringed.

Rents, interests, dividends, alimonies, and other periodic obligations will have a five-year statute of limitation. Accommodation, debts on commercial goods sold to the public, and debts to liberal professionals have a two-year statute of limitations.

Debts related to what are considered to be universal consumer services, such as electricity, water, internet, telephone and cable services, will have a statute of limitations of six months. There are also limited periods of two years and six months – e.g., for claims from merchants and establishments providing accommodation services against consumers.

Any judicial claim within the statute of limitation period will reset the elapsed prescriptive period, meaning that deadline. The elapsing of the statute of limitation can be avoided by filing judicial proceedings before the competent judicial Court or by requiring a judicial citation presenting a direct and express intent of demanding compensation for the other party’s right infringement.

There are no pre-action conduct requirements in the Portuguese jurisdiction. It is customary to send a registered letter to the opposing party before commencing any kind of judicial proceedings to achieve a settlement agreement and bypass litigation proceedings. This is usually achieved by sending a registered letter to the other party requesting their best efforts to achieve an amicable solution.

Absent of a contractual deadline, the claimant must provide a reasonable deadline for the fulfilment of the other party’s obligations.

The use of registered letters is advisable because the definitive breach of a contract will only occur if the judge adjudicating the cause considers that an objective loss of interest in fulfilling the obligations has occurred. In that respect, registered letters, in terms of burden of proof, are helpful because they provide sufficient evidence to the Court that a defaulting party was given adequate opportunities to comply with his obligations.

To commence a judicial proceeding, the Plaintiff must usually retain an attorney. The Plaintiff will send the initial petition to the competent Court containing all the facts that, if proven, would result in Court ruling. A legal analysis specifying the applicable legal provisions is also usually presented. If all the petition’s formalities are respected, the Court secretary will order the Defendant’s to be served.

The Court usually oversees the service of the initial petition and its enclosed documents, mainly done via registered mail. When the service via registered mail proves ineffective, Plaintiff may request the personal service of Defendant by a court clerk, an enforcement officer, or a solicitor. If the abovementioned fails, the Court may order the citation via public notice.

When serving Defendants abroad, the following service provisions are applicable:

• Regulation (EU) 2020/1784 of the European Parliament and Council, dated 25 November 2020, regarding the service of judicial and extrajudicial documents in civil or commercial matters within Member States;
• The Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (HCCH 1965 Service Convention).

The necessary documents to prove the claim are also attached. Once the statement of claim is sent to the Court, the court office will give it to the judge and inform the other party involved, namely, the Defendant.

During the initial assessment, the Court must determine if it has jurisdiction over the case regarding subject matter, territory, and its economic value. The Portuguese International Jurisdiction is regulated under Regulation (EU) No. 1215/2012 of the European Parliament and the Council of 12 December 2012 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters (Brussels Regulation (recast), which is fully applicable in Portugal.

Additionally, the Portuguese Code of Civil Procedures gives international jurisdiction over matters that:

• Could be adjudicated under the general rules of internal competence set in the Portuguese Code of Civil Procedures;
• Have occurred in the Portuguese territory;
• The claimed right will be rendered ineffective if a Portuguese Court does not adjudicate it.

In terms of internal jurisdiction, the jurisdiction will depend on the request made on the initial petition by the Plaintiff. If the Plaintiff requests the fulfilment of an obligation, the competent Court would be the Court of the Defendant’s residence. Real estate cases are to be adjudicated by the Court where the properties are located, and succession cases are to be resolved in the deceased’s last residence.

If the Court finds that it does not have the necessary jurisdiction, the consequence depends on whether the incompetence is relative or absolute. Regarding matter jurisdiction, if the claim is in the wrong Court, there is absolute incompetence, which means the Defendant will be acquitted and file a motion in the competent court. However, if the Court lacks jurisdiction over value and territory, the case must be referred to the competent Court.

Determining which law applies to the claim is mainly guided by the conflict of laws rules, as outlined in various sources such as the Portuguese Civil Code, European Union regulations, and international conventions to which Portugal is a party.

Parties have the freedom to reach an agreement during the proceedings, leading to an early conclusion of the trial. Additionally, if an initial petition goes uncontested by the Defendant, the articulated facts will be deemed confessed, resulting in a default judgment. In some rare instances, when the complexity of the matter and sufficient evidence have been brought into the proceedings, the judge will issue a summary judgment without conducting the trial.

In Portugal, injunctions are the primary form of interim remedies. These urgent measures serve to temporarily address rights violations in a timely manner where the delay of the regular proceedings could render the right claimed by the Defendant completely moot or irreversibly lost. In these cases, the Code of Civil Procedures specifies general and special injunctive relief procedures to safeguard and protect the Plaintiff’s rights. However, injunction relief in Portugal has an ancillary nature, meaning that the Plaintiff must file the regular proceedings within 30 days after being granted injunctive relief, or the Court revoke the temporary granted injunctive relief that were granted.

Under Portuguese law, the granting of an unspecified interim measure (providência cautelar não especificada) is subject to several cumulative requirements. First, the applicant must demonstrate a serious likelihood of the existence of the right being asserted (fumus boni juris). Second, there must be a well-founded risk that, before the main proceedings are commenced or while they are pending, a third party may cause serious and irreparable or difficult-to-repair harm to that right (periculum in mora). Third, the requested measure must be suitable and proportionate to prevent the imminent harm identified. Furthermore, the damage resulting from the interim measure itself must not outweigh the harm it seeks to avoid. Finally, the measure is only available where there is no specific interim remedy provided by law capable of adequately protecting the right in question.

The required documents vary depending on the type of process. The general rule in the Portuguese jurisdiction is that documents must be produced with the production of the initial petition and the Defendant’s petition. However, it is not unusual to have documents added to the proceedings in later stages if the judge deems it relevant to the case. If the documents were not produced with the initial petition or the contest, the parties can enclose them 20 days before the beginning of the trial. This will, however, result in a fine if the party does not prove that it didn’t have the newly enclosed document at the time of the production of the initial petition or contest. If any necessary documents are missing, the judge may allow the parties to submit them during the process, allowing the other party to counter-examine the document’s content.

In Portugal, all documents can be disclosed as long as they do not conflict with constitutionally protected rights or values, such as personal dignity, privacy, or public morality, or constitute an abusive intrusion into private or family life. However, disclosing documents that contain private communications between lawyers and their clients or documents related to negotiation agreements can be considered a breach of professional secrecy unless authorized by the Portuguese Bar Association upon request.

In Portugal, witness evidence is extensively utilized. Parties can summon up to 10 witnesses to provide testimony, either in the Plaintiff’s petition or the Defendant’s statement of defense. Witnesses can also be listed at the preliminary hearing or up to 20 days before the trial.

Before testifying, witnesses must take an oath attesting that they shall tell the truth, under the penalty of committing a criminal offence. Each party may question the witnesses presented by either side, and the Court may intervene at any time to ask questions it deems important for uncovering the material truth of the facts.

Witnesses are generally expected to present oral testimony, adhering to the principle of immediacy to ensure the accuracy and truthfulness of their statements. They can only testify about facts that they have first-hand knowledge of. In exceptional cases, written testimony from witnesses may be sought, mainly when appearing in Court is unfeasible or exceptionally challenging.

Expert testimony is crucial in cases involving technical or specialized knowledge and can be requested by any party or required by the Court.

The Court has the authority to commission an expert examination from reputable institutions, laboratories, or official services. The chosen expert must be highly qualified and competent in the relevant field and is expected to conduct the examination diligently and impartially.

If both parties agree on a specific expert, the Court shall appoint that expert unless there are reasonable grounds to believe the expert is not the most capable for the matter in question.

In complex cases or at the parties’ request, a team of up to three experts can provide expert evidence. In such cases, each party appoints one expert, and the Court appoints the third.

There are two levels of appeal: the Appeals Court and the Supreme Court of Justice. The judgment value and the extent of the unfavorable decision determine the right to appeal. If the claim value exceeds EURO 5,000 and the decision is unfavorable to the appealing party by more than EURO 2,500, the party can appeal to the Appeals Court.

Under certain legal conditions, a party can appeal an Appeals Court decision to the Supreme Court of Justice if the claim exceeds EURO 30,000.00 and always if the decision is unfavorable to the appealing party by more than EURO 15,000.00.

Not all interim decisions can be appealed. If an appeal is allowed, the appealing party has a 30-day window from the date of notification to appeal to the Appeals Court. The Appeals Court has the authority to decide on both factual and legal matters. In specific cases, there may be an option to appeal to the Supreme Court of Justice, which exclusively handles legal issues and does not address factual matters.

For urgent proceedings, the parties have a 15-day period to appeal.

The legal framework for enforcing foreign judgments in Portugal is based on the Portuguese Code of Civil Procedure and EU Regulations, such as EU Regulation No. 1215/2012 for judgments from EU member states, as well as the Hague Convention and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

There is no requirement to declare the enforceability of the judgment, but the interested party must first seek review and confirmation of the non-EU judgment. The Appeals Court in the location where the Defendant has their domicile or registered office has jurisdiction over this process. EU decisions do not require special procedures and are automatically enforceable in Portugal.

Portuguese law governs judgment enforcement, without prejudice to the provisions of international treaties, conventions, or specific legislation. This requires submitting a certified copy of the judgment issued by the foreign Court.

Recognition proceedings are indeed merely formal as the Court does not review the merits of the case; however, recognition may be refused if the judgment’s content violates Portuguese public order, if the certificate is not authentic, if the judgment is not considered final, or if the foreign Court’s notification procedures or principles of fair hearing and equality were not followed.

In Portugal, parties involved in litigation must pay Court fees to initiate proceedings. These fees cover the cost of public justice services provided by the Courts unless they qualify for legal aid due to financial distress. Upon the conclusion of the case, the losing party is usually responsible for bearing the costs in proportion to their loss.

The prevailing party has the right to seek reimbursement for their Court fees from the losing party and other expenses incurred during the proceedings. These expenses may include costs related to experts, translators, interpreters, necessary certificates, or other required documents, as well as fees paid to legal counsel (although such fees are typically limited by law to a small amount).

The prevailing party must submit a statement of these costs to both the Court and the losing party within 10 days of the judgment becoming final. If the losing party disputes the statement of costs, they have the option to file a complaint with the Court.

Portugal has a relatively well-developed system of collective redress and is, in some respects, a European pioneer — notably through its use of an opt-out model. The principal mechanisms are as follows:

1. Popular action / ação popular (Law No. 83/95 of 31 August). This is the central collective redress instrument in Portugal, with constitutional basis in Article 52(3) of the Constitution. Its key features are:

Standing: any citizen in the enjoyment of their civil and political rights; associations and foundations whose purpose is the defence of the interests at stake, irrespective of whether their members are directly affected; and local authorities, in relation to the interests of their residents.

Protected interests: public health, the environment, quality of life, consumer protection of goods and services, cultural heritage and the public domain.

Opt-out model: the holders of the interests are automatically represented unless they exercise the right to self-exclusion. This is the distinctive feature of the Portuguese system compared with most other European jurisdictions.

Scope: it allows both injunctive/cease-and-desist claims and claims for damages.

Costs (Article 20): a regime favourable to the claimant — if the action is dismissed, the popular claimant is ordered to pay between one tenth and one half of the costs, save in cases of bad faith.

In terms of Consumer Protection Law (Law No. 24/96), confers standing on consumer associations. There are also specific injunctive actions (for example, regarding general contractual terms — Decree-Law No. 446/85).

Portugal also as transposed Directive (EU) 2020/1828 — the RAD on representative actions for the protection of the collective interests of consumers under Law No. 8/2023 of 3 March, which dovetailed the new regime with the Popular Action Law. It regulates, in particular, qualified entities (for both domestic and cross-border actions), injunctive and redress measures.

Portuguese law does not have a self-contained set of joinder/consolidation rules for collective actions. Instead, the “ação popular” and other collective proceedings are governed by the general mechanisms of the Code of Civil Procedure, supplemented by the specific representation rules of the Popular Action Law.

The Code of Civil Procedure provides several routes through which a third party may be brought into, or join pending proceedings:

Principal intervention (“intervenção principal”): a third party with an interest equal to that of one of the existing parties (i.e. who could have been an original co-claimant or co-defendant) may intervene.

Accessory intervention (“intervenção acessória”) where a third party has a legal interest in the outcome but no autonomous claim. The most common form is provoked accessory intervention (Articles 321–325), used by a defendant who would have a right of recourse against the third party, and spontaneous accessory intervention / assistance (Articles 326–332).

In Portugal, there is currently no legal framework for third-party funding in litigation.

The COVID-19 pandemic significantly impacted legal proceedings in Portugal, as well as in many other countries. The state of emergency and periods of lockdown interrupted numerous non-urgent judicial activities, leading to additional delays in proceedings. Public health restrictions, such as social distancing and Court capacity limitations, also contributed to delays and case backlogs. Regrettably, these delays affected the efficiency of the judicial system and had severe consequences for the administration of justice itself.

The delays caused by the COVID-19 pandemic continue to manifest themselves today, as many processes that began during that time are still not finished due to the backlog in the Portuguese Court offices.

The main advantage of litigating international commercial disputes in Portugal is the quality and predictability of its legal system. Portugal offers an independent judiciary, a well-developed civil law framework, and full integration within the European Union legal order. Judgments are generally well reasoned, procedural costs remain comparatively moderate when compared with many other Western European jurisdictions, and Portuguese courts are accustomed to dealing with cross-border disputes involving foreign parties and the application of foreign law.

The principal disadvantage is the duration of judicial proceedings. Although significant efforts have been made to improve efficiency, complex commercial disputes may still take several years to reach a final and enforceable judgment, particularly where appeals are involved. This can reduce the attractiveness of court litigation for parties seeking a swift resolution and is one of the reasons why arbitration remains a popular alternative for high-value international disputes.

This is always a difficult exercise to embar on but we there are several areas where we could see a growth in commercial disputes in Portugal.

The first area could involve projects relating to the “residency-by-investment” regime, particularly in light of the recent amendments to the legislation governing the entry, stay, departure and removal of foreign nationals from Portuguese territory, as well as to the Portuguese Citizenship Law. These amendments have extended the residence period required for naturalization from five to ten years for certain foreign nationals. Such changes are likely to generate significant litigation against the Portuguese State, as well as against certain firms that promoted investments previously regarded as eligible for obtaining what are commonly referred to as “Golden Visas”.

As EU sustainability obligations become increasingly stringent, particularly through the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD), once these instruments are transposed and progressively implemented, disputes are likely to emerge in relation to allegations of greenwashing, failures in supply chain due diligence, and inaccuracies in sustainability reporting. Portugal’s opt out ação popular regime, combined with its broad standing rules in environmental and consumer protection matters, provides a particularly effective mechanism for collective ESG claims. As a result, Portugal may become a more attractive jurisdiction for this type of litigation than many of its European counterparts.

Finally, the roll-out of the EU AI Act, alongside the GDPR, NIS2 and the Data Act, is expected to drive disputes over data protection, cybersecurity incidents, software and IT-procurement performance, and liability for AI-driven decisions. Cyber-incident and ransomware-related claims (against vendors, insurers and service providers) are a related growth strand.

Artificial Intelligence is likely to have a significant impact on commercial litigation in Portugal over the next five years. On the one hand, AI tools will enable lawyers and courts to process large volumes of information more efficiently, thereby reducing the time and costs associated with legal research, document review and case preparation.

On the other hand, the widespread availability of AI-powered legal tools may encourage businesses and individuals to assess and pursue claims without first seeking professional legal advice. Whilst this may improve access to justice, it is also likely to result in an increase in poorly founded or speculative claims, as users may place undue reliance on automated legal assessments that fail to take into account the specific factual and procedural nuances of each case.

As a result, courts may face a growing number of frivolous or weakly substantiated claims, particularly in areas where legal information is readily available online. At the same time, disputes relating to the use of AI itself, including contractual liability, data protection, intellectual property and professional negligence issues, are expected to become increasingly common.