Mediation is the great unknown. It works with great success in other countries and here it is frequently disqualified, even in specialized areas, with arguments that reveal that it is not known what it is.

Preambles of our laws praise its benefits and they declare their firm intentions to promote it, but the reality shows that only some private institutions and some judges with a deep vocation to satisfy the parties’ interests bet on it with determination.

The truth is that when the mediation is thoroughly known, its promotion and impulse are usually sought.

Conflicts of trading companies with their clients are an ideal field for testing mediation. Often the interest of this type of companies goes far beyond recovering an amount in short term and they start judicial procedures that could even exceed the amounts at stake.

Online trading companies cannot attract professional investors with a profile of default and insolvency and who know how to surround risk control systems to make large investments leveraged without funds to respond.

In this context, the mediator will be an effective assistant so that the parties can get to better know and understand each other true interests.

A mediation clause in an options and futures agreement could probably avoid endless and uneconomic procedures that, in addition to eroding the justice administration system, put the clients in a position to withstand up to ten years of unnecessary judicial conflict.

The Provincial Court of Las Palmas, in a judgment of October 20, 2017, has ruled on a matter in which we defended a securities company acting as an online broker in front of one of its clients that, operating with derivative financial products, he had left a considerable unpaid debt.

The most interesting part of this resolution is that it condemns the client to pay the contractual interest agreed upon at 18% per annum, rejecting his claim that the clause be declared null and void in accordance with the Consumer and Users Law.

Despite the fact that multiple judgments have considered as consumers those citizens who acquire shares linked to the evolution of the markets, the Court has considered in this case that the client of this type of complex financial products that acts daily in the markets does not fit into the definition of consumer of the Law.

In addition, the Court also understands that these contracts with derivatives are far from being similar to the consumer loan contracts which are the basis of the majority of judgments to declare as abusive this type of clauses, even if they contain a clause on high interest rates to discourage the client from leaving uncovered amounts.

Many companies are offered as intermediaries to invest in financial derivative products. Once reserved for large investors, today anyone can invest in options, futures or CFDs.

The operation is usually performed through sophisticated platforms that transmit orders to markets through the Internet with a speed and reliability unthinkable a few years ago.

Some of these complex products are particularly volatile, but allow large profits with small amounts of equity. This feature causes operations that can be very risky and overdrafts more frequent than desired when markets do not behave as expected.

Conflicts arising from these overdrafts sometimes cause major legal battles between the company acting as an online broker and his client, often a small investor protected by consumer protection rules.

For years I have acted as counsel for some of these large companies, drafting all standard contracts to be subject to the approval of the National Stock Exchange Commission (CNMV in Spanish), and I have also acted as attorney in multiple legal disputes with customers. This allows me perhaps to draw some conclusions that might be useful:

• Many of these companies do not think about the judicial conflicts when drafting their contracts. They are rather concerned about passing the filter approval of the CNMV, so their contracts are often stereotyped models obtained as literal translations of Anglo-Saxon or contracts. This causes that a skilled lawyer defending an overdrawn client, can bring to serious trouble the company if he fully understands the functioning of these products and dominates the civil process.
• Customer Relationship Services of these companies are highly specialized in the operation of the product, but they are almost never well advised by lawyers, so quite often, when resolving a complaint, they offer to the customers valuable weapons to be used against the same company in lawsuits.
• Very often judges do not understand the functioning of these products and, as in other technical matters, experts can acquire a decisive importance. If we add that many of the experts do neither understand these complex products, but still act as experts without any remorse, a simple extract of movements can become the object of the craziest interpretations.

If you are trading business operating online, ask yourself if your standard contracts are adequate to deal with legal disputes and consider carefully the responses from your customer relationship service. I am sure your company is well equipped with a good system to prevent their overdrafts, so probably your losses will not be too high. However, think about what could happen to your business if one of those customers wins a lawsuit and you will be condemned to pay the procedural costs, the client gets rid of paying and then he decides to spreads the information across networks.

If you are a customer overdrawn, check with an expert lawyer your situation, a consultation costs little and to embarrass your opponent is easier than you think

A new disposition (Act 29/2015, of July 30) on international legal cooperation in civil matters has come into force. The Act introduces many new features on the matter and in particular, how to prove foreign law that might be applicable to the case.

The regulation on foreign law applicable in the procedures in Spain is quite curious. So far, the only procedural reference was Article 281.2 of the Code of Civil Procedure, not very clear about the consequences of lawyers not proving enough the foreign law that they intend to enforce. It was clear that the judges had always the power to investigate on their own and apply that foreign law it, but what if they did not? In fact, too often judges did not investigate and simply applied the Spanish law. However, in the absence of a procedural rule protecting against such decisions, the judgment was always poorly substantiated in possible appeals.

Article 33.3 of the new Act provides that, in cases in which the parties have not fully justified the content and validity of foreign law, the Spanish law may exceptionally apply.

Therefore, it seems that it could be decided: in case the client will be better defended by a foreign applicable law, we’ll worry about its justification before the Judge; but if it was more interesting the application of the Spanish law, we will leave the initiative to the other party to prove and justify it. The justification of a foreign law is usually expensive and if the law now applies “exceptionally” the Spanish one, I am convinced that very few judges will take the initiative to investigate the foreign law, though they still retain this power.

The European Regulation 650/2012 on jurisdiction and applicable law in matters of successions and on the creation of a European Certificate of Succession has come into effect. It affects heirs of people who deceased from August 17, 2015.

In case of inheritances, the general rule in Spain was to apply to the heirs the law of the country of nationality of the deceased person. However, the new Regulation sets that the applicable law will be, in general, the law of the residence of the deceased at the time of death.

This could be of importance, for example, for the many British people that usually reside in Spain. If they all rely on the implementation of their English law —in which, for example, there are not legal heirs—, they could now discover with surprise that two thirds of the heritage to be received by the spouse, must necessarily be delivered to the sons and daughters according to the Spanish law.

Without entering into additional legal details, it can easily be understood with this simple example that the fact of applying one law or a different one could determine major conflicts, many of which would be solved only in lengthy and costly litigation if nothing is foreseen in advance.

Our recommendation: be sure to use the possibility granted by the Regulation to determine in your will the applicable law. In case of necessity, do not hesitate to contact us.