Question for Maria. How long can Spanish courts hold claimants monies and what are the rules governing interim interest?

Dear  Maria

Please can you advise how long can Spanish courts hold claimants money that has been deposited into the courts safe keeping following a successful Bank claim, and not process a court order by the procurator?

Can this be an indefinite delay or are there legal time limits in place to protect from excessive procedural delays of this nature?

What would be deemed an " excessive" delay by the legal team?

Do the courts gain interest on claimant's monies held in the interim?

Given the Bank having deposited monies owed is no longer liable for interest on these monies, can the legal team reclaim any interim interest accrued by the courts, as part of the delayed court order process, or is there no facility to do so?

In other words are Spanish Courts under any legal obligation to return any additional interim accrued interest due as a consequence of procedural delays which are not of claimants making?

Has this impact on final enforcement to the ACTUAL RETURN OF MONIES to client accounts, according to successful judicial rulings, now become a major problem for legal teams and clients alike? Are claimants effectively financially protected from excessive delays in this regard?

Many thanks in anticipation!

Update:

Think this scenario plays a major part now with regard to delays in the Justice System.

https://www.euractiv.com/section/politics/news/administration-lawyers-strike-in-spain-creates-massive-case-backlog-inspires-others/
 

https://inspain.news/end-of-strike-of-court-lawyers-after-agreement-on-wage-increase/#:~:text=Chaos%20in%20the%20Spanish%20justice,€1.3%20billion%20in%20payments
 

Goodness this will be a challenging time for all concerned.

Could Maria please provide an update relating to major delays to retrieve monies being held by the courts ( supposedly in their safe keeping) following successful Bank claims.

Is there a major backlog of outstanding administrative claims where monies have been deposited by the Banks and yet innocent clients are STILL awaiting return of monies to client accounts for further transfer to the UK?

Is there any progress being made to ensure that the courts can be time limited for return of monies from court accounts to client accounts in this scenario, or is there no legal means at their disposal to ensure accountability in this regard? How long will this scenario be " allowed" to continue unregulated? What legal means do you have at your disposal to protect clients from what appears an abusive timeframe?

Or is there something else that we are missing here?

Many thanks yet again in anticipation. 

Apologies for the late reply.

Thank you for reaching out and expressing your concerns. I understand your frustration regarding the delays in the return of funds following successful bank claims. The issue you're facing is, unfortunately, a common one in the Spanish legal system, and I appreciate the opportunity to provide some clarity on the matter.

Current Situation:

• Backlog in the Courts: The Spanish judicial system currently faces significant backlogs, primarily due to administrative inefficiencies and a high volume of cases. This situation has led to delays in processing claims and releasing funds, even in cases where banks have already deposited the money with the court.
• Progress and Efforts: We are aware of these delays and are continually working to expedite the process. However, the speed of resolution is often beyond our direct control due to the systemic issues within the judicial administration.

Legal Recourses and Timeframes:

• Limited Legal Means: Unfortunately, there is no specific legal mechanism to impose strict time limits on the courts for the return of funds. The judicial system operates independently, and while we can apply pressure through follow-ups and formal inquiries, the courts have their procedural timelines.

Protecting Your Interests:

• Client Advocacy: We understand the financial and emotional impact of these delays. Our team is dedicated to following up on your case regularly and ensuring that your claim is not overlooked or unduly delayed.

Transparency and Communication:

• We believe in keeping an open line of communication with our clients. Rest assured, you will be promptly informed of any progress or updates regarding your case.

Understanding the Bigger Picture:

• While the delays are certainly frustrating, it's important to note that these issues stem from systemic challenges within the Spanish judicial system. We share your concerns and are doing everything in our capacity to advocate for a more efficient process.

Many thanks Maria. Much appreciated as ever.

Do the courts pay interest on clients’ money? 

Maria,

Or alternatively does the judge have any discretionary rights to make the Banks accountable for ADDITIONAL interest at point of deposit of funds into the courts to take account of their behaviour where instances of purposeful delaying tactics can be proven? Such things as purposeful administrative mistakes, failure for voluntary payments requiring further enforcement procedures, or last minute withdrawal of their appeals to the SC in full knowledge that this can delay deposit of funds into the court ( or for that matter the negative impact this has on achieving TIMELY SC doctrine)?

One thing for sure is that there is a need for an effective financial deterrent to prevent banks from abusing the system of delays to their own advantage in this way. 

In terms of Court delays attributable to lack of Govt funding to sustain timely justice, it would appear again there is no financial deterrent in place to gain adequate compensation for circumstances completely beyond claimants' control.

Do you see any possibility going forward the means by which law firms can effect adequate compensation built into their legal claims to act as an effective fallback? " In the event that..... we require the right to make the Bank fully accountable for  any proven bad intent" ?

To avoid the accumulation of interest against a condemned party and considering the slowness of the processes in courts, banks, and insurers that have been ordered to pay certain amounts, sometimes opt to make a deposit of these amounts. This deposit is made to prevent the detriment that would result from continuing to accumulate interest during the duration of the appeal process or any other subsequent legal procedure. In summary, it is a strategy to mitigate additional financial losses during the prolonged legal process

Yes Maria,

But this is the irony ....it is the Banks that are protected by this method of mitigating financial losses, whereas the claimant is left to suffer the consequences of the Banks ploys who purposefully exacerbate delays by their continuing behaviour which is indicative of bad intent ....which requires the judiciary to recognise such in their awards and deliberations going forward.

Therefore the question remains, where applicable, is there any way to equally mitigate against the Bank's  " bad intent " to purposefully cause delays ( such things as failure to abide by voluntary payments leading to additional costly enforcements, or purposeful administrative ploys that delay payments to the court ( fabricated mistakes!), or contrived last minute withdrawal of SC appeals in full knowledge of  the impacts this will have on the ability to gain SC doctrine, etc) all of which leaves the complainant financially compromised .

Is there any way that law firms can encorporate this into their legal case arguments to act as protection should any of the above " bad intents" arise. Does existing law protect against bad intent of this nature?

Many thanks.

Banks can exercise its right to judicial consignment, effectively relinquishing control over the money for its business operations. In this scenario, the legitimately entitled party can request provisional execution and payment of the amount to be deposited into their account. However, this approach does have associated costs and places the party exercising provisional execution in a position where, should the amount need to be returned in the future, it would be returned with interest.

Thank you Maria. Could you please also provide some clarity to the following scenarios, as this can be quite confusing for claimants to comprehend.

Where you state " should the amount need to be returned in the future, it would be returned with interest" .

Presumably this is if the Bank have returned the principal deposit at point of provisional execution (I.e. after a first instance court judicial ruling in favour of the claimant )?

But after a Bank appeal, if this ruling is overturned in favour of the Bank,  how would that interest be assessed? Would it be assessed from the point of provisional execution when the Bank returned the principal monies into the court up to the point of final judicial high court resolution in favour of the Bank?
 

Alternatively if the claimant gains a successful ruling after the Bank appeals to the high court, does the claimant also reserve the right to gain interest right up to up to the point of judicial resolution, as the Bank appeals can take a significant amount of time to reach that judicial resolution? In this instance does the claimant's law firm have to submit a further claim for additional interest to cover the interim period whilst the Bank appeal was outstanding?

And in the instance of the Bank issuing a further appeal to the SC following the high court resolution in favour of the claimant, and then withdraws their appeal at the last minute, can the claimant gain additional interest to cover that interim timeframe also?

Is it correct to say that once monies have been deposited into the courts the courts cannot be made accountable for interest on any delays on their part to return those monies to client' accounts?

Thanks again.

Thank you Maria. Could you please also provide some clarity to the following scenarios, as this can be quite confusing for claimants to comprehend.

Where you state " should the amount need to be returned in the future, it would be returned with interest" .

Presumably this is if the Bank have returned the principal deposit at point of provisional execution (I.e. after a first instance court judicial ruling in favour of the claimant )?

That's correct. In the scenario where the bank or insurer disburses funds to the court during provisional execution, and the payment is handed over to the winning party following an estimated sentence in the first instance. If, subsequently, the case is lost in appeal or in the Supreme Court, the sum received in provisional execution, along with the applicable legal interests, must be refunded. The interests will be fixed by the judge.

However, if the funds are  in the court instead of being delivered to the victorious party, no additional interest will accrue in favor of the bank.

But after a Bank appeal, if this ruling is overturned in favour of the Bank,  how would that interest be assessed? Would it be assessed from the point of provisional execution when the Bank returned the principal monies into the court up to the point of final judicial high court resolution in favour of the Bank?
 

Interest will be calculated from the moment the amount is delivered to the winning party in the first instance, after the provisional enforcement, until it is returned to the court.

Alternatively if the claimant gains a successful ruling after the Bank appeals to the high court, does the claimant also reserve the right to gain interest right up to up to the point of judicial resolution, as the Bank appeals can take a significant amount of time to reach that judicial resolution? In this instance does the claimant's law firm have to submit a further claim for additional interest to cover the interim period whilst the Bank appeal was outstanding?

Regrettably. If the bank paid the money in court, the interest ceases to accrue from that very moment, as the bank would have fulfilled the sentence, although the procedure continues.

On the contrary, if the bank does not earmark the funds in court until the Supreme Court ruling, then interest will continue to accrue.

And in the instance of the Bank issuing a further appeal to the SC following the high court resolution in favour of the claimant, and then withdraws their appeal at the last minute, can the claimant gain additional interest to cover that interim timeframe also?

Unfortunately once the bank makes the payment in court, interest stops accruing. However, if the bank has not paid the principal amount in court, initiates an appeal before the Supreme Court, and later withdraws the appeal, interest will continue to accumulate until the amount is paid in the court. 

Is it correct to say that once monies have been deposited into the courts the courts cannot be made accountable for interest on any delays on their part to return those monies to client' accounts?

Indeed, funds in the Court account do not accrue interest.

Thank you Maria for that clarification. 

Is it correct to surmise that there is every incentive for the Bank to delay any payment into the court ( and not abide by a "voluntary payment " at point of preliminary execution)  following their first instance loss, as this provides them an opportunity to continue to accrue interest on claimants deposits that they are withholding in the interim period, even though the first instance ruling went against them?

Is it correct to surmise that the "voluntary" nature of return of funds by the Bank to the court (within the provisional execution procedure) is allowed only when the Bank have submitted an appeal ? Does this voluntary aspect therefore incentivise the Bank to swiftly appeal the first instance ruling at every opportunity so long as elements of doubt exist ( I.e. no SC doctrine yet exists)?

Would a mandatory requirement to return monies by the Bank to the court after the first instance supportive ruling in recognition of the provisional enforcement order in favour of the claimant, have acted as effective disincentive to proliferate Bank appeals? Is this where the Banks have been afforded an unfair advantage over the claimant given the current system of voluntary payments into the court? Do you envisage any change or review to this voluntary aspect given the subsequent impacts that have overloaded and thereby compromised the justice system?

Is it correct to surmise that so long as elements of doubt exist that it becomes essential to review all aspects that can compromise the achievement of SC doctrine which assist judges in their deliberations?

Given the current system, have the Banks been incentivised to proliferate appeals and withdraw at the last minute any SC appeals on their part, (both of which led to the overloading of the justice system), and in so doing significantly delayed the ability for claimants law firms to eliminate those areas of doubt and gain essential SC doctrine?

But also hasn't the "voluntary" nature of provisional enforcement, where Banks have the choice to deposit monies into the court, undermined the ability for claimants to gain early access to their deposited monies?

It needs re-emphasising that the current system of voluntary payment into the court by the Bank,  appears to allow Banks the ability to chose NOT to pay those monies into court according to the first instance ruling ( making a mockery of this ruling) and furthermore they continue to gain interest on claimants monies throughout any continuing appeal procedures they instigate until all elements of doubt (SC Doctrine) have been established. BUT THEIR ACTIONS ARE IRONICALLY DELAYING SUCH ELEMENTS OF DOUBT TO BE FINALLY RESOLVED.

Is it therefore essential that judges remain aware (at their final deliberations) of these " purposeful ploys" on the part of the Banks that have created an unequal playing field with regard to interest?

Can law firms bring this to the judges attention? Is this in effect a necessary requirement to demonstrate how the system for Banks' " voluntary" payments to the court at point of provisional enforcement, where the Banks chose to not deposit monies into the court, has in effect unfairly significantly compromised innocent claimants ability to acces their monies and retain the right to a fair assessment of interest throughout the remaining stressful and costly judicial appeal procedures instigated by the Banks?

 
Is there any facility in the current system to request this review by the judge at final deliberation of interest?

Have these purposeful actions on the part of the Bank also compromised the award of costs in favour of the claimants?

This message was last edited by ads on 1/10/2024.

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Thank you Maria for that clarification. 

Is it correct to surmise that there is every incentive for the Bank to delay any payment into the court ( and not abide by a "voluntary payment " at point of preliminary execution)  following their first instance loss, as this provides them an opportunity to continue to accrue interest on claimants deposits that they are withholding in the interim period, even though the first instance ruling went against them?

If the bank initiates an appeal process, the payment of the principal amount from the judgment is not mandatory for the bank, unless the opposing party requests the provisional execution of the judgment.

Is it correct to surmise that the "voluntary" nature of return of funds by the Bank to the court (within the provisional execution procedure) is allowed only when the Bank have submitted an appeal ? Does this voluntary aspect therefore incentivise the Bank to swiftly appeal the first instance ruling at every opportunity so long as elements of doubt exist ( I.e. no SC doctrine yet exists)?

If the bank pays after the provisional execution, it is not considered a voluntary payment because, in the absence of payment, the funds in their accounts could be seized through legal means.

Provisional execution can only be initiated once the appeal has been filed and formally accepted for processing. If the bank fails to submit the appeal within the 20 business days stipulated by the law, the initial trial or appellate court's judgment would be considered final. In such a scenario, any subsequent execution would not be provisional but rather a definitive execution of the judgment.

Would a mandatory requirement to return monies by the Bank to the court after the first instance supportive ruling in recognition of the provisional enforcement order in favour of the claimant, have acted as effective disincentive to proliferate Bank appeals? Is this where the Banks have been afforded an unfair advantage over the claimant given the current system of voluntary payments into the court? Do you envisage any change or review to this voluntary aspect given the subsequent impacts that have overloaded and thereby compromised the justice system?

When a judgment is dismissed, and money has been recovered in provisional enforcement, it must be returned. This obligation applies to both banks and ordinary citizens, signifying a commitment to justice and compliance with judgments.

A change in regulations is set to take effect in the coming months: provisional enforcements will incur costs borne by the party obligated to pay.
This aims to discourage provisional enforcements and encourage voluntary payments, even in the presence of an appeal.

While provisional enforcement indeed facilitates quicker recovery of funds, it temporarily places the recovered money at the disposal of the claimant, albeit at the expense of foregoing interest accrual during that period.

Is it correct to surmise that so long as elements of doubt exist that it becomes essential to review all aspects that can compromise the achievement of SC doctrine which assist judges in their deliberations?

It is absolutely correct to acknowledge the importance of carefully reviewing all aspects when there are elements of doubt. The doctrine of the Supreme Court plays a crucial role in judicial deliberations, and ensuring its effective application is essential to maintain the integrity of the process.

Given the current system, have the Banks been incentivised to proliferate appeals and withdraw at the last minute any SC appeals on their part, (both of which led to the overloading of the justice system), and in so doing significantly delayed the ability for claimants law firms to eliminate those areas of doubt and gain essential SC doctrine?

The law acknowledges the legitimacy of withdrawing legal actions if deemed appropriate, along with the corresponding consequences that may follow ( a little court costs). However, there is no apparent incentive, or at least none that we are aware of.

It is undeniable that such a practice is highly unethical and immoral, given that there are individuals awaiting a judicial resolution, eagerly seeking a prompt resolution to their cases. However, the fundamental issue persists: banks are not individuals, and the lawyers representing them do not advocate for people; instead, they represent large corporations without the moral imperative to work in tandem with the client for a swift and satisfactory resolution.

The act of submitting appeals only to later withdraw them contributes to the overburdening of the justice system. There should be a more stringent penalty, perhaps in the form of imposing higher fees, to discourage such practices and ensure a fair and efficient legal process.

But also hasn't the "voluntary" nature of provisional enforcement, where Banks have the choice to deposit monies into the court, undermined the ability for claimants to gain early access to their deposited monies?

Provisional execution is not voluntary; it entails compelling the bank to make payments while the appeal is being resolved, allowing the prevailing party to access the awarded funds without waiting. Additionally, banks can choose to voluntarily deposit the money with the court, in line with the conviction, similar to any individual with a judgment against them.

Pros of this voluntary deposit or post-provisional execution: the individual recovers their money while their case is being resolved, a process that can span over several years.
Cons: the money ceases to accrue interest during this period.

It needs re-emphasising that the current system of voluntary payment into the court by the Bank,  appears to allow Banks the ability to chose NOT to pay those monies into court according to the first instance ruling ( making a mockery of this ruling) and furthermore they continue to gain interest on claimants monies throughout any continuing appeal procedures they instigate until all elements of doubt (SC Doctrine) have been established. BUT THEIR ACTIONS ARE IRONICALLY DELAYING SUCH ELEMENTS OF DOUBT TO BE FINALLY RESOLVED.

Is it therefore essential that judges remain aware (at their final deliberations) of these " purposeful ploys" on the part of the Banks that have created an unequal playing field with regard to interest?

Judges act in accordance with the law.

The sums do not accrue interest once the sentence is fulfilled through payment to the court.
However, the amounts not yet delivered continue to accrue interest.

Can law firms bring this to the judges attention? Is this in effect a necessary requirement to demonstrate how the system for Banks' " voluntary" payments to the court at point of provisional enforcement, where the Banks chose to not deposit monies into the court, has in effect unfairly significantly compromised innocent claimants ability to acces their monies and retain the right to a fair assessment of interest throughout the remaining stressful and costly judicial appeal procedures instigated by the Banks?

I understand it can be frustrating, but it's important to note that provisional enforcement is designed to grant the citizen access to funds while the appeal is being resolved. This means the principal amount is received, although interest isn't accrued during this process.

While legal proceedings can indeed be costly, if there's a cost award, the losing party essentially reimburses those expenses. In summary, although the legal process might seem intricate, the system aims for fairness and justice for all parties involved.
Is there any facility in the current system to request this review by the judge at final deliberation of interest?

Interest amounts are determined by the judge or the judicial secretary after both parties have submitted their respective amounts in line with the court's decision. It's important to emphasize that judges operate within the framework of the law.

Once the interest is approved, if you are not satisfied with the decision, you have the option to appeal within the stipulated period, which typically ranges between 5 to 20 days. The specific time frame depends on whether the resolution is issued by the judge or the judicial secretary. This ensures that there is a fair and transparent process in place for any concerns or disagreements regarding the approved interest amounts. 

Have these purposeful actions on the part of the Bank also compromised the award of costs in favour of the claimants?

Presently, provisional execution does not involve a judgment for costs; such court costs are typically associated with definitive execution. Therefore, if the bank does not opt to voluntarily make the payment once the resolution becomes final, the option to request final execution arises, and this process does involve costs.