A client calls. A distributor owes them three invoices, or a shareholder is not honouring what was signed, or a supplier delivered badly and does not want to know. Until recently the first question was whether it was worth suing.
Now there is another one first: what has been done to try to sort it out without going to court. Because if nothing has been done, the claim is not even admitted.
This follows from Organic Law 1/2025 of 2 January, on measures for the efficiency of the Public Justice Service, and specifically from its rules on appropriate dispute resolution methods, known in Spain as MASC. That part came into force on 3 April 2025, three months after publication in the Official State Gazette. A year and a half later we still see companies that find out when the court sends their claim back.
The rule
Article 5 calls it a procedural requirement. In civil matters, which include commercial ones, a claim is only admissible if an appropriate dispute resolution method has been tried first. And the negotiation must have concerned the same matter as the lawsuit, even if what is later asked of the judge may vary.
What counts as an attempt is quite broad. Mediation, conciliation, the opinion of an independent expert, a confidential binding offer or a collaborative law process all qualify. And above all, direct negotiation between the parties, or between their lawyers acting on their instructions.
In practice, almost every claim between businesses goes down this last route. It needs no third party, adds no cost and, properly approached, settles more matters than you might think.
What is excluded
The requirement applies to ordinary declaratory proceedings and to the special proceedings of the Civil Procedure Act, with specific exceptions. For a business these are the ones that matter: there is no need to negotiate first for bill of exchange proceedings (claiming on a promissory note, a cheque or a bill), for an enforcement claim, to seek interim measures before suing or preliminary disclosure, or to apply for a European order for payment or start a European small claims procedure. Nor in proceedings concerning fundamental rights.
Outside those, better to assume it applies.
Deadlines
Starting a negotiation moves the clock, and it helps to know which way.
The request interrupts the limitation period or suspends the time bar from the date on which the attempt to communicate it to the other party is recorded, provided it properly defines the subject of the negotiation. If the other party does not reply in writing within thirty calendar days, or the first meeting never takes place, time starts running again.
And there is one deadline that is easily forgotten. When the negotiation ends without agreement, or if the request never received a reply, there is one year to file the claim with the requirement met. Negotiating in March, closing without agreement in April and leaving the matter in a drawer until the following summer means starting again.
How it is proved
The attempt has to be documented.
Where no third party was involved, a document signed by both parties will do, stating their identities, the dates, the subject of the dispute and a declaration that both acted in good faith. If the other party will not cooperate, it is enough to prove that it received the request or proposal, when, and that it could access its full content; where a mediator or conciliator was involved, they issue the document. In practice this means sending the invitation by a means that proves receipt and content, such as a burofax with certified text or certified email. An ordinary email without acknowledgment may fall short.
A lawyer is only mandatory if the method chosen is the binding offer, unless the amount does not exceed two thousand euros or sector-specific law says otherwise. What is said in the negotiation is confidential and, with few exceptions, cannot later be taken to court.
Where it really shows
In the costs.
The reform does not stop at requiring the attempt. The new Article 394 of the Civil Procedure Act provides that, where using an appropriate method is mandatory, no costs will be awarded in favour of a party that refused to take part without just cause, even if it wins. And if the claim succeeds only in part, costs may be awarded against the party that failed to take part without justification. Courts must also weigh how each party cooperated in seeking a settlement and whether there was abuse of the public justice service, both when ruling on costs and when imposing fines.
Ignoring an invitation to negotiate, or answering it with an unreasoned no, can prove expensive even when you are right.
What we recommend
First, review your contracts. A clause setting out how a disagreement will be negotiated, with deadlines, contacts and, if you wish, a mediator or expert appointed in advance, saves arguments just when nobody feels like having them.
Then, write the invitation to negotiate as if a judge were going to read it, because one probably will. A well-defined subject, specific amounts, supporting documents and a reasonable time to reply.
Make proposals you can stand behind. If the case ends in something close to what you offered and the other side rejected it, that proposal will count.
Put the year in your diary.
And do not use the procedure to buy time. Confidentiality and the interruption of time limits are not a hiding place, and abuse is also paid for in costs.
Approached this way, prior negotiation stops being a formality. Often it is the fastest and cheapest way to get paid or close a dispute, and when it does not work, it is the best preparation for the trial.
This article contains general information for informative purposes and does not constitute legal advice or an investment recommendation. The rules cited may have been amended after publication; always check the text in force before taking a decision.