The first issue that we address, in the Insurance Department of BELZUZ ABOGADOS S.L.P., is the most well known novelty, it consists of the requirement imposed on any person or entity that initiates a civil claim, has to duly prove that an attempt has been made to negotiate and resolve the dispute out of court beforehand, a necessary requirement for the admissibility of the claim.

This is therefore a procedural requirement, which, if not met, prevents the initiation of the claim in the civil courts.

This requirement translates into the need to resort to appropriate means of dispute resolution («ADR») as a prerequisite for the filing of a civil claim.

The intervention of lawyers is in most cases compulsory, but in order to speed up the procedure, the law provides that the ADR negotiation must be carried out electronically, especially in the case of disputes involving amounts not exceeding 600 euros.

Documenting the agreement or attempted agreement is essential in order to comply with the requirement of prejudiciality provided for in art. 10 of the Law.

The intervention of a third party helps, but if a third party has not intervened it will be sufficient to document the attempted agreement, stating the identity of the professionals who have intervened in the attempted agreement, the issues dealt with, dates and their signatures as a declaration of the attempted agreement in good faith.

In more complex situations, such as those cases in which one of the parties does not wish to sign anything, documentary evidence of the sending of an attempt to reach an agreement or an invitation to negotiate would be sufficient to comply with the pre-judiciality requirement.

Proof of compliance with the pre-judiciality requirement is simplified when individual actions are brought by consumers or users, since in such cases it would be sufficient to provide:

«the prior out-of-court complaint to the company or professional with whom they had contracted, without having obtained a response within the period established by the applicable special legislation, or when the response is not satisfactory, and when the complaint filed with the Bank of Spain, the National Securities Market Commission and the Directorate General of Insurance and Pension Funds has been resolved under the terms established by article 30 of Law 44/2002, of 22 November, on Financial System Reform Measures.»

This is an important peculiarity for the insurance sector that empowers policyholders or consumers to sue in court if they have previously initiated the claim in the customer service department, or the DGS regardless of whether or not the response has been satisfactory.

We have already dealt in previous articles with the novelties in the matter of interest for late payment comparable to the regime foreseen in the current art. 20 LCS, so without wishing to reiterate, we will only highlight that this regime, which penalises the delay in the payment of compensation to insurers, now also extends to the delay produced in litigation due to abusive clauses.

«The imposition of interest on late payment in excess of the legal interest rate on money on businessmen in general and financial institutions in particular, in proceedings in which actions are brought by consumers and users when businessmen do not contribute to a consensual solution to the dispute when this would have been feasible and evident, as in the case of litigation on abusive clauses already firmly resolved in court and with identical factual and legal grounds, in which the consumer or user is obliged to file a lawsuit, or in cases in which the claims are notoriously lacking in any justification and have an impact on the sustainability of the system.»

As the primary purpose of the Law is to speed up the processing of cases in the Courts, we have identified certain measures incorporated by the law for this purpose.

In oral trials, the judge may issue oral sentences, and may decide not to hold a hearing depending on the evidence requested, even when the parties have requested it.

Enforcement may be suspended in order to go to ADR and reach an agreement.

The electronic auction will be speeded up and the executor will be able to be an additional bidder in the process.

All of the above is not only for new proceedings after its entry into force, as in ongoing proceedings the parties will be allowed to reach an agreement to enter into an ADR.

Finally, this law also extends the scope of compensation for civil liability of insurers to personal income tax law, by referring to the tax treatment of compensation received in a civil liability process, so that the exemption provided for in personal income tax for compensation for personal injury as a result of civil liability in the amount legally or judicially recognised can also be applied to compensation paid by insurers for the civil liability of the tortfeasor in the context of a mediation agreement or any other ADR provided for by law.

In this case, certain requirements must be met in order to benefit from the exemption:

1.-That a neutral third party has been involved in obtaining the agreement by this means, a simple agreement between the parties is not valid.

2.-The agreement must have been executed in a public deed.

The exemption will only operate up to a maximum amount equivalent to that resulting from applying, for the damage suffered, the system for the valuation of damages caused to persons in traffic accidents.

CONCLUSION: In view of the novelties introduced by Law 1/2025, some changes will be seen in the processing of proceedings in the courts, although not all the measures will be sufficiently effective to achieve the desired objective of speeding up the processing of proceedings, as we have historical experience in which this has also been attempted without success. Adding a pre-judicial requirement will deprive certain people of access to justice, because they lack the means and we are not covered by the benefit of legal aid when the intervention of lawyers is not relevant. All this is without prejudice to adding another element to the process that extends the processing.

Belzuz Abogados, S.L.P., as specialists in insurance law, remains at your disposal for any clarification you may require.