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Our legal system provides a system to ensure the effectiveness of the judicial protection sought in legal proceedings. To this end, Law 1/2000 on Civil Procedure (“LEC”) regulates what is known as the procedure for “Precautionary Measures,” which aim to ensure the effectiveness of a future judgment that upholds our claims
In some cases, the adoption of Precautionary Measures can be crucial. Imagine a Company with two partners who are also joint Administrators, where one of them withdraws all the money from the bank accounts and transfers it to their personal account. Beyond filing a lawsuit for misappropriation and/or breach of trust, Precautionary Measures to freeze the bank account should be requested to prevent the Administrator who misappropriates the money from squandering it. If the money is spent, it will be impossible to recover the damage caused, even if we obtain a favorable judgment months or years later.
These measures can be requested before filing the corresponding lawsuit because we anticipate that without them, it might be impossible to enforce the judgment. For example, we can request the precautionary freezing of a bank account to prevent the recovery of the claimed amount once the legal proceedings have concluded and a favorable ruling has been obtained, as in the example above
They can also be requested simultaneously with the filing of the lawsuit and must be done in the same document as the filing of the lawsuit.
What Precautionary Measures can be requested?
The Precautionary Measures that may be ordered, among others, as provided in Article 727 of the Spanish Civil Procedure Law (LEC), are the following: (i) the preventive attachment of Assets, to ensure the execution of judgments ordering the delivery of money or goods; (ii) the deposit of movable property, when the delivery of said property is requested in the claim and it is in the possession of the defendant; (iii) the provisional registration of the claim, when it refers to assets that can be registered in a public registry, such as the Land Registry; (iv) the Court order to provisionally cease an activity considered unlawful and whose prohibition or cessation is sought in the claim; or (v) the suspension of challenged corporate resolutions, when the plaintiff represents at least 1% or 5% of the share capital; and (vi) all other measures deemed necessary to ensure the effectiveness of the intended judicial protection.
What are the requirements for adopting Precautionary Measures?
For the Court or Tribunal that will hear our claim to be able to grant one of the aforementioned Precautionary Measures, the following requirements must be met: (i) appearance of good right or fumus boni iuris; (ii) danger due to procedural delay or periculum in mora; and (iii) security.
i) Appearance of good right or fumus boni iuris
When requesting Precautionary Measures, the application must include the data, arguments, and documentary evidence that will lead the Court, without prejudging the merits of the case, to form a provisional and indicative judgment favorable to the grounds of the claim. In the absence of documentary evidence, the applicant may offer it by other means of proof, which must be formally proposed in the same document.
ii) Danger due to procedural delay or periculum in mora
For the Judge or Court to grant the Precautionary Measure, the applicant must justify that, in the case at hand, situations could arise during the pendency of the proceedings if the requested measures are not adopted, which would prevent or hinder the effectiveness of the protection that could be granted in a potential judgment in favor of the plaintiff. That is to say, if, for example, our claim is for a specific sum of money, and we request as a precautionary measure the attachment of a bank account of the defendant, it will be necessary to justify why it is necessary to order said attachment and that, if the measure is not ordered, it would be almost impossible to recover the amount claimed in our lawsuit.
The Law also tells us that Precautionary Measures will not be granted when they are intended to alter factual situations consented to by the applicant for a long time, unless the applicant fully justifies the reasons why said measures have not been requested until then.
iii) Security
The final requirement for the Precautionary Measure to be adopted is that the applicant must provide sufficient security to respond quickly and effectively to any damages that the adoption of the Precautionary Measure might cause to the defendant’s Assets.
The Court will determine the amount of the security, taking into account the nature and content of the claim and its assessment of the grounds for the request. However, it is most common for the applicant to offer a security they consider reasonable, and the Judge or Court will then rule on its sufficiency.
What is the procedure for adopting precautionary measures?
As for the procedure for adopting Precautionary Measures, it resembles a summary trial procedure since, normally, the defendant is notified and the parties are summoned to a hearing to argue the appropriateness and necessity of adopting the requested measure, as well as the fulfillment of the requirements established by law, which we have referred to previously. However, the adoption of the Precautionary Measure may also be ordered without a hearing for the defendant when there are reasons of urgency or when the hearing could jeopardize the success of the Precautionary Measure requested and ordered by the Court.
Finally, the Judge or Court will decide by Order on the adoption of the Precautionary Measures, against which an Appeal may be filed
This procedure for Precautionary Measures can be very useful and interesting for the defense of our interests since it aims to ensure the effectiveness of future monetary judgments or orders for the delivery of movable property, thus preventing the defendant from carrying out any acts of disposal—whether of money or movable property—before the judgment is issued, thereby preventing the effectiveness of our claim from being frustrated.
