- 1.Outline the court system in your jurisdiction.
The ordinary judicial system consists of three levels of courts: the trial courts (also courts of first instance); the Appeals Courts; and the Supreme Court.
- 2.What remedies are available to a party that is in a dispute with a foreign entity? Do the laws provide foreign entities the same rights afforded to local entities? Are there laws requiring foreign entities to post a bond or other security before they can defend a suit?
There are no differences between the treatment of national and foreign entities. Moreover, special laws and international treaties try to promote and protect foreign investment (ie, Decree Law No. 600 among others).
- 3.What is the most common type of litigation encountered in your jurisdiction by foreign entities (for example, claims for breach of contract, employment or some other issues)?
As stated there are no differences between foreign and national entities’ when it comes to litigation. Notwithstanding this, one of the commonest types of litigation encountered in our jurisdiction by foreign entities relate to environmental matters.
- 4.How frequently do parties pursue criminal actions (eg, querellas) in the context of commercial disputes? May criminal trial evidence be adduced in follow-on civil litigation? May civil cases be brought concurrently or after criminal litigation?
Since the new criminal procedure was established in 2005, criminal actions have not usually been pursued regarding commercial disputes. However, such actions are sometimes brought over privileged information matters.
- 5.Is there a right to a trial by jury in a commercial dispute?
Chilean law follows the civil law system, so there are no juries but only judges that rule on the facts and the law.
The most common and useful way to solve commercial matters is through Arbitration.
- 6.Do courts require or strongly encourage mediation before or during a litigation proceeding?
During recent years, significant changes have been introduced to procedural systems, especially regarding criminal and labour matters (changes to tax, civil and commercial issues are forthcoming). As a part of those changes, judges are required to promote mediation insofar as is possible.
- 7.Will choice of law and choice of forum provisions in a contract be enforceable recognised?
Chilean law recognises and protects lawful contract provisions, including the chosen law and the forum provisions, whether they be Chilean or foreign companies.
- 8.Does your jurisdiction have specific arbitration law? Are arbitration awards enforced by the courts? May courts enjoin or prohibit arbitration proceedings in matters that are also pending in a court proceeding?
There is a specific arbitration law based on the ICC arbitration rules. Arbitral awards will be enforced by the courts. If the parties agreed to an arbitration clause, it prevails over the jurisdiction of the ordinary courts unless on matters where arbitration is not permitted.
- 9.Do the courts recognise attorney-client privilege? If so, is the privilege applicable to in-house lawyers?
Courts recognise attorney-client privilege provided that the lawyer is admitted to practise in Chile.
- 10.Are legal proceedings public? In other words, can the general public observe hearings and review the filings of the parties?
Legal proceedings are public. However, courts, especially in criminal and family trials, are allowed to order that some evidence or parts of the trial be kept private.
- 11.May a defendant join other potentially liable parties into the existing lawsuit?
No. Actions must be brought by the plaintiff directly against the defendant. There are no mechanisms that allow defendants to bring to the trial another potential liable parties.
- 12.How may a party enforce a foreign judgment?
If the judgment was rendered in a foreign jurisdiction, to enforce it in Chile there is a special proceeding called exequatur, which must be executed by the Supreme Court.
- 13.How much time does a party have to answer a complaint? Can a party extend this time?
In ordinary trials the term depends on the place where the notification of the lawsuit took place, but ranges between 15 and 30 days.
In arbitration, parties, by mutual agreement, are allowed to settle their own terms.
- 14.How long does it take to obtain a first-instance judgment in a typical commercial litigation case?
- 15.Is a party required to submit all facts, arguments and supporting evidence with its initial pleading?
There are different stages in a trial. Parties must submit all their arguments in the discussion stage. They may submit some evidence too (especially documents) during this period, but there is a trial stage in which parties must submit all the evidence (including witness testimony) to be adduced.
- 16.Does litigation provide a process for investigating claims or right to discovery of evidence prior to trial?
- 17.Does litigation provide a process to subpoena or obtain documents or testimony from third parties?
Although this process is not common, it is possible.
- 18.Does the judge or opposing counsel examine witnesses?
Witnesses should be examined by the judge and the opposing counsel is also allowed to examine them. Notwithstanding, they are examined by a court functionary.
- 19.How may evidence be challenged? Are there specific rules of evidence?
Evidence may be challenged with other evidence. In civil and commercial litigation there are specific rules to weigh the evidence. However in criminal and labour processes there are no special rules.
- 20.Do courts typically allow hearings at or before a trial? At what state may parties present expert witness testimony?
In civil and commercial litigation there are written processes, so hearings are not common. However judges, by law, must hear the parties whenever they so ask.
Parties are allowed to present expert witness testimony and reports only during the trial stage.
- 21.What must be demonstrated to collect a debt based on a written instrument?
It depends on the type of written instrument on which the debt is based. If the debt is recognised in a public deed, it is demonstrated per se. In other cases, the interested party must demonstrate the debt by all the evidence possible.
- 22.What remedies are available in your jurisdiction to a minority shareholder of a corporation in a dispute with the corporation or the majority shareholders?
There are several remedies given by law, including article 133bis of Law No. 18.046 allowing every shareholder that, alone or together with other minority shareholders, holds at least 5 per cent of the company, to pursue civil and criminal actions in the name and for the benefit of the company.
- 23.What rights are available in the courts for someone holding a maritime lien interest in a vessel?
Articles 861 to 865 of the Commercial Code regulate maritime lien interests, conceding special privileges to the creditor over the cargo, and in some cases, over the ship. As a consequence of those privileges, creditors may ask the court to auction the cargo and pay their debt with preference to other creditors.
- 24.What rights are available for a party holding a security interest in real property and personal property? Are there expedited proceedings to allow the recovery of property serving as security for debt obligations?
There are special procedures for mortgagees and other security holders to request a judicial auction of the property.
Also, creditors holding security over real property (especially mortgages and pledges) are treated prefentially.
Once outstanding debts are paid property serving as security is easily recoverable.
- 25.Describe the types of employment disputes that frequently result in litigation.
The most common labour disputes concern “dismissals without cause”.
- 26.Does your jurisdiction allow class actions or some form of collective litigation proceeding?
Class actions are allowed only in matters related to consumer law. In other issues only individual actions are allowed.
- 27.Do government-owned or controlled entities enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation?
There is a special procedure called the juicio de hacienda, which applies every time the state has interest in a trial.
Notwithstanding, if the state, or a private entity controlled by it, is engaged in purely commercial activity, there is no privilege at all and it is treated as an ordinary party.
- 28.Is injunctive or other relief available on an emergency basis?
There are some remedies or procedures available, such as recurso de protección, amparo económico, orden de no innovar, among others.
- 29.Is injunctive relief or other relief available as part of a final award? If so, in what types of cases do courts usually provide injunctive relief?
The only injunctive relief recognised is the recurso de protección.
- 30.What are the typical court fees and costs required to file a civil lawsuit?
Theoretically, justice should be free for the parties. Notwithstanding, there are some fees the parties must pay to start and proceed with a trial, particularly related to the intervention of some public functionaries (receptor judicial).
Besides that, parties must cover their own attorneys’ fees and, if required, they must pay for expert testimony.
- 31.Is a bond required for non-residence? What is the amount of the bond?
No bond is required. Chilean law requires each party to specify, for the purpose of the trial, an address that must be inside Chilean territory and in the jurisdiction of the court.
- 32.What damages are available? How are damages quantified? Are punitive damages available?
Recoverable damages are pecuniary and non-pecuniary.
Pecuniary damages also distinguish between actual damage and the loss of profits.
There are different ways to quantify the damage: by operation of law; at the judge’s discretion; and as agreed by the parties (only through penalty clause).
Besides the penalty clause, Chilean law, generally, neither allows nor recognises punitive damages.
- 33.Is the losing party liable for attorneys’ fees and costs? If so, how are attorneys’ fees and costs determined and proved?
The losing party will be liable for the other party’s court fees and costs only when completely unsuccessful in the dispute. Otherwise, parties must cover their own expenses.
Procedural law distinguishes between “procedural costs” and “personal costs”. The first kind of are determined by law (notwithstanding the actual costs).
Notwithstanding, personal costs are determined by the judge, although they are generally much lower than the actual costs as each party must cover its attorneys’ fees.
- 34.Will courts enforce a liquidated damages provision in a contract?
Damages might be liquidated by the parties only through penalty clauses. In that case, the damaged party may choose between enforcing the penalty clause (without proving any actual damage) or bringing an action for the real damage.
- 35.What is the appeal process against trial court decisions?
The appeal must be brought to the trial court to carry out a formal review of admissibility.
If the formal review is approved, the file rises to the appeal court, for a second formal review.
If the second review is passed, the court will hear the case. However, hearings only take place when it comes to final judgment and when the parties ask for it. Otherwise the court judges with the only merit of the file.
After the hearing the court decides the matter based on a majority of votes.
- 36.How frequently do appellate courts reverse trial court decisions?
Figures for the number of overturned cases are unavailable but some decisions are confirmed and some reversed.
- 37.May the courts entertain challenges to administrative decisions made by federal or local governments? If so, how frequently do courts reverse administrative decisions in favour of a private party?
Yes they can. It usually happens when the government decisions violate people’s constitutional rights.
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