1.1 General Characteristics of Legal System
Chile follows a civil law system strongly influenced by the Spanish and French legal systems, specifically by the Napoleonic Code model.
Generally, judicial proceedings are adversarial and have been evolving from a system based on written submissions to one centered on oral arguments. Currently, criminal, labour, tax, and family procedures are based on oral arguments, whereas civil litigation remains essentially as a written system, except for oral arguments before the Court of Appeals and the Supreme Court.
1.2 Structure of Country's Court System
All courts and judicial agencies branch out from a single Judicial Power, forming a hierarchical system led by the Supreme Court, organised by territorial divisions and subject matter jurisdictions. The Supreme Court, located in Santiago and divided into four specialised courtrooms on a subject matter basis, has the directive, correctional and economical supervision of most courts (except, for example, the Constitutional Court). It has national jurisdiction and also acts as a Court of Cassation.
There are several regional circuits covering the territory, which internally include different court hierarchies. First instance courts may include one or more districts and in more populated districts are divided according to the matter over which they exercise jurisdiction (civil, family, criminal and labour law), whereas in rural or less populated areas they tend to exercise jurisdiction over various matters.
Courts of Appeal, on the other hand, are located in the main cities of the country (17 in total), acting as second instance courts in most matters when parties challenge the judgments of trial courts (exception: antitrust or constitutional matters).
We can also find courts with limited or special jurisdiction over certain matters, such as military, tax, antitrust and environmental issues, among others, and some governmental agencies that exercise jurisdiction as first instance courts in matters of their competence.
1.3 Court Filings and Proceedings
Court records are public in civil and commercial matters, whereas family proceedings and preliminary criminal investigations are kept private (except for the parties). For civil and commercial proceedings, public court records are accessible not only in the court where the proceeding is substantiated, but also on the official website of the Judicial Branch, with no procedure for protecting court filings and proceedings in general from public disclosure. Exceptionally, parties can request that the court limit public access to the court file, and both the parties and third parties can refuse to exhibit documents that contain secret or confidential information. In some special proceedings, such as before the Antitrust Court, parties may request to not disclose part of documents that contains confidential information.
1.4 Legal Representation in Court
In general terms, it is required that any person who must appear in court in his own name or as the legal representative of another, must do so in the manner determined by law. A person who appears in court on behalf of another, in the performance of a mandate or in the exercise of a position requiring a special appointment, must exhibit the title that proves his representation.
If a foreign lawyer wants to practice as a lawyer in Chile, he/she must first carry out a validation process, regardless of the length of time that the assignment or work is expected to last. If the degree has been obtained in a country that has an international treaty with Chile regarding this matter, a process of recognition must be initiated before the Ministry of Foreign Affairs. If not, the degree must be revalidated at the University of Chile. In both cases, it is also necessary to obtain a subsequent habilitation by the Supreme Court, which must grant the title of lawyer. The foregoing does not include foreign lawyers who, like any other professionals, are hired to provide advisory services given their experience, skills and/or knowledge.
2. LITIGATION FUNDING
2.1 Third-party Litigation Funding
The issue of third-party funding is not regulated. As there are no particular rules or limitations on third-party funding, not being prohibited either by law for the parties or ethically for the attorneys, it is a permissible practice. However, there are no known cases where third-party funding has been involved.
2.2 Third-party Funding of Lawsuits
Considering that the subject matter is not regulated in Chile, in principle, all types of claims would be available for third-party funding. However, there are currently no professional funders in the Chilean market.
2.3 Third-party Funding for Plaintiffs and Defendants
Third-party funding is available to both the plaintiff and defendant. Please refer to 2.1 Third-party Litigation Funding, above.
2.4 Minimum and Maximum Amounts of Third-party Funding
As there are no regulations on the matter, there is no minimum or maximum amount a third-party funder would fund. The matter would be open to negotiation.
2.5 Third-party Funding of Costs
As indicated above, there are no professional funders in Chile, and the practice is still relatively unknown.
2.6 Contingency Fees
Contingency/conditional fee arrangements are permissible. This is a matter that can be privately regulated in an attorney-client agreement.
2.7 Time Limit for Obtaining Third-party Funding
As Chile does not have applicable regulation on the matter of third-party funding, there are no time limits in this regard.
3. INITIATING A LAWSUIT
3.1 Rules on Pre-action Conduct
In general terms, no pre-action conducts or steps are required to file a lawsuit. It is not mandatory to issue or respond to a pre-action letter, or engage in alternative dispute resolution.
However, in civil litigation, to file an action for damages against a private health provider, the claimant must submit to a mediation process (even though it is not binding). The same pre-requirement is asked in the labour and family law fields. It is also not uncommon for pre-action letters to be exchanged in a commercial setting.
3.2 Statutes of Limitations
In Chilean law, the statute of limitations provides a substantive defense to a claim. There are several statutes of limitations that apply depending on the class of action and on a subject matter basis. Contract claims generally have a five-year statute of limitations counted from the date on which the obligation becomes enforceable, whereas torts have a four-year period counted from the date the offence occurred. It must also be noted that the statute of limitations in the case of requesting an enforcement proceeding is either one or three years, depending on the nature of the title. Also, commercial disputes generally have a statute of limitations of four years.
However, special rules apply, so a case-by-case analysis is always recommended. In family matters, for example, some actions have a one-year time bar. The statute of limitations is a defense which may be waived and cannot be imposed ex officio. Finally, there are special short-term statutes of limitations for collecting taxes and certain fees.
3.3 Jurisdictional Requirements for a Defendant
Chilean law allows both individuals and legal entities to be defendants subject to suits.
Because the Chilean Civil Procedure Code does not contemplate any specific rule that indicates the capacity required to be part of a trial, it is necessary to resort to the general rules, which allow one to conclude that the defendant has to be liable under the law, the legal ability of a person to acquire rights being sufficient. Thus, the general rule is that everyone is liable under the law, with some specified exceptions (ie, individuals with mental health issues, minors under the age of 18).
If the claimant directs his claim against a legal entity, the lawsuit must be duly served to its legal representative.
3.4 Initial Complaint
The initial complaint submitted by the plaintiff must be made in writing, and must comply with the following requirements set forth in Article 254 of the Chilean Civil Procedure Code, including:
- identification of the court where the claim is filed;
- name, address and profession of the plaintiff and the persons that represent him, and the nature of such representation;
- name, address and profession of the defendant;
- facts and legal grounds of the claim; and
- the petitions submitted to the court.
In effect, the claim must include a precise and chronological statement of all relevant facts and the law applicable to the case. In Chile, practitioners usually do not file documents along with their submissions but present all or most evidence at a later stage, during the evidentiary term.
The pleadings can be amended by the claimant in two exceptional cases: (i) once the claim has been served and before the defendant's response, the claimant can enlarge and amend the initial claim, but this enlarged or amended claim must be notified to the defendant, and the period to respond to the claim will begin on the date of this service of notice; (ii) if the defendant has responded the complaint, the claimant is not permitted to substantially change or modify the main cause of action of the trial, and can only enlarge and amend his action accessorily in the rejoinder.
3.5 Rules of Service
Chilean civil proceedings begin with the filing of an initial claim and its service of notice, which is carried out by court officials called receptores, but paid by the interested party. The period of time in which the notice must be served depends on the statute of limitations applicable to the case, and the service will act as an interruption to the statute of limitations.
In general terms, the first notice must be served in person. Exceptionally, the claim may be notified to the defendant's address under the following conditions: (i) the address of the defendant must be confirmed; (ii) the receptor must have sought the defendant at his address on two different days; and (iii) it must be confirmed that the defendant is in the jurisdiction where the proceeding takes place.
However, if the defendant's address is hard to locate, or the number of defendants complicates the serving of the claim, this objective may be achieved by means of service by publication (ie, by publishing the notice in a newspaper).
In the case that the party to be sued is outside of the court's jurisdiction, the notice must be made through a rogatory letter. Regarding lawsuits that affect parties located outside of Chile, the method of notification is governed by the laws of the country in which it should be carried out.
In any case, the defendant is entitled to dispute the court's jurisdiction through dilatory or preliminary objections, either in terms of subject matter or territory. However, this type of defense must be presented within the legal term available to respond to the claim (ie, to submit the statement of defense), and before taking any other action in the proceedings. In an ordinary proceeding, this objection must be resolved before any other issue and will suspend the proceeding until a decision is reached. In summary proceedings, on the other hand, this defense can be resolved in the final ruling, along with the other claims.
3.6 Failure to Respond to a Lawsuit
In the case of a civil claim, the Chilean justice system adopts the posture of the ficta litis contestatio, meaning that if the defendant does not respond to a lawsuit the facts will be deemed denied in what is considered a fictional response to the claim. If the defendant has been properly notified and refuses to appear or respond, the proceedings will continue with the absent defendant being automatically notified of each decision, with the possibility of a final and valid ruling being reached in this manner. However, the plaintiff has the burden of proving all the facts asserted in his claim, as the defendant's silence is not considered to imply a confirmation of the facts alleged by the claimant. The defendant can appear subsequently during the proceedings but will have to accept everything that has occurred up to the point of his intervention.
Different rules apply in the case of summary proceedings, where in the absence of the defendant from the first hearing and if plausible grounds are presented, the plaintiff may request provisional granting of the claim. Faced with the resolution that gives provisional access to the claim, the defendant may choose to appeal the resolution or to formulate opposition, but this does not suspend the enforcement of the resolution.
3.7 Representative or Collective Actions
Chilean law allows collective suits for specific matters, being first introduced into national legislation in 2004 for consumer protection (Law 19.946 of Consumer Protection). This proceeding has then been applied to other matters, such as unfair competition (Law 20.169 on Anti-Trust), and quality of construction (DFL 458 of Urban Planning and Construction).
The court must declare the admissibility of the collective action, when the following requirements are met: (i) the action has been deduced by a legitimised person to present this type of claim; (ii) the behaviour that is claimed affects a collective or diffuse interest.
In the case of consumer rights, an additional requirement exists, which demands that the potential number of affected consumers justify, in terms of costs and benefits, the procedural or economic need to submit their processing to the special proceeding for the protection of the collective or diffuse interest of consumers. The persons entitled to exercise consumer collective actions are: (i) the National Consumer Service; (ii) a consumer association; (iii) a group of consumers (at least 50 people) affected by the same interest.
The recent reform to the Anti-Trust Law made the proceeding for collective actions regulated in the Consumer Protection Law applicable to compensation claims for antitrust infractions, a matter that was also handed over to the jurisdiction of the Chilean Antitrust Court.
3.8 Requirement for a Costs Estimate
On this matter there are no legal requirements. However, in ethical terms, the Chilean Bar Association has issued certain rules in this regard, urging the negotiation of professional fees with the client in a free and fair manner, as soon as possible and making them appear in writing, without abusing their position of privilege to the detriment of the client, as well as obtaining an improper advantage from the possible situation or state of vulnerability.
As for the estimate of expenses, it is stated in the Chilean Bar Association's Code of Ethics that the lawyer must provide a reasonable estimate of the expenses that the client will incur, and if the expenses necessary for the development of the assignment exceed their initial estimate, the lawyer may not incur them without the client's authorisation.
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Originally published by Chambers and Partners.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.