1 Litigation – Preliminaries

1.1 What type of legal system does your jurisdiction have? Are there any rules that govern civil procedure in your jurisdiction?

The Mexico legal system is governed by civil law. The Mexican Constitution establishes that matters not expressly designated to the Federal Government shall fall under the competence of each Mexican state, including civil matters. As consequence, each Mexican state has its own local Code of Civil Procedure.

However, there is also a Federal Code of Civil Procedures, which may be applicable throughout the country depending on the case. Such Code may also be applied on a supplementary basis whenever the local codes do not regulate a specific situation.

1.2 How is the civil court system in your jurisdiction structured? What are the various levels of appeal and are there any specialist courts?

The Civil Court system in Mexico mainly consists of three levels: Courts of First Instance; Courts of Appeal; and Collegiate Federal Courts. The Courts of First Instance and Appeal may be Federal or local, depending on the decision of the plaintiff or if the dispute arises from an agreement in which the parties have agreed to submit it to the jurisdiction of a specific court. However, the three-level structure remains the same.

Courts of First Instance

The local Civil Courts or Federal District Courts are the lowest Mexican Courts to conduct civil proceedings. The decisions of these Courts can be challenged at the Courts of Appeal.

Courts of Appeal

Courts of Appeal are in charge of ruling on the appeals filed by the parties against the decision of the Courts of First Instance. The parties are not allowed to exhibit further evidence unless it is related with a possible cause for rejection of the main action. The decisions of the Appeal Courts can be challenged by the parties through a so-called “Amparo” lawsuit before a Collegiate Court.

Collegiate Federal Courts

Collegiate Courts are always Federal, due to the fact that they oversee the resolution of appeals and means of challenge provided for in Federal laws, such as the “Amparo” law. Just as with the Courts of Appeal, the parties are not allowed to exhibit further evidence unless it is related to a possible cause for rejection of the main action. The cases are heard and ruled by a panel of three Magistrates, whose decision is final.

The Supreme Court

The Supreme Court is the exceptional Court of final appeal in Mexico. It is exceptional because, for this Court to hear a dispute, one of the following situations must exist: (i) the Supreme Court determines to hear an appeal from the Collegiate Federal Courts based on the general public importance of the matter at hand, or on whether the interests of justice require the Court to hear the matter; or (ii) the unconstitutionality of a regulation was brought before the Courts of Appeal.

1.3 What are the main stages in civil proceedings in your jurisdiction? What is their underlying timeframe (please include a brief description of any expedited trial procedures)?

The main stages of civil proceedings in Mexico may change slightly depending on the type of proceedings being brought. However, the main stages are normally as follows:

I. Initial brief and response

A regular civil proceeding begins with the filing of the lawsuit with the Court, which may admit, dismiss, or request clarification of the lawsuit. If the lawsuit is admitted, the Court will serve the defendant, granting a statutory term to file the response and possible counterclaim. If the defendant files a counterclaim, the other party will be served to file its brief of response.

At this stage, the parties are obliged to offer all their documentary evidence, detailing which evidence is in their possession and which is not. The evidence they do have must be exhibited together with their brief. Otherwise, the parties must provide reasons as to why they do not have such evidence.

After the initial claim and counterclaim, if any, are responded to, the Judge will set the date of the preliminary hearing in which the parties may discuss and reach an agreement. It is important to consider that this hearing is not contemplated in the Federal Code of Civil Procedures, but it is contemplated in some local codes. Therefore, this stage will depend on the code pursuant to which the civil dispute is being prosecuted.

II. Evidence period

After the response to the initial claim or counterclaim is filed, the Judge will grant the parties a statutory term to offer and exhibit evidence. At this moment, the parties may offer confessional, testimonial and/or expert evidence, besides exhibiting the pending documentary evidence.

Once the evidence has been offered and exhibited, the Judge will rule on whether to admit it and schedule an evidence hearing in which all admitted evidence will be prepared and conducted, e.g. testimonials, confessionals, and experts' opinions.

III. Final allegations

Once all the evidence has been filed and conducted, the Judge will grant the parties a statutory term to file the brief of final allegations, which are the parties' last declarations before the Judge issues the resolution.

IV. Decision

Once the period of allegations has concluded and the parties have submitted their briefs, the Judge will issue the resolution, which may be challenged at a Court of Appeal. The resolution of such appeal can also be challenged through a so-called “Amparo” lawsuit, which will be resolved by a Collegiate Federal Court.

The length of a civil proceeding in Mexico depends on the complexity of the matter and the volume of material that composes the dispute, e.g. the evidence offered by the parties. Additionally, in Mexico any provisional or incidental decisions issued by the Judge can be appealled.

Therefore, it can take from one to three years to obtain a resolution at the first stage of a traditional civil procedure. However, considering the fact that a first instance resolution can be challenged at a Court of Appeal, and at a Circuit Court at the last instance, the whole procedure may take a minimum of two-anda-half years, or up to four to six years in normal cases. Very complex cases may take more than a decade.

1.4 What is your jurisdiction's local judiciary's approach to exclusive jurisdiction clauses?

In Mexico, it is very common in civil acts to agree that, in case of dispute, the parties expressly waive any jurisdiction other than the Mexican Courts, whether Federal or state. If this is the case, the Mexican Courts will have to enforce said clauses based on the freedom of contract, unless a well-founded and motivated reason is found not to do so.

1.5 What are the costs of civil court proceedings in your jurisdiction? Who bears these costs? Are there any rules on costs budgeting?

The Mexican authorities are obligated to deal with the costs of the litigation, since the Constitution establishes that justice is free for everyone.

However, every party is responsible for attorney and expert fees, along with other costs relating to the litigation, such as document expenses and the fees of the experts and another diligence. There are some guidelines for Courts to order payment of costs and attorney fees, based on the percentage of the amount expressly claimed.

1.6 Are there any particular rules about funding litigation in your jurisdiction? Are contingency fee/ conditional fee arrangements permissible?

There are no rules regarding funding litigation, contingency and conditional fee arrangements. Any clause or obligation in this matter may be arranged and based on arrangements between a financier and the parties.

1.7 Are there any constraints to assigning a claim or cause of action in your jurisdiction? Is it permissible for a non-party to litigation proceedings to finance those proceedings?

Mexican regulation does not expressly establish constraints to assign a claim. However, both the Federal and local Codes that regulate civil proceedings state that only those with an interest in the judicial authority declaring or establishing a right or imposing a condemnation, and those who have a contrary interest, may initiate or intervene in a judicial proceeding.

Therefore, if an assignment of the cause of action is sought, it must be demonstrated that the assignee has the legal interest to participate in the dispute. This becomes relevant if we take into account that surrogacy is permitted and regulated in Mexico.

Finally, Mexican law does not regulate any prohibition regarding the financing of litigation by a non-party.

1.8 Can a party obtain security for/a guarantee over its legal costs?

No, Mexican regulation does not provide the possibility of obtaining security for or a guarantee over legal costs. However, within the trial or prior to its commencement, the seizure of sufficient assets to guarantee the outcome of the trial may be ordered at the request of a party, and as a precautionary measure, exhibiting a guarantee to respond to the possible damages that could be caused to the person against whom the precautionary measure is adopted.

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Originally published by ICLG

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.