I. Introduction: A Continental Divergence Reconsidered
Across the complex terrain of cross-border construction practice, Spain and England offer compellingly divergent paradigms. The Spanish approach to dispute resolution, deeply rooted in its civil law heritage, stands in marked contrast to the procedural expedience and contractual flexibility that characterise English practice. For English practitioners navigating the Iberian legal terrain, appreciating the historical, doctrinal and procedural divergences is paramount to effective cross-border engagement.
Spanish law retains a pronounced commitment to 19th-century codification, strict judicial formalism, and the primacy of legislative texts. This contrasts with the common law system’s reliance on precedent and judicial discretion. Furthermore, while English adjudication delivers rapid, binding interim decisions to preserve cash flow and construction progress, Spain provides no equivalent statutory mechanism. The absence of a similar statutory adjudication presents a significant cultural and legal divergence that English professionals must negotiate with care when approaching the Spanish jurisdiction.
Moreover, the Spanish legal environment reflects broader philosophical distinctions. Legal culture in Spain is typified by an emphasis on the written word, with litigation unfolding through voluminous pleadings and a judicial temperament that values systematisation over commercial pragmatism. By contrast, English adjudicators and judges often embrace commercial realities and a robust procedural economy. Such differences have profound consequences in multi-jurisdictional projects.
This article presents a brief comparative commentary on the Spanish legal landscape, exploring how construction disputes are adjudicated or, more accurately, arbitrated and litigated within a system that is structurally and technically distinct from the English model. It addresses institutional architecture, procedural features, substantive legal standards, and practical considerations for foreign practitioners, with an eye towards advising and drafting strategies that reconcile these two legal systems.
II. Civil Codifications and Institutional Architecture in Spain
The Spanish legal system, as with most continental systems, is founded on civil law principles, and its construction law framework is predominantly statutory. Central among these statutes are the Código Civil (Civil Code)1, the Ley de Enjuiciamiento Civil(Law on Civil Procedure)2, and the Ley de Ordenación de la Edificación (Law on Building Regulation or LOE)3. Together, these provide the structural foundation for rights, liabilities, and procedural entitlements in construction matters.
The Código Civil, first promulgated in 1889 and drawing strong influence from Napoleonic legal codes, remains the bedrock of contractual interpretation and general liability. Its provisions emphasise consent, good faith, and the principle of pacta sunt servanda, but also enshrine mandatory protections that limit party autonomy. Spanish courts interpret these norms through a lens of public interest, often restricting attempts by parties to contract out of liability.
The LOE, enacted in 1999, provides a sector-specific regulatory framework tailored to construction activity. It delineates the obligations of various construction agents, including developers, contractors, designers, and technical architects, and introduces substantial statutory warranties for defects. Its public policy nature ensures that these provisions override any contrary private arrangement, and its influence permeates all levels of the construction sector, from planning through to post-completion.
Institutionally, Spain does not possess a dedicated construction court akin to the Technology and Construction Court (TCC) in England. Interestingly, all construction matters are adjudicated in the Juzgados de Primera Instancia (First Instance Civil Courts) for private disputes or the Juzgados de lo Mercantil (Commercial Courts) for matters involving corporate actors. Appeals are typically heard in the Audiencias Provinciales, and further appeals to the Supreme Court (Tribunal Supremo) are limited to cassation cases.
On the contrary, in construction matters involving public entities, disputes may traverse the Juzgados de lo Contencioso-Administrativo, (judicial review of administrative decision) pathway, requiring very specialised procedural approaches and engaging doctrines unique to public law in a distinct interpretation by these specialised courts. Undoubtedly, the legal boundaries between private law obligations and administrative acts in public contracts add a layer of complexity unfamiliar to English practitioners. The legal boundaries between private law obligations and administrative acts in public contracts add a layer of complexity unfamiliar to English practitioners.
The absence of binding precedent in Spain means that the weight accorded to judicial decisions depends on their hierarchy and persuasive reasoning rather than stare decisis. Therefore, while Supreme Court judgments carry de facto authority, lower court rulings often diverge in many interpretations of the same law, producing regional inconsistencies. Legal certainty, therefore, derives less from jurisprudence and more from codified law and authoritative commentary, particularly by legal scholars and Supreme Court judgments.
Furthermore, Spain’s decentralised constitutional structure allows for regional legal variation in specific autonomous communities. Notably, Catalonia and the Basque Country possess their own civil codes or statutory compilations that may affect construction-related obligations. For instance, Catalan civil law, governed by the Codi Civil de Catalunya4, incorporates distinct provisions on obligations and contracts. At the same time, the Basque Civil Law Act5 likewise asserts competencies in areas such as property law and inheritance. These regional laws operate alongside national legislation but can influence construction projects in nuanced ways, mainly where regional planning, housing, or procurement norms apply, requiring specialised procedural approaches and engaging doctrines unique to public law.
III. Procedural Realities: Absence of Adjudication, Mandatory Mediation and Judicial Delay
Perhaps the most striking contrast for English practitioners lies in Spain’s absolute lack of an adjudication system comparable to that introduced by the 1996 Act. In England, adjudication offers a swift mechanism to resolve disputes during the life of a project, ensuring continued performance and mitigating the risk of payment disruption. Spain, by contrast, lacks an equivalent statutory framework. Disputes must instead be channelled into litigation or arbitration, both of which entail considerable delay and cost.
Remarkably, a significant procedural innovation has been introduced with the implementation of mandatory mediation in almost all civil court proceedings. As of recent legislative reforms, parties in designated civil and commercial matters must attempt mediation before initiating formal litigation, with courts empowered to suspend proceedings until a genuine effort at settlement has been demonstrated.
Though construction disputes have traditionally resisted mediation due to their technical complexity and financial stakes, this reform could mark a cultural shift in early-stage conflict resolution, although this scenario is still in its first steps of implementation. If interpreted broadly by Spanish judges, this requirement could substantially delay court access and incentivise parties to incorporate mediation clauses and pre-action resolution protocols into construction contracts more systematically.
While the long-term impact remains to be seen, English practitioners should anticipate a greater emphasis on structured negotiation in the Spanish litigation landscape. On the other hand, arbitration offers a viable alternative for parties seeking confidentiality and expert adjudicators. However, arbitration proceedings in Spain are not necessarily faster than court processes, especially where institutional rules adopt formal written stages. The absence of streamlined interim enforcement mechanisms, such as those under English adjudication, remains a significant limitation.
The default civil court procedure is the juicio ordinario, which is used for most construction claims. Proceedings commence in Spain with an extensive written claim (demanda) setting out the facts, legal grounds, and evidence. The defendant’s response (contestación) is equally formal. Following a preliminary hearing (audiencia previa), which serves to address procedural objections and admit evidence, a final hearing is scheduled, often many months later.
The Spanish procedural frame prioritises the written record and severely curtails the oral dynamic. Witness evidence is admitted, but cross-examination is limited. Spanish civil Judges usually adopt a passive role during hearings, focusing on the file and expert documentary evidence rather than oral advocacy. For English lawyers accustomed to the TCC’s interactive case management and evidential fluidity, the Spanish approach may seem rigid and paper-heavy.
Interim measures, though theoretically available under Articles 721 to 747 of the Civil Procedure Act, are challenging to obtain in practice. Spanish courts customarily impose demanding thresholds, including a demonstration of fumus boni iuris (appearance of legal right) and periculum in mora (risk in delay). These requirements make precautionary remedies an exceptional tool, rarely deployed in private construction disputes, particularly if compared with the English jurisdiction.
IV. Substantive Norms: Statutory Impositions and Contractual Constraints
The LOE’s imposition of non-excludable statutory warranties represents a fundamental departure from English norms, where contract terms generally govern defect liability. The Spanish regime delineates three warranty periods: ten years for the building's structural integrity, three years for habitability, and one year for finishings. These periods commence upon practical completion and apply irrespective of the specific contractual allocation.
Spanish law classifies construction participants into distinct statutory roles, primarily under the LOE. These include the promotor(developer), who commissions the works; the constructor (main contractor), who executes them; the proyectista (designer or architect), who is responsible for the project’s technical design; and the director de ejecución (site manager or technical architect), who oversees compliance with the design and technical control of the works. Each of these actors bears specific duties under the LOE, which arise not merely from contract but from legal attribution.
Notably, the LOE imposes a robust regime of joint and several liability among these participants in the event of construction defects, particularly those affecting the structural integrity or habitability of the building. This collective responsibility operates independently of fault allocation or contractual delineation of duties and reflects a consumer-protection rationale embedded in Spanish public policy. For English contractors and consultants, this framework may appear striking, as it contrasts with the expectation of proportionate liability based on defined scopes of work and negotiated risk apportionment. In Spain, unless a party can affirmatively demonstrate that a defect is unrelated to its statutory role, liability is usually presumed. This reinforces the importance of robust contractual back-to-back arrangements and comprehensive professional indemnity insurance for all construction agents operating within the Spanish jurisdiction.
Under Spanish law, the seguro decenal6 is a compulsory insurance mechanism, mandated under Article 19 of the LOE for all new residential buildings. It insures the owner for a 10-year period against structural failure, and policies must be in place before the local authority issues the certificate of habitability. The inability to sell completed properties without this insurance constitutes a de facto bar to market access, underscoring its commercial significance.
On another note, construction-related payment mechanisms are not governed by a statutory framework akin to the Housing Grants, Construction and Regeneration Act7. Instead, Spanish construction contracts typically rely on bespoke or industry-standard payment schedules tied to predetermined project milestones, certification by architects or quantity surveyors, or the issuance of invoices. These are contractual alternatives rather than statutory obligations, and their enforceability rests entirely upon the terms agreed by the parties or professional practice.
There is no statutory entitlement to interim payment or a default prohibition on pay-when-paid clauses, nor are there mandatory timelines for responding to invoices or certificates. The absence of such safeguards can expose contractors, particularly subcontractors and smaller firms, to extended payment periods or strategic non-payment by principals. Retention of title clauses and unilateral deductions are commonly employed by employers without recourse to statutory adjudication, further exacerbating payment risks.
The lack of statutory remedies for non-payment means that contractors usually rely on litigation or arbitration to recover unpaid sums, with attendant delays and costs. There is no Spanish summary procedure equivalent to the enforcement of an adjudicator's decision in England. Even where the non-payment is undisputed, the procedural route to enforcement may require full evidential proof, thereby increasing transaction costs and project-level financial pressure.
This legislative vacuum has an evident disproportionate impact on cash flow within the supply chain. While large contractors may absorb payment delays through financial reserves or parent company guarantees, smaller entities often lack the liquidity or bargaining power to demand timely payment. This has a chilling effect on project momentum and may lead to a greater incidence of claims, project abandonment, or insolvency-related disputes. Consequently, delays and disputes over valuation often trigger formal recourse to litigation or arbitration, further burdening a system already devoid of interim statutory relief.
Liquidated damages for delay (penalizaciones por mora) are enforceable, provided they do not offend against the principle of proportionality. Spanish courts retain the power to moderate penalties under Article 1154 of the Civil Code, remarkably, where performance was partially fulfilled. Contractors should be aware that courts will scrutinise delay claims closely, and documentary evidence, including site diaries and even informal correspondence, is essential.
Extensions of time and claims for disruption are governed by general contract principles, notably Civil Code’s Article 1101 (damages for non-performance), Article 1124 (termination for breach), and Article 1258 (implied duties of good faith). These articles provide a flexible but less certain framework compared to bespoke English clauses. The absence of contractual mechanisms such as Early Warning Notices or Compensation Events requires that parties diligently record and notify events contemporaneously.
V. Alternative Forums: Arbitration, Expert Determination, and Administrative Recourse
Litigation remains the default mechanism for resolving construction disputes, mainly where contracts are silent on alternative forums. However, arbitration is increasingly employed in high-value, technically complex disputes, and Spanish arbitral institutions usually offer a credible infrastructure for efficient resolution under Spanish law.
Arbitral tribunals in Spain can grant interim measures, and many institutional arbitration rules consider the appointment of an emergency arbitrator, although enforcement always requires judicial assistance. Therefore, the efficacy of interim protection remains limited in practice, and practitioners usually resort directly to courts rather than arbitration to avoid substantial delays. Unlike the UK, where adjudicator decisions may be enforced swiftly through summary judgment, Spain lacks a corresponding fast-track enforcement mechanism for non-judicial determinations.
Expert determination is gaining traction, particularly in disputes over valuation or technical compliance. Though known in Spanish law as dictamen pericial vinculante, its enforceability hinges on contractual agreement. If the parties designate the expert’s decision as final and binding, courts will generally uphold it unless it is manifestly unreasonable. However, if the clause is silent on enforceability, the expert’s opinion may serve only as persuasive evidence in litigation or arbitration proceedings.
Public procurement disputes involving award criteria, scoring, or bidder exclusion are handled by specialist administrative tribunals, such as the Tribunal Administrativo Central de Recursos Contractuales (Administrative Tribunal for Contract Appeals or TACRC)8. These bodies provide an expedient forum for contesting procedural irregularities. Their decisions are enforceable, though subject to subsequent judicial review in the judicial review courts.
International parties often stipulate foreign seats of arbitration, among which London, Paris and Geneva continue to enjoy a pre-eminent status, when negotiating construction contracts in Spain. For instance, London’s long-established arbitration infrastructure, neutrality, and the global reputation of its judiciary make it a particularly attractive venue for international dispute resolution related to Spanish construction disputes. Moreover, the availability of experienced construction arbitrators, robust procedural rules, and pro-enforcement judicial practice consolidate its appeal.
While any foreign seat introduces additional considerations regarding recognition and enforcement, arbitration awards in London benefit from the United Kingdom’s full commitment to the New York Convention9 and an enforcement track record that inspires confidence. English law's commercial sensibility and the efficiency of the English courts in supporting arbitration proceedings further recommend London as a seat of choice for international practitioners. Nevertheless, precise and comprehensive drafting, coupled with local legal advice, remains indispensable to ensure enforceability within the Spanish jurisdiction and to pre-empt jurisdictional objections.
VI. Cross-Jurisdictional Considerations: Strategic Guidance for English Practitioners
English professionals undertaking construction projects in Spain must recalibrate their contractual frameworks and risk management strategies to reflect the civil law environment. Chief among these adjustments is the recognition that Spain lacks an adjudication regime akin to that found under English law. This absence heightens the importance of embedding robust dispute resolution clauses within contracts, ideally incorporating multi-tiered escalation mechanisms, clearly defined expert determination procedures, and a tailored litigation or arbitration agreement. Accordingly, every such clause must be drafted with exactitude, specifying governing law, dispute forum, language, and enforcement strategy. Failure to do so may result in procedural deadlock or adverse jurisdictional rulings.
The regulatory and public law landscape also requires meticulous preparation. Therefore, developers must ensure the timely procurement of the seguro decenal to avoid delays in final certification and property transfer. Similarly, contractors must diligently document delay events, site variations, and correspondence, in accordance with Spanish evidentiary norms. Interestingly, communications with subcontractors and consultants must adhere to formal notification procedures under Spanish law, where informal exchanges carry limited evidential weight.
Contractual terms that seek to contract out of or curtail liabilities under the LOE will be rendered void. Risk must therefore be allocated indirectly, through ancillary obligations, indemnity provisions, and compulsory insurance, within the boundaries of statutory compliance. Given the prevalence of mandatory rules in Spanish construction law, English practitioners are strongly advised to collaborate with local counsel at the drafting stage to safeguard enforceability.
In parallel, cultural fluency remains essential. Spanish construction culture places a premium on interpersonal relations and informal site-level consensus. While this may offer flexibility in resolving minor disputes, English parties must not forgo formal record-keeping or issue resolution protocols. Reliance on oral agreements or undocumented instructions may imperil future claims.
Spanish civil procedure is becoming more receptive to alternative dispute resolution, with recent legislative initiatives mandating mediation before litigation in many civil and commercial disputes. This cultural evolution, although it may signal a gradual shift toward consensual resolution methods in the construction sector, in practice represents another delaying step before entering into litigation proceedings in an already slowed jurisdiction. In any case, practitioners approaching Spanish court disputes should be prepared for mediation as a procedural prerequisite and incorporate such expectations into their dispute strategy.
Looking ahead, Spain could benefit from introducing a statutory adjudication regime that mirrors international best practices. Such a reform would alleviate judicial backlog, secure interim cash flow for contractors, and enhance Spain’s reputation as a secure jurisdiction for construction investment. However, until such reforms materialise, English practitioners must approach Spanish projects with detailed preparation, legal conservatism, and a contractual architecture designed with dispute resolution at its core.
Josep Galvez, Barrister, 4–5 Gray’s Inn Square, London
Email: JGalvez@4-5.co.uk
Josep Galvez is a barrister specialising in international arbitration, construction law, and public law, with particular experience advising on cross-border disputes in civil and common law jurisdictions. He previously served as a judge in Spain and has extensive experience in matters involving sovereign liability, infrastructure development and investment treaty arbitration.
- 1Royal Decree of 24 July 1889 Publishing the Civil Code (Real Decreto de 24 de julio de 1889 por el que se publica el Código Civil).
- 2Law 1/2000 of 7 January on Civil Procedure (Ley 1/2000, de 7 de enero, de Enjuiciamiento Civil).
- 3Law 38/1999 of 5 November on Building Regulation (Ley 38/1999, de 5 de noviembre, de Ordenación de la Edificación).
- 4Law 29/2002 of 30 December, First Book of the Civil Code of Catalonia (Llei 29/2002, de 30 de desembre, primera del Codi Civil de Catalunya).
- 5Law 5/2015 of 25 June on Basque Civil Law (Ley 5/2015, de 25 de junio, de Derecho Civil Vasco).
- 6Mandated under Article 19 of the LOE, this insurance is compulsory for developers and provides cover against structural defects in residential buildings for ten years.
- 7Housing Grants, Construction and Regeneration Act 1996.
- 8Established under the Royal Decree 817/2009 of 8 May Partially Implementing the Public Sector Contracts Law (Real Decreto 817/2009, de 8 de mayo, por el que se desarrolla parcialmente la Ley de Contratos del Sector Público).
- 9Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958.