Litigation

Last verified on Wednesday 27th September 2017

Costa Rica

Alejandro Pignataro
Pignataro Abogados
  1. 1.

    Outline the court system in your jurisdiction.

  2. Pursuant to the Judicial Branch Organic Act No. 7333, the Costa Rican judicial system is organised under a hierarchical structure of courts and superior tribunals with the Supreme Court of Justice, constituted by its four specialised chambers or sections (civil, commercial and administrative law; labour, family and insolvency law; criminal law; and constitutional matters) as the superior judicial authority.

    The procedural system establishes, in principle, two complete instances encompassing the processing, resolving and execution of legal controversies. (This is the ordinary phase of each process, not the only way to appeal). All new controversies must be submitted to a court of first instance, which may be specialised or mixed in its subject matter competence and is, in most cases, constituted by a single judge. First-instance judgments may be appealed before the second instance courts, constituted by three judges. These Superior Tribunals are specialised by subject matter in the main circuits, while mixed courts are common elsewhere.

    As an exception, the Administrative Contentious Court, constituted by three judges, serves as a first instance for administrative contentious matters. Its decisions have no recourse, but may be challenged via the exceptional cassation appeal. Depending on the nature of the administrative act or the entities involved, the cassation recourse must be brought before either the Court of Cassation for contentious-administrative matters or the First Chamber of the Supreme Court of Justice.

    Finally, depending on the amount of the claim, second instance decisions may be challenged via a cassation appeal. You have the right of cassation appeal because of formal specific errors, or because of specific substantive errors (articles 594 and 595 of the Civil Procedure Code). This recourse is subject-matter-specific and is brought before the respective chamber of the Supreme Court of Justice, each of which serves as a Cassation Tribunal as follows:

    • ​First Chamber: civil, agrarian, commercial and administrative disputes are brought before this section;
    • Second Chamber: resolves labour, family, bankruptcy and insolvency law matters;
    • Third Chamber: focuses exclusively on criminal matters (five justices constitute these three chambers); and
    • the Constitutional Court: this section, constituted by seven justices and informally known as the "fourth chamber", is not a cassation tribunal and, pursuant to the Constitutional Jurisdiction Act No. 7135, it decides exclusively on claims of breach of constitutional rights and liberties and the unconstitutionality of norms.

    Together, the four chambers constitute the Plenary Court, vested mostly with administrative functions and powers related to the administration of justice, however, having the power to issue resolutions on a jurisdictional basis. 

  3. 2.

    What remedies are available to a local entity or resident 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?

  4. Disputes between a local and a foreign entity are certainly encumbered ab initio by intricate discussions of procedural order, specifically on jurisdiction grounds. In accordance with domestic law, controversies pertaining to contracts with effect in the Republic of Costa Rica, regardless of where they were executed or when at least one of the contractual parties involved is a national of Costa Rica (the jurisdiction based on ratione personæ: article 23, Civil Code of the Republic of Costa Rica; or property located in Costa Rican territory or co-related rights in rem (articles 24 and 25 Civil Code of the Republic of Costa Rica) may be brought before ordinary Costa Rican courts. Generally, there is an inclination to admit and draw to domestic jurisdiction controversies with any such elements present, even if not patent.

    Naturally, Costa Rican legislation and courts also recognise forum selection and arbitration clauses and courts will decline to examine any controversy that may contravene the said contractual agreements, regardless of the presence of one or several local elements.

    This becomes clear in analysing article 46 of the Civil Procedure Code of the Republic of Costa Rica, which establishes the international competence of Costa Rican judges in the following cases:

    • when defendants, regardless of their nationality, have their domicile in Costa Rica;
    • when the obligation must be fulfilled in Costa Rica; and
    • when the claim has its origin in an event occurring or an act executed in Costa Rica.

    Article 47 thereof further adds that the claim brought before a foreign judge does not generate a lis pendens situation.

    Under article 33 of the Constitution all persons are equal before the law; further, article 41 thereof establishes that everyone shall find reparation to injuries or damages suffered directly over their property or moral interests, guaranteeing at the same time that justice must be prompt, thorough and administered without discrimination and in strict accordance with the law.

    The equitable treatment of the parties is also a well-established procedural principle, strongly upheld by Costa Rican courts and hence, the same rights and obligations are afforded to foreign and domestic entities in their conditions of litigious party. 

    There is, indeed, a general requirement to make a security deposit only when a party pursues the precautionary seizure of certain assets, aimed at guaranteeing possible pecuniary damage derived thereof, but it is demanded to the movant regardless of their nationality. There is no particular requirement, condition, onus or payment required by a litigious party by virtue of their nationality or their corporate domicile. 

  5. 3.

    What is the process by which a foreign entity may challenge the jurisdiction or venue of the; court where litigation is filed? What factors are considered when a court evaluates whether; to exercise jurisdiction over a foreign entity?

  6. Beyond the peaceable recognition and enforcement of forum selection and arbitration clauses – subject to formal and substantive examination by a domestic judge if challenged, which allow foreign entities to challenge the territorial competence of a local court – either party, regardless of their nationality or domicile, may still challenge the competence of domestic courts invoking either of four possible exceptions:

    • ratione territoriæ, alleging that the dispute has no effect in the territory of Costa Rica;
    • ratione personæ, based on the nationality or domicile of the parties involved – in this case, the lack of personal connection to the territory;
    • ratione temporis, calculating the time frame for bringing to law a case when it has expired under domestic legislation; or
    • ratione materiae, focusing on the controversy’s subject-matter in light of the domestic court competence.

    The latter is usually decisive in international disputes where there have been divergent attempts to draw the case to a preferable jurisdiction.

    Procedurally speaking, it can be also challenged via an exception of incompetence through which, prior to discussing the merits of the case, the court must decide on its competence. The decision has recourse to the First Chamber of the Supreme Court acting as Cassation Tribunal. 

  7. 4.

    What is the most common type of litigation encountered in your jurisdiction by foreign entities?

  8. The type, object, scope and amount of the litigation usually encountered by foreign entities varies greatly depending on the kind of economic activity they carry out and, consequently, on the acts they execute. Generally speaking, contractual matters, for example, breaches and liquidated damages claims, make up a considerable part of foreign entities’ litigious cases. (For example, the conflicts pertaining the representation of foreign entities.) As mentioned before, even the procedural approach to international territorial competence relies mostly on contractual considerations (articles 23, 24 and 25 of the Costa Rican Civil Code, among others). However, foreign entities are increasingly litigating against the state as contractual party at a contentious-administrative level.

  9. 5.

    How frequently do parties pursue criminal actions 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?

  10. By virtue of the general and definite bifurcation between civil and criminal law and procedure, a commercial dispute does not necessarily entail a criminal action, let alone an ex officio prorogation of competence from a civil to a criminal court, as in Costa Rica there are no specialised commercial courts and commercial matters are brought before the civil courts. Even a commercial dispute with a potential criminal element – provided it is a private prosecution – may be completely resolved at a civil instance. However, if the civil judge notices a public order offence during a civil dispute, he or she should communicate this to the Prosecutor’s Office.  

    On the other hand, the collection of damages declared by a criminal court must be enforced via a separate civil reparatory action before a civil court. Civil damages may be claimed before a criminal court via a civil action for damages, yet the prevailing party must execute such award before a civil court. However, as part of the litigious strategy in a commercial dispute, the legal counsel may start a criminal action in tandem with the core commercial or civil case in order to exert pressure and precipitate a certain result, but on the contrary, this strategy has been proven to delay and cloud the main procedure and to make the plaintiff’s economic expectation illusory. In support of this thesis, the procedural institute of prejudicialidad (articles 202 and 400 of the Civil Procedures Code) orders the suspension of the civil procedure in light of the existence of a criminal case. According to article 202 of the Costa Rican Civil Procedure Code, criminal court proceedings that may influence or affect the future of an ongoing civil or commercial court case will result in the latter being suspended until the final resolution of the criminal matter is reached. The idea is to avoid ultimately hindering the commercial dispute and vastly increasing litigation expenses while defusing the possibility of economic reparation.

  11. 6.

    Is there a right to a trial by jury in a commercial dispute?

  12. The Costa Rican justice system does not contemplate trial by jury in any subject matter. All legal disputes are brought before the court and decided by individual judges or tribunals.

  13. 7.

    Do courts require or strongly encourage mediation or other alternative dispute resolution methods before or during a litigation proceeding?

  14. Mediation, conciliation and, in general, alternative dispute resolution mechanisms have been enshrined in the domestic legislation and promoted by the judicial power since the enactment of the Alternative Dispute Resolution and the Promotion of Social Peace Act No. 7727 (1997). Beyond fostering out-of-court dispute resolution and empowering public entities and private centres to encourage these mechanisms, this Act also promotes and in most judicial instances (labour, commercial, civil law and misdemeanour cases) obliges the exhaustion of a conciliation stage prior to trial. The purpose thereof is not only to alleviate the clotted judicial system of a litigious society, but also to promote easier, swifter and cheaper ways of resolving legal controversies, both to the judiciary’s and the citizen’s benefit.

    Pertaining to the procedural obligation to hold a conciliation hearing prior to the initial hearing, in the case an agreement is reached therein, it becomes res judicata upon its homologation. Article 314 of the Civil Procedure Code goes beyond this in recognising the competence of the judge to promote, at any stage of the process, a space for conciliation through an ad hoc hearing. The aforementioned Act No. 7727 also admits the possibility, even within a legal procedure, of arriving at an extra-judicial agreement without the judge’s mediation, prior to the decision of the case.

  15. 8.

    Will choice of law and choice of forum provisions in a contract be recognised?

  16. Yes. Both the choice of forum in its diverse forms and choice of law provisions are recognised by domestic tribunals, which will decline the admission of claims where another jurisdiction has been clearly agreed upon contractually, regardless of the presence of an element that may allow its intervention. However, where there is controversy, the said clauses shall be revised from a formal and substantive perspective by the domestic judge, who will then determine on his or her own territorial competence, or even on the delegation thereof to another tribunal within the territory of the Republic of Costa Rica. This decision has recourse before the First Chamber of the Supreme Court acting as Cassation Tribunal.

  17. 9.

    Does your jurisdiction have a specific arbitration law? Are arbitration awards enforced by the courts? May courts enjoin/prohibit arbitration proceedings in matters that are also pending in a court proceeding?

  18. In this regard, it is necessary to distinguish, in line with the present discussion, between international commercial arbitration and domestic arbitration.

    In the latter case, although there is no subject-specific regulation, the Alternative Dispute Resolution and the Promotion of Social Peace Act No. 7727 (1997) encompasses mediation, conciliation, arbitration and all major forms of alternative dispute resolution, devoting several chapters to thoroughly regulating arbitration from a procedural and substantive perspective. Hence, Costa Rica does have an array of specialised rules that not only recognise the validity of arbitration, but also promote it as an effective alternative for the settlement of disputes. 

    Arbitration awards are granted the status of res judicata, and may be notarised at the request of any of the parties. Arbitration awards only admit two qualified recourses, which must be brought before the First Chamber of the Supreme Court of Justice: annulment and review actions (articles 64-67, Act No. 7727). However, there is no mandatory court enforcement of arbitration awards. The prevailing party may execute its arbitration award before the ordinary civil courts.

    As explained, the Costa Rican legal and judicial system award equal recognition to judicial decisions and arbitral awards, based on the stipulations of Act No. 7727. In this vein, in order to be considered valid, arbitral awards must comply with the same formal requirements as the judicial decisions (article 705, Costa Rican Civil Procedure Code).

    As with judicial resolutions, in order to safeguard the execution of an arbitral award in the case of non-compliance by either party, the affected party might seek remedy in the ordinary jurisdiction. In fact, the same norm (article 12, Costa Rican Civil Procedure Code), under the heading Assistance to Arbitrators and Execution of the Arbitration Award, furnishes arbitrators and arbitral tribunals with procedural assistance from the relevant judicial entity to execute jurisdictional acts, which in nature are, however, necessary within an arbitration procedure, including the issuance and execution of precautionary measures, injunctions and obtaining and securing evidence.

    It is a well-established principle that the same controversy cannot be discussed in several instances at the same time, including bringing the same case before an ordinary court and an arbitral tribunal. Under the litis pendencia institute, which is similar to the American lis pendens but is not restricted to real estate and applies to any case that has been brought before several instances at the same time, a court of law admitting the controversy on competence grounds immediately disqualifies other courts from admitting or further examining the matter at stake. The acts of the non-competent courts after the litis has been established may be annulled.

    On the other hand, and on arbitration in particular, Act No. 7727 admits the possibility of parties of an ongoing judicial process submitting the controversy to an arbitration panel. If agreed upon and accepted by the judge, the judicial procedure is suspended and the competence in connection therewith is delegated to the chosen arbitral panel. As a form of a previous defense, the defendant may also argue the existence of an arbitration agreement (article 298, Costa Rican Civil Procedure Code).

    Last, Costa Rica does have a specific law on international commercial arbitration, the Law on International Commercial Arbitration based on the United Nations Commission on International Trade Law Model Law No. 8937 (2011). This law applies exclusively to international commercial arbitration to which Costa Rica adopted, as did Chile and Colombia, a dual approach. The Costa Rican norm also has a more modern approach, having adopted the 2006 and not the 1985 Model Law. 

  19. 10.

    Do the courts recognise attorney-client privilege? If so, is the privilege applicable to in-house lawyers?

  20. Yes, Civil and Criminals Courts recognise and have consistently upheld attorney-client privilege. Even though it is primarily regulated in a private statute, courts peaceably accept and defend this principle, which is set forth in articles 41, 42 and 43 of the Costa Rican Bar Association Code on Juridical, Moral and Ethical Duties (2004). Article 41 thereof defines attorney-client privilege or, more precisely, professional secrecy, as the information received by the attorney in the said capacity from his or her client, the adversaries or their legal counsel, including that emanating from preliminary conciliation or settlement interviews, or from third parties. The knowledge or information acquired acting as an attorney and derived from the contact, examination or holding of private documents is also protected. The attorney-client privilege continues after the said relationship is terminated and, if called to testify under oath within a judicial cause, the attorney is obliged to invoke the said privilege and refuse to answer questions that may compromise it. As notable exceptions to this principle, the attorneys’ exercise of their own defence or the need of avoidance of the conviction of an innocent person (article 42) can be highlighted. Also, if a client confesses under confidentiality their intention to commit a criminal act, the attorney may renounce this privilege and denounce them after having exhausted all dissuasion mechanisms. The institute is so respected by the judiciary that courts have even upheld the impossibility to incorporate as evidence communications exchanged under the attorney-client privilege (Resolution 00027-2013, Tribunal de Apelación de Sentencia Penal, III Circuito Judicial de Alajuela, San Ramón) or for a tribunal to use parts of a dialogue between attorney and client prior to the start of the concluding remarks (Resolution 00049-2009, Sala Tercera de la Corte Suprema de Justicia).

    Last, neither the cited Code nor the disciplinary organs or courts have distinguished between trial attorneys and in-house counsel. The duty is equally posed upon all members of the Costa Rican Bar Association and, hence, an in-house lawyer may be accused of breaching this privilege. 

  21. 11.

    Are legal proceedings public? In other words, can the general public observe hearings and review the filings of the parties?

  22. As a general rule, legal proceedings are public; likewise, third parties may consult filings and files without having a direct interest in the matter if they are lawyers or have an authorisation therefrom for this purpose.  Only interested parties, their lawyers and law students may attend the hearings (article 358, Costa Rican Civil Procedure Code). This is true for most civil, commercial, agrarian and administrative procedures. Some notable exemptions are juvenile crime cases, cases where minors are involved as victims, for example, sexual abuse cases, when normally the only part of the hearing where the minor appears is private, and also family cases where minors are involved.

    Noteworthy is the fact that Act No. 7727 establishes the confidentiality of arbitral procedures; further, article 60 thereof provides the parties with the possibility of agreeing on the confidentiality of the award.

    Pertaining to the consultation of filings and judicial files, their publicity must be understood as to be available only to involved parties or parties with a legitimate interest therein; however, they are available for consultation by any attorney, even without any relation to the case, except in criminal cases, and hence they can be considered public. 

  23. 12.

    May a defendant join other potentially liable parties to the existing lawsuit?

  24. Yes, a defendant may voluntarily join other co-defendants, provided there is coincidence in the object of the claim. Further, if a defendant believes that there are other potentially liable parties that have not been brought into the process or brought under an erroneous premise, for example, as a witness, interested third party, etc, they may draw them to the process via the institute of litisconsorcio pasivo or joint defence. Should the judge find merit on the request based on the identity of the litigious object and its relationship to the potentially liable parties, the process shall be suspended until they are brought to, and constituted as co-defendants, in the process (article 298, Costa Rican Civil Procedure Code). A defendant, may also counterclaim and drag another plaintiff to the process (article 308, Costa Rican Civil Procedure Code).

  25. 13.

    How may a party enforce a foreign judgment?

  26. As in many Civil Law countries, this may be achieved via the exequatur instrument, regulated in article 705 of the Costa Rican Civil Procedure Code, which implies the recognition and enforcement of a foreign judgment or award by the domestic judicial system. It is a summary procedure that prima facie admits the validity of the judgment or award and the competence of the issuing entity, subject mainly to the verification of six main elements, only one of them formal:

    • that all presented documents are duly legalised;
    • proof that plaintiff was either duly notified, represented or declared in contempt as per the law of the issuing country and that they were legally notified of the resulting judgment or award;
    • that the controversy’s object was not of exclusive competence of the Costa Rican courts;
    • that there is not an ongoing procedure in Costa Rica, nor that an executed resolution has given the case res judicata status;
    • that the said sentence or award can be legally executed in the country of origin; and
    • that it is not contrary to public order, as understood domestically, for example, the matrimony of a minor under the age of 15 or the conviction of an individual who was not granted the right to defence or to double instance.

    On the execution of foreign arbitral awards, articles 35 and 36 of the Law on International Commercial Arbitration based on the United Nations Commission on International Trade Law Model Law No. 8937 (2011) recognise a simpler procedure, therefore, not using the exequatur test described above and processing instead the recognition of the international award via the regular procedure for the execution of judicial sentences. 

  27. 14.

    How is service of process effected?

  28. Pursuant to the Judicial Notices Act No. 8687 (article 19) service of process must be effected via “personal” means. “Personal means” is defined as in person or at the residence of the defendant.  In the latter case (residence), anyone who seems to be 15 years of age or older may be served with the court documents. This supposes the defendant must receive in person (or through a representative, in the case of entities) the initial notice of a process. Subsequently, all parties have the duty to submit to the court an electronic means of service for future notices (fax or email). All following resolutions will be served via such electronic means. 

    In order to effect this first notice several means are available to plaintiffs. The first is the official court notices system. This implies that an auxiliary officer of the sourt must to personally go and serve the process on the defendant. Despite the fact that this is the more traditional and inexpensive way to proceed, it normally takes more time given the work load of such auxiliary officers of the sourt. Another alternative is, when filing the lawsuit plaintiff may request the court for an authorisation for a notary public to serve the process on the defendant. In this case, the sourt will issue a resolution with said authorisation and the notary public must serve it on the defendant acting as an auxiliary officer of the sourt.

    If the process must be served on a defendant located outside of Costa Rica, the plaintiff may resort to the Consular Service (which, in this case, will operate as an auxiliary officer of the court) or request an authorisation for a notary public to travel abroad and serve the defendant. 

    Finally, if several attempts are made to serve the process and they fail because of the apparent absence of the defendant, service of process may take place through the publication of a notice in the Costa Rican official newspaper La Gaceta. If the defendant does not appear within the period granted for that purpose via the publication, the court will nominate a “procedural guardian” who will represent the interests of the absent party and the process shall continue normally (Civil Procedure Code, article 262). The plaintiff must pay a fee in these cases established by the court.

  29. 15.

    How much time does a party have to answer a complaint? Can a party extend this time?

  30. Procedural terms vary radically according to the subject matter, the nature of the process, the kind of action pursued and, sometimes, when allowed by law, the judge’s discretion. It could be as short as 24 hours for some interlocutory acts and up to 30 days for delivery of a response to a civil claim.

    Given that different procedural laws provide for a plethora of terms depending on the subject matter, we will offer a basic overview of the civil procedure, by virtue of it not only being the most common, but also as it also applies to commercial matters.

    Pursuant to article 295 of the Costa Rican Civil Procedure Code, once the civil suit is filed and any defects corrected, for which the judge normally provides the plaintiff between one and five days, the judge delivers the statement of claim to defendant, who will then have a peremptory term of 30 days to respond or challenge it.

    In principle, these deadlines are rigid and cannot be extended or suspended (article 143, Costa Rican Civil Procedure Code); however, as an exception, article 201 thereof admits the possibility of a temporary suspension of terms for litigious parties without the temporary capacity or means to appear before court or respond to the claim, for example, caused by serious illness, absence, etc.

  31. 16.

    What types of pretrial proceedings are available in court? What kinds of dispositive motions can be filed before trial? Under what circumstances may a lawsuit be dismissed prior to trial?

  32. Certain pretrial proceedings are available in court in order to assure the future results of the process. For instance, in the event of great jeopardy and urgent necessity, injunctive relief may be ordered by the court. As provided in articles 241 and 243 of the Civil Procedure Code, if such relief is granted, plaintiff is obligated to file the lawsuit within a fixed period of time. Failure to do so shall result in said injunctive relief ceasing immediately and plaintiff becoming liable to defendant for the damages and losses caused by such measure.

    According to the Civil Procedure Code (article 242) the nature of injunctive relief may be as broad as required by plaintiff. Nonetheless, injunctive relief orders issued by the court may in no way substitute a final verdict; they only constitute a means of ensuring the results of the process and the protection of the object in discussion, nothing further. Normally this kind of judicial protection measures are related to liens on properties, express prohibition of an action or behaviour, protection of a specific object or business transaction, precautionary seizure of an asset (aimed at guaranteeing possible pecuniary damages derived thereof), etc.

    In the same sense, if the reception of a relevant evidence is urgently needed, because there is a great risk of losing it (for example, the testimony of someone who is a terminal patient), previous request from the interested part, the Court may issue an order to gather such evidence.

    A lawsuit may be dismissed prior to trial under a few qualified circumstances, all of which are pre-defined by law, including when a previous defence is admitted under article 298 of the Costa Rican Civil Procedure Code. Dismissal is considered exceptional rather than common under Costa Rican procedural law. The most usual occurrences of this are when a lawsuit presents inconsistencies, which are not amended by the plaintiff, despite a formal resolution issued by the court granting time to do so. The same would occur in the existence of an arbitration clause or evident lack of jurisdiction of the court.       

  33. 17.

    How long does it take to obtain a first-instance judgment in a typical commercial litigation case?

  34. Unfortunately, there are no statutory time maximums for the processing of a case and the issuance of a final resolution, a process that is often affected by a series of internal and external circumstances and occurrences, including the parties’ judicial hyperactivity or reckless litigation. However, based on our experience in civil and commercial litigation, an educated time estimate for a simple commercial litigation case without major occurrences or hindrances, calculated from the moment the claim is filed till the first-instance decision is attained, can be processed between 18 and 24 months.

  35. 18.

    Is a party required to submit all facts, arguments and supporting evidence with its initial pleading?

  36. Costa Rican procedural law is inspired and rigorously governed by the principles of due process and legal certainty, which does not only integrate the whole legal system but informs every legal procedure. In this regard, direct estoppel guarantees that procedural acts are executed at the appropriate stage in the procedure without the possibility of carrying them out or reviving extempore. 

    In principle, the filing of the claim or initial pleading is the pertinent moment to submit all facts, arguments and supporting evidence, precisely in order to safeguard the counterparty’s right of defence, who should be able to know, at the moment of being served, the full scope and extent of the controversy, as well as to gather the arguments and evidentiary elements to challenge it accordingly. Under the Costa Rican procedural perspective, with the exceptions set forth below, extemporaneous addition of claims, facts or evidence negatively affect the resolution of the controversy and subject the counterparty to a state of defencelessness.

    However, some exceptions catering to the nature of the process have been established. For example, it is possible to include new facts in the process in the event that the said occurrences have taken place after the initial pleading. In the same vein, our system contemplates the exceptional "evidence for a better resolution", which allows furnishing new evidence that may be crucial in resolving the case, but its admission by the judge is discretionary. “Evidence for a better resolution” is not a way to offer evidence that the party should have offered within its initial pleading. Likewise, although, in principle, there is no possibility in broadening the factual or evidentiary base of the initial pleading, the appellate court may admit certain new evidence so long as it aids clarifying an obscure or unproven fact.

    Finally, regarding the presentation of allegations, there is no temporary limitation when the case is discussed in the first and second instances. However, having reached the last recourse, it must be limited to the ones that have already been presented. Every allegation should be related to a fact submitted at the appropriate procedural time.

  37. 19.

    Does litigation provide a process for investigating claims or right to discovery of evidence prior to trial?

  38. In Costa Rica, the right to discovery of evidence prior to trial does not exist under procedural law, nor does it provide a process for investigating claims. However, there is a procedural exception by which, having a fair cause, the parties of a litigious controversy may convene to an advanced "discovery period", pursuant to article 253 of the Costa Rican Civil Procedure Code, in which they promote preliminary efforts for the collection of evidence. As explained, this is an extraordinary resource and, as such, may only be invoked upon risk of evidence being destroyed or disappearing, for example, due to natural disasters or the action of third parties. Article 245 of the Costa Rican Civil Procedure Code also allows the interrogation of a potential defendant prior to trial.

  39. 20.

    Does litigation provide a process to subpoena or obtain documents or testimony from third parties?

  40. Yes. The Costa Rican Civil Procedure Code furnishes parties with means for the collection of evidence in possession of third parties; article 361 thereof explicitly establishes the subpoena process pertaining to the deposition of witnesses. In this vein, article 336 sets forth that the refusal to declare their personal condition over personal acts, when allowed by law, concerning the non-attendance at the hearing or the refusal to answer properly and thoroughly gives grounds to the judge to declare the interrogated party as self-confessed, the procedural consequence thereof being that all the controversial facts, without evidence in the contrary, are deemed as truthful and affirmative.

    Finally, pertaining to the access of documents in the hands of third parties, which are relevant to the controversy, article 246 of the Costa Rican Civil Procedure Code establishes the document production process, by which the judge issues an order for the said documents, having proven their relevance, to be brought before the court for exhibition. This is easily achieved when referring to public documents or documents in the possession of public entities; applications for documents in the hands of private subjects are rare and only exceptionally granted. It is important to note that, pursuant to article 393 of the Costa Rican Civil Procedure Code, a person who is not a party to a civil action may not be compelled to exhibit private documents before the court.

  41. 21.

    Does the judge or opposing counsel examine witnesses?

  42. Both counsel examine witnesses. Costa Rican procedural law recognises and encourages the common nature of evidence gathered or made available within the legal procedure, namely, filed evidence is readily available to all interested parties regardless of who provided or produced it. Testimonial evidence is no exception. Article 355 of the Costa Rican Civil Procedure Code establishes that once the proposing party finishes their examination, the counterparty and even the judge may cross-examine their witness. However, this cross-examination possibility is limited to the facts on which the proposing party examined the witness, without any possibility to pose exorbitant questions, which would be overruled.

  43. 22.

    How may evidence be challenged? Are there specific rules of evidence?

  44. The rules of evidence are established in article 316 of the Costa Rican Civil Procedure Code.  Evidence should be related to a legal fact submitted or argued at the right time, and only if it is contentious or disputed. Evidence must be legal.

    The Costa Rican Civil Procedure Code establishes a test on the procedural value of all possible evidentiary elements. However, the judge ultimately ponders their relevance under the rules of rationality and good judgment.

    Nonetheless, there are iuris tantum presumptions regarding certain evidence, as per article 336 of the Costa Rican Civil Procedure Code, confession is vested with the highest evidentiary value. Likewise, public documents are covered with an iure et de iure presumption by which they are deemed to be true, correct and precise unless patently proven otherwise (article 370, Costa Rican Civil Procedure Code).

    Having stated the above, all evidence in Costa Rica is subject to challenge by the counterparty or third parties. For instance, pertaining to testimonial evidence, the suitability of witnesses offered may be objected to by the counterparty. Testimonial evidence is not appropriate for proving certain facts of contracts according to article 351 of the Costa Rican Civil Procedure Code. As for documentary evidence, there are several methods, including forensic and technical examinations, to challenge their veracity (articles 396 to 399 of the Costa Rican Civil Procedure Code). Similar tests are applied to forensic advice (expert opinions), confessional statements and judicial recognition of documents.

  45. 23.

    Do courts typically allow hearings at or before a trial? At what stage may parties present expert witness testimony?

  46. Using ordinary civil proceedings as a reference, procedural regulations define the time and manner of hearings, which are programmed prior to trial to present and examine evidence, or granted to receive the parties’ preliminary or opening statements. In situ inspections or the examination of forensic or expert advice also allow for hearings before trial. As required by Act No. 7727, prior to trial, the judge must summon the parties to a conciliation hearing. Exceptionally, it is possible that courts summon the parties to a hearing in order to present the application of the remedies invoked to a certain resolution. According to the Costa Rican Civil Procedure Code, only the settlement and evidence hearings, and of course preliminary hearings in case of injuctive relief measures, may be held, as the courts may not set hearings not expressly foreseen by law (article 139, Costa Rican Civil Procedure Code). It must be noted, however, that Costa Rica does not have a fully oral procedural system, but one even less developed in the civil instance and, as such, extraordinary hearings tend to be scarce.

    Pertaining to the involvement of expert witness testimony; in principle, it can only be proposed with the filing of the claim or controversy or at the moment of its challenge, and analysed during the evidence examination hearing. However, overcoming relevant facts within the process may require its involvement, as required by the judge.

  47. 24.

    What must be demonstrated to collect a debt based on a written instrument?

  48. Traditionally, debts were collected through an ordinary civil proceeding, and a summary procedure was available should a valid enforceable document, as defined by the Civil Procedure Code and the Commerce Code, be presented with the filing, pursuant to article 432 of the Civil Procedure Code.

    Otherwise, an ordinary civil proceeding ought to be filed, with the advantage that not only enforceable titles, restricted to those set forth by law, but also any kind of instrument documenting a debt would give valid ground to a claim. On the downside, the process has tended to be tremendously cumbersome, as not only the validity and authenticity of the instrument has to be proven, but also the existence and standing of the debt claimed, as well as the debtor’s acceptance thereof.

    Recently, with the enactment of the Judicial Collection Act No. 8624, a swifter procedure has been made available to collect debts that are monetary, liquid and overdue, be they based on a public or private instrument, enforceable or not.

    In general terms, the said document must comply with these minimum requirements: 

    • it must be an original or a certified copy;
    • it must clearly and indubitably state who the debtor is with the signature of the debtor or, alternatively, signatures of two witnesses on it; and
    • it must clearly state the debt amount and the due date.

    To be enforceable, the debt must be due and no special execution condition must have been agreed upon in the debt instrument. 

  49. 25.

    What remedies are available in your jurisdiction to a minority shareholder of a corporation in a dispute with the corporation or the majority shareholders?

  50. Minority shareholders enjoy limited protection under international standards. 

    Plural-vote shares are expressly prohibited and the company’s by-laws or incorporation agreement may not partially or totally restrict the voting right entailed to common shares (article 139, Costa Rican Commerce Code). Non-common or other kinds of shares may have their voting right restricted, but such limitation shall not apply to a general shareholders’ meeting convened to discuss the company’s term or purpose, its merger or to establish its corporate domicile outside the Republic of Costa Rica (article 145, Costa Rican Commerce Code). In the same vein, ‘founder’s bonds’ are limited and devoid of political rights, so as to avoid abuse from founding shareholders or partners (article 148, Costa Rican Commerce Code).

    Further, any shareholder has the right to demand at the general shareholders’ meeting a meeting in order to discuss the annual financial statements and to decide on the distribution of profits derived thereof (article 141, Costa Rican Commerce Code).

    In the same vein, article 155 of the Costa Rican Commerce Code establishes one mandatory general meeting to be held within three months after the end of the fiscal year in order to discuss management and financial statements, agree on the distribution of dividends and decide on board member appointments, thus guaranteeing all shareholders the right to information and safeguarding their political rights.

    More specifically, the shareholder(s) representing at least 25 per cent of the company’s interest may request at any given time in writing the holding of a shareholders’ meeting to discuss the points proposed by them (article 159, Costa Rican Commerce Code). This petition may be filed even by one shareholder regardless of his or her total interest in the company, in the following cases:

    • when a shareholders’ meeting has not been held in the past two years; and
    • when the said meetings did not discuss the matters indicated in article 155 of the Costa Rican Commerce Code, as stated above.

    In both cases, upon the management’s refusal to summon the meeting, the request may be filed before a judge.

    Pertaining to the decision-making process and voting strategies within meetings, article 172 of the Costa Rican Commerce Code allows shareholders holding individually or jointly at least 25 per cent of the company’s interest, to request the suspension and extension, for up to three days and without the need of a new summons, of the voting on any decision on which they believe they have not been properly informed. This right may only be exercised once for the same matter.

    In line with the defence of the right to information, all shareholders may request, in the course of a meeting, all the documents and clarifications necessary regarding the matters included in the discussion agenda. Management is legally obliged to share them unless they deem it jeopardises corporate interest. This exception shall not apply when the request is filed by at least 20 per cent of the represented interest (article 173, Costa Rican Commerce Code).

    A meeting agreement shall be deemed null when:

    • the corporation does not have the legal capacity to decide upon it;
    • when it was agreed to in contravention of the applicable legislation; or
    • when incompatible with the corporation or the company’s legal nature, or it contravenes stipulations meant to protect shareholders or in defence of public interest (article 176, Costa Rican Commerce Code).

    This annulment action has a statute of limitations of one year as of the moment the agreement was reached or recorded before the Public Registry (article 177, Costa Rican Commerce Code).

    Lastly, all shareholders may request the annulment of a meeting, beyond the causes set forth above, in observing the following requirements:

    • that the claim establishes the violated by-law’s article or legal precept, indicating the nature of the said infraction;
    • that the suing shareholder(s) did not participate in the meeting or voted negatively against the resolution; or
    • that the claim was filed within one month after the adjournment of the contested meeting (article 178, Costa Rican Commerce Code). 
  51. 26.

    What rights are available in the courts for someone holding a maritime lien interest in a vessel?

  52. The Costa Rican civil law and registry system allows for the recording of vessels before the Public Registry of Property, as well as of any liens in connection therewith. The execution of the lien would follow the simplified procedure made available with the enactment of the Judicial Collections Act No. 8624, as with any other duly recorded lien. If there is no recorded lien, an ordinary civil proceeding as described in question 22 must be filed, which poses the challenge that, in order to secure the result of the process and seize the vessel as a precautionary measure, the plaintiff must pay, regardless of their nationality or domicile, a security deposit of at least 25 per cent, in order to cover the potential damages derived from a reckless or unfruitful legal action. 

  53. 27.

    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?

  54. This point has been extensively addressed in question 22. There is indeed a summary proceeding, provided that the security interest guarantees a debt that is monetary, liquid and due, be it based on a public or private instrument, enforceable or not. Pursuant to the Judicial Collections Act No. 8624, all recorded securities or liens over real or personal property are considered executable obligations and, as such, their collection may be filed via the said summary proceeding. Otherwise, the debt’s existence, nature and enforceability must be proved in an ordinary civil proceeding. 

    Noteworthy is the recent enactment of the Law on Secured Transactions No. 9246, which allows rendering real guarantees based on moveable property not registered at the National Registry, which, to this date, only records the title of automotive vehicles, airplanes and vessels. The act provides for a simplified, online recording of securities and a swift execution process to be carried out by a notary public at a private auction without the need to resort to court.

  55. 28.

    Describe the types of employment disputes that frequently result in litigation.

  56. It is as difficult as it is imprecise to indicate which employment disputes tend to escalate to litigation. However, it is safe to say that whereas administrative violations (workplace safety, work conditions and means to execute tasks) tend to be resolved internally or with the intervention of the Inspection of the Ministry of Labour or the Social Security Board. Disputes with a pecuniary background tend to result in litigation, specially as there are certain claims (overtime, unpaid rest days and holidays, among others) whose amount may be exponentially inflated based on the employee’s seniority, justifiably or not. The lack of payment of wages due and of severance upon termination, as well as the non-application of legally decreed salary rises are also among the most contentious, recurrent matters. These matters are discussed before the labour courts.

  57. 29.

    Does your jurisdiction allow class actions or some form of collective litigation proceeding?

  58. Even though joint litigation of plaintiffs and defendants is widely recognised and sometimes imposed by law or the judge, this certainly drifts away from collective litigation dynamics and, more specifically, from class actions. Joint litigation, as described here, is a procedural demand for optimally processing the case observing procedural law and principles.

    In a similar way, although the constitutional jurisdiction has recognised and safeguarded diffuse interest, as in the case of environmental damage and collective interest, typically with trade unions, this active legitimacy to represent or invoke the interests of a group of individuals, acting as a collective body or not, does not, in any way, embrace the concept in question.

    Having sketched these oblique or tentative approaches to collective litigation, the conclusion is that the Costa Rican jurisdiction and procedural law do not allow for class actions. However, there seemed to be a possibility of such in the realm of administrative law. Article 48 of the relatively recent Administrative Procedure Code, in fact, provides for the possibility of collective actions against the state. Further, the Draft Law Project No. 15,979, which brought a series of interesting reforms to civil procedure law, and has been under discussion in the past few months, contemplated the possibility of class actions in both civil and commercial controversies. However, after a tumultuous legislative discussion, the project was rejected. Hence, despite a genuine interest in enabling this possibility, class actions do not currently exist in Costa Rica. 

  59. 30.

    Do government-owned or controlled entities enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation?

  60. No. There is no procedural privilege or advantage to government-controlled entities engaged in commercial activities; they receive equal treatment under law as any procedural party, regardless of the controversy being of an administrative or commercial nature. The Costa Rican procedural system upholds the principles of equality and fair treatment for all parties. However, it must be noted that regardless of the conflict’s nature, all controversies involving public entities, including government-controlled entities, even when engaged in commercial undertakings, must be brought and resolved before contentious-administrative courts.

  61. 31.

    Do foreign states or entities controlled or owned by foreign states enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation in your jurisdiction (state immunity)?

  62. No. There is no procedural privilege or advantage to foreign states or entities controlled or owned by foreign states engaged in commercial activities; they receive equal treatment under law as any procedural party, regardless of the controversy being of administrative or commercial nature. The Costa Rican procedural system upholds the principles of equality and fair treatment for all parties. 

  63. 32.

    Is injunctive or other relief available on an emergency basis?

  64. The immediately effective protection of fundamental rights is constitutionally enshrined and zealously guaranteed by procedural laws in Costa Rica. Beyond procedural-specific institutes aiming to safeguard constitutional rights and liberties, civil and criminal procedural laws provide a plethora of injunctions and precautionary measures to guarantee the certainty, validity, effectiveness and rightfulness of the result, let alone to avoid that a party’s rights or expectations become illusory under procedural conundrums and the passing of time. Many legal bodies, including administrative, environmental, labour and family statutes are enforced with injunctions.

    Injunctive relief is a great tool under emergency circumstances, if the party demonstrates the actual urgency and the appearance of having a right upon which to base a claim. Such relief is open ended under the Costa Rican Civil Procedure Code (article 242, Costa Rican Civil Procedure Code).

  65. 33.

    Is injunctive relief available as part of a final award? If so, in what types of cases do courts usually provide injunctive relief?

  66. Yes. In this respect, the Costa Rican procedural system does not conceptually constrain the final judgment to compensation alone. As part of the resolution, a judge may impose, via an injunction, the obligation to do or to refrain from carrying out a certain action or to give something (articles 693, 695 and 696, Costa Rican Civil Procedure Code). As a matter of fact, in real estate litigation, it is common to find specific injunctions ordering the losing party not to alter or disturb the exercise of the right of property of the victorious party over the contentious asset or the enjoyment thereof.

  67. 34.

    What are the typical court fees and costs required to file a civil lawsuit?

  68. The administration of Justice in Costa Rica is a free public service; hence, there are no court fees to file any kind of lawsuit. However, civil, commercial and contentious-administrative claims must pay stamp duties, of which labour, family law and other socially sensitive actions are exempted. Such stamp duties are calculated based on the claim’s estimated amount (article 108, Decree No. 39078-JP), with a maximum to be paid of 50,000 colones.

  69. 35.

    Is a bond required for a non-resident? What is the amount of the bond?

  70. The explanation offered in question 2 for foreign entities stands for non-resident individuals. Under the principle of equality, non-residents may freely exercise their right to litigate before the Costa Rican Courts of Justice on the same conditions as residents, without the issuance of a bond or making a security payment. 

  71. 36.

    What types of damages are available? How are damages quantified? Are punitive damages available?

  72. Costa Rican law does not contemplate the possibility of punitive damages. Within a judicial procedure, only duly proved and quantified material and immaterial damages may be subject to compensation, as well as revenue and indexation for monetary disputes. The latter, especially under the general form of moral damage, is limited to the infringement of personality rights (article 59, Costa Rican Civil Code) and requires qualified forensic verification and assessment in order to declare and compensate it. Specifically, subjective moral damage, more familiarly referred to as moral distress or psychological suffering, is evaluated and granted in re ipsa by the tribunal, based on the gravity of the distressing fact and the suffering undergone by the victim. It is noteworthy that immaterial damages tend to be compensated modestly in Costa Rica, because moral damage compensation is not considered the retribution for pain and suffering, but just compensation, and the invocation of moral damage, distress or psychological suffering is only admitted under very qualified circumstances.

  73. 37.

    Is the losing party liable for the prevailing party?

  74. As a rule of principle in civil and commercial litigation, the losing party should cover the costs incurred by the counterparty, including attorneys’ fees and correlated costs. In this regard, article 221 of the Costa Rican Civil Procedure Code contemplates both the payment of the victorious party’s personal costs, understood as their legal fees, which, nonetheless, must be determined pursuant to the applicable Costa Rican Bar Association Fees Decree at the time, and not paid as agreed upon the party and their legal counsel. The same goes for the procedural costs, including all costs associated with litigation: copies, notarisations, authentications and stamp duties.

    However, article 222 thereof immediately recognises an exception, the losing party may be waived from the payment of their counterparty’s costs when it is evident that the litigation was in good faith and the controversy could not be resolved without judicial intervention.

    In the same vein, when neither party is granted absolute reason, the judge will normally make each part liable for their own costs. 

  75. 38.

    Will courts enforce a liquidated damages provision in a contract?

  76. If a contract stipulates a liquidated damages provision, its execution will be easily enforced in court. It is a common occurrence in commercial litigation, and damages are swiftly liquidated provided that the validity and standing of the contract and the specific clause, as well as the occurrence of the stipulated default event are proven.

    However, it does not preclude the possibility of such provision being challenged in court. For this matter, not only the specific clause but also the agreement as a whole may be questioned. A typical example is offered by sign-up or standard contracts, such as financial products agreements, which may be challenged upon illegality or abusiveness grounds as per domestic Consumer law.

  77. 39.

    What is the appeal process against trial court decisions?

  78. Once again, using the ordinary civil proceeding as a general example (being the most frequent and under which commercial matters are resolved as well), once the final first-instance judgment is issued, the parties may appeal before the hierarchical superior. Whereas the first instance court – a quo – is a single judicial organ, three members constitute the appellate court. The appeal, in the case of final judgments, must be filed within five days before the a quo, whereas interlocutory decisions have a filing term of three days (article 559, Costa Rican Civil Procedure Code). The court of first instance, upon issuing the admissibility resolution, may grant from three to five days to appeal before the ad quem, depending on the circuit. The grieving party must present their allegations before the competent court, expressing the formal or substantial reasons for opposing the contested decision (articles 567 and 574, Costa Rican Civil Procedure Code). The appellant may exceptionally offer new evidence within the limits of article 575 Civil Procedure Code, which mainly restricts it to documentary and confessional proof in qualified cases such as:

    • the elements offered in first instance not being properly or fully examined beyond the appellant’s control;
    • when the defendant is in contempt or absent during the examination of evidence in first instance;
    • when a new event potentially having effective influence in the result occurs; and
    • when the parties agree on their need or pertinence.

    There is also a procedure to appeal when the first instance judge does not accept the appeal acting against the law, which is called an appeal by inadmission and it is filed directly before the appellate court (article 583, Costa Rican Civil Procedure Code).

    In the realm of administrative procedure law the possibility is more limited. In accordance with article 134 of the Costa Rican Administrative Procedure Code, first-instance judgments may not be appealed, as in the civil instance, and can only be challenged through the extraordinary cassation recourse. However, other interlocutory resolutions may be appealed directly before the competent ad quem judge (article 133 Costa Rican Contentious-Administrative Procedure Code). The challenge of court territorial competence is an exceptional situation in which the term to appeal is reduced to three days. 

    Further, an adverse result in second instance may be challenged via the exceptional cassation recourse (article 591, Costa Rican Civil Procedure Code). As explained before, it is limited to the analysis of allegations and evidence already on record, without allowing new formal or substantial considerations. Given its special nature, it must be filed within 15 days after the issuance of the second instance judgment before the First Chamber of the Supreme Court of Justice acting as Cassation Court (article 596, Costa Rican Civil Procedure Code). 

  79. 40.

    How frequently do appellate courts reverse trial court decisions?

  80. There is no accurate way to predict or assess the potential effectiveness of an appeal; however, it is certainly a recourse frequently resorted to and part of most litigious strategies, with the aim of affecting the course of the proceedings. Nonetheless, the issuance of second-instance judgments reverting, partially modifying or even annulling – under major procedural defects grounds – the a quo ruling is frequent. The technical work of second-instance judges is praiseworthy, as they normally deliver thorough resolutions that prevent the exacerbated abuse of the recourse.  The parties may appeal only certain interlocutory decisions according to article 560 of the Costa Rican Civil Procedure Code, yet the final decision may be appealed at all times.

  81. 41.

    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?

  82. A preliminary clarification is in order, as Costa Rica is not a federal government and is organised at a local or municipal level, autonomously from the central government.

    Indeed, the existence of the contentious-administrative procedure in Costa Rica responds precisely to the need of challenging administrative decisions, including those of autonomous and semi-autonomous entities. The Contentious-Administrative Procedure Code establishes the judicial process to challenge an administrative act or omission, including those by local governments, as well as to pursue its annulment.

    Recognising the asymmetry between the administration and the individuals and entities subject to its power, regardless of the nature or rank of the challenged authority, the result of such a claim is ultimately guaranteed as, pursuant to article 190 of the General Law on Public Administration, the administration shall be liable for the legitimate or illegitimate damages it causes, except in cases of force majeure, fault of the victim or a third party’s actions.

    Hence, as difficult as it is to gauge the degree of success in reverting administrative decisions against the issuing body or, in general, the efficiency of the contentious-administrative process, courts, in fact, frequently overturn administrative decisions rendered by local governments and other public entities in favour of private parties, catering not only to the recognition of the aforementioned asymmetry between the administration and those subject to its authority, but also to the general liability of the administration set forth in the General Law on Public Administration. 

  83. 42.

    How are trade secrets protected in judicial proceedings?

  84. A specific statute referred to as the Non-Disclosed Information Act No. 7975 deals with the protection of confidential information in different instances. Article 9 thereof protects confidential or privileged information pertaining to trade and industrial secrets, including those discussed in administrative and legal proceedings.

    Further, arbitration offers considerable protection to trade and industrial secrets under discussion, as article 60 of the Alternative Dispute Resolution and the Promotion of Social Peace Act No. 7727 (1997) expressly establishes the confidentiality of arbitral proceedings and its records, covering any privileged, worthy information discussed therein.

  85. 43.

    Are settlement agreements confidential? Must the parties’ settlement agreement be certified by the court?

  86. Settlement agreements within a judicial process are not confidential if the proceeding is public and this condition is not agreed upon.

    Article 14 of the Alternative Dispute Resolution and the Promotion of Social Peace Act No. 7727 (1997) on the other hand, establishes the confidentiality of conciliatory negotiations and proceedings. This implies the prohibition to publish or publicise the result thereof. Further, the parties may also agree upon the absolute confidentiality of the award.

    As previously indicated, it is not necessary to resort to court in order to formalise a settlement agreement. However, in order to guarantee its effectiveness, article 220 of the Costa Rican Civil Procedure Code grants conciliation agreements the character of res judicata in the same terms of a court judgment. Hence, in the case of breach, the affected party may appear at court demanding the enforceability of the settlement, via the judgment execution procedure. In some cases, the agreement must be certified by the court in order to be able to execute it before another authority as an enforceable judgment.

    Out-of-court settlements reached with the intervention of ADR Centres, typically law clinics, houses of justice and employment ADR, receive the same treatment described above. 

  87. 44.

    Who has the burden of proof at trial? What is the burden?

  88. As a basic procedural principle, the burden of proof rests upon the proponent of a fact to prove a right or to reject it, be it generally on the plaintiff when filing a claim or on any party making a relevant assertion within the process. Hence, the burden of proof fluctuates and falls upon the party promoting a certain jurisdictional act (article 317 Civil Procedure Code).

    However, conscious of the asymmetry of relationships in terms of capability to deploy legal defence and produce evidence, the legal system has reverted the onus probandi in some cases, labour law being the most patent. Given the disproportionate gulf between employer and employee’s resources, the onus probandi falls upon the employer, regardless of who filed the claim or executed the jurisdictional action. This reversion has only one, though notable, exemption: the examination of overtime and its payment. In this case, employees must prove that they worked overtime for the employers to demonstrate they were paid accordingly.

    Finally, in criminal proceedings the mechanics are basically the same, as the process is modulated by the principle of innocence that vests the eventual offender, the burden of proof hence resting on the prosecutor body. Based on the in dubio pro reo principle, any reasonable doubt persisting, the judge must order the acquittal of the accused. 

  89. 45.

    What are the most significant recent developments regarding judicial reform? Is any proposed legislation likely to affect the civil litigation market?

  90. There have important changes with the Judicial Collections Act No. 8624, which allowed specialised courts to deal with collections’ disputes, releasing the ordinary courts from the workload generated by such proceedings. This impacts directly the amount of time that parties had to wait to obtain a first-instance judgement in civil actions.  The civil procedure reform in the process of coming into effect will reward oral procedures over written litigation. With the recent change of government the discussion over sanctioning a Labour Procedure Code project, which was vetoed by the previous administration under concerns of it exceeding its procedural scope and allowing strikes in essential public services, was revived. President Solís Rivera tried to lift the said veto, an action that was declared unconstitutional by the Constitutional Court of the Supreme Court of Justice of the Republic of Costa Rica.

  91. 46.

    Describe any recent noteworthy litigation and arbitral cases.

  92. The most relevant litigation and arbitral cases have, without doubt, been foreign-investment related, both as direct investment in commercial and industrial undertakings, but mainly in the granting and exploitation of public concessions. These cases have also been tainted by accusations of fraud and prevarication of governmental officers involved and have sometimes had a strong environmental element.

    Perhaps the most resounding case regards that of Infinito Gold Mining, a company of Canadian capital that was granted a mineral extraction concession in Cutris, San Carlos in 2008. After a contentious administrative process, the concession was annulled under allegations of corruption promoted by an intense lobby from environmentalists, who pointed out that environmental damages were never considered in the granting of the concession despite the nefarious consequences of similar strip mining projects in the region. The case ended with the definitive revocation of Infinito Gold Mining´s mineral extraction concession and a three-year conviction sentence under prevarication accusations of the then Environment Minister, who signed the Decree that authorised the exploitation. There is an attempt to bring the case to investment arbitration under foreign investment protection grounds.

    In 2010, a resounding corruption case known as ICE-Alcatel, which ended with the conviction of several Costa Rican government officers under aggravated corruption, bribery and illicit enrichment charges among others, was intended to be strapped to a racketeer influenced and corrupt organisations (RICO) action, stemming from an Foreign Corrupt Practices Act investigation initiated by the United States government against Alcatel-Lucent. The government of Costa Rica (Costa Rican Institute of Electricity) filed a complaint against Alcatel-Lucent asserting Florida applicable law and alleging that the company ran a racketeering scheme aimed at drawing business from Costa Rica. The case was dismissed on forum non conveniens grounds, alleging not only that ICE-Alcatel could not bind the criminal prosecution under civil RICO claims, but also that the Costa Rican interest had already been served in the domestic proceedings.

    Other relevant cases that did not reach litigation due to settlement were the revocation of a highway concession from San José to San Ramón originally granted to the Brazilian contractor OAS (2013). The Costa Rican government settled for US$34.9 million.

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Questions

  1. 1.

    Outline the court system in your jurisdiction.


  2. 2.

    What remedies are available to a local entity or resident 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?


  3. 3.

    What is the process by which a foreign entity may challenge the jurisdiction or venue of the; court where litigation is filed? What factors are considered when a court evaluates whether; to exercise jurisdiction over a foreign entity?


  4. 4.

    What is the most common type of litigation encountered in your jurisdiction by foreign entities?


  5. 5.

    How frequently do parties pursue criminal actions 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?


  6. 6.

    Is there a right to a trial by jury in a commercial dispute?


  7. 7.

    Do courts require or strongly encourage mediation or other alternative dispute resolution methods before or during a litigation proceeding?


  8. 8.

    Will choice of law and choice of forum provisions in a contract be recognised?


  9. 9.

    Does your jurisdiction have a specific arbitration law? Are arbitration awards enforced by the courts? May courts enjoin/prohibit arbitration proceedings in matters that are also pending in a court proceeding?


  10. 10.

    Do the courts recognise attorney-client privilege? If so, is the privilege applicable to in-house lawyers?


  11. 11.

    Are legal proceedings public? In other words, can the general public observe hearings and review the filings of the parties?


  12. 12.

    May a defendant join other potentially liable parties to the existing lawsuit?


  13. 13.

    How may a party enforce a foreign judgment?


  14. 14.

    How is service of process effected?


  15. 15.

    How much time does a party have to answer a complaint? Can a party extend this time?


  16. 16.

    What types of pretrial proceedings are available in court? What kinds of dispositive motions can be filed before trial? Under what circumstances may a lawsuit be dismissed prior to trial?


  17. 17.

    How long does it take to obtain a first-instance judgment in a typical commercial litigation case?


  18. 18.

    Is a party required to submit all facts, arguments and supporting evidence with its initial pleading?


  19. 19.

    Does litigation provide a process for investigating claims or right to discovery of evidence prior to trial?


  20. 20.

    Does litigation provide a process to subpoena or obtain documents or testimony from third parties?


  21. 21.

    Does the judge or opposing counsel examine witnesses?


  22. 22.

    How may evidence be challenged? Are there specific rules of evidence?


  23. 23.

    Do courts typically allow hearings at or before a trial? At what stage may parties present expert witness testimony?


  24. 24.

    What must be demonstrated to collect a debt based on a written instrument?


  25. 25.

    What remedies are available in your jurisdiction to a minority shareholder of a corporation in a dispute with the corporation or the majority shareholders?


  26. 26.

    What rights are available in the courts for someone holding a maritime lien interest in a vessel?


  27. 27.

    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?


  28. 28.

    Describe the types of employment disputes that frequently result in litigation.


  29. 29.

    Does your jurisdiction allow class actions or some form of collective litigation proceeding?


  30. 30.

    Do government-owned or controlled entities enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation?


  31. 31.

    Do foreign states or entities controlled or owned by foreign states enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation in your jurisdiction (state immunity)?

  32. 32.

    Is injunctive or other relief available on an emergency basis?


  33. 33.

    Is injunctive relief available as part of a final award? If so, in what types of cases do courts usually provide injunctive relief?


  34. 34.

    What are the typical court fees and costs required to file a civil lawsuit?


  35. 35.

    Is a bond required for a non-resident? What is the amount of the bond?


  36. 36.

    What types of damages are available? How are damages quantified? Are punitive damages available?


  37. 37.

    Is the losing party liable for the prevailing party?


  38. 38.

    Will courts enforce a liquidated damages provision in a contract?


  39. 39.

    What is the appeal process against trial court decisions?


  40. 40.

    How frequently do appellate courts reverse trial court decisions?


  41. 41.

    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?


  42. 42.

    How are trade secrets protected in judicial proceedings?


  43. 43.

    Are settlement agreements confidential? Must the parties’ settlement agreement be certified by the court?


  44. 44.

    Who has the burden of proof at trial? What is the burden?


  45. 45.

    What are the most significant recent developments regarding judicial reform? Is any proposed legislation likely to affect the civil litigation market?


  46. 46.

    Describe any recent noteworthy litigation and arbitral cases.


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