Plan for Transition towards a “New Normality” – RDL 16/2020, of April 28

Within the State of Alarm which continues in force in Spain, a plan for transition towards a “new normality” or “de-escalation” of confinement that currently is living the society and that affects, to a great extent, small and medium-sized companies, was approved last Saturday, April 28.

The plan has been divided into four differentiated phases (from phase 0 to phase 4) that will start on May 4. These phases, as a general rule, will last fifteen days each and will follow a preconceived schedule but, in case of a new resurgence of the pandemic, might be modified or even revoked. In fact, the criteria established by the Government as a marker to advance from one phase into the following one are the health-system capacity, the epidemiological situation of the area, collective protective measures and socio-economic and mobility data. The State of Alarm confers on the central Government power of control over “de-escalation”, although meetings with the Autonomous Communities will be maintained to establish criteria adapted to each area.

If we focus on the area of Administration of Justice, on April 29, the Royal Decree-Law 16/2020 issued on April 28, regarding the procedural and organizational measures to deal with the COVID-19 in the field of the Administration of Justice, was published. The RDL comes in force on April 30 and incorporates:

Impulse to Recover Judicial Activity and Digital Transformation   

With the aim to resume the ordinary court activity and in order to address the expected increase of litigations which will arise as a consequence of the health crisis we are undergoing, the creation of judicial units of cases deriving from the COVID-19 is expected and August 2020 will be, exceptionally and partially, enabled as a working month, being the working period established between August 11 and August 31, excluding Saturdays, Sundays and public holidays.

With this regard, there are several Bar and Procurators Associations (among them the Bar Association of Biscay) that have shown their concern regarding the decision to enable a part of August for judicial practices. In fact, they have already revealed their total opposition to this decision, since they consider that it violates the right to rest, underscoring the implicit sacrifice that this decision will entail for the professionals working in the justice system when there is no evidence that this decision will be efficient against the collapse of the Courts.

Similarly, it will be permitted to assign the regionally appointed Judges preferentially to matters arising from the pandemic. It will also be permitted that the officers of each court, public prosecutor’s office or tribunal perform their duties in other units of the same locality and jurisdictional, and lawyers in the Administration of Justice in training, those who have passed the competitive examination but have not yet joined in the courts as official lawyers, are authorized to carry out substitutions and tasks of reinforcement.

Lastly, the use of digital identification and signature systems in the administration of justice will be enabled and improved to ensure that the procedural management systems of the courts and tribunals allow telework of the professionals and the parties concerned.

Procedural Measures  

After the suspension of the terms and procedural deadlines on March 14, with the necessary exceptions, the RDL determines to restart the calculation of the time limits, not taking into account the time that has elapsed prior to the declaration of the State of Alarm. Therefore, the time limits will be calculated again from the beginning, being the first day of the calculation the first working day following the day on which the State of Alarm ends.

It is also agreed to extend, for a period equal to that determined by law, the deadlines for filing appeals against sentences and other resolutions that end the process and are notified during the suspension of the deadlines established by the RD nº 463/2020 of March 14, as well as those that are notified within 20 working days following the lifting of the suspended procedural deadlines, allowing thus these to be filed in stages. These deadlines will be extended by a period equal to that established for the announcement, preparation, formalization or filing of the appeal in its corresponding regulatory law. The provisions will not apply to procedures whose deadlines were exempted from suspension in accordance with the second additional provision of the RD nº 463/2020 of March 14.

On the other hand, and without prejudice to the preferential nature of other procedures recognized in accordance with procedural laws, the following procedures will be processed in a preferential manner:

  1. – The proceedings or files of voluntary jurisdiction in which the measures referred to in article 158 of the Civil Code are adopted, as well as the special and summary proceedings provided for in articles 3 to 5 of this Royal Decree-Law.
  2. – In the civil jurisdiction order, the processes deriving from the lack of recognition of the legal moratorium on the mortgages of habitual residence and of properties affected to the economic activity by the creditor entity, the processes derived from any claims that could be raised by the tenants due to the lack of application of the legally foreseen moratorium or of the obligatory extension of the contract, as well as the bankruptcy procedures of debtor who is a natural person and that does not have the condition of entrepreneur.
  3. – In the contentious-administrative jurisdictional order, the appeals lodged against the acts and resolutions of the Public Administrations denying the application of the aid and measures legally provided for to relieve the economic effects of the health crisis produced by the COVID-19.
  4. – In terms of social jurisdiction, proceedings for dismissal or termination of contract, those arising from the procedure to declare the duty and form of recovery of working hours not worked during the paid leave provided for in Royal Decree Law 10/2020, of 29 March, which regulates recoverable paid leave for employees who do not provide essential services in order to reduce the mobility of the population in the context of the fight against COVID-19; the procedures for the application of the MECUIDA plan under article 6 of the Royal Decree-Law 8/2020 of 17 March; the procedures for individual, collective or ex officio challenges to temporary employment regulation proceedings on the grounds regulated by articles 22 and 23 of Royal Decree-Law 8/2020 of 17 March; and those for the implementation of distance working or the adaptation of the working conditions provided for in article 5 thereof.

In accordance with the procedural modality of Collective Conflict, claims filed regarding suspensions and reductions in working hours, adapted in application of the provisions of article 23 of Royal Decree Law 8/2020, of 17 March, will be processed, when these measures are applied to more than 5 workers. The representative commission provided for in the labour regulations to mitigate the effects of the COVID-19 in relation to temporary employment regulation proceedings will also be entitled to promote this collective conflict procedure.

In relation to family law, a special and summary procedure will be regulated “ex novo” for the resolution of issues relating to family law directly arising from the health crisis, articles 3 to 5 of the present RDL. It will last throughout the State of Alarm and up to three months after its termination.

With regard to the Civil Registry, a provision is introduced to ensure that marriage files that have already been processed and suspended due to confinement do not have to be processed again (the idea is that people who have planned their wedding and have not been able to celebrate it will not face further delays. In other words, the “vacatio legis” of Law 20/2011 of 21 July on the Civil Registry is amended and extended until 30 April 2021.

Increase of Bankruptcy Proceedings in Commercial Courts

With regard to the bankruptcy and corporate area, new measures are added to those already adopted by the Royal Decree Law nº 11/2020 of 31 March, with three objectives: a) economic continuity of companies and professionals and the self-employed, b) to encourage the financing of companies to meet their temporary need for liquidity c) to avoid the collapse of the Commercial Courts.

The measures adopted are as follows:

  1. – The duty to request the opening of the liquidation phase is postponed when, during the term of the agreement, the debtor becomes aware of the impossibility of complying with payment commitments and obligations contracted after the approval of the agreement.
  2. – The modification of the agreement or the extrajudicial payment agreement or the approved refinancing agreement is facilitated. In addition, the filing of a new application is permitted without the need for a year to elapse from the filing of the previous application.
  3. – Claims arising from financing commitments or the provision of guarantees by third parties are classified as claims against the estate in the event of liquidation. The claims of persons especially linked to the debtor in insolvency proceedings that may be declared within two years of the declaration of the State of Alarm shall be classified as ordinary claims.
  4. – A series of rules are established to speed up the bankruptcy process.
  5. – The suspension of the duty to apply for a declaration of bankruptcy is extended until 31 December 2020.
  6. – It is foreseen that for the purposes of the legal cause for dissolution due to losses, those of the current financial year will not be taken into account.
  7. – Article 43 of Royal Decree Law 8/2020 of 17 March is repealed.

Safety at Work

During the term of the State of Alarm and up to 3 months after its end, the celebration of procedural acts is established through the telematic presence of the intervening parties to guarantee the protection of health and minimize risks. However, in the Criminal Jurisdictional order, the celebration of trials by means of telematic presence is excluded in the cases of procedures for serious crimes, in which the physical presence of the accused is necessary.

Likewise: (i) public access to all oral proceedings is limited; (ii) the public will be served by telephone or e-mail and, only if necessary, in person but always by appointment; (iii) medical – forensic reports may be made on the basis only of the existing medical documentation available to them; (iv) lawyers are exempted from  wearing of togas in public hearings; (v) morning and afternoon sifts are established to prevent overlapping of workers, which allows trials and hearings to be held not only in the morning but also in the afternoon.

In a nutshell, this Royal Decree Law 16/2020, of April 28, extensively develops, with a relatively sound approach, diverse areas which are of vital importance for the impulse and development of tasks related to justice and which, undoubtedly, will lead to recovering normality as soon as possible.