I have written extensively about the state of the Spanish legal system in my eBook: Survive the Crisis in Spain. Although it has always been clear to many people in Spain that the courts are slow, with the global financial crisis and Spain’s current recession making the number of firms seeking administration rise dramatically, the experts are now talking about “a total collapse of commercial courts” this year.
The consultants at PriceWaterhouseCoopers look at the trends in the final months of 2008 (Oct. to Dec,) and extrapolate the figures over the year 2009, projecting figures of up to “4,000 companies seeking creditor protection which would in effect cause a total collapse of commercial courts.”
The Spanish press already reported of complete saturation towards the end of 2008. Commercial courts in Barcelona declaring a state of “emergency” in August. Two months later an article on elconfidencial.com reports on the courts having 1000% work overload. And unofficial insider blogs like absurdar reveal a complete chaos inside Spanish courts.
The year ahead looks even worse: “More than 1,300 firms of those will be property and construction firms, unable to secure financing to stay afloat while the market dries up and they seek to repay over 470 billion euros in debt – almost half of Spain’s corporate borrowing.”. Does Spain know what’s coming it’s way? Do you?
Image from mjusticia.es