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The legal security of Spanish, put to the test

The controversial decision of the Supreme Court regarding the tax on mortgages was applauded by the dealer to preserve the “legal security”. Same concept that served the Government to show its rejection of the position of the plenary of the Room of the Contentious-administrative. “The purchase of a home is a big investment plan and life that you must have legal security”, said Pedro Sanchez in the tweet in which he announced the approval of royal decree law that transferred to the entities with the obligation to pay the tax on documented legal acts.

beyond who holds with more reason in the argument of legal certainty, what is certain is that the vagaries of judicial and legislative do not contribute to the stability and predictability that must govern any regulatory system. And, episodes unfortunate as the lived these weeks in the Supreme, make relevant the question: is there sufficient legal certainty in Spain?

this is Not a disquisition theoretical one. All the reports on the economic environment and investment include references to the stability of regulations, the effectiveness of the courts or the effectiveness of judicial decisions. The money runs away from uncertainty.

Before any analysis, it should be noted, first, that the concept of legal security does not have a definition closed. The Constitutional Court includes, within the same principles as those of certainty, legality, hierarchy, and advertising rules, non-retroactivity of the unfavorable or prohibition of arbitrariness. But, as has warned in its resolutions, is not exhausted only in them, and it can include other attributes that contribute to clarity and predictability to the legal order.

In the second term, it should be borne in mind that the legal security is enforceable throughout the life of the standard. Since its creation, which should be based on the clarity; during its term, that has to be governed by the stability; and, finally, in its application by the courts, at which time it should be effective. These different stages make it impossible for the analysis unit and force you to cater to specific indicators.

The hangover of the renewable

When the question of the legal security in Spain, in the minds of the lawyers appears automatically the conflict provoked by the cut in premiums of renewables, that still keeps alive more than 30 international arbitrations. Have you spotted this problem the image of the country? Theresa Clog (DLA Piper) you believe you already have become extinct all “delicious”, because investors understand that it was the crisis that caused the spin on the legislation. Opinion that subscribes to Jasminbet Vicente Conde (Osborne Clarke), who believes that has already been “dispelled” the concern that are detected in subsequent years.

One of the circumstances which undermines the regulatory stability in Spain is the “huge” production of law. The term is used by the CEOE in the report that annually calculates the number of rules with legal standing dictated in the country. In 2017, between laws, organic laws and royal decrees-laws, the Congress passed 517 texts. To this number we must add the nearly 250 standards that emerged from the autonomous parliaments. In total, the official bulletins amounted to nearly a million pages.

however, the lack of majorities clear in the Congress has relaxed the avalanche of legislation. In 2015, the last year of the absolute majority of the PP, the number of laws came up to 900.

The moderation policy is one of the circumstances that explains the improvement in the perception of the regulatory environment that points to the last edition of the Barometer of business climate in Spain, developed by the ICEX-Invest in Spain, a survey that measures the attractiveness of our country to foreign investors. The improvement is not hidden, however, that the note in this section remains an approved scraping. Worse off out of the courts merchant, receiving a suspended. The overall rating of Spain as an investment destination, however, is 2,92 out of 5.

The discrete rating is the barometer of the ICEX seems less bad when it comes to studies that offer comparative data between countries, such as the Doing Business report of the World Bank that, in the paragraph in which measures the quality of the judicial system, puts Spain in the position 23, ahead of Germany (26), and with better note that the average of the OECD: of 70.9 points out of 100, compared to 67.6.

Without sonrojos

In comparative terms, the duration of the legal proceedings also does not appear as a factor that should blush to the Spanish system. The commercial litigation need in Spain an average of 510 days, compared to an average of 582 of the countries of the OECD. In Germany are 499.

Between lawyers who work with foreign investors there is not a uniform view about whether Spain is perceived as legally secure. Teresa Clog, a partner at DLA Piper, notes that “never” has seen a transaction in which you ask for “additional security measures” to be held in our country. “We don't have standards that will attract attention negatively or act in a way which is dissuasive,” he says.

In the same line, José Antonio Sánchez-Swots, partner, Latham & Watkins, defends the “strength and maturity” of the Spanish legal system. And suggests that, in fact, the national courts offer a high degree of certainty. “Our Law is very coded. In the anglo-saxon countries, in contrast, the system is more based on the case law and the judges may vary their criteria more easily,” he explains.

From a more critical perspective, the partner of Osborne Clarke, Vincent Conde, asserts that the evaluation of Spain will vary according to with whom to be compared: “at the side of countries of other continents, to investors we are the paradise. If the comparison is with Germany, it is perceived less legal security”.

According to what the lawyers, the decision of the Supreme on the tax of the mortgage-has not aroused any disquiet among his international clients. “They are worse, much worse, the lurching government, especially if they pass on the idea that you do not respect the decisions of the judges,” concluded Conde, who warns that the worst enemy of legal certainty are not the judges, but the policy.

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