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What is Alternative Dispute Resolution in Portugal? When you may need ADR for Portuguese debt collection
Cross-border disputes often involve differing laws and practises regarding debt collection. A business owner in the UK may find it challenging to recognise the correct course of action to achieve a satisfactory outcome. As a foreign entity, recovering outstanding debt in Portugal may pose a problem and you may believe that you face cross-border litigation to recover what you are owed. However, there are alternatives to costly litigation which is exactly what Alternative Dispute Resolution (ADR) aims to avoid. ADR offers alternative ways of resolving a dispute without going to court, including adjudication, mediation and arbitration.
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This guide will explore what Alternative Dispute Resolution in Portugal, and when it is an appropriate solution for Portuguese debt collection.
Discover which situations you may need to use ADR as a non-Portuguese resident.
Find out more about Portuguese laws and what this means for ADR.
Discover the benefits of ADR when recovering debts in Portugal.
Discover the considerations you should make when instructing litigation lawyers for ADR.
The most common queries on ADR for debt collection in Portugal.
When may you need Alternative Dispute Resolution in Portugal?
Debt collection in Portugal has many similarities to other jurisdictions, such as Spain; however, for a foreign national, there are certain obstacles to address. Typically, debts must be paid in Portugal within 30 days of receiving an invoice. If this payment is not made, outstanding invoices can be recovered through Portuguese courts or Alternative Dispute Resolution (ADR).
ADR offers substitute options for creditors looking to recover debts without the need to instigate court proceedings, taking the dispute through arbitration centres, mediation services, and the Justices of Peace (Julgados de Paz) for smaller debts.
Court proceedings can become a time-consuming and expensive process if you are recovering outstanding debts in Portugal through a different jurisdiction, for example, England and Wales. You may find ADR in Portugal a more suitable option for collecting Portuguese debts. Advice from an English-speaking Portuguese commercial lawyer is strongly advised.
Giambrone & Partners' multi-jurisdictional debt collection lawyers will work with you and suggest the best strategies, including ADR. We will attempt to resolve the matter initially through mediation in the presence of an impartial and experienced mediator to agree a mutual settlement.
Find out more about litigation and dispute resolution in Portugal here.
What are the key principles of ADR in Portugal?
Alternative Dispute Resolution (ADR) aims to give both parties an opportunity to present their point of view on the matter and be heard by an impartial qualified mediation professional. Mediation and arbitration enables all parties to have the chance to discuss the issue and to resolve the matter rather than going through Portuguese courts.
The Alternative Dispute Resolution Office
(Gabinete de Resolução Alternativa de Litígios)
This office (GRAL) is responsible for supporting extra-judicial solutions for resolving disputes and implementing them.
The Portuguese Arbitration Act
In 2012, the Portuguese Arbitration Act was agreed upon between the Portuguese government, the International Monetary Fund, and the European Union's institutions. The agreement prioritised ADR procedures, ensuring they are available in Portugal as a suitable alternative to progressing through Portuguese courts.
The Portuguese Arbitration Act focuses on party autonomy, upholding the will of the parties in several areas, and features essential procedural principles to be applied if an agreement fails. This includes equality of those involved and a due and fair process.
The Mediation Law
Mediation is one form of Alternative Dispute Resolution in Portugal. This voluntary procedure is confidential to an extent and the deliberations cannot be used as evidence should the claim continue in court.
When recovering debts from Portugal, ADR may be the most appropriate approach. If you are concerned about the next step, it is recommended that you seek expert legal advice as soon as possible.
Giambrone & Partners debt collection lawyers will use their collective expertise and successful track record to develop the best solution to recover any outstanding debts. Our Portuguese lawyers (Advogados) will seek a settlement through ADR, advising you every step of the debt collection process.
If you require help with Portuguese debt collection and would like to speak to our lawyers, contact the Giambrone & Partners team today.
What are the advantages of Alternative Dispute Resolution for Portuguese debt collection?
In most situations, undergoing ADR for debt collection in Portugal is highly beneficial. Advantages of Portuguese Alternative Dispute Resolution include:
Inexpensive in comparison to procedures through the Portuguese courts
It is usually a faster process
A professional mediator or arbitrator hears both sides
Portuguese ADR principles make the process fair and equal for both parties
If ADR is unsuccessful, or is not suitable for your specific requirements, debt collection lawyers will establish the financial strength of the debtor. This will determine whether your debtor is sufficiently financially robust to be able to settle the debt and the potential costs arising from court action.
To determine the success rate of debt collection, it is crucial to consult with experienced lawyers who understand the success rate in recovering outstanding invoices. They will be able to determine the best option considering all factors involved.
Find out more about the importance of instructing debt collection lawyers in Portugal with our expert guide here.
What should you consider when choosing Alternative Dispute Resolution in Portugal?
Before opting for Alternative Dispute Resolution (ADR) in Portugal, it's crucial to consider the jurisdiction where the dispute arose. Understanding the legal framework and jurisdictional boundaries relating to the dispute. In Portugal, ADR methods such as mediation, arbitration, and conciliation may vary in procedural requirements depending on the nature of the dispute and the parties' location.
Legal representation
Engaging qualified legal representation is essential when pursuing ADR in Portugal. Competent legal advisors can provide valuable guidance throughout the ADR process, assisting clients to choose the most suitable method to achieve settlement. Debt collection lawyers will represent their client’s interests during negotiations or hearings and navigate complex legal issues, safeguard rights, and optimise the chances of achieving a favourable outcome.
Giambrone & Partners has a team of multi-jurisdictional debt collection lawyers who offer tenacious and robust arguments in order to recover any unpaid debts. We are experienced in achieving the settlement of outstanding debt by means of ADR. Our expertise in ADR mechanisms, such as mediation and arbitration, equips our lawyers to devise strategic approaches tailored to the specific circumstances of each case, maximising the likelihood of reaching a mutually satisfactory settlement.
If you have any questions on debt collection in Portugal and want to speak to our lawyers (Advogados), contact Giambrone & Partners today.
Frequently asked questions
What are the differences between arbitration and mediation in Portugal?
Both mediation and arbitration are forms of ADR that strive to resolve conflicts outside the courtroom. The main difference between them is that a mediator provides the parties with what is, in their opinion, the best solution, whereas an arbitrator can make a final decision. that is enforceable.
Find out more about managing mediation with our expert guide here.
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