Spanish government up against ECJ over discriminatory law

A law in Spain which requires foreign plaintiffs to give a financial guarantee to cover costs and lawyers' fees prior to the conclusion of civil proceedings is to become the focus of a legal battle at the European Court of Justice.

The European Commission has referred Madrid to the ECJ, which has the power to order the Spanish government to abolish the practice. If it refuses, European judges can impose huge fines.

Spanish citizens are not subject to the requirement - known as cautio iudicatum solvi - that can be insisted upon under the Spanish code for civil proceedings.

The commission claims that the cautio iudicatum solvi breaks EU laws, in that it is "a barrier to the free movement of services, in breach of Article 59 of the EC Treaty".

It has a legal precedent to follow - Anthony Hubbard v Peter Hamburger - which also found against the imposition of a cautio iudicatum solvi only against EU citizens or firms and not a country's own nationals.

Brussels also considers that the requirement violated the EU Treaty ban on discrimination on grounds of nationality (Article 6).

Spain has informed the commission that a new law on civil proceedings presented to the Spanish Parliament last November will suppress the financial guarantee requirement in question, but the new law has not yet been adopted.