When you travel to Ecuador and consider the possibility of retiring and becoming a resident or doing business, it is important to consider its legal system.
This short summary is not intended to be legal advice. Please seek your own independent advice on any legal matters. This information is provided because we have learnt from bitter experience that we were not well prepared or well advised about when we first arrived in Ecuador.
There are three main legal systems in the world:
1. Civil Law
2. Common Law
3. Religious Law
It is important to note that Ecuador’s is based on Civil Law like most of South America and Europe whereas the USA, Canada, the UK, Australia, New Zealand (and others) are based on Common Law.
So what does the difference mean?
From my understanding, Civil Law is based on legislation, and there is little room for the judiciary to move. Common Law on the other hand takes into account case law and precedents and looks more at surrounding evidence. A “hand-shake” or verbal agreement is more likely to be upheld under Common Law than Civil Law.
In simple terms, after a bitter experience, in Ecuador it is extremely important to get all agreements written in legal terms in Spanish and have such agreements officially notarized. The difference is one of the main reasons why the profession of being a Notary is considered one of the most prestigious you can have, yet not so in Common Law countries.
Civil Law is the most widespread system of law around the world. For those of us laymen who hail from a Common Law country, this fact is probably not well known. The central sources of that law that are recognized are codifications in a constitution, or statute passed by legislature to amend a code. Civil law is interpreted rather than developed or made by judges. Only legislative enactments (rather than judicial precedents, as in Common Law) are considered legally binding.
The Ecuadorian Civil Code was introduced in 1861 and was a near exact reproduction of the Chilean Civil Code which came into effect on January 1, 1857.
Common Law and Equity are systems of law whose sources are the decisions in cases by judges. Alongside every system will have a legislature that passes new laws and statutes? The relationships between statutes and judicial decisions can be complex.
In Ecuador, make sure that you have all agreements drafted in Spanish by a competent bilingual local attorney, and then have them Notarized. If you don’t do that, you will have little chance of having your agreement enforced. You can easily be taken advantage of and robbed if you don’t follow this advice.
This advice then puts a very strong onus on finding a good competent bilingual attorney. As a newcomer to Ecuador, that is probably the most important initial priority.
And how do you know what is a good competent attorney? That is also a risk. There are plenty of bad stories to read about and we have had several ourselves. You need to spend time asking around, and then meeting several attorneys before settling on a decision. Make sure you get a warranty from your chosen attorney that if something goes wrong, then he/she pays for the consequences.
Also keep in mind that “you pay for what you get”. If the fees are cheap with no performance warranties, then don’t expect as good a result as from an attorney who guaranties his performance.
"Spanish Law - A type of civil law, often referred to as the Spanish Civil Code, it is the present legal system of Spain and is the basis of legal systems in 12 countries mostly in Central and South America, but also in southwestern Europe, northern and western Africa, and southeastern Asia. The Spanish Civil Code reflects a complex mixture of customary, Roman, Napoleonic, local, and modern codified law. The laws of the Visigoth invaders of Spain in the 5th to 7th centuries had the earliest major influence on Spanish legal system development. The Christian Reconquest of Spain in the 11th through 15th centuries witnessed the development of customary law, which combined canon (religious) and Roman law. During several centuries of Hapsburg and Bourbon rule, systematic recompilations of the existing national legal system were attempted, but these often conflicted with local and regional customary civil laws. Legal system development for most of the 19th century concentrated on formulating a national civil law system, which was finally enacted in 1889 as the Spanish Civil Code. Several sections of the code have been revised, the most recent of which are the penal code in 1989 and the judiciary code in 2001. The Spanish Civil Code separates public and private law. Public law includes constitutional law, administrative law, criminal law, process law, financial and tax law, and international public law. Private law includes civil law, commercial law, labor law, and international private law. "