Administrative penalty proceedings and the recurso contencioso-administrativo

What we take on, and what we do not

We take on penalty files of some substance and their continuation before the administrative courts, whether the authority is central government, the regional government or the town hall:

• Penalties against businesses subject to sector regulation: pharmacies, clinics and healthcare centres, hospitality, retail and licensed activities, where what is at stake alongside the fine is the business itself.
• Files in consumer affairs, health, industry and the environment.
• Planning enforcement: orders to carry out works, restoration of lawful use, licences refused.
• Liability of the administration for damage caused by the running of public services.
• Grants and subsidies: recovery of sums paid and loss of entitlement.
• Public procurement, so far as it affects our business clients.

The penalty file, stage by stage

A file is decided at four moments, and the first is the most important:

• The decision to open proceedings. It must identify the facts, the provision said to have been infringed, the penalty that might follow, the officer conducting the file and the body with power to decide. This is the moment to put forward evidence and to make written representations. What is not asked for here is very hard to recover later.
• Investigation and proposed decision. Representations on the proposal, with the evidence already taken and with the defects in the file set out in writing.
• The decision. It must answer what has been argued and give reasons for the amount. A penalty that does not explain why it is set where it is set is a penalty open to challenge.
• Appeals. Alzada or reposición depending on the body, and after that the court appeal.

On the principles that govern all of this — legality, the requirement that conduct be defined as an offence, culpability, proportionality — there is one practical point worth keeping in mind: the setting of the penalty within its range is always open to attack. Where the authority imposes the upper part of the range without explaining what circumstances justify it, it is handing you a ground of challenge.

Lapse and limitation: the two defences that work most often

They are two different things and both of them close files.

Caducidad, lapse of the proceedings. In proceedings opened by the authority of its own motion in which it exercises powers to penalise or, generally, powers of intervention capable of producing adverse effects, the expiry of the maximum period without an express decision having been notified causes the proceedings to lapse, and the decision so declaring will order the file to be closed (art. 25.1 b) de la Ley 39/2015, the Public Administrative Procedure Act). Time is only interrupted if the proceedings were halted for a reason attributable to the person concerned (art. 25.2).

Prescripción, limitation. Where the sector legislation sets no periods, very serious infringements are time-barred after three years, serious ones after two and minor ones after six months; and penalties after three years, two years and one year respectively (art. 30.1 de la Ley 40/2015, the Public Sector Legal Regime Act). Time for infringements runs from when they were committed — or from when the conduct ceased, if it was continuing or permanent — and is interrupted by the opening of the penalty proceedings coming to the knowledge of the person concerned, but starts again if the file is left dormant for more than a month for a reason not attributable to the person said to be responsible (art. 30.2).

Paying with the twenty per cent reduction

Where the penalty is purely financial, the law allows two early exits: admitting responsibility and voluntary payment before the decision, which brings the proceedings to an end except as regards restoring the position and making good the damage caused. In both cases the competent body will apply reductions of at least 20 % on the amount proposed, which may be combined with each other, and these must be stated in the notice opening the file (art. 85 de la Ley 39/2015).

There is one condition worth reading twice: those reductions take effect only if you withdraw or waive any claim or appeal within the administration against the penalty. In other words, you pay less but you give up arguing. That is why the decision is not automatic: where lapse is close, where the file has a serious defect, or where what really worries you is not the fine but its knock-on effects on the business, accepting the reduction can be the worst bargain on the table.

Appeals within the administration

Against a decision that does not exhaust the administrative route there is a recurso de alzada, within one month where the decision is express, to the superior body. Against one that does exhaust it there is, at your option, the recurso de reposición, also within one month, to the same body that made the decision. At your option means it can be skipped and the matter taken straight to court; and that is worth deciding on the merits, because bringing it delays access to the court and rarely changes the mind of the very body that has already decided.

The recurso contencioso-administrativo

The period for bringing it — the appeal to the administrative courts — is two months from the day after notification of the decision that exhausts the administrative route, where that decision is express. Where it is not — administrative silence — the period is six months from the day after the day on which, under the applicable rules, the deemed decision arises. If a recurso de reposición was brought, the two months run from notification of the express decision on it or from the date on which it must be taken to have been refused. And against action taken without any legal basis at all, the period is ten or twenty days according to whether a prior formal request was made (art. 46 de la Ley 29/1998, the Administrative Courts Act).

These are strict periods and they admit no excuse. In practice the most repeated mistake is letting administrative silence run on in the belief that «nothing is running».

Suspending the penalty

Penalties are not enforceable while an ordinary appeal within the administration is still available. But once that route is exhausted, the authority may demand payment even though the matter is still live before the court. Hence, in matters where the penalty is high or carries with it a measure affecting the business — closure, suspension, loss of an authorisation — the interim order suspending it is applied for with the court appeal itself and supported by the irreversible harm that enforcement before judgment would cause. It is often the most urgent part of the instruction.

Where we work

Our office is in Villanueva de la Cañada, with matters in Brunete, Villanueva del Pardillo, Valdemorillo, Quijorna, Majadahonda, Las Rozas, Boadilla del Monte, Pozuelo de Alarcón and the rest of western Madrid. Files are dealt with before the town halls of the area and before the departments of the Comunidad de Madrid, and appeals before the administrative courts of Madrid and the Administrative Division of the Tribunal Superior de Justicia de Madrid (the high court of the region). We work in English, French and Portuguese as well as Spanish.