The Constitutional Court has confirmed a decision upholding an action brought by the attorney for human rights against the ministers of economy and energy and mines. The action accused the authorities of inaction and non-compliance with their obligation to safeguard consumer and user rights by failing to protect consumers against the National Energy Commission's approval of adjustments to electricity rates.
The Directorate of Attention and Assistance to the Consumer (DIACO) is the administrative unit responsible for the implementation of the Consumer Protection Act, which establishes the minimum consumer rights and guarantees that cannot be waived, as they are considered a matter of public order and interest. DIACO's operations cover a wide range of enforcement activities and include several extensive new initiatives.
The Department for Consumer Welfare was established to guide, assist and inform consumers regarding the quality, quantity, weight and other characteristics of the goods and services available on the market. Nevertheless, the existing legislation fails to provide a suitable framework for matters directly related to product liability.
The Constitution obliges the government to protect the health, safety and economic interests of consumers. However, no product liability statutes are currently in force. Although the Consumer and Users Protection Act 1985 was passed to promote and defend consumer rights by establishing certain penalties and procedures, it has largely failed to provide a general framework for product liability issues.
Including: Court system; forms of action.
In a product liability context, Guatemalan law establishes certain administrative proceedings that may arise under the Consumer Protection Act, and some proceedings may lead to the initiation of commercial arbitration if both parties agree. However, liability arising from the sale, distribution, commercialisation or supply of defective or dangerous products is almost invariably considered in an ordinary trial.
The main issue relating to the production of evidence of damage suffered because of a defective product (on grounds other than breach of contract) is that a claimant need prove only that the victim sustained damage. As negligence - the main source of liability - is presumed, a defendant in a product liability action must either disprove the claimant's facts or show that damage occurred as a result of the victim's inexcusable negligence.
Guatemala's increased use of alternative dispute resolution is part of a trend not only elsewhere in Central America, but throughout the world. However, in order to be truly effective, such procedures require the possibility of judicial involvement in issuing preventive injunctions.
Guatemalan legislation makes provision for a range of precautionary measures, including arraignment, attachment, sequestration and intervention, as well as allowing for sui generis measures. Parties contemplating litigation should be aware of the basis, procedure and conditions for obtaining precautionary measures.
In the context of private international law, and in view of the need of different countries to maintain international relations and apply their laws beyond their borders, it is possible to execute court orders issued abroad in Guatemala. Following the issuance of Law Decree 107 of the Civil and Mercantile Procedural Code, the process to execute a decision made by a foreign court has been simplified.
Guatemalan court procedure, like that of other Latin American countries, includes a variety of hearing procedures, which may be in written form - as in the case of plenary suits and summary proceedings - or may be conducted orally. Oral proceedings are required for a declaration of jactitation. Such a declaration forces a party making a disputed assertion to bring a claim in order to prove its right.
The Secured Transactions Act is intended to promote the use of different types of secured transaction in order to encourage and guarantee credit obligations. The executions provided in the the act are becoming an important tool in Guatemalan law, since they offer an expeditious means of resolving disputes and help to avoid the lengthy formalities and procedures laid down in the Procedural Regulations.
The Commercial Registry's Fast-Track Window provides a unified point of contact for all procedures involved in the registration of companies and other commercial enterprises. The new facility, which involves a single form and a one-off payment, is part of a national initiative to attract foreign investment.
The streamlining of administrative procedures means that a Guatemalan company can obtain provisional registration in eight business days. A provisionally registered company can carry out business, sign contracts, issue invoices, open bank accounts and print shares.
The relatively new Banks and Financial Groups Law has been tested by the failure of two banks in less than six months. The failures have been well handled, even though several disgruntled investors have filed court actions objecting to the measures taken by the authorities. The events have led to a rapid consolidation of the market and demands for increased public scrutiny and regulatory action.
Including: Corporate Structures; Process of Incorporation; Requirements for Registering a Corporation; Branches of Foreign Companies; Tax Registration.