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Trump's Executive Order ordering to pause FCPA actions

Written by Santamarina + Steta en . Published in Updates.

The President of the United States, Donald J. Trump, signs an Executive Order ordering to pause Foreign Corrupt Practices Act or FCPA actions, as a means to restore American competitiveness and security.

  • On February 10, 2025, President Donald J. Trump signed an Executive Order directing Attorney General, Pam Bondi, to revise the Foreign Corrupt Practices Act (“FCPA”).
  • The Executive Order calls to review past and existing FCPA actions and issue revised FCPA enforcement guidance, which will govern future investigations and enforcement actions, promoting American competitiveness and the efficient use of federal law enforcement rules.
  • The FCPA is a law enacted in 1977 that applies, among others, to foreigners, and prohibits acts of corruption of foreign public officials.
  • Despite this U.S. Executive Order, in Mexico, corruption, which includes, among other concepts, bribery, illegal inducement, and illegal inducement of public officials, constitutes a serious offense under Mexican law, which holds companies to respond to criminal and administrative sanctions, ranging from the suspension of their activities to their dissolution.
  • The adoption of adequate compliance models, including an integrity policy and due control, through which vulnerable areas in the structure and operations of the organization are identified and the level of compliance with applicable regulations is measured, will allow to control, prevent and better manage the risk of corruption within companies, in accordance with the provisions of both Mexican and international law.

The fact sheet of the Executive Order is available in the following link: Pausing Foreign Corrupt Practices Act Enforcement.

Santamarina Steta Podcast: International ESG Standards and Their Impact on Competitiveness

International ESG standards and their impact on competitiveness

Written by Santamarina + Steta en . Published in Podcast.

In this new episode of Legal Evolution, we are joined by Norma Álvarez, senior associate at the firm and expert in energy and sustainability, and Juan Carlos Machorro, to discuss international standards on environmental, social, and governance (ESG) issues. We talk about why it is important for Mexican companies to adhere to these standards and what the impact is on their productivity and competitiveness globally.

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Exclusive Powers to Confirm, Modify or Revoke Suspensions in Amparo: Criteria of the Supreme Court of Justice of the Nation

Written by Santamarina + Steta en . Published in Updates.

  • On February 13, 2025, the Supreme Court of Justice of the Nation (“SCJN”) issued a press release reiterating that suspensions granted within amparo trials by district judges can only be confirmed, modified or revoked by the Circuit Collegiate Courts or the SCJN itself.
  • Accordingly, it determined that the Superior Chamber of the Electoral Tribunal of the Judicial Branch of the Federation (“TEPJF”) does not have the constitutional or legal powers to supervise or invalidate such determinations.

The Plenary of the SCJN resolved a controversy arising from suspensions granted in various amparo trials brought against the implementation of the Judicial Reform, published on September 15, 2024. In light of this, authorities such as the National Electoral Institute (“INE”) and the Senate of the Republic requested the Superior Chamber of the TEPJF to rule on the validity of said suspensions. In its resolution, the Superior Chamber determined that such suspensions were invalid and issued by an incompetent authority.[1]

However, the SCJN established that the Superior Chamber of the TEPJF does not have the power to review, supervise or invalidate decisions issued by amparo judges. In this regard, it stressed that the power to confirm, modify or revoke suspensions in amparo falls exclusively on the Circuit Collegiate Courts or on the SCJN itself, in accordance with the principles of judicial independence and hierarchy of powers established in the Constitution.

As a result of its resolution, the Plenary of the SCJN ordered the District Judges who had granted suspensions against the implementation of the Judicial Reform to review their respective determinations ex officio. Additionally, it declared inadmissible the request of the TEPJF to consider various ministers of the SCJN disqualified for alleged personal interest in the controversy, since the Superior Chamber of the TEPJF is not a defendant nor does it have a litigious interest in the conflict.

The criterion adopted by the SCJN reaffirms the exclusivity of the powers of the judges and tribunals of the Judicial Branch of the Federation in matters of amparo. In addition, it establishes a precedent in the defense of judicial independence, by making it clear that no other authority, including the Superior Chamber of the TEPJF, can attribute to itself powers that have not been conferred by the Constitution or the law. This decision could have a significant impact on future litigation on the application of the Judicial Reform and on the delimitation of powers between federal jurisdictional bodies.

[1] Press Release Supreme Court of Justice of the Nation: https://www.internet2.scjn.gob.mx/red2/comunicados/comunicado.asp?id=8170

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Modification to the guidelines for the marketing of Mobile Services by MVNOs

Written by Santamarina + Steta en . Published in Updates.

On February 11, 2025, it was published in the Official Gazette of the Federation, the Agreement by which the Plenary Session of the Federal Telecommunications Institute (“IFT”) modifies the Guidelines for the marketing of mobile services by virtual mobile operators (“OMVs”), which will come into force 60 (sixty) calendar days after the day of its publication.

In its explanatory statement, the IFT stated that end users of those MVNOs that have stopped operations and therefore the marketing of telecommunications services, either due to a scheduled cessation of operations or an abrupt interruption, are not always migrated in a timely manner to other service providers, putting the continuity of users' connectivity at risk and limiting their right to use telecommunications services, as there are no clear mechanisms to address this situation, such as ensuring that users have sufficient and timely information to exercise their right to number portability.

The IFT also stated that although the MVNO Guidelines had established various rules associated with the relationship between Wholesale Mobile Concessionaires and MVNOs for the provision of services by and/or through the latter, they did not establish what would apply in the event that an MVNO that stops providing services does not give timely notice to end users about the cessation of provision of the services contracted by them, nor what would happen to those end users who, due to the lack of sufficient information to exercise their rights, have not previously established a contractual relationship with another mobile telecommunications service provider, which generated uncertainty about the continuity of the connection of said users to public telecommunications networks.

In view of the above, it was considered necessary to establish additional obligations for both the MVNOs and the Wholesale Mobile Concessionaire aimed at safeguarding the rights of users, in order to guarantee that, in the event that the provision of telecommunications services by the MVNOs ceases, users have all the necessary information to exercise their right to number portability in a timely manner and thus safeguard access to their telecommunications services considered to be of general interest and thus guarantee their continuity.

These modifications established the actions necessary to implement the mechanism that allows users to provisionally maintain connectivity in public telecommunications networks for: (i) origination and termination of calls and/or short messages provided for in the Portability Rules; (ii) origination of calls to emergency numbers established in the Guidelines for Collaboration in Matters of Security and Justice; and (iii) allowing any communication with the user to provide information related to the number portability process and/or to address any type of user query related to their number.

For more information, we are at your service.

Santamarina Steta podcast: reform to reduce the weekly working hours

The reform to reduce the weekly working hours

Written by Santamarina + Steta en . Published in Podcast.

In this episode, Juan Carlos Machorro, a partner at our firm, and Ernesto de la Puente, a senior associate in our labor law practice, meet to discuss the proposed reform to reduce the workweek; a series of initiatives seeking to amend the Constitution and the Federal Labor Law to reduce the workweek for Mexican workers to 40 hours. We discuss the business sector's opinion on these proposals, Mexico's situation compared to the rest of the world, and our expectations for this reform in the coming years.

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Real Estate Coordination Office, a new mechanism to streamline real estate procedures in Mexico City

Written by Santamarina + Steta en . Published in Updates.

Executive Summary:

  • On January 22, 2025, the Agreement establishing the Real Estate Coordination Desk in Mexico City was published, a new mechanism designed to streamline procedures related to real estate development. It aims to simplify processes, increase transparency, and provide greater certainty to the sector through coordination between various government agencies, such as the Secretariats of Government, Environment, and Mobility, among others. This collaborative effort ensures that all stakeholders are included in the process.
  • This system will focus on large-scale projects and is set to begin operating no later than March 6, 2025. This clear timeline ensures that all stakeholders are well-informed about the establishment of the Real Estate Coordination Desk and its objectives, improving administrative efficiency and reducing bureaucracy in key permits for urban development.

On January 22, 2025, the Agreement establishing the mechanism to facilitate the management of procedures, known as the Real Estate Coordination Office of Mexico City (the “Agreement”), was published in the Official Gazette of Mexico City.

Through this Agreement, the Government of Mexico City acknowledges the construction sector as a key pillar of the economy and fundamental to the country's development, emphasizing the importance of providing it with greater certainty through transparent and efficient administrative mechanisms that facilitate the streamlining of procedures and processes in real estate development.

The creation of the Real Estate Coordination Office of Mexico City (the “Office”) is established, with its operation being in charge of the Secretariat of Planning, Territorial Management, and Metropolitan Coordination of Mexico City (the ”Secretariat”).

APPLICABLE PROCEDURES

The Office will serve as a key tool to streamline procedures related to Real Estate Projects that require submitting any of the following applications to the Secretariat:

  1. Constitution of the Action Polygon.
  2. Application of the Urban Development Potential Transfer System (Receiving Property).
  3. Opinion on the Application of Land Use Regulations or General Zoning Rules.
  4. Unique Zoning Certificate with the application of Regulation 26 for the Housing Secretariat and SERVIMET.
  5. Unique Impact.

CLASSIFICATION CRITERIA FOR THE PROJECTS

Real Estate Projects classified for management through the Office include:

  • Residential projects with more than 10,000 m² of construction: Including those intended for social or popular interest housing, with low-impact commerce or services included in the type C manifestation registry.
  • Non-residential projects with more than 5,000 m² of construction: Including offices, retail, services, industry, or equipment.

  • Mixed-use projects with more than 5,000 m² of construction: Excluding those intended for social or popular housing or developed under Federal or Local Government programs, which include low-impact commerce or services, registered in the Type B manifestation.

INVOLVED AUTHORITIES

The Secretariat will closely collaborate with the competent Boroughs, according to the characteristics and needs of each real estate project, and with the following entities of Mexico City:

  1. Secretariat of Government;
  2. Secretariat of Administration and Finance;
  3. Secretariat of Comprehensive Risk Management and Civil Protection;
  4. Secretariat of Comprehensive Water Management;
  5. Secretariat of the Environment
  6. Ministry of Mobility; and
  7. Institute for Construction Safety.

ESTABLISHMENT AND LAUNCH OF OPERATIONS

The Agreement entered into force on January 23, 2025, and the Office must begin operations no later than March 6, 2025. Procedures initiated before the entry into force will continue in accordance with the traditional procedure in effect, in accordance with the applicable legislation.

There are several aspects of the Agreement that still need to be clarified. The Secretariat must issue the corresponding guidelines for the operation of the Office and the working group no later than February 13, 2025. Likewise, the Unique Impact Commission must publish the guidelines for the analysis of the projects on the same date.

Additionally, due to the implementation of the Agreement, the competent agencies of the Public Administration of Mexico City must review and adjust their procedures no later than March 6, 2025.

Query here the Agreement of the Real Estate Coordination Office of Mexico City.

Santamarina Steta podcast search funds the new investment funds for entrepreneurship

Search Funds: the new investment funds for entrepreneurship

Written by Santamarina + Steta en . Published in Podcast.

In this episode, we are joined by Juan Carlos Machorro and Guillermo Moreno, partners at our firm, to discuss Search Funds. We explore the relevance and innovation of this investment model, what it means for entrepreneurs seeking to acquire established companies, how this approach can offer new opportunities for growth and management, and the importance of strong leadership in acquired companies to ensure their long-term success.

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Mexico’s Supreme Court of Justice Confirms Constitutionality of Justified Dismissal Without Termination Notice.

Written by Santamarina + Steta en . Published in Updates.

Executive Summary:

  • On January 29th, 2024, Mexico’s Supreme Court of Justice ruled that the last paragraph of Article 47 of the Federal Labor Law (LFT), as amended in May 2019, is constitutional. This decision allows employers to defend themselves by proving a justified termination of the employment relationship, even if they did not provide the employee with a termination notice.
  • According to this ruling, the ability to present evidence to rebut the presumption in favor of the employee regarding the dismissal, thereby justifying the termination of the employment relationship, does not violate the employee’s rights to full judicial protection, the guarantee of due process, the principle of legality, or procedural equality.

As a result of a case handled by this Firm from its beginning to its conclusion, the Second Chamber of the Supreme Court admitted, due to its exceptional interest, and unanimously ruled on January 29th, 2025, in a Direct Amparo in Review, confirming the constitutionality of the addition to the last paragraph of Article 47 of the LFT.

With this decision, it was confirmed that employers have the right to defend and prove the justification for a dismissal with counterevidence in labor litigation, regardless of whether they provided the termination notice directly to the employee or submitted it to a competent Labor Court.

This ruling upholds the principle of reality introduced in the May 2019 amendment to the LFT over the mere formality of delivering the termination notice. While the absence of such notice continues to create an initial presumption in favor of the employee during litigation, this presumption can be rebutted if the employer provides objective and sufficient evidence that the termination of the employment relationship was justified, in accordance with the grounds established in the LFT.

This precedent, now supported by Mexico’s Supreme Court of Justice, strengthens the position of employers in labor disputes within the current labor justice system and marks a turning point in the way employment dismissal conflicts are evaluated in the country.

Resolution amending the general provisions applicable to issuers of securities and other participants in the securities market

Written by Santamarina + Steta en . Published in Updates.

Antecedent

On July 24, 2017 and July 23, 2021, respectively, certain guidelines were published in the Official Gazette of the Federation (“DOF”) that modified the “Resolution modifying the General Provisions applicable to brokerage firms” and the “Resolution modifying the General Provisions applicable to credit institutions”. The issuance of said resolutions adjusted the accounting criteria applicable to brokerage firms in relation to the classification of their investments in securities held to maturity, expanding: (i) the term of sale, or (ii) their classification prior to maturity. In the same sense, the lower risk incurred by credit institutions when granting credit to women was incorporated into the methodology for estimating preventive reserves and into the rating of non-revolving consumer and mortgage loan portfolios, by adjusting the risk parameters of probability of default and severity of loss.

Publication of the Resolution

On January 28, 2025, the Resolution amending the General Provisions applicable to issuers of securities and other participants in the securities market (“Resolution”) was published in the DOF. This publication is part of the efforts of the National Banking and Securities Commission (the “CNBV”) to update the regulatory framework based on international standards and, in turn, promote the development of a more transparent and sustainable securities market.

The Resolution is the result of a technical and regulatory analysis carried out by the CNBV, with the purpose of incorporating sustainability elements into the obligations of securities issuers and aligning the regulatory framework with the International Financial Reporting Standards (“IFRS”) for Disclosure of Sustainability Information (“IFRS-S”) in order to contribute to directing capital flows towards investments that foster economic development, promoting environmental and social sustainability, transparency and long-term strategies in the financial and economic activity of issuers, thus providing the investing public with better tools for decision-making based on measurable and comparable information. The key points of the Resolution are described below:

Obligation to Disclose Information Related to Sustainability

As one of the most relevant changes, the Resolution establishes the obligation for issuers to provide a sustainability report. This must include information on risks and opportunities related to governance, strategy and sustainability metrics that may affect the issuers' cash flows, access to financing or capital costs.

The sustainability report should be aligned with IFRS S1 Standards, General Requirements for Financial Information to be Disclosed Related to Sustainability and IFRS S2, Climate-Related Disclosures, issued by the International Sustainability Standards Board. Foreign issuers may present information based on local standards, provided they include explanations on interoperability with IFRS.

General Disclosure Requirements

Broadcasters must comply with the following periodic disclosure obligations:

  • Submit an annual sustainability report, certified by an external auditor, starting in 2027.
  • Provide quarterly financial information within 20 business days of the close of the quarter.
  • Submit audited annual financial statements by June 30 of the following year.

Validity and Conditions

The Resolution will enter into force on 29 January 2025. From 2026, issuers will be required to submit a sustainability report for the year 2025. This report will not require initial assurance, but in 2027 it will need limited assurance, and from 2028 reasonable assurance by an external auditor will be mandatory. In addition, the registration of securities may be cancelled at the request of the issuer or the stock exchange, always with the favourable opinion of the latter. In the case of securities backed by assets or debt, the issuer must first comply with all its obligations or have the approval of the holders' meeting to proceed with the cancellation.

This Resolution marks an important step forward for the business sector in Mexico, whose observance and structured and gradual implementation will allow them not only to comply with the corresponding provisions, but also to have access to greater financing and, in turn, consolidate their commitment as drivers of sustainability actions in favor of the community.

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State Patrimonial Responsibility: Implications of Deficient Supervision by the National Banking and Securities Commission

Written by Santamarina + Steta en . Published in S+S Litigation Newsletter.

Executive Summary

  • On January 10, 2025, the Twentieth Collegiate Court on Administrative Matters of the First Circuit published the thesis with digital registration 2029799 under the heading “STATE PATRIMONIAL LIABILITY. IT CAN BE GENERATED BY THE DEFICIENT PREVENTION, MONITORING AND SUPERVISION OF THE NATIONAL BANKING AND SECURITIES COMMISSION (CNBV) TO A FINANCIAL ENTITY.”
  • This thesis establishes a relevant criterion to determine the State's patrimonial responsibility for omissions or deficiencies in the CNBV's supervisory functions towards financial institutions.

On January 10, 2025, the thesis of the Twentieth Collegiate Court on Administrative Matters of the First Circuit was published in the Judicial Weekly of the Federation; in which the obligation of the National Banking and Securities Commission ("CNBV" or the "Commission") to prevent, supervise and monitor financial institutions in order to ensure their stability and correct operation; in attention to the protection of public order and the social interest is foreseen.

This criterion finds its origin in the claim for compensation for patrimonial liability of the State presented by an individual; in which, it was argued, among others, that the CNBV had incurred in deficient supervision towards a credit institution. In this regard, since the Commission denied said responsibility, the claimant promoted a contentious administrative trial in which the Federal Administrative Court of Justice recognized the validity of the resolution issued by the CNBV by applying the isolated thesis 2a. XVIII/2020 of the Second Chamber of the Supreme Court of Justice of the Nation (“SCJN”). In that isolated thesis 2a. XVIII/2020 (10th), entitled: “NATIONAL BANKING AND SECURITIES COMMISSION (CNBV). THE REFUSAL TO INTERVENE IN POPULAR FINANCIAL SOCIETIES AT RISK DOES NOT CONFIGURE A CAUSE FOR PATRIMONIAL LIABILITY OF THE STATE, NOR DOES IT GENERATE A RIGHT TO COMPENSATION IN FAVOR OF THIRD PARTIES, SINCE IT IS A DISCRETIONARY POWER GRANTED BY LAW”, the Second Chamber of the SCJN provided that:

  1. The CNBV has discretionary powers to ensure the proper functioning of financial institutions, since the law grants it a broad scope of application to decide whether to act or refrain, to decide when and how to do so, or even to freely determine the content of its possible action; and
  2. In order to determine the State's liability for inactivity, there must be a legal duty to act.

However, and despite the criteria upheld by the Second Chamber of the SCJN, the Twentieth Collegiate Court determined that the CNBV's omissions; specifically those deficiencies in preventing, monitoring and supervising regulated subjects, could generate patrimonial liability of the State. This is because the Commission, as a decentralized body of the Ministry of Finance and Public Credit, regulated by the Law of Credit Institutions, is obliged to act diligently and in a timely manner to protect the assets of users of the financial system.

In addition, this new criterion underlines that the CNBV's discretion should not be interpreted as an absolute power that justifies omissions or arbitrary acts. On the contrary, this power must be exercised under the principles of the legal order, guaranteeing that the Commission's actions do not expose savers to unnecessary or foreseeable risks.

Likewise, it highlights that the irregular administrative activity of decentralized bodies can seriously affect the property rights of citizens, thus creating a legal basis for the generation of patrimonial liability of the State. This principle could be applied by analogy to various entities of the Public Administration that act under discretionary powers.

We consider that the publication of this thesis establishes a relevant precedent in the context of administrative litigation and financial law. In addition, it marks a significant change in the way in which the obligations of regulatory authorities are conceived, promoting greater diligence in their performance. This, by indirectly encouraging regulatory authorities to review and, where appropriate, strengthen their supervision and oversight procedures.

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Suspension of the challenged act with restorative effects in the Amparo Trial

Written by Santamarina + Steta en . Published in S+S Litigation Newsletter.

  • The suspension of the challenged act with restorative effects in the Amparo Trial is a measure provided for in the Amparo Law that seeks to temporarily restore the violated rights of the complainant, avoiding irreparable damage and preserving the subject matter of the trial without extinguishing it.
  • In granting such a suspension, judges must ensure that it is temporary, reversible and not definitive, carefully assessing the legal consequences to ensure protection without affecting the development of the main trial.

In Mexico, the Amparo Trial is a means of constitutional control whose foundation is found in articles 103 and 107 of the Political Constitution of the United Mexican States (“CPEUM”), which aims to protect the human and fundamental rights established in the CPEUM and in the International Treaties of which Mexico is a party.

The CPEUM provides in section X of article 107 the suspension of the claimed acts in the cases and through the conditions that are determined by the regulatory law, that is, the Amparo Law, through an analysis of the appearance of good law and social interest.

In this order of ideas, the Amparo Law provides for the figure of the “suspension of the challenged act”, the purpose of which is to preserve the subject matter of the trial and prevent the persons related to the challenged act from suffering an affectation to their legal sphere while the substance of the controversy is resolved in the trial, either with conservative measures -prevent an act from materializing in the legal sphere of the complainant- or early guardianship -restoration to the complainant of the enjoyment of an affected right-.

Thus, the Amparo Law itself establishes certain requirements that the Judge must evaluate in order to be able to deny or grant the suspension of the claimed act, these requirements being: (i) that the suspension is requested by the complainant, (ii) that does not harm the social interest, nor contravene public order provisions, (iii) that an analysis be carried out of the appearance of good law and danger in the delay; and, (iv) that there is a legal and material possibility of granting it.[1]

It is important to note that, as mentioned in the preceding paragraphs, the suspension of the challenged act is a benefit provided for in Article 147 of the Amparo Law. However, this is of a transitory nature, that is, it has a limited duration, starting from the time the order granting it provisionally is issued or when the resolution granting said measure definitively is issued and ends when the matter is resolved by means of an enforceable judgment in the Amparo Trial. 

Now, focusing on the suspension with advance protection measures, the article referred to in the previous paragraph contemplates the possibility of giving restitutionary effects to the suspension, that is, anticipating the effects of a possible sentence as long as the requirements indicated above are met and that these effects can be retroactive in the event of a negative sentence for the complainant. The aforementioned provision establishes the following: “Considering the nature of the challenged act, it will order that things remain in the state in which they are and, if legally and materially possible, it will provisionally restore the complainant to the enjoyment of the violated right while a final judgment is issued in the amparo trial.”

The First Chamber of the Supreme Court of Justice of the Nation (“SCJN”) has determined that the nature of the contested acts referred to in Article 147 of the Amparo Law is a factor that must be considered by the Judge, but is not decisive in deciding whether to grant or deny the suspension of the contested act, since the legal consequences of granting the suspension must be analyzed.[2]

The above is only relevant in determining what type of measures can be adopted in the event that the suspension is granted, whether: (i) to paralyze an act; or (ii) to provisionally restore a right.

The latter means that judges must consider the consequences that certain types of acts, whether positive, negative or omissions, may produce in order to decide whether things should remain as they are or whether the person should be provisionally restored to the enjoyment of the violated right.

In the aforementioned considerations, what criteria should the jurisdictional bodies follow in order to grant the suspension of the challenged act with restorative effects?

The Second Chamber of the SCJN has indicated that the parameters that judges must take into account to analyze the possibility of granting the suspension of the challenged act with restorative effects are those consisting of the provisional restitution of rights being temporary to the extent that, in the event of a decision contrary to the complainant's claim, it is possible to reverse the effects of the suspension, since it can be revoked in the event of the denial of protection.[3]

The purpose of this “temporary or provisional” measure is to preserve the subject matter of the trial, and the Judge protects the right that the complainant considers affected while the trial is being resolved. Therefore, it is irrelevant that the effects of a precautionary measure coincide with those of a possible amparo ruling, as long as these effects are transitory, not definitive, and can be retroactively applied.

Therefore, since the provisional suspension is of a transitory nature, until the final judgment resolving the amparo trial is issued, it is possible to grant it in accordance with the provisions of article 147 of the Amparo Law, since, if it is legally and materially possible, the complainant must be provisionally or temporarily reinstated in the enjoyment of the violated right without this implying that the subject matter of the main trial is extinguished.

However, it is important to clarify that if the complainant's full restitution of the right he believes has been violated, then such restitution is not admissible by means of suspension. This is because it would imply leaving the Amparo Trial without subject matter, since the latter is the subject matter of the final judgment to be issued in accordance with section 77 of the Amparo Law.[4]

It is important to remember that, even if the suspension is granted with restorative effects, this does not imply modifying, restricting rights or establishing any other rights that the complainant did not have before filing the claim, but rather, maintaining the legal situation of the complainant in the state in which it is at the date of filing the claim.

In this regard, it seems irrelevant that there is an identity between the effects of the suspension with restorative effects and the effects of a possible favorable judgment for the complainant in order to assess whether it should be granted or not. As mentioned above, the suspension of the challenged act with restorative effects is a temporary benefit that seeks to prevent the complainant from suffering a greater impact on his legal sphere.

The important thing is that the Judges analyze the legal consequences that the temporary restitution of rights may bring and whether this temporary restitution of rights can be revoked in the event of a negative judgment. The above is because it must always be privileged that with the execution of the act claimed, the rights of the person who went to the amparo trial to seek protection and restitution of his violated or affected rights are not seriously and irreparably violated.

Author: Pamela Balderas O.

[1] Articles 139 to 146 of the Amparo Law.

[2] 1a./J. 70/2019 (10a.) with digital registration number 2021263.

[3] Thesis contradiction number 338/2022. Thesis: 2a./J. 22/2023 (11a.).

[4] Thesis: I.11o.C. J/5 K (11a.) with registration number 2024344.

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Implications of the right of insurers to request information from policyholders regarding an accident

Written by Santamarina + Steta en . Published in S+S Litigation Newsletter.

  • The right of insurers to request information from policyholders about a claim, provided for in the Insurance Contract Law (LCS), allows them to investigate the circumstances of claims without clear limits as to timing or frequency, which may generate legal uncertainty for policyholders.
  • Although the courts have indicated that this power must be exercised in a reasonable and proportionate manner, the lack of precision in the LCS regarding the time limit for resolving claims or requesting information leaves room for possible abuses and affects the legal certainty of users.

In recent times, the need for protection of our person and property has been increasingly reflected. As an example, we remember the unfortunate catastrophe that occurred in Acapulco, Guerrero, which devastated the tourist center and left many of its citizens, businessmen and even the government itself in a state of defenselessness; this, due to the fact that most of them did not have a response plan for this contingency.

For this reason, it is important to generate a culture to safeguard personal and material integrity by taking out insurance. For this reason, the insurance sector offers multiple services with the purpose of insuring life, health, property, assets, among other issues. However, the regulations relating to this sector still present various gaps and inconsistencies that have not been resolved.

Specifically, the Insurance Contract Law (“LCS”) regulates the procedure to be followed in the event of an accident. First, before the insurer determines whether payment of the insured sum to the user is appropriate or inappropriate, the LSCS establishes a power in favor of insurers to require from the insured or their beneficiaries any type of information on facts related to the accident by which the circumstances in which it occurred can be determined; however, to what extent does this power cover?

The fact is that the article relating to this right does not establish any type of limit or time frame for requesting information from its insured, that is, it leaves the way open for the insurer to request information relating to the accident as many times as necessary, without any type of sanction or limit established in the legal norm.

The above could generate legal uncertainty for users of insurance companies, especially due to the time they have to take action against them. In the case of property insurance, they have a time limit of two years to claim the insured amount and in the case of death coverage in life insurance, it is five years.

In addition to the above, a comprehensive reading of the LCS reveals various causes that authorize the insurer to terminate the Insurance Contract in question and to void its obligations to the insured in the event of any omission or inaccurate declaration of information at the time of contracting the insurance. This is because insurers calculate the risks based on the declarations of the insured and thus offer specific coverage for each user and the amount of the premium.

At the time of an accident, it is the responsibility of the insurance company to investigate, through its collaborators, the specific circumstances that led to the accident. However, this does not mean that insurers have an absolute right to ask the insured for any kind of information without limit.

In recently issued judicial criteria, the Collegiate Courts have determined that the investigation of information is carried out by insurance company professionals to determine the circumstances relating to the accident, but from a rational, adequate and appropriate requirement for the specific case. This does not mean that the burden of proof is transferred to the insured to obtain an effective claim against the insurer, much less that it is the responsibility of the insured to provide information that allows the insurance company to discharge its obligations.[1]

For its part, the First Chamber of the Supreme Court of Justice of the Nation had interpreted that this power in favor of insurers does not violate the right to equality because by establishing that the insurance company can disclaim its obligations in the event that a false statement is proven, it attributes the burden of proving the bad faith of the insured to the insurance company and thus overturns the presumption of good faith.[2]

However, it is considered that this power is closely related to the inaccuracy of the LCS regarding the time limit that an insurance company has to decide on the admissibility or inadmissibility of a claim. This omission in the regulation could generate uncertainty for the insured, since the power to request information related to the accident also has no limit and the insurance company can request said information as many times as it considers necessary to relate the circumstances of the accident.

Author: Ivan Castelan C.

[1] See the thesis under the heading “INSURANCE CONTRACT. THE INSURANCE COMPANY'S POWER TO REQUEST INFORMATION ON THE CIRCUMSTANCES RELATING TO THE ACCIDENT DOES NOT ALLOW THE BURDEN OF PROOF TO BE TRANSFERRED TO THE BENEFICIARY.” and digital registration number 2028776.

[2] See the thesis heading: “INSURANCE CONTRACT. ARTICLE 70 OF THE RELATIVE LAW DOES NOT VIOLATE THE RIGHT TO EQUALITY.” and digital registration number 2017154.