There may be good news for those who have lost their property or other assets to fraud in Costa Rica.
Believe it or not, the courts are divided on who should be protected. Here is a little informational background:
Most jurisprudence is decided in the Corte Supremo, or superior court. The court is divided into four sections. The first court, called the Sala Primera, decides civil matters. The second is called the Sala Segunda, and is the labor court. The third, the Sala Tercera, is the criminal court. The fourth is the Constitutional Court, called the Sala Cuarta or Sala IV, and by its name it is obvious that it decides constitutional issues and that its decisions can override law made by another of the courts.
The civil court jurisprudence has historically protected third parties in fraud cases, while the criminal court has protected victims. What does this mean? Here is a true story to illustrate the situation.
Mary, let’s call her, came to Costa Rica after working a lifetime as a teacher in Colorado. She only had $100,000 to her name and a teacher’s pension. She purchased a piece of property on the beach. In building her home, she worked with several contractor and attorneys and signed many papers, mostly in Spanish. Mary took a little Spanish in high school, so she didn’t get any of the documents professionally translated.
Upon returning from a trip to the States, she found her beautiful piece of property and cozy house was sold out from under her. She hired attorneys and more attorneys, but they were no help.
The property was sold to John, let’s call him, by one of the people who was originally involved in helping Mary. John, too, was a teacher from somewhere in the United States with about as much money as Mary. Basically, he put his life savings into the deal. John purchased the property in good faith. He had never met Mary and got clear title to the land. He took the word of his legal counsel that everything was in order.
Now, who should be protected?
The civil court says John because he was a party acting sincerely. The criminal court says Mary because she was the original owner and a victim, like so many others in Costa Rica, to blatant fraud.
On Sept. 13, 2002, someone filed an action in the Sala IV saying that the criminal court, the Sala Tercera, is wrong and that third parties should be protected.
In Costa Rica, whenever a constitutional case is presented in the high court, anyone with a legal action can also attach themselves to the case, so they can present their views to the court.
Even though this goes against victims’ rights, the case was great for victims because it gave them a place to express their beliefs on which way the law should fall. However, hardly any people who had been swindled knew about this court case and made themselves parties to it.
Friday the Court Record Newspaper, the Boletin Judicial, reported that someone else has filed another appeal saying the civil court, the Sala Primera, is in error.
Victims now have a chance to express their views by adding their names to the case as coadyuvantes, or in English, coadjutant, meaning a helper or assistant to the case.
Many in the property and legal business believe that original owners as victims should be protected and that the Sala Tercera, the criminal court, is correct for one simple reason: There are more victims who have been defrauded in Costa Rica than third parties.
Moreover, from personal experience in advising foreigners, the writer of this article has found there really aren’t too many Johns who were truly innocent. Most, not all, but most, third parties are one way or another involved in a scam.
Should the constitution decision protect the original owners and not the third parties, both Mary and John will be protected. Under the view of the criminal court, Mary will have the right to her property, and John will have the right to collect his loss from the government of Costa Rica because the government should be responsible for those who misuse the system to hoodwink others.
It is easy to laundry property and asset transfers through legal paperwork in Costa Rica. But a bit of homework can send up red flags to a purchaser. Purchasers of anything in Costa Rica should do their homework and not leave it up to anyone else, especially attorneys.
If Costa Rica decides to protect third parties and not victims, those involved in such cases fear that the country will be even more of a paradise of the wanted and the unwanted of the world not to mention its own homegrown crooks.
Costa Rica should protect original owners in property and asset fraud and send a message to the rest of the developed world it is moving away from its Napoleonic version of Roman law.
Article first published in A.M. Costa Rica on May 17, 2004.
