The Dispute Resolution Review: France

Introduction to the dispute resolution framework

France is a civil law system in which legal statutes are the primary source of law. The doctrine of precedent as it is known in common law systems does not apply. Each case is decided on an individual basis. However, precedents help to interpret statutes, and decisions of the Court of Cassation and the Council of State, respectively the highest courts of the judicial and administrative orders in France, are largely relied upon by the lower courts.

i Structure of the law

The French legal system is based on a hierarchy of norms. Lower norms must be consistent with the higher norms.

The Constitution of 4 October 1958 is at the top of the hierarchy.2 The Constitution includes the 1789 Declaration of Human and Civic Rights,3 the Preamble of the 1946 Constitution4 and the 2004 Charter for the Environment.5

International treaties and European Union (EU) law are at the second level, followed by Parliament laws, government regulations and the guidance of administrative authorities at the lowest level.

The French Constitutional Council reviews the constitutionality of legislation. It can be seized prior to the enactment of legislation by a political authority or a group of Parliament members or, after the enactment of legislation, by parties to pending judicial proceedings (application for a priority preliminary ruling on the issue of constitutionality).

The Constitutional Council does not assess the consistency of national legislation with international treaties and EU law.6 Such assessment can be requested during judicial proceedings, directly to the seized court. In addition, French courts may refer questions to the Court of Justice of the European Union (CJEU) as to whether national law is consistent with EU law, or regarding interpretation of EU law.

ii Structure of the courts

The French court system is characterised by a dualism of court hierarchies with, on the one hand, administrative courts having jurisdiction in public law matters and, on the other, courts of the judicial order having jurisdiction in private law (i.e., all matters not subject to public law).

Both the administrative court system and the judicial court system form a three-tier hierarchy.

The administrative court system is composed of courts of first instance organised on a territorial basis, local administrative courts of appeal and the highest administrative court, the Council of State.

Courts of a judicial order dispense both criminal and civil justice.

At first instance, the main civil courts are the judicial courts that have jurisdiction over certain matters specifically reserved to them and over all matters not reserved to specialised courts. Judicial courts are composed of professional judges.

There are also several specialised courts such as commercial courts and labour courts, which are overseen by non-professional judges.

Commercial courts have jurisdiction over commercial cases (e.g., corporate disputes, insolvency proceedings). The judges in these courts come from the business world and are elected by their peers.

Since April 2018, the Commercial Court of Paris has had an international chamber specially designed to enhance the attractiveness of the Paris court in connection with disputes arising from international economic and financial relations. Proceedings before this international chamber provide for an extensive use of the English language and allow the use of certain common law mechanisms, such as witness testimony and cross-examination.7

Labour courts have jurisdiction over disputes arising from employment contracts and are evenly composed of employer and employee representatives elected by their peers.

Except for decisions ruling on claims of less than €5.000, which may not be appealed, either party can freely appeal judgments from civil courts to a court of appeal within the time frame provided by the law. Three professional judges review the case, in law and in fact.

The Court of Appeal of Paris has an international chamber that complies with a specific procedure allowing the use of certain common law mechanisms, as is the case before the international chamber of the Paris Commercial Court.

The Court of Cassation is the highest court of the judicial order, and its role is not to rule on the merits, but to state whether the law has been correctly construed and applied to the facts by the lower court.

iii Framework for alternative dispute resolution procedures

The Civil Procedure Code sets a framework for alternative dispute resolution (ADR) procedures.8 Engaging with ADR prior to launching litigation is not mandatory in France, except for civil claims that do not exceed €5,0009 or if a contract provides for it.

As regards arbitration, the Code10 deals with all the aspects of both domestic and international arbitration, inter alia, the arbitration clause or agreement, the constitution of the arbitral tribunal, the applicable procedure, the arbitral award, the exequatur and the remedies. These provisions are in line with international best practices.

ADR procedures are discussed in further detail in Section VI.

The year in review

The important decisions of the year are too numerous to all be listed. The following three decisions are merely a sample.

i Total Direct Energy v. EDF11 (force majeure)

Total Direct Energy is an alternative electricity supplier purchasing energy from EDF, the historical supplier, under a regulated agreement. Due to the covid-19 pandemic, consumption and market prices of electricity decreased. In this context, considering that it was obliged to sell on a particularly weak market the quantities purchased from EDF that were not consumed by its customers because of the restrictions on business activities imposed by the public authorities, Total Direct Energy asked EDF to suspend performance of the agreement. Total Direct Energy deemed that the conditions of force majeure, as defined in the agreement, were met. EDF refused, considering that Total Direct Energy was able to perform the agreement.

Total Direct Energy applied to the President of the Commercial Court of Paris for interim measures, arguing that the refusal of EDF was a manifestly illegal nuisance. The President of the Court examined the conditions of force majeure as defined in the agreement. The parties had defined force majeure as an external, irresistible and unforeseeable event making it impossible to perform the parties' obligations under reasonable economic conditions. The legal definition of force majeure is different, and provides that the event must prevent the debtor from performing its obligation.12 Thus, in principle, when the event only makes it more expensive to perform the obligation, the conditions of force majeure are not met.

The President of the Court found that the spread of the virus was an extraneous cause, unforeseeable and irresistible, and that it was impossible for Total Direct Energy to perform its obligations under reasonable economic conditions due to a significant decrease of energy prices and the inability to store electricity. Focusing on the contractual definition of force majeure, the President of the Court ordered EDF to suspend the performance of the agreement. The Court of Appeal of Paris confirmed this ruling.

ii Scor v. Covéa and its CEO13 (fiduciary duties of board members)

On 10 November 2020, the Commercial Court of Paris rendered a judgment concerning Covéa's €8.3 billion unsolicited bid to take over SCOR in August 2018.

At the time of the takeover bid, the CEO of Covéa sat on the board of SCOR, in his personal capacity. SCOR rejected the takeover bid of Covéa and alleged that the offer had been prepared with SCOR confidential information and documents gathered by the CEO of Covéa as a SCOR director in his personal capacity.

The Commercial Court ruled that the CEO of Covéa committed a breach of the internal rules of the board of directors for which he is civilly liable by violating the commitments he made to SCOR relating to conflicts of interest, confidentiality and loyalty. The Court also found that Covéa knowingly participated in and benefited from its CEO's misconduct.

The judgment is notable in particular because it helps to specify the fiduciary duties of board members of listed companies and discusses the issues of corporate interest and economic harm in the context of takeover bids.

iii Ebenal and Kering v. Iron Mountain France14 (transfer of criminal liability in the case of a merger)

On 25 November 2020, the criminal chamber of the Court of Cassation overturned well-established case law in M&A matters. France's highest judicial court stated that the absorbing company could now be sentenced to a criminal fine or to seizure measures for an offence committed by the absorbed company prior to the transaction. This case law applies only to merger operations after 25 November 2020, which fall within the scope of Directive 78/855/EEC of 9 October 1978 concerning mergers of public limited liability companies.

Prior to this reversal of case law, the Court of Cassation consistently considered that the principle according to which one can only be criminally liable for one's own acts, set out in Article 121-1 of the Criminal Code, precluded any criminal proceedings against the absorbing company for acts committed prior to the merger by the absorbed company.

The Court explained that its reversal is based in part on a recent decision of the European Court of Human Rights,15 which held that the sentencing of the absorbing company to a civil fine for a pre-merger offence does not affect the above-mentioned principle.

This new solution is in line with the principle of universal transfer of all the assets and liabilities of the acquired company, which has long been applied by French civil and commercial courts.

Court procedure

i Overview of court procedure

The Civil Procedure Code lays down the guiding principles of trial and specifies the rules governing civil and commercial litigation before French courts at each court level. Trials are conducted on the basis of two main principles: cooperation between the judge and the parties and the adversarial system.

ii Procedures and time frames

Proceedings usually commence when a writ of summons is served on the defendant and subsequently registered with the court.

In standard court proceedings, the parties then exchange their written materials until the case is ready to be tried. This stage is overseen by a judge, who may set deadlines. It typically takes 12 to 18 months to get to trial. This period may be longer, particularly in complex cases or in the event of a procedural incident. However, parties can apply to the President of the Court for an authorisation to litigate under emergency procedures on the merits, in which case decisions can be obtained within six months.

Several types of urgent or interim applications are available before French courts in civil and commercial matters, including the following: in urgent cases, the judge may order any measures that do not raise any serious challenges or that the existence of the dispute justifies. The judge may where necessary order protective measures or measures to restore the parties to their previous state, either to avoid imminent damage or to stop a manifestly illegal nuisance. In certain cases, the judge may award an interim payment to the creditor or order the mandatory performance of the obligation even where it is a non-monetary obligation. Depending on the nature of the claim, a decision can usually be obtained within one to four months. If a case is extremely urgent, a hearing can be held very quickly even during holidays or on non-working days and in such case a decision may be obtained within one week to one month (and even within a matter of days if the case justifies so).

iii Class actions

Class actions were introduced in French law in 2014. A class action may be brought in relation to consumer and competition law disputes, health product liability, environmental liability, discrimination and personal data protection. The French class action is an opt-in mechanism and may only be initiated by certified associations or specific groups (labour unions). Other mechanisms enable claimants to act jointly, such as legal actions introduced by associations representing their members in connection with a collective harm.

Class actions are not common in France. According to various sources, less than 30 class actions have been introduced since 2014 and most of them have failed.

A parliamentary report dated 11 June 2020 on the results and prospects of class actions highlights a rather disappointing track record due to, among other things, the complexity and restrictive nature of the procedure.

Following this report, a law proposal dated 15 September 2020 was submitted for a new class action regime to simplify access to the class action procedure, ensure better compensation for victims and reduce the time taken to reach a decision.

This law proposal also aims to take into consideration the guidelines of European Directive (EU) 2020/1828 dated 25 November 2020 on representative actions for the protection of the collective interests of consumers, which 'sets out rules to ensure that a representative action mechanism for the protection of the collective interests of consumers is available in all Member States, while providing appropriate safeguards to avoid abusive litigation' (Chapter 1, Article 1).

Pursuant to Article 24 of the Directive, Member States shall adopt and publish, by 25 December 2022, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall apply those measures as of 25 June 2023.

According to French scholars, the implementation of this Directive is an opportunity to reform the rules governing class actions in France in order to facilitate exercise thereof.16

iv Representation in proceedings

Since 2020, parties must be represented by a lawyer before the judicial court and the commercial court when the amount in dispute is more than €10,000 as well as for several specific proceedings regardless of the amount in dispute (including divorce and tax proceedings).

Legal entities and natural persons can represent themselves before first instance courts when the amount of the dispute is less than or equal to €10,000 and in certain proceedings regardless of the amount in dispute (including matters falling under the jurisdiction of the litigation and protection judge, for professional elections, or for business difficulties and certain pledges).

As a general rule, parties must be represented by a lawyer before the court of appeal and before the highest courts by a special attorney (Court of Cassation and Council of State).

v Service out of the jurisdiction

A natural person may be served with documents within the EU according to the rules provided by EU Regulation (EC) No. 1393/2007 of 13 November 2007, which applies to the service in Member States of judicial and extrajudicial documents in civil or commercial matters. The Regulation provides for a service procedure through transmitting and receiving agencies in each Member State. The transmitting agencies in France are the bailiffs and the court services. The receiving agencies are the bailiffs.

A new EU Regulation on service of documents (2020/1784) dated 25 November 2020 will partially apply as of 1 July 2022 and replace the above-mentioned Regulation 1393/2007. Article 5 of this new Regulation (which will apply at a later stage) provides for new means of communication between agencies and specifies that the documents to be served, requests, confirmations and receipts between agencies, etc., shall be transmitted through a secure and reliable decentralised IT system.

Outside of the EU, the service of documents is governed by the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, to which France is a party, and other bilateral agreements. Pursuant to the Hague Convention, each contracting state designates a central authority that undertakes to receive requests for service coming from other contracting states and serves the document or arranges to have it served by an appropriate agency.

If no EU regulation or international provision applies, the service of documents is governed by the French civil procedure code.

Once the proceedings are initiated, subsequent documents may be served to the address where the foreign party expressly elects domicile in France, including the address of the lawyer designated in France by the foreign party.

The rules for service of documents outside of the jurisdiction are similar for natural and legal persons.

vi Enforcement of foreign judgments

Judgments given in Member States of the EU are in principle directly enforceable in France. The applicant simply has to provide a bailiff with a copy of the judgment and a certificate issued by the court of origin confirming that the judgment is enforceable, pursuant to Brussels I bis Regulation.17 Unless a bilateral treaty provides otherwise, enforcement of judgments rendered outside the EU requires an exequatur, that is, a judgment of the relevant French judicial court stating that the judgment is enforceable in France. Exequatur is subject to the following conditions: jurisdiction of the foreign court, compliance of the foreign judgment with French international policy and absence of fraud.

vii Assistance to foreign courts

Within the EU, EC Regulation No. 1206/200118 sets a framework for cooperation between the courts of the Member States (except Denmark) in the taking of evidence in civil or commercial matters. Under this Regulation, any court of a Member State may request to take evidence directly in France or request that a French court takes that evidence.

France is also a contracting party to the Hague Evidence Convention,19 which provides that in civil or commercial matters, foreign judicial authorities may request evidence abroad. Letters of request should be sent to the civil service for international mutual judicial assistance of the French Ministry of Justice. Pursuant to Article 23 of the Convention, France has stated that it will not execute requests having as their purpose a pre-trial discovery of documents, unless the requested documents are listed restrictively in the letter of request and have a direct and specific link with the purpose of the procedure.

If no convention or treaty applies, the French Civil Procedure Code governs assistance to foreign courts.20 Requests should be sent to the French Ministry of Justice, which forwards it to the public prosecutor and to the president of the judicial court. The judge appointed by the president of the judicial court must execute the request, unless it is irregular or would interfere with French sovereignty or security.

viii Access to court files

Neither written submissions nor exhibits are available to the public. Oral arguments are held in public hearings, save where the law requires or allows that they be held in the judge's council chamber. Thus, hearings may be held in private, in particular to protect trade secrets or individual privacy, or should all parties request it.

Judgments are available to the public, but their wording can be adapted to ensure, for instance, trade secret protection.

ix Litigation funding

Third-party funding is available in France. It is mostly used in arbitration proceedings, which are significantly more expensive than state court proceedings.

Third-party funding is not subject to formal regulation. However, on 21 February 2017, the Paris Bar Council issued a resolution providing in essence the following recommendations: attorneys remain solely accountable to their client, not to the third-party funder; only the client (and not the attorney) can communicate information about the case to the third-party funder; and attorneys should encourage their client to disclose the existence of third-party funding to arbitrators and should warn their client about the possible consequences of nondisclosure (namely, a conflict of interest issue that may result in the nullity of the award).

There is no specific rule providing that third-party funders can be made liable for the costs incurred by the other side.

Legal practice

i Conflicts of interest and Chinese walls

Under the National Bar Regulation, a lawyer may not advise, represent or act on behalf of two or more clients in the same matter if there is a conflict or a significant risk of a conflict between the interests of those clients.

When a conflict of interest arises, if there is a risk of a breach of confidence or if the lawyer's independence may be impaired, the lawyer must cease to act unless every party gives a written consent. The lawyer must also refrain from acting for a new client if there is a risk of breach of confidence entrusted to the lawyer by a former client or if the knowledge that the lawyer possesses of the matter of the former client would give an undue advantage to the new client.

In such cases where lawyers are practising in association, these rules apply to the association and all its members. The Regulation contains no reference to Chinese walls, and the Bar Association has not taken a position on this matter. Thus, some lawyers consider that in the presence of an existing or potential conflict of interest within a firm, setting up a Chinese wall does not allow for compliance with the National Bar Regulation.21 Nevertheless, Chinese walls could be usefully set up when no prohibition applies under the National Bar Regulation, for example when all parties have given their written consent to a conflict of interest or when the risk of a conflict between clients is not significant.

ii Money laundering, proceeds of crime and funds related to terrorism

Lawyers must comply with the provisions of the Monetary and Financial Code relating to the fight against money laundering and terrorist financing.22 These obligations are derived from the implementation of EU anti-money laundering/combating the financing of terrorism (AML-CFT) directives.

When assisting their clients in financial, corporate or real estate transactions, as well as when providing tax advice, lawyers are bound by vigilance and disclosure obligations. In litigation matters, lawyers have the same vigilance obligations but they have no disclosure obligations.

Thus, lawyers should have internal procedures to prevent and detect possible money laundering attempts made by their clients. In particular, lawyers have to identify their clients and their beneficial owners.

If a lawyer knows, suspects or has good reason to suspect that a transaction involves money derived from an offence punishable by more than one year's imprisonment or from tax fraud, or that is linked to the financing of terrorism, he or she must address a suspicious transaction report to the president of the bar association. The president of the Bar Association will check that the AML-CFT conditions are met and, if so, forward the lawyer's report to Tracfin, which is the national financial intelligence unit of the Ministry of Economy.

To protect confidentiality, the monitoring of lawyers' compliance with their AML-CFT obligations has been entrusted to the Bar Association, which also has the power to sanction lawyers' breaches.

iii Data protection

The EU General Data Protection Regulation (GDPR) regulates the processing of personal data.23 The French Data Protection Act24 has been modified to implement the GDPR. Acting as personal data controllers or data processors, or both, law firms should comply with this regulation and, in particular, with its key principles (transparency, lawful basis, purpose limitation, data minimisation, accuracy, retention, data security and accountability).

Usually, engagement letters include a section about the processing of personal data, it being specified that consent is not required when the processing is necessary for the purposes of the legitimate interests pursued by the controller or by a third party. In most cases, dispute resolution is a legitimate interest. Furthermore, the establishment, exercise or defence of legal claims, whether in court proceedings or in an administrative or out-of-court procedure, allow the processing of special categories of personal data that merits higher protection, such as data concerning health.

Sharing personal data with other law firms or legal processing outsourcers is allowed, however the controller must ensure that sufficient guarantees are provided regarding compliance with the GDPR. Transfer of personal data outside the EU may take place in third countries recognised by the European Commission as ensuring an adequate level of protection. If this condition is not met, the data controller will have to conclude a specific agreement with the service provider to ensure that it applies an adequate level of protection.

Documents and the protection of privilege

i Privilege

Under French law, legal privilege applies both to correspondence between lawyers and between lawyers and their clients, irrespective of whether the lawyer acts as legal counsel or defence counsel. By way of exception, privilege does not apply to correspondence between lawyers when lawyers mark them as 'official'. There is however a limited number of situations where lawyers are authorised to do so. An official letter may under no circumstances refer to prior elements that themselves are covered by privilege.

Clients can always decide to waive the legal privilege attached to a correspondence with their lawyer by communicating it to a third party or by producing it in legal proceedings. Conversely, lawyers are not authorised (except in very limited situations) to waive the legal privilege attached to correspondence with their clients or with other lawyers. Doing so is a criminal offence under French law.

Correspondence protected by legal privilege is inadmissible in civil proceedings. A civil court may not order the forced production of a document covered by legal privilege.

Privilege does not cover correspondence with or between in-house counsels.

The European Code of Conduct, which has legal force by way of incorporation in the rules governing the profession, gives no confidential character to exchanges between lawyers within the EU.

Whenever French lawyers work with a foreign correspondent, they are obliged to check on the rules of privilege and professional conduct that apply to the foreign lawyer and ensure that they provide for confidentiality of correspondence between lawyers. Should that not be the case, French lawyers must enter into a confidentiality agreement or ask their client if he or she accepts an exchange of information that is not covered by confidentiality.

A draft law for trust in the judicial institution, adopted on 18 November 2021, specifies that legal privilege attached to correspondence exchanged between a client and a lawyer acting as legal counsel (as opposed to defence counsel) cannot be invoked to oppose investigation measures concerning tax fraud and other economic criminal offences such as corruption, provided that the correspondence shows that it was used to commit or facilitate such criminal offences.

ii Production of documents

Each party must prove the facts that are relevant to support its claim. The parties are under no obligation to spontaneously reveal all of the information they possess. They do not need to produce documents or materials that might be unfavourable to their case. In other words, there is no spontaneous mechanism of searching and gathering evidence comparable to discovery in French civil procedure.

That being said, court proceedings are governed by the adversarial principle, which implies that each party must be able to examine the documents relied upon by the other. Documents invoked by a party must be produced in a prompt and timely manner.

If a party wants to obtain evidence that is not in its possession, it may request the judge to order:

  1. the forced production of documents (including electronically stored documents), provided that the requesting party can establish the existence of the documents requested and their relevance for the success of its claim. Where appropriate, the judge may decide to impose a penalty on the requested party in a case of refusal; or
  2. an investigative measure, provided that it is strictly proportional to the needs of the case, which implies that the request is sufficiently clear and precise, and that its execution does not lead to the violation of a fundamental right or freedom.25

Forced production of documents and investigative measures may be ordered against the litigants or against third parties. The fact that a document is in the possession of a third party is not in itself an obstacle to such orders.

In principle, the intervention of the judge in the collection of evidence take place during the trial. However, Article 145 of the French Civil Procedure Code also recognises the possibility to request pre-trial investigative measures, provided that the requesting party meets certain conditions among which is the existence of a legitimate motive.

It is worth noting that European Directive (EU) 2016/943 of 8 June 2016 on the protection of know-how and trade secrets was transposed into French law by Law No. 2018-670 of 30 July 2018. Article L 153-1 et seq., introduced into the French Commercial Code, provides several measures to ensure that confidentiality is maintained when a party requests the production of a document protected by trade secrets. For instance, the judge may decide to limit the production of the document to certain elements only, or restrain access to the document to one individual designated by the requesting party.

French courts may order forced production of documents stored overseas or investigative measures concerning such documents, provided that they respect the applicable international treaties or conventions. Within the European Union, European Regulation (EC) No. 1206/2001 of 28 May 2001, on cooperation between the courts of Member States in the taking of evidence in civil or commercial matters, may apply.26 It will be replaced by European Regulation (EU) 2020/1783 of 25 November 2020, effective as from 1 July 2022, which modifies some of its provisions, in particular to enhance electronic cross-border transmission of documents.

France is also a contracting party to the Hague Evidence Convention.27

Alternatives to litigation

i Overview of alternatives to litigation

Alternatives to litigation are increasingly being used to settle disputes in France. French lawmakers and courts promote in particular amicable forms of dispute resolution such as mediation and conciliation.

ii Arbitration

Arbitration is a widely used form of ADR in France. It is commonly presented as quick, efficient and able to preserve confidentiality better than traditional litigation. The ICC, whose headquarters are based in Paris, is a commonly used institution both in domestic and international arbitration. A new set of the ICC rules of Arbitration entered into force on 1 January 2021.28

The French law on arbitration was reformed by Decree No. 2011-48 of 13 January 2011, and since then is subject to Articles 1442 et seq. of the Civil Procedure Code. Only French law on international arbitration is considered here.

International arbitration agreements are not subject to any formal requirement or content. Provided that they evidence the intention of the parties to resort to arbitration, they are enforceable.

Pursuant to the 'negative effect' of the competence–competence principle, French courts called to rule upon a dispute must declare themselves incompetent when an arbitration clause is invoked and let the arbitral tribunal decide on its own competence. They may only declare themselves competent if the dispute has not yet been referred to the arbitral tribunal and if the arbitration clause is manifestly invalid or inapplicable. This standard is very high and rarely met.

Once the arbitration has commenced, the arbitral tribunal ensures equality between the parties and makes sure due process is respected. It rules on the case pursuant to the law agreed on by the parties or, failing such an agreement, pursuant to the rules it deems appropriate.

No appeal lies against an international arbitration award (as opposed to domestic arbitration, where awards may be subject to appeal before the court of appeal if the parties agreed to it). The only recourse is for annulment on certain limited specific grounds, namely:

  1. the arbitral tribunal wrongly asserted or denied jurisdiction;
  2. the tribunal was irregularly constituted;
  3. the tribunal exceeded its terms of reference;
  4. the principle of due process was breached; or
  5. recognition or enforcement of the award would be contrary to French international public policy.

The courts interpret the last ground very strictly, and apply a high threshold for a finding of violation of international public policy.

International arbitral awards are recognised and enforced in France provided that the party invoking the award establishes its existence and that its recognition or enforcement is not manifestly contrary to international public policy. Enforcement may only be obtained through an exequatur judgment rendered by the competent French judicial court.

France has ratified the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 10 June 1958. The New York Convention came into effect in France on 24 September 1959.29 However, French law usually prevails over the New York Convention as permitted by its Article VII (1) since on many aspects it is more favourable to the recognition and enforcement of awards than the New York Convention itself. This is the reason why French courts rarely apply the New York Convention.

iii Mediation and conciliation

Mediation and conciliation are the two most common forms of amicable dispute resolution recognised by French law. These two types of procedures both imply, in substance, that the parties try to resolve their dispute amicably with the help of a third party, that is, a conciliator or a mediator.

There is a difference between the level of training required for mediators and for conciliators. Mediators are not required to have received specific mediation training or to have any experience of mediation, as long as they are qualified to understand the nature and object of a dispute. By contrast, conciliators are unpaid officers of the court who must have had at least three years of legal experience.

The French Civil Procedure Code contains various provisions dedicated to mediation and conciliation. It makes a distinction between conciliation or mediation that intervene during judicial proceedings, and 'conventional' conciliation or mediation (i.e., conciliation or mediation that intervene out of judicial proceedings).

During judicial proceedings, the judge may always invite the parties, if they agree, to try conciliation or mediation. Such invitation may intervene at any stage of the proceedings. The judge him or herself can act as a conciliator or designate a conciliator to lead the conciliation. The mediator is necessarily a third party different from the judge.

Outside of the scope of judicial proceedings, parties may decide to resort to conventional conciliation or mediation. Such procedures take place with the help of a third-party mediator or conciliator who must accomplish his or her mission with impartiality, competence and due diligence.

Decree No. 2012-66, which entered into force on 20 January 2012, promulgated a separate book (Book V) of the French Civil Procedure Code, dedicated specifically to the amicable settlement of disputes, which contains the provisions applicable to conventional mediation and conciliation.

Pursuant to these provisions, both conventional mediation and conciliation are subject to a principle of confidentiality.

Agreements reached through one or other of these procedures can be given binding force by the judge with the consent of both parties.

Decree No 2019-1333 of 11 December 2019 introduced an obligation to resort to conventional mediation or conciliation (regarding the participatory procedure, see below) prior to launching proceedings before the judicial court that do not exceed an amount of €5,000. Any application not exceeding this amount that does not comply with this procedural requirement is considered inadmissible. The judge may pronounce such inadmissibility sua sponte.

iv Participatory procedure

In addition to conventional mediation and conciliation, the Decree of January 2012 provides for a participatory procedure, a negotiation mechanism that is both procedural and contractual in nature. Law No. 2010-1609 of 22 December 2010 first introduced this amicable method of dispute settlement into the Civil Code. The 2012 Decree defines its scope and effects, and deals with confidentiality issues.

v Other forms of alternative dispute resolution

In certain specific areas French law provides for specific tribunals, commissions or quasi-judicial organs with jurisdiction (e.g., in matters of social security, competition, journalism and broadcasting). Proceedings before such specialist tribunals or quasi-judicial bodies are governed by their own particular sets of rules.

Outlook and conclusions

In 2020, the Commercial Court of Paris recorded a 23 per cent drop in the number of judgments rendered. However, the covid-19 pandemic has substantially strained commercial relations. During the crisis, economic actors preferred to look for amicable solutions that could be swiftly executed. National economic support schemes have successfully reduced the number of business failures in France, and seem to have prevented an increase in litigation. However, according to some experts, the gradual end of these business support schemes may be followed by a significant increase in business failures. As a result, one could expect an increase of restructuring and insolvency litigation, as well as cascading breaches of contracts, for instance.

In this respect, it is worth noting that France recently reformed its restructuring and insolvency law. Ordinance No. 2021-1193 of 15 September 2021 and its application decree transpose into French law the 2019 EU Restructuring Directive.30 Among other things, the reform rebalances power between the debtor and its creditors. Some aspects of the reform, such as classes of creditors, remain to be clarified, which is likely to give rise to disputes.

On another note, France has published decree No. 2021-1276 of 30 September 2021, which aims to expand the availability of court decisions to the public. Such access will broaden the dataset for judicial analytics. The development of artificial intelligence and tools of predictive justice is likely to enhance the analysis of case law and improve the anticipation of court decisions. This evolution will probably increase the influence of case law in France.

Footnotes

1 Kyum Lee is a partner and Florian Dessault, Aïda Taban and Pierre Tricard are associates at BDGS Associés.

2 English version of the Constitution of 4 October 1958: https://www.conseil-constitutionnel.fr/en/constitution-of-4-october-1958).

3 English version of the 1789 Declaration of Human and Civic Rights: https://www.conseil-constitutionnel.fr/en/declaration-of-human-and-civic-rights-of-26-august-1789.

5 English version of the Charter for the Environment: https://www.conseil-constitutionnel.fr/en/charter-for-the-environment.

6 Constitutional Council, No. 74-54 DC, 15 January 1975.

7 The Practical Guide to proceedings before the International Commercial Chambers of the Paris Commercial Court (ICCP-CC) and the Paris Court of Appeal (ICCP-CA) (https://www.cours-appel.justice.fr/paris/guide-pratique-de-procedure-devant-les-ccip-tc-et-ccip-ca-practical-guide-proceedings-iccp-cc).

8 Civil Procedure Code, Articles 1528 to 1567.

9 But exceptions such as emergency may apply.

10 Civil Procedure Code, Articles 1442 to 1503.

11 President of the Commercial Court of Paris, 20 May 2020, No. 2020016407; Court of Appeal of Paris, 28 July 2020, No. 20/06689.

12 Civil Code, Article 1218.

13 Commercial Court of Paris, 10 November 2020, No. 2019036759.

14 Court of Cassation, criminal chamber, 25 November 2020, No. 18-86.955.

15 European Court of Human Rights, decision of 24 October 2019, Carrefour France v. France, No. 37858/14.

16 See, for example, 'Laurence Usunier, L'action de groupe européenne au milieu du gué', RTD Civ, 2021 p. 370.

17 Regulation (EU) 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

18 It will be replaced by European Regulation (EU) 2020/1783 of 25 November 2020, effective as from 1 July 2022, which modifies some of its provisions, in particular to enhance electronic cross-border transmission of documents.

19 Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters.

20 Civil Procedure Code, Articles 735 to 747, and Article 748.

21 Jensen D, Dalloz référence Cabinet d'avocats, §343.32, 2017–2018.

22 Monetary and financial code, Articles L. 561-1 to L. 564-2.

23 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data.

24 French Data Protection Act of 6 January 1978.

25 Investigative measures may also be ordered sua sponte by the judge.

26 Except for Denmark, which did not take part in the adoption of the regulation and is not bound by it. It is debatable whether this regulation applies to forced production of documents. Some scholars consider that it only applies to investigative measures to be performed in foreign member states, so that a French judge would be allowed to order a party to produce documents stored in a foreign member state without resorting to the Regulation (see, e.g., H Gaudemet-Tallon, L'obtention de preuves à l'étranger, Travaux du comité français de droit international privé, 2002–2004). Even as regards investigative measures, the Court of Justice of the European Union has ruled that the Regulation does not govern exhaustively the obtention of cross-border evidence, but simply aims to facilitate it, so that it allows a Member State to order an investigative measure to be performed in another Member State in accordance with its own national law (CJEU, 6 September 2012, No C-170/11, Lippens; CJEU, 21 February 2013, No C-332/11, Prorail BV v. Xspedys NV and a).

27 Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters.

29 The only outstanding reservation made by France is the reciprocity reservation to recognise and enforce only awards that are made in the territory of another contracting state.

30 Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency).

The Law Reviews content