The French commercial dispute resolution system involves legally qualified businessmen sitting as elected judges in commercial courts ("Tribunal de Commerce") to hear disputes between consumers and/or companies. Judges combine their legal expertise with their practical experience in their respective fields when hearing a case. Hearings are also normally heard by one judge ("Juge rapporteur") who will prepare the case to be discussed and decided with two other judges.
2. Emergency Relief
In France, one can obtain an injunction requiring a party to do, or refrain from doing, some act either pre-action or during the litigation.
Injunctions are obtained under French law through instigating summary proceedings ("Procédure de référé"). They can be requested in the following circumstances:
a) if the matter is urgent
b) there is a danger of irreparable harm being done by one party to another
c) an obviously illegal act is expected to take place imminently
d) the means by which a party intends to prove the factual circumstances in dispute needs to be preserved (for example, documentary evidence of some kind)
The courts have a wide discretion as to the types of injunctions they can grant.
‘Measures of conservation’ ("Mesures conservatoires") being orders to seize and freeze assets may be obtained very quickly without the need to give notice to the other party. Such measures are enforced at the risk of the applying party. Seizure and freezing of assets is a very effective and inexpensive way to oblige another party to pay or to perform an obligation, or at least to enter into negotiations.
Typically, a case will run for about 8 to 15 months. However, urgent cases can be decided on the merits according to a fast track procedure ("Bref délai") in 2 to 3 months. Appeal proceedings usually take between 15 to 18 months.
The choice of the court in which a claimant commences an action depends on the nature and value of the claim. Most French courts are organised into specialist divisions, such as IT, banking, real estate, and international trade. The choice can be mandatory for certain matters (eg: real estate property is only judged at the TGI) or for certain amounts (eg: above €7.600,00, the claim must be heard by TGI).
Parties can seek the assistance of the court on a whole variety of issues before any trial (eg: to order the communication of a document unduly held by a party or a third person to the trial or to obtain a provision on an amount due which is not subject to serious dispute). This is typically done through summary proceedings and measures to conserve one’s rights.
The case management powers of the French courts are limited but practically the courts have the ability to ensure that there are only limited opportunities for parties to delay an action (eg: in Paris, the principle of a “calendar of the proceedings” has been agreed between the Tribunal and the Paris Bar. Therefore, lawyers are subject to strict deadlines to provide their writs / communicate their documents, and sanctions are applied, such as the closing of the proceedings or payments for late communication).
All decisions (except some minor disputes under €3.800,00 / €4.000,00) can be appealed. It is up to the appealing party to decide whether to appeal in relation to the whole or only part of the case. Appeals are available on points of fact and of law.
In France, the parties to litigation are not obliged to disclose documents relevant to the case. Parties are also not obliged to refer to any facts or evidence during the litigation if it is not in their interests to do so. However, a party may be ordered by the court to disclose information.
As a general rule, lawyers are under an obligation to comply with the duty of professional confidentiality. As a result, communications between lawyers and their clients are effectively privileged from disclosure to any party including the court.
All communications between lawyers are also privileged by nature, unless they are marked ‘official’ in which case they can be disclosed to the court. An example of when the two different types of communication will be used is during the negotiation of an agreement. The correspondence between the parties’ lawyers negotiating the terms of the agreement will be privileged. The final letter of agreement will be marked ‘official’ and will set out the terms negotiated and agreed between the parties.
6. Enforcement of Judgments
A French court judgment can be registered and enforced within the European Union and EEA countries as if it were a judgment of those countries’ courts.
In addition, there exist reciprocal arrangements between Franceand other jurisdictions around the world, which allow for the registration and enforcement of a French judgment in those jurisdictions.
If there is no reciprocal arrangement, enforcement of judgments in Francemay be obtained by an "exequatur decision" i.e. an order under which the defaulting party is compelled to perform its obligations under the award. However, for uncontested claims, a European enforcement order was created in 2004. It lays down minimum standards to ensure that judgments, court settlements and authentic instruments on uncontested claims can circulate freely within the European Union. This entails the abolition of exequatur.
Foreign arbitral awards are also enforceable in Francein certain circumstances.
As a general rule, the unsuccessful party following trial will be responsible for the court costs (dépens) unless the court orders otherwise. The “dépens” includes what is known as a fee for pleading in court, but it does not include the lawyers’ or barristers’ fees. Under French law, each party must cover its own legal costs, including the barristers’ fees. The French rules of civil procedure do, however, contain a provision which states that the court may order the unsuccessful party to bear the legal costs of the successful party.
8. Arbitration and ADR
The French legal system encourages parties to resolve their disputes other than in the courts. Recently, the scope of arbitration within French law has been progressively extended (2000 – 2002) to public companies when dealing with industrial or commercial matters under precise conditions.
The arbitral decision is binding on the parties. When a party does not comply with the award, an action can be brought before the ordinary court of first instance ("Tribunal de Grande Instance") in order to obtain an "exequatur decision".
ADR (Alternative Dispute Resolution)
The French legal system encourages parties to resolve their disputes through ADR. In that regard, in 1995 a law was passed authorising judges to refer litigious actions to mediation. If the parties agree to this, the judge appoints the mediator, determines the duration of the mediation and the amount of the mediation fees. The judge retains power to halt the mediation should he believe that it will fail at any stage. Following settlement through mediation, the judge may approve the settlement agreement ("homologation"), ensuring that the agreement complies with all relevant legal provisions. Consequently, the mediation agreement has legal force.
Also, the parties are bound to attempt a negotiation before going to courts (“conciliation”) when such a provision is specified in the agreement (conciliation clause or negotiation clause), as it was judged on 14th February 2003 by the High Court.
Written by Marion Barbier in our Paris office.
Important - The information in this article is provided subject to the disclaimer. The law may have changed since first publication and the reader is cautioned accordingly.