SPOTLIGHT #11: Law No. 2023-1059 of 20 November 2023, Creating Economic Activity Tribunals: Explanations and Concerns
At Lead up, we are committed to providing our clients with the most innovative conflict resolution solutions tailored to their specific industry contexts. To achieve this, we stay abreast of the latest developments in our clients’ sectors and analyze these changes in relation to their needs. Each month, in the “Lead up Spotlight,” we share with our colleagues, clients, and potential partners—our analysis of a recent development related to conflict resolution in a sector that matters to us and our clients.
This month’s “Lead up Spotlight” focuses on Law No. 2023-1059 of 20 November 2023, known as the “Justice Law”, which introduces, among other reforms, the experimental creation of Economic Activity Tribunals. We summarize below the key points relating to these newly constituted tribunals:
Creation of Economic Activity Tribunals (EATs)
The Justice Law (Article 26) provides for the experimental replacement of commercial courts with Economic Activity Tribunals (“EATs”) with expanded jurisdiction, starting January 1, 2025, and lasting for four years.
While maintaining jurisdiction over disputes traditionally handled by commercial courts, the law grants 12 commercial courts—renamed EATs—near-exclusive jurisdiction over amicable and collective proceedings involving all economic actors, regardless of their status or activity, merchants, artisans, farmers, civil companies, associations, and self-employed professionals previously under the jurisdiction of judicial courts (with the exception of lawyers and public officials, who remain under judicial court jurisdiction). This jurisdiction also extends to disputes involving commercial leases linked to collective proceedings with sufficient connections to the latter.
The goal of the law is to simplify the division of jurisdiction between judicial and commercial courts by establishing a unified jurisdiction block for amicable and collective proceedings.
The list of commercial courts affected by this law is set by Article 2 of the decree of July 5, 2024, designating the following as EATs: the commercial courts of Marseille, Le Mans, Limoges, Lyon, Nancy, Avignon, Auxerre, Paris, Saint-Brieuc, Le Havre, Nanterre, and Versailles.
Composition of EATs
EATs will comprise elected commercial court judges, judges from the agricultural sector if necessary, and a clerk. Judges from the agricultural sector will act as assessors when required by the composition of the judgment panel.
Representation by Lawyers Before EATs
Representation by a lawyer is not mandatory before these new tribunals in cases where the claim involves an amount less than or equal to €10,000, arises from the execution of an obligation not exceeding €10,000, or relates to amicable or collective proceedings, disputes involving the trade and companies register, or the amicable settlement of agricultural disputes (Article 26 II of the law).
Contribution for Economic Justice
Article 27 of the Justice Law introduces a contribution, payable by the claimant, for each case brought before the EAT, with non-payment resulting in inadmissibility that the judge may declare ex officio. This contribution aims to finance economic justice through the contributions of those using public justice services.
Decree No. 2024-1225 of 30 December 2024, details the financial scale and application methods for this contribution.
- The contribution applies when the total value of claims exceeds €50,000.
- In cases with multiple claimants, the contribution is owed by each, based on their respective claim amounts.
- Exemptions apply for claims made by public prosecutors, the state, local authorities, private entities with fewer than 250 employees, and cases involving the initiation of amicable or collective proceedings or agreements arising from alternative dispute resolution mechanisms.
Contribution Scale
- For private legal entities with over 250 employees and claims exceeding €50,000: The payment of the contribution and the amount of the contribution vary based on the average annual turnover and profits over the last three years:
- For individuals with over 250 employees and claims exceeding €50,000: The contribution depends on taxable income per share:
Reimbursement applies in cases of amicable settlement or case withdrawal.
Concerns Raised by the Law
While the Justice Law aligns France with European standards (most EU countries fund justice through litigant fees), it raises several concerns and questions:
- Discouraging Costs: The financial contribution may discourage some litigants from initiating actions before EATs.
- Inequality Among Litigants: Whether litigants fall under the jurisdiction of the EAT in Versailles or the commercial court in Créteil, they will not be treated in the same way. In the former case, they may be subject to the financial contribution, while in the latter, they will not and will benefit from free access to justice. Territorial equality among litigants is therefore at risk. Similarly, a private legal entity employing more than 250 employees, with an average annual turnover exceeding €50 million over the past three years and claims exceeding €50,000, will not be treated the same as a company with the same turnover and claim amount but employing only 200 employees, as the latter will not be subject to the financial contribution for filing its claim.
- Forum Shopping Risks: By introducing a financial contribution in EATs, some litigants may seek to file their claims with a commercial court not subject to such a contribution to avoid payment. To do so, parties may include a jurisdiction clause in their new contracts to exclude courts participating in the experiment.
- What About Artificial Valuation of Claims?: To avoid paying the financial contribution, some litigants might undervalue their initial claim to stay below the €50,000 threshold, and later adjust them upwards during proceedings. Article 5 of the Decree No. 2024-1225 of 30 December 2024 stipulates that once the contribution is paid – either at the court registry or online – a receipt and a proof of payment are issued, and the funds are held in a dedicated account for 3 months after the court’s ruling or the termination of proceedings. In cases where the initial claim was undervalued, will the court clerks in charge of recording the contribution be allowed to reassess the amount of the contribution at the end of the proceedings?
Criticized by legal professionals, the law has faced or will face challenges before the Council of State by the Bar Council, Conference of Bar Presidents, and National Bar Council.
However, the Constitutional Council upheld the contribution in Decision No. 2023-855 DC of 16 November 2023, considering it a well-defined, time-limited experiment. The resulting inequality is deemed necessary for the experiment’s implementation.