Commercial mediation in France
The types of mediation relevant for commercial disputes are (i) court ordered mediation and (ii) contract-based mediation, both of which require the parties’ consent. There is no general obligation to mediate, although mediation is increasingly promoted by judges and legislation. Under court ordered mediation, the judge remains seized of the matter and can order necessary measures. A mediator has a ‘best endeavours’ obligation to conclude the mediation successfully. There are no adverse costs consequences for failing to mediate. Mediations are confidential, subject to certain exceptions. Settlement agreements are either enforced as contracts or through a court recognition process, provided that the contents are not contrary to French public policy.
How is a mediation conducted?
Mediation is conducted by a neutral third party. The mediator can be a legal entity or an individual. If it is a legal entity, it must submit the name of the individual who will be its representative in the mediation to either (i) the judge in a court-ordered mediation, or (ii) the parties in a contractual mediation.
The Ordonnance provides that the mediator must fulfil his or her role in a manner that is impartial, competent, independent, and diligent (Article 1 of the Ordonnance, enacted as Article 21-2 of the 1995 Law). The requirement of diligence is intended to mean that the mediator has a best endeavours obligation (“obligation de moyens”) to bring the mediation to a successful conclusion. The procedure to be followed depends to a large extent on the parties’ agreement.
In the case of court-ordered mediation, if the parties agree to submit all or part of their dispute to mediation, the court will appoint the mediator or designate an association to nominate a mediator, in which case the judge must confirm the appointment. The appointment decision also provides for the provision to be paid by the parties (or one of them) directly to the mediator and the deadline for such payment. In the absence of payment within the specified time period, the appointment decision becomes null. The mediator will summon the parties as soon as he/she has received the provision. The parties may be represented by any person having the right to do so before the court that ordered the mediation (Article 131-6 CPC).
The court fixes a time period for the mediation when making the mediation order. Article 131-3 of the CPC provides for a maximum time period for the mediation of three months, from the date of payment of the advance on costs into the hands of the mediator. Such time period may be renewed once for the same duration, at the request of the mediator. No specific mediation procedure is provided for in the CPC rules on court-appointed mediation. The CPC specifies that the mediator does not have investigatory powers but may, with the parties’ consent, hear third parties who appear voluntarily (Article 131-8 CPC).
The court may terminate the mediation procedure at any time at the request of a party, the mediator or ex officio "when the proper conduct of the mediation appears to be compromised" or when it has become "pointless" (new Article 131-10 CPC). The final remuneration of the mediator is fixed at the end of his/her mission in agreement with the parties or, failing such agreement, by the court. The court will generally divide the costs to be paid in equal shares, unless it deems such allocation to be unfair in light of the parties’ respective economic situations.
With regard to contractual mediation, the procedure to be followed will be determined by the mediator with the consent of the parties. Although the rules of civil procedure do not apply, the requirement of neutrality on the part of the mediator is essential to the mediation process and this principle can affect the procedure adopted. If the parties have referred to a set of mediation rules, such as those of the Paris Centre for Mediation and Arbitration (“CMAP”), those rules may impose certain requirements, which may be incorporated into the parties’ agreement to mediate by reference (unless they provide otherwise).
In mediations, the principle of adversarial debates, applicable in court proceedings and arbitration, does not have to be respected (i.e. a party may have an ex parte meeting or “caucus” with the mediator).
Is there any obligation on litigants to mediate?
There is no general obligation to mediate in commercial matters. Nevertheless, there appears to be increasing awareness amongst judges, lawyers and companies in France of the benefits of mediation. In recent years, courts have proposed mediation to parties with growing frequency and recent legislations tend to promote it. If the parties have agreed to a contractual provision providing for a compulsory attempt to mediate prior to referral of a dispute to a competent court, the parties must comply with it. Failure to comply with a contractual clause referring disputes to mediation will result in the inadmissibility of the claim before a court.
Legislation introduced in 2015 (Decree No 2015-282 of 11 March 2015) has made it mandatory for a claimant to indicate in a writ of summons (assignation) the efforts that have been made to settle the relevant dispute, save where there are legitimate reasons for not doing so, such as urgency, the nature of the dispute and, in particular, where matters of public policy are involved (Articles 56 and 58 CPC). Where this requirement is not complied with, the court may propose conciliation or meditation (Article 127 CPC).
Moreover, parties have, in principle, an obligation to try to find an amicable settlement before bringing an action before the judicial courts, when (i) the amount in dispute does not exceed 5.000 euros, or when (ii) the dispute at stake relates to a neighbourhood conflict such as demarcation actions (as set out in Articles 211-3-4 and 211-3-8 of the Code of Judicial Organization) or to abnormal neighbourhood disturbances (Article 750-1 CPC).
This may be an attempt at conciliation, an attempt at mediation or a participatory procedure. Please note that the conciliation attempt may also be delegated to a judicial conciliator or conducted by the court itself. If such a procedure is not attempted before these disputes go to court, the latter may raise the inadmissibility of the claim ex officio.
It must be noted that a mandatory recourse to mediation does not prevent a party from applying, in summary proceedings, for an interim measure to prevent imminent damage or to put an end to a manifestly unlawful disturbance (Cass. civ. 1, 24 November 2021, No. 20-15.789).
Does failure to mediate attract adverse cost consequences?
Awards of costs in court proceedings are discretionary in France. Decisions on costs generally follow the event, but awards of costs tend to be much lower in France than in countries such as England. A party’s conduct with regard to acceptance or not of a settlement offer is not referred to in the CPC as a factor to be taken into consideration by a court in making an award of costs. Similarly, French civil procedure rules do not, at present, provide that a failure to mediate is to be taken into consideration by a court in making an award of costs or that such a failure will necessarily have adverse consequences with regard to costs.
Are mediations confidential?
Confidentiality is considered to be one of the most important features of mediation in France. Accordingly, the Ordonnance has included a general principle of confidentiality, which is subject to the same exceptions provided for in the EU Mediation Directive. The Ordonnance preserves the confidentiality of any observations made by the mediator and statements made during the course of the mediation and provides that they may not be disclosed to third parties, nor invoked or produced in the context of court or arbitration proceedings, without the agreement of the parties (Article 1 of the Ordonnance, enacted as article 21-3 of the 1995 Law). There are express exceptions which mirror those of the Mediation Directive. In addition, the Ordonnance provides that, where the mediator has been appointed by a judge, the mediator shall inform the judge or court as to whether or not the parties have reached an agreement.
Article 131-14 CPC states, in relation to court-ordered mediation, that “The mediator’s findings and the statements the mediator receives may not be produced or referred to subsequently in the proceedings without the parties’ agreement, nor under any circumstances in connection with other proceedings”. This principle pre-dated the Ordonnance but is not inconsistent with it. Applying this provision, the courts have protected confidentiality through interlocutory orders.
Is there a system of accreditation and/or regulatory body for mediators?
There is no mandatory statutory accreditation system or regulatory body for mediators in commercial cases, although this has been the subject of discussions given that such a system exists in France for mediators involved in family law cases and now exists for mediation of consumer disputes.
However, Law No 2019-222 of 23 March 2019 (supplemented by Decree No 2019-1089 of 27 October 2019, Decree No 2020-1682 of 23 December 2020 and Decree No 2021-95 of 29 January 2021) introduced an optional certification system for online mediation services providers. An online mediation services provider may (but does not have to) apply for a certification to an accredited certifying body. If, following a complete audit, the accredited certifying body is satisfied that the applicant complies with certain requirements, relating to personal data protection, impartiality, independence, competence and diligence, the required certification is awarded, for a period of 3 years, renewable. Such certification may only be awarded by an entity accredited by the French committee of accreditation (COFRAC).
Such certification is automatically awarded, if requested, to (i) judicial conciliators; (ii) mediators registered on a list before a Court of Appeal (see below) and (iii) consumer dispute mediators.
1-5 CPC sets out some minimum requirements for courtappointed mediators:
(i) the mediator must not have been the subject of a criminal sentence, incapacity or forfeiture;
(ii) the mediator must not have engaged in acts that are contrary to principles of honour, probity or good morals, giving rise to disciplinary or administrative sanctions or dismissal, removal, revocation, or withdrawal of an accreditation or authorisation;
(iii) the mediator must have, by virtue of his or her actual or past occupation, qualifications with respect to the subject matter of the dispute;
(iv) the mediator must have appropriate training or experience for the practice of mediation; and
(v) the mediator must demonstrate the capacity to be independent.
As regards contractual mediation, Article 1533 CPC sets out quite similar requirements (applicable to the mediator if he or she is an individual or, where the mediator is a legal entity, its representative):
- the mediator must not have been the subject of a criminal sentence, incapacity or forfeiture;
- the mediator must have, by virtue of his or her actual or past occupation, qualifications with respect to the subject matter of the dispute or have appropriate training or experience for the practice of mediation.
Since Law No 2016-1547 of 18 November 2016 (supplemented by Decree No 2017-1457 of 9 October 2017), a list of mediators is established by each Court of Appeal, “for the judges’ information”. A mediator may be registered on this list if he/she complies with the conditions (i), (ii) and (iv) enumerated above. A special category for online mediation services was created in 2021 (Decree No 2021-95 of 29 December 2021).
Similarly, after having been sworn in before the Court of Appeal, judicial conciliators are registered on a list established by each Court of Appeal (pursuant to Decree No 2018-931 of 29 October 2018).
Mediators and conciliators providing online services must demonstrate that they comply with data protection and confidentiality obligations. This is also a requirement for mediators to be registered on the lists established by the Courts of Appeal.
In addition, several private institutions provide mediation training and set qualification requirements for mediators (CMAP is an example of such an institution), but there is no general regulatory body.
Finally, in the case of consumer mediation, a Commission to evaluate and monitor the mediation of consumer disputes has been created (Commission d’évaluation et de contrôle de la médiation de la consummation, provided for in Ordonnance No. 2015-1033 of 20 August 2015, now Article L. 615-1 of the Consumer Code). The mandate of this Commission includes the establishment and updating of a list of mediators that meet certain statutory requirements (contained in Article L. 613-1 to L. 613-3 of the Consumer Code), the notification of the names of mediators on the list to the European Commission, as well as to evaluate the activities of consumer dispute mediators and ensure that these activities are conducted properly.