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.
What is the status of mediation in this jurisdiction?
The EU Mediation Directive was implemented in France by Ordonnance No 2011-1540 of 16 November 2011, passed pursuant to Law No 2011-525 of 17 May 2011 (“Ordonnance”). The implementing legislation has gone beyond the scope of the EU Directive in the sense that it has created a general regime for mediation in France, subject to specific rules applicable to mediation of certain types of dispute, which applies in relation to the mediation of both cross-border and domestic civil and commercial disputes. The definition of mediation contained in the Ordonnance, is very close to that of the Directive. Accordingly, mediation is defined as any structured process, regardless of its name, whereby two or more parties attempt to reach an agreement to settle their dispute amicably, with the assistance of a third party, the mediator, chosen by them or appointed, with their agreement, by a judge seized of the dispute (Article 1 of the Ordonnance, enacted as Article 21 of the Law of 8 February 1995 as amended (“1995 Law”)).
The Ordonnance has been supplemented by Decree n°2012-66 dated 20 January 2012 which sets out additional features of the regime (the “Decree”). Certain provisions of this legislation have been incorporated in the French Civil Procedure Code (“CPC”).
Two types of mediation may be relevant for commercial disputes: court-ordered mediation (médiation judiciaire) and mediation on the basis of a contract, either in the form of a dispute resolution clause providing for mediation or a subsequent agreement (“contractual mediation”).
A section of the French CPC is dedicated to court-ordered mediation in civil and commercial matters (Articles 131-1 to 131-15 of the CPC). In accordance with Articles 131-1 and 131-2 of the CPC, a judge seized of a dispute may, after obtaining the consent of the parties, appoint a mediator and refer the parties to mediation of their dispute in whole or in part. Although party consent is required, the term “court-ordered mediation” is used in such a case.
A further section of the CPC, which addresses various methods for achieving the amicable resolution of disputes, contains a specific chapter on contractual mediation (Articles 1530 to 1535 CPC; see also Articles 1565 to 1567 CPC). Contractual mediation can either be (i) purely contractual – i.e. the parties appoint a third party to help them reach an agreement and agree on a set of rules applicable to the mediation procedure – or (ii) institutional – i.e. mediation is organised by a specialised body such as the CMAP (the Centre for mediation and arbitration in Paris) or the ICC (International Chamber of Commerce), which have their own set of rules.
Recent Law No 2019-222 of 23 March 2019 also introduced new provisions to regulate online mediation services providers, requiring in particular that they comply with personal data protection rules and standards of impartiality and independence.
With regard to consumer disputes, in 2015 France implemented the EU Directive on alternative dispute resolution for consumer disputes, with the publication of Ordonnance No 2015-1033 of 20 August 2015 and Ordonnance No 2016-301 of 14 March 2016 (now Articles L.611-1 et seq. of the French Consumer Code). The implementing legislation provides all consumers with a right to mediation, free of charge, with respect to disputes between a consumer and a trader (professionnel). A website has also been created to facilitate the use of mediation (https://www.economie.gouv.fr/mediation-conso). Similarly, the European Commission has opened a platform for the online settlement of consumer disputes to which 117 national out-of-court dispute settlement bodies are connected across seventeen Member States (http://ec.europa.eu/consumers/odr). Submission of disputes to mediation remains voluntary and mediations under this regime are conducted by a consumer dispute mediator (médiateur de la consummation), who must meet certain statutory requirements.
Conciliation is another form of amicable dispute resolution, which is very similar to mediation (Articles 128 to 131 and Articles 1536 to 1540 of the CPC). Conciliation can be either ordered by the court, during court proceedings, or purely contractual. The only significant difference to mediation relates to the identity of third party conducting the conciliation, known as the “judicial conciliator.” Judicial conciliators are sworn in and registered on a list established by the Court of Appeal, following a recruitment process (which includes a mandatory training course on conciliation). If the conciliation takes place during court proceedings, conciliation may be conducted by the judge itself (Article 129 of the CPC), although the judge more often appoints a judicial conciliator.
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 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 judge also 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, which may be renewed once for the same period of time, 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).
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 n° 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, Law No 2016-1547 of 18 November 2016 introduced an obligation to try to find an amicable settlement before bringing an action before the judicial courts, when the amount at stake in the dispute does not exceed 4.000 euros. Recent Law No 2019-222 of 23 March 2019 increased this amount to 5.000 euros and extended the obligation to try to find an amicable settlement to neighborhood disputes.
The Decree n°2019-1333 of 11 December 2019, passed as an application of the Law n°2019-222 of 23 March 2019, has radically modified the rules of civil procedure in France. Among the many changes, article 750-1 of the CPC now stipulates that it is mandatory to attempt conciliation for disputes where the amount claimed is less than 5,000 euros, for neighbourhood disputes such as boundary disputes, or for the actions set out in Article R. 211-3-8 of the Code of Judicial Organization.
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 judge herself. If such a procedure is not attempted before these disputes go to court, the judge may raise the inadmissibility of the claim ex officio.
Does failure to mediate attract adverse cost consequences?
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.
How are settlement agreements enforced?
An agreement embodying an amicable settlement of the parties is a contract, which is enforceable as such. However, a settlement agreement concluded during mediation may also be enforced through a court recognition process (referred to as “homologation”). In line with the Directive, the Ordonnance provides that, once a settlement agreement resulting from mediation has been recognised by the court, it may be enforced through execution measures as if it were a judgment (thereby given “force executoire”) (Article 1 of the Ordonnance, enacted as Article 21-5 of the 1995 Law).
With regard to court-ordered mediation, “homologation” is specifically provided for in Article 131-12 CPC (as amended by Decree nº 2015-514 of 26 April 2016), which states that settlement agreements reached during the mediation process may, at the request of the parties, or the most diligent party, be recognised by the court that ordered the mediation through a non-contentious procedure (“procedure gracieuse”). The court decides the application without submissions from the parties unless it considers that it is necessary to hear them.
With regard to contractual mediation, Article 1534 of the CPC provides that the parties to the mediation (or one party with the consent of the others) may apply to the court for the recognition (homologation) of their mediation settlement.
The judge having jurisdiction to recognise the agreement is the judge who would have jurisdiction to hear the related dispute, should it proceed to trial. The judge will make his or her decision without a hearing unless he or she thinks one is specifically needed. The terms of the agreement may not be modified by the judge.
Before rendering a decision that will make the agreement enforceable, the court will verify that its contents are not inconsistent with French principles of public policy.
If the request for recognition is granted, anyone having an interest in the mediation can challenge this decision before the judge who granted recognition.
If the request is not granted, the decision may be appealed through a non-adversarial procedure.
If the agreement resulting from a mediation has been recognised by a court or an authority in another member state, the agreement will be enforceable in France pursuant to the procedure of recognition of EU court decisions.
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) 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.
Article 131-5 CPC sets out some minimum requirements for court-appointed 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):
(i) the mediator must not have been the subject of a criminal sentence, incapacity or forfeiture;
(ii) 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.
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).
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 n° 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.