Effective January 1, 2025, twelve commercial courts have transitioned to become Tribunals for Economic Activities (hereinafter referred to as ‘TEA’). This reform was enacted under Law No. 2023-1059 of November 20, 2023, on the orientation and programming of the Ministry of Justice for the years 2023-2027, as well as Decree No. 2024-1225 of December 30, 2024 (the ‘Decree’). This initiative is part of a four-year pilot program designed to evaluate the advantages of consolidating the adjudication of amicable settlement and collective procedures, along with insolvency proceedings, within a singular judicial body.
The courts concerned are those of Avignon, Auxerre, Le Havre, Le Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc and Versailles.
The TEA will have jurisdiction over insolvency proceedings irrespective of the debtor’s status or business activity, with the sole exception being professions referred to in paragraph 2 of Article L. 722-6-1 of the French Commercial Code. These professions, which include lawyers, notaries, judicial commissioners, clerks of commercial courts, court-appointed administrators, and judicial representatives, will remain under the jurisdiction of the judicial court.
This reform aims to modernize and enhance the efficiency of the French judicial system by responding to the increasing specialization inherent in commercial litigation and collective proceedings by centralizing the jurisdiction for certain cases within a specialized forum.
The substantive law governing amicable settlement procedures and collective proceedings remains unchanged before the TEA.
Additionally, the reform introduced a ‘contribution for economic justice,’ a payment obligation to be fulfilled by the plaintiff for each case initiated before the TEA as of January 1, 2025.
PERSONS SUBJECT TO THE CONTRIBUTION FOR ECONOMIC JUSTICE
The contribution for economic justice must be paid by the initial claimant, regardless of whether the claimant is a natural person or a legal entity, in instances where the aggregate value of the claims exceeds € 50,000.
The term “initial claim” is the claim submitted by a litigant to the judge to formally commence legal proceedings (Article 53 of the Code of Civil Procedure).
The Decree specifies that the following do not constitute an initial claim:
- an application to lodge an appeal, an opposition, a third party opposition, an application for review or an appeal in cassation,
- an application to vary, withdraw or contest an order made on a motion,
- an application for the interpretation, rectification or supplementation of a previous decision, pursuant to Articles 461 to 463 of the Code of Civil Procedure, and
- a referral to the TEA as a court of appeal after cassation.
Incidental claims are, therefore, not subject to the contribution for economic justice.
Incidental claims encompass counterclaims, which allow the original defendant to assert an advantage beyond the mere rejection of the opposing party’s claim; additional claims, wherein a party seeks to modify or expand upon their initial allegations; and interventions, referring to the participation of third parties in the legal proceedings, whether such participation is voluntary or compelled.
Moreover, the contribution is not required when the claim is made by the Public Prosecutor, the State, a local authority, or a public cooperation body. It also does not apply to natural persons or a legal entities with fewer than 250 employees.
Additionally, the contribution is not due when the request
- pertains to the initiation of amicable or collective proceedings;
- relates to the homologation of an agreement resulting from an amicable dispute resolution procedure or a settlement;
- has given rise to earlier proceedings which have been discontinued as a principal cause of action for lapse of time or lapse of the summons; or
- relates to a challenge before the president of the court or the delegated judge of the verification by the court’s secretariat of the costs due in respect of an action.
THE AMOUNT
The contribution amount is determined based on the claimant’s ability to pay and the total value of the claims specified in the summons.
When multiple claimants make the initial claim, each claimant must pay their own contribution for economic justice. The value of the claims is assessed individually for each claimant to determine their contribution obligation and the corresponding amount.
For legal entities with an average annual profit over the last three years of more than € 3 million and a turnover between € 50 million and € 1.5 billion, the contribution amount is 3% of the total value of the claims stated in the document instituting proceedings, with a maximum limit of € 50,000. For those with a turnover exceeding € 1.5 billion, the contribution amount is set at 5%, with a maximum limit of € 100,000.
For individuals with a reference tax income between € 250,000 and € 500,000, the contribution amount is 1% of the total value of the claims, capped at € 17,000. For individuals earning more than € 500,000, the contribution is 2%, up to a maximum of € 33,000. Lastly, individuals with a tax income exceeding € 1 million must pay a contribution of 3%, with a limit of € 50,000.
TO BE NOTED
The contribution is subject to reimbursement in instances where a decision is made to terminate proceedings, either due to a withdrawal by a party or because of a settlement reached through an amicable dispute resolution procedure that effectively concludes the dispute. This provision is intended to promote the amicable resolution of conflicts among parties.
Furthermore, the contribution for economic justice is classified as part of the costs incurred, typically assigned to the losing party.
NEXT STEPS
The Paris Bar has lodged an appeal with the Conseil d’Etat to challenge the Decree that establishes the scale for the contribution for economic justice. The Paris Bar asserts that this Decree infringes upon the principle of equal access to justice, citing the prohibitively high entry cost that the contribution represents for certain claimants. Additionally, there are concerns among legal practitioners that this requirement may incentivize parties to circumvent the jurisdiction of the TEAs, potentially leading to preferential selection of the commercial courts through jurisdiction clauses or forum shopping practices.
