The Contribution for Economic Justice: A Move Toward a Fee-Based Approach to Commercial Justice?

Since January 1, 2025, the economic activity courts have replaced 12 commercial courts on an experimental basis, and a financial contribution for economic justice has been introduced.

French commercial justice has just undergone a major change with the creation of 12 economic activity courts, or EATs (Tribunaux des activités économiques), replacing the commercial courts in the cities of Avignon, Auxerre, Le Havre, Le Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc, and Versailles. [1] Provided for in Article 26 of the 2023-1059 Law of November 20, 2023 on the orientation and programming of the Ministry of Justice 2023-2027, this system will apply for four years, i.e., from January 1,2025 to December 31, 2028, on an experimental basis.

The decision to include the Paris and Nanterre jurisdictions in the EATs reform is not trivial for the business world seeing as companies headquartered in La Défense or in the French capital will be subject to these new rules going forward.

Above all, this reform of the EATs also imposes, on an experimental basis, the payment of a contribution for economic justice, or CEJ (Contribution pour la justice économique), under certain conditions for commercial disputes.

EXPLANATION AND ANALYSIS OF THE CONTRIBUTION FOR ECONOMIC JUSTICE

CEJ Application Conditions

The CEJ will only apply to cases brought before one of the 12 EATs after January 1, 2025. In this respect, the creation of the 12 EATs does not affect contractual jurisdiction clauses concluded between two merchants, who can therefore decide that their dispute will be dealt within the jurisdiction of a commercial court and not an EAT. On the other hand, in the absence of a valid clause, referral to an incompetent commercial court will result in referral to the competent EAT, triggering the obligation to pay the CEJ.

Trials already in progress are therefore not affected.

Further, the CEJ is not requested for proceedings relating to insolvency law or for the alerting procedures and amicable proceedings for prevention of companies’ difficulties.

The cumulative conditions for being liable to CEJ are as follows:

• The total value of the initial claim, i.e., the claim set out in the writ of summons which initiates the proceedings, must be above €50,000, without taking into account any procedural costs which are not included in the calculation;
• The claimant must be a legal entity employing more than 250 employees at the time of initiation of proceedings; and
• The claimant:
  • (Hypothesis no. 1) Has achieved an average annual turnover over the last three years of over €50 million [2] and an average annual profit over the last three years of more than €3 million;
  • (Hypothesis no. 2) Has achieved an average annual turnover over the last three years of over €1.5 billion (without taking any annual profit into account)

As a result, no contribution is due for “small” claims or for companies with turnovers and profits below the specified scales.

These conditions call for a number of comments.

Firstly, it seems to mean that claims for an unspecified amount are excluded from the obligation to pay this contribution, even if the amount subsequently determined by the court is higher than €50,000.

Second, amounts included in incidental claims (counterclaims, additional claims or claims in intervention) are excluded: exceeding the €50,000 threshold for claims after proceedings have begun does not render the claimant liable for the contribution.

Lastly, if there is more than one claimant meeting the conditions for application of the CEJ, each must pay a CEJ individually. However, this does not apply to claimants who make a claim in voluntary intervention after the proceedings have been initiated.

In any case, in view of the major changes brought by the reform of the EATs for companies, it is advisable to prepare a tax return or other accounting document containing both the accounting data and the number of employees over the last three years, in advance of potential litigations.

The Calculation and Payment of the Contribution

The EAT court register is responsible for determining whether the contribution is owed and, if so, setting the amount.

Pursuant to Article 3 of Decree no. 2024-1225 of December 30, 2024, this amount represents:

• 3% of the amount of the initial claim when the average annual turnover is less than or equal to €1.5 billion
• 5% of the amount of the initial claim when the average annual turnover exceeds this amount
• With a cap amount of €100,000

To calculate the contribution, the claimant is required to provide the court register with the information needed to verify the amounts at the time the claim is registered, i.e., at least eight clear days before the first hearing. [3]

The court register has until the date of the first hearing to communicate the amount of the contribution owed by the claimant. As the decree does not specify a fixed deadline for payment, it must be assumed that the claimant has a reasonable amount of time to pay the contribution, which can be made in person at the EAT court register or online. However, as there are penalties for nonpayment (see below), we recommend that payment be made as soon as possible.

It is important to note that the claimant’s payment of the contribution is not definitive since the contribution may be either reimbursed or charged to the losing party.

This reimbursement of the contribution is provided for in two cases: (1) in the event of discontinuation of proceedings by withdrawal of the claim and (2) in the event of a settlement agreement reached after conciliation or amicable settlement between the parties. It is consistent with the objective of promoting alternative dispute resolution methods and encouraging companies and merchants to resort to amicable settlement.

However, the time limit for reimbursement of the contribution has not yet been specified. In addition, the case where an EAT is incompetent in favor of a commercial court, where the CEJ is not owed, is not one of the hypotheses envisaged by the texts. In the silence of the law, it would therefore seem that the claimant who has brought their case before the wrong court must withdraw their claim and register it to the right court in order to be reimbursed for their payment—losing in the process the benefit of the interruption of the statute of limitations that comes with a legal claim.

In addition, if neither of the two reimbursement options applies, the CEJ will follow the rules on costs relating to proceedings, deeds, and enforcement procedures set out in Articles 695 and 696 of the French Code of Civil Procedure: the final burden of legal costs and expenses is borne by the losing party, unless the judge decides otherwise in a justified statement of reasons.

In this respect, the fact that the contribution is assessed on the basis of the claimant’s financial capacity rather than the defendant’s risks imposes a heavy financial burden on the latter, should they be the losing party.

THE PENALTIES PROVIDED FOR IN THE REFORM

Penalties for Nonpayment of the Contribution

The penalty provided for in the event of non-payment of the CEJ is severe as this failure constitutes a dismissal based on a plea of inadmissibility (fin de non-recevoir), which may be pronounced ex officio by the judge. However, it is not specified whether the defendant is kept informed of the payment and can therefore also raise this objection.

When the claim is dismissed, the claimant has 15 days from the date of notification of the decision to dismiss to pay the amount owed. Once payment has been made, Article 7 of Decree no. 2024-1225 of December 30, 2024 provides that “the judge, on request lodged by the claimant . . . shall retract [the dismissal] on proof of payment of the contribution.”

However, the decree does not specify the conditions for such request nor whether it entails additional legal costs.

Penalties for Attempting to Circumvent the CEJ

Article 27 of the law of November 20, 2023 introduced a new penalty for dilatory or abusive behavior, with a civil fine of up to €10,000.

As Article 32-1 of the French Code of Civil Procedure, which applies to all legal proceedings, already provides for a civil fine of up to €10,000 for dilatory and abusive legal action, it must be assumed that the newly created civil fine is designed precisely to punish claimants liable for the CEJ who attempt to circumvent their obligation to pay the contribution. The two civil fines could therefore be cumulated.

While it may therefore seem tempting for companies to form an initial claim of less than €50,000 before submitting additional claims, this is risky for two reasons:

• On the one hand, the court could consider this measure dilatory or abusive and impose a civil fine in addition to an order to pay the CEJ.
• On the other hand, there is a non-zero risk that the defendant will acquiesce to the claim before the claimant has had time to present their additional claims, depriving them of the opportunity to ask for the sums that should have actually been claimed.

The same risk exists in the case of multiple claimants, if some of them agree not to participate in the initial application, but voluntarily intervene afterwards.

The introduction of such deterrent penalties seems consistent with the current focus on alternative dispute resolution and arbitration.

The implementation of this system was not met with unanimous approval and has indeed been strongly criticized by the French National Council of Bars (Conseil National des Barreaux), that adopted a resolution on January 21, 2025 calling for its withdrawal. [4]

On the same day, the Council of the Paris Bar Association (Conseil de l’Ordre des Avocats du Barreau de Paris) voted in favor of filing an appeal with the French administrative supreme court (The Conseil d'État) against Decree no. 2024-1225 of December 30, 2024 that set up the experimentation of the CEJ, which should be filed in the coming days.

The future of this contribution therefore remains uncertain.

Juris Ines Chaudonneret and law clerk Marion Duval contributed to this LawFlash.