UIA FLORENCE October 31st, 2014 LITIGATION COMMITTEE THE ROLE OF LAYMEN Marie-Christine Cimadevilla CIMADEVILLA LAW

1. LAY JUDGES IN FRANCE

COURTS EXCLUSIVELY COMPOSED OF LAY JUDGES Commercial Courts Elected by tradesmen from lists established by the chambers of commerce. First instance Labor Courts Half of the judges elected by the employers and half by the employees. Half of the judges elected by the employers and half by the employees. Proximity judges Designated among legal practitioners for 7 years. Jurisdiction in civil matters if value of the dispute does not exceed Euros - and criminal matters for minor offenses

COURTS PARTLY COMPOSED OF LAY JUDGES One Juvenile judge and two lay judges chosen by the Minister for Justice among particularly competent persons from lists established by the Presidents of the Courts of Appeal. Juvenile Court (Tribunal pour enfants) : One Juvenile judge and two lay judges chosen by the Minister for Justice among particularly competent persons from lists established by the Presidents of the Courts of Appeal. Three professional judges, one of which presides the Court, and six citizen (nine in the Court of Appeal) drawn by lot. Jury of Assize Court (jurisdiction over felonies) : Three professional judges, one of which presides the Court, and six citizen (nine in the Court of Appeal) drawn by lot. Presided by a judge of the Regional Court (Tribunal de Grande Instance) or a honorary magistrate. Two lay judges : one representing the social security funds chosen by them, one representing those entitled to social security chosen by the representative trade unions. The Social Security Tribunal : Presided by a judge of the Regional Court (Tribunal de Grande Instance) or a honorary magistrate. Two lay judges : one representing the social security funds chosen by them, one representing those entitled to social security chosen by the representative trade unions. Presided by a District Court Judge (Tribunal d’instance). One judge represents the owner farmers and one the tenant farmers Agricultural Rent Court (Tribunal paritaire des baux ruraux) : Presided by a District Court Judge (Tribunal d’instance). One judge represents the owner farmers and one the tenant farmers One professional judge and two lay judges chosen for two years among persons presenting guarantees of competence and impartiality. In New Caledonia, First Instance Tribunal : One professional judge and two lay judges chosen for two years among persons presenting guarantees of competence and impartiality.

2. PROCEEDINGS BEFORE THE COMMERCIAL COURTS

JURISDICTION OF THE COMMERCIAL COURTS Insolvency proceedings Commitments Commercial companies Commercial transactions French Commercial Courts are 1 st instance jurisdictions composed of lay judges (art. L French Commercial Code) having jurisdiction over : Insolvency proceedings concerning any person exercising a commercial activity, and any actions connected with (article L French Commercial Code). Commitments and transactions between tradesmen Commercial companies Commercial transactions between all persons (art. L French Commercial Code)

PERSONAL COMPETENCE  If claimant is not a tradesman, he can choose between the competent civil court (proximity judge / district court / Regional court) and the Commercial court.  If the defendant is not a salesman, the claimant must bring his claim before the competent civil court.

TERRITORIAL COMPETENCE In principle, there is at least one commercial court in each département. General rule the competent Commercial Court is that of the domicile of the defendant. Exceptions   Contractual matters, the jurisdiction of the place of effective delivery of the good or the place where the services have been provided.   Matters of tort : the jurisdiction of the place of the damaging event or the place where the damage has happened (Art. 46 French Civil Procedure Code).   Insolvency proceedings, the court of the registered office of the insolvent company.   If the litigating salesmen agree to submit the dispute to a jurisdiction which otherwise has no territorial competence (Art. 48 French Civil Procedure Code).

LEGAL REMEDIES The Commercial Courts decide in first and last instance when the value of the dispute does not exceed 4000 Euros. It is not possible then to lodge an appeal before the Court of Appeal. The only remedy left is the appeal before the Cour de cassation.

MATTERS BEYOND THE JURISDICTION OF THE COMMERCIAL COURTS Regional Courts (Tribunaux de grande instance) have jurisdiction over :  Commercial leases  Disputes concerning the sale of inmovable property  Liability of court appointed agents or liquidators (mandataires judiciaires - liquidateurs)  Insolvency proceedings of civil companies, economic interest groupings and european interest groupings (GIE, GEIE)  Actions concerning Patents, Designs and Models and Trademarks (only certain Regional Courts are competent : Paris, Lyon, etc.) The Regional Court has also jurisdiction in matters of unfair competition deriving from the use of trademarks (Cour de cassation, May 28 th 2013, Nr )

PROCEDURAL RULES   The proceedings are oral : the parties are not required to submit their arguments and demands in writing   Representation by lawyer is not required   The Public Prosecutor (“Procureur de la République”) has an office in each Commercial Court. He is present during the insolvency proceedings In other proceedings, the Parties may request his presence in Court

3. ACTUAL DISCUSSION : SHOULD WE MAINTAIN THE COMMERCIAL COURTS ? Attempts to reform the Courts are undertaken nearly every ten years. Working groups have been established on March 5 th 2013 on the improvement of commercial justice.

In favor : Allows to unite in the same court both legal and economical expertise (Marshall Report). Mixed : the combination would guarantee a greater impartiality, but is costly, requires cooperation from the lay judges (Judges Union – USM). Against :  The professional judges are not sufficiently trained / show no interest for economical and financial questions (Employers Union – MEDEF).  The Courts are already efficient. This measure would not be usefull (ACE National Confederation of lawyers – CNA, Cercle Montesquieu).  The combination should not be introduced before the Court of Appeal, where mainly legal questions are examined for which professional judges are better suited (Judge’s Union – USM). THE COMBINATION OF PROFESSIONAL AND LAY JUDGES

TRAINING OF THE LAY JUDGES Consensus in favor :  Initial training before the lay judges take office, continuing education in civil law, commercial law and in professional ethics are necessary (Judges Union – USM).  Training the lay judges would improve the quality of their decisions (Marshall Report, Employers Union - MEDEF, Cercle Montesquieu, National Confederation of Lawyers – CNA.

SPECIALIZATION OF CERTAIN COMMERCIAL JURISDICTIONS Mixed: The Commercial Courts are already specialized due to their localization. The smaller Courts rarely deal with important insolvencies. Insolvency prevention requires the commitment of the president of the Court. The institution of prevention chambers is useless (Employers Union – MEDEF) Against : The Courts are already efficient. This measure would not be usefull (Cercle Montesquieu).

INTERVENTION OF THE PROSECUTION In favor : The presence of the prosecution in Court reminds the parties of the general interest. In order to fully exercise its mission, the prosecution must be more specialized. Adequate training of the prosecutors is required to give them an economic culture. Specialized functions in the prosecution should be created (Judges Union – USM). Against : Intervention of prosecution in prevention of insolvency proceedings could discourage business managers to go into prevention and is contrary to the contractual nature of this procedure (Employers Union – MEDEF).

4. OPINION OF A PRACTITIONER

STRONG LOCAL TIES Many Commercial Courts are firmly attached to the city and region where they are established. Litigating parties not belonging who do not belong to that region may find it difficult to be make themselves heard.

COMMERCIAL COURTS ALLOW ACCESS TO HIGH LEVEL BUSINESS PRACTITIONERS WHO RECEIVE NO SALARY IN RETURN   In Paris, the proceedings are held in small offices to allow conciliation between the parties. The hearings are almost confidential.   Conciliation is facilitated : one party submits a request for conciliation to the President of the Commercial Court, who designates a conciliator to help the parties find a mutual agreement. In case of success, the agreement will be confirmed by the Court. This procedure allowed in September 2014 to settle the dispute between LVMH and HERMES which lasted since October 2010 and threatened to harm both companies.

  Due to their experience, some judges have an accute understanding of transnational dealings and speak various languages.   Creation in 2011 by the Commercial Court of Paris of the International Chamber in which parties are allowed to assess evidence in a foreign language (English, German and Spanish). UNDERSTANDING OF INTERNATIONAL TRANSACTIONS