In a recent, little-commented legislative change, the French Cassation Court is now permitted to overturn a lower court decision and hand down a final binding ruling1 where "justified in the interests of the good administration of justice". In the past, it has been exceptional for the Cassation Court to do this. In the classic mould of a cassation court, where it has disagreed with a lower court on a point of law, it would typically send the matter back for further adjudication, delaying the final outcome between the parties.
Does this legislative change herald a speedier justice for civil and commercial claims, and make France a more attractive forum for dispute resolution?
The role of the French Cassation Court is to exercise ultimate control over questions of law. Where it finds an error in application of the law, it will typically quash the lower court decision and send the matter back either to a different lower court or to a reconstituted lower court for further adjudication.
In the most common case of an appeal, the second court of appeal seized of the matter is not then bound by the Cassation Court decision. The second appeal court may disagree with the Cassation Court and hand down judgment agreeing with the first court of appeal.
In that scenario, the disgruntled losing party can bring the second appeal court decision before the Cassation Court. The Cassation Court will then sit in plenary session and hand down its decision. If it disagrees with the second court of appeal on the law, the Cassation Court will quash the decision and remit the matter to a third court of appeal. The third court of appeal is then bound by the Cassation Court decision. Its hands are tied in areas where the Cassation Court has ruled.
In November 2016, the French legislator passed a law entitled "Modernisation of Justice in the 21st Century". This law has introduced a number of changes to aspects of French administration of justice, including matters favouring private justice and the various forms of ADR (including arbitration).2
On the subject of the Cassation Court, a new provision was introduced into the Administration of Courts Act which provides that "in civil matters, [the Cassation Court] may rule on the substance of the matter where justified in the interests of the good administration of justice".
For the typical scenario in French civil or commercial process, a losing party will have a right of appeal to the competent appeal court. France has more than 35 general appeal courts spread geographically across the country. Appeal hearings are essentially a complete rehearing on the facts and the law. Final "appeal" then lies to the Cassation Court.
The Cassation Court has historically been focused on matters of law only, and is not permitted to review the substance of the matter, except where expressly permitted by the law.
Where the Cassation Court quashes an appeal decision and refers it back to a lower court, the decision of the second appeal court typically takes a year or more to emerge. While it is relatively rare that the second appeal court will rule against the Cassation Court decision, given that the second appeal is essentially a rehearing, it is not rare to find losing parties seeking to introduce new factual or legal arguments at the second appeal stage. This delay and legal insecurity is avoided where the Cassation Court quashes without referral back. Historically, the Cassation Court has adopted this stance in very few cases – in the order of 2%-5% of cases per year – while at the same time overturning a significant percentage of court of appeal decisions.3
The new provision is clearly aimed at encouraging the Cassation Court to increasingly undertake the role of final arbiter, and to bring litigation to an end, in the mould of a common law supreme court. However, the new provisions leave considerable discretion to the Cassation Court as to whether in any particular case it does this. The touchstone of "the good administration of justice" is an imprecise notion. It will therefore be interesting to follow how extensively the Cassation Court embraces this newly bestowed power. It represents a significant change in mindset for France's final appellate judges. But it is a change that will hopefully find fertile ground and contribute to efficiency, legal security, and speed in French civil and commercial proceedings, reinforcing France as an increasingly attractive forum for dispute resolution in the EU.
1 Such decisions are referred to as "cassation sans renvoi" (quashing with no referral back)
2 A subject briefly touched upon in the comments section of our December 2016 alert "Annulment of international arbitral award: the French Conseil d'Etat makes first foray into the fiefdom of the civil Cassation Court"
3 For example, in 2016, approaching 40% of civil and commercial matters that went to a hearing were overturned, representing 27% of all such Cassation Court appeals filed.
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