Alternative dispute resolution methods

Dispute resolution: mastering alternative dispute resolution methods in France

Dispute resolution no longer takes place solely in court. For SMEs and mid-market companies, choosing between litigation and alternative dispute resolution (ADR) has become a strategic decision, with direct implications for timelines, costs and their commercial relationships. Since the entry into force on 1 September 2025 of Decree No. 2025-660 of 18 July 2025, the Code of Civil Procedure now places amicable settlement at the heart of civil proceedings, making party-led case management the rule and judicial case management the exception. This article offers executives and legal professionals an operational overview of the tools available — negotiation, conciliation, mediation, participatory proceedings — and the key considerations to anticipate in order to manage their litigation effectively.

In summary

1. Judicial proceedings coexist with a structured range of alternative dispute resolution methods enshrined in Book V of the Code of Civil Procedure (Articles 1528 et seq.).
2. For disputes involving less than €5,000, recourse to an ADR is, in principle, mandatory before bringing the matter before a judge (Article 750-1 CPC).
3. Since 1 September 2025, party-led case management has become the norm in civil proceedings, requiring practitioners to rethink their litigation strategy.
4. Negotiation, conciliation, mediation and participatory proceedings each follow distinct rationales: the choice of method must be tailored to the type of dispute and the relationship between the parties.
5. Confidentiality, the enforceability of the agreement and contractual clauses on mandatory mediation are decisive legal levers.
6. The business mediator, who offers a free and confidential service, provides a specific avenue for resolving tensions between business partners and with the authorities.
7. An effective dispute resolution strategy is built from the moment the contract is drafted, not when the dispute arises.

Dispute resolution: understanding the two main avenues available to businesses

When faced with a commercial dispute, any business has two main avenues: the judicial route, which leads to a decision imposed by a judge, and the contractual route, which relies on seeking a negotiated settlement, possibly with the assistance of a third party. Article 1528 of the Code of Civil Procedure explicitly recognises this coexistence, providing that the parties may attempt to resolve their dispute “amicably with the assistance of a judge, a court conciliator, a mediator or, in the context of a participatory procedure, their lawyers”.

Why ADR is gaining ground

The use of alternative dispute resolution (ADR – known in French as MARD, « modes alternatifs de règlement des différends », or sometimes MARC, « modes alternatifs de règlement des conflits ») meets operational requirements that are now well established within legal departments. Traditional legal proceedings can drag on for several years if the case goes to appeal, whereas a well-conducted mediation generally concludes within a few weeks to a few months. In addition to the issue of time, there are those of cost, discretion — particularly sensitive when the dispute involves a competitor, a strategic supplier or a key employee — and, above all, the preservation of the commercial relationship.

A now unified legal framework

The regulatory landscape for ADR has undergone a major change with Decree No. 2025-660 of 18 July 2025, applicable since 1 September 2025, which has rewritten and consolidated all applicable rules in Book V of the Code of Civil Procedure, entitled ‘Amicable Dispute Resolution’. This text follows on from Law No. 2023-1059 of 20 November 2023 on the Ministry of Justice’s policy and planning for 2023–2027, which had set the objective of a more participatory justice system, based on greater involvement of the parties. The stated aim is clear: to achieve a faster, more predictable and less costly resolution of civil and commercial disputes.

Negotiation, conciliation, mediation, participatory proceedings: choosing the right tool

The choice of a dispute resolution method is not a matter of personal preference but of a precise analysis of the dispute: the nature of the disagreement, the level of tension, the existence of a commercial relationship to be preserved, financial stakes, and the need for confidentiality. Each tool follows its own logic.

Direct negotiation and settlement

Amicable negotiation remains the first instinct and, often, the most effective approach when constructive dialogue between the parties remains possible. It concludes with a settlement, a contract defined in Article 2044 of the Civil Code, whereby the parties resolve an existing dispute or prevent a future dispute through mutual concessions. Its legal force is considerable: a settlement duly concluded precludes any subsequent action having the same subject matter, subject to compliance with the conditions laid down in Articles 2044 et seq. of the Civil Code.

A settlement is a contract by which the parties, through reciprocal concessions, settle an existing dispute or prevent a future dispute.
This contract must be in writing. – Article 2044 of the Civil Code

To be enforceable, the settlement must include identifiable reciprocal concessions — a point regularly scrutinised by the Court of Cassation — and be drafted with sufficient precision to avoid any dispute regarding its scope. A poorly drafted settlement agreement may backfire on its beneficiary.

Conventional conciliation

Conventional conciliation involves the intervention of a third party seeking to bring the parties together. The services of a court-appointed conciliator are free of charge, making this a particularly suitable tool for small claims, but also for certain straightforward commercial disputes. It is often used under Article 750-1 of the Code of Civil Procedure, which, since 1 October 2023, requires a prior attempt at amicable resolution for claims not exceeding €5,000.

Mediation: a structured and confidential process

Mediation is defined by Article 1530 of the Code of Civil Procedure, as amended by the Decree of 18 July 2025, as ‘any structured process by which several persons attempt, with the assistance of a third party, to reach an agreement aimed at resolving the dispute between them’. The distinction from conciliation lies essentially in the status of the third party involved: provided they are not a court-appointed conciliator, they fall under the mediator’s regime.

The mediator – who may be a lawyer, a specialist professional or a mediator appointed by a centre such as the CMAP – must offer guarantees of independence, competence and impartiality, now codified in Article 1530-2 of the Code of Civil Procedure. They do not settle the dispute: they facilitate the search for a solution acceptable to both parties.

Mediation is particularly suited to:

• complex commercial disputes involving relational issues (partnerships, distribution, subcontracting);
• disputes between shareholders or within a company's governance bodies;
• the termination of commercial relationships that may be reclassified as a sudden termination within the meaning of Article L. 442-1, II of the Commercial Code;
• cross-border disputes, where the cost and slowness of court proceedings are often a deterrent.

Participatory proceedings and party-led case management

The participatory procedure agreement, governed by Articles 2062 et seq. of the Civil Code and 1538 et seq. of the Code of Civil Procedure, is entered into between parties, each assisted by their own lawyer. It commits them to working together, within a defined framework, towards the amicable resolution of their dispute. The Decree of 18 July 2025 strengthened this mechanism by establishing party-led case management in civil proceedings. Two avenues are now available:

1. Simplified party-led case management (Articles 129-1 to 129-3 CPC), an agreement between lawyers that interrupts the limitation period and confines the judge’s role to verifying compliance with the guiding principles.
2. The participatory procedure for the purposes of case management (Articles 130 to 130-7 CPC), which is more formalistic and provides a precise framework for the allocation of costs, the disclosure of documents via a schedule, and the procedures for amending or terminating the agreement early.

These tools, long regarded as ancillary, are becoming strategic: they enable the parties to control the timetable, the confidentiality of communications and the organisation of the proceedings, whilst retaining the option of a judicial decision on matters that cannot be resolved.

The legal framework overhauled by the reform of 18 July 2025

Since 1 September 2025, Book V of the Code of Civil Procedure has formed the unified foundation of French law on ADR. The reform marks a shift in approach that legal departments must fully grasp.

The principle of party-led case management

The key innovation is the reversal of the hierarchy between party-led case management and judicial case management. Party-led case management becomes the rule and judicial case management the exception. In practice, the parties and their lawyers are encouraged to take charge of organising the case management, with the judge intervening only in the event of difficulty or to ensure compliance with the guiding principles of the trial.

This reform is in line with the mechanisms introduced by the Act of 20 November 2023, notably the division of civil proceedings – which allows the dispute to be split so that certain points are adjudicated as a priority – and the amicable settlement hearing (ARA), during which a specially appointed judge attempts to facilitate the amicable resolution of the dispute between the parties.

The prior obligation of amicable resolution for small claims

Article 750-1 of the Code of Civil Procedure, resulting from Decree No. 2019-1333 of 11 December 2019, requires, on pain of the claim being declared inadmissible, a prior attempt at conciliation, mediation or participatory proceedings for claims relating to a sum not exceeding €5,000 and for certain neighbourhood disputes. This threshold serves as a warning sign for any business considering a small claims recovery action: failure to comply with this requirement risks the claim being dismissed (inadmissibility of the claim).

Please note: Article 750-1 of the Code of Civil Procedure does not apply to the order for payment procedure. For further information: Order for payment: a practical guide to commercial debt recovery

Contractual clauses on prior mediation

The parties may, when drafting their contract, include a mandatory mediation clause requiring an attempt at amicable resolution before any referral to the courts. The Court of Cassation, in a judgment of the Joint Chamber of 12 December 2014 (No. 13-19.684), established a strict principle: the clause establishing a mandatory mediation procedure prior to bringing the matter before the court is binding on the court, and failure to comply with it cannot be remedied by implementing it during the proceedings. This position has been confirmed on several occasions, notably by a judgment of the Third Civil Chamber on 6 October 2016 (No. 15-17.989).

In other words, a mediation clause that has been improperly implemented may result in the legal action being dismissed – a major procedural risk that requires such clauses to be drafted with the utmost precision: designation of the mediation body, time limit for commencing proceedings, and coordination with protective measures and enforcement procedures. On this last point, the Second Civil Chamber further ruled in a judgment of 22 June 2017 (No. 16-11.975) that a clause requiring mediation cannot, in the absence of an express provision, prevent the enforcement of a compulsory enforcement measure.

Securing the amicable agreement: confidentiality, approval and enforceability

The strength of an ADR depends as much on the quality of the process as on the legal soundness of its outcome. Three aspects deserve particular attention.

The principle of confidentiality

Conventional mediation and conciliation are subject to the principle of confidentiality, now codified in Article 1528-3 of the Code of Civil Procedure. This confidentiality covers the mediator’s findings, the statements taken and the documents produced, which may not, in principle, be disclosed to third parties or relied upon in subsequent judicial or arbitral proceedings, unless the parties agree or there are specific exceptions (notably in matters of public policy or the protection of a person’s physical or psychological integrity).

This protection is a major advantage for businesses: it allows them to explore compromise solutions without the concessions made during mediation being used against the party making them should the process fail.

Please note: Unlike documents prepared as part of the amicable process, documents produced during the amicable settlement hearing, conciliation proceedings before a court-appointed conciliator, or mediation are not covered by confidentiality.

Approval of the agreement

An agreement resulting from mediation, conciliation or a participatory procedure has, in principle, only the force of a contract. To make it fully enforceable, the parties may apply to the competent court for its approval, in accordance with the conditions set out in Articles 1543 et seq. of the Code of Civil Procedure, as amended by the Decree of 18 July 2025. The court approves the agreement after verifying that its subject matter is lawful and that it does not contravene public policy.

The approved agreement allows for enforcement proceedings to be brought against the debtor’s assets, pursuant to Article L. 111-2 of the Code of Civil Enforcement Procedures.

The writ of execution affixed to the lawyer’s deed (acte d'avocat)

Decree No. 2022-245 of 25 February 2022 established a streamlined mechanism allowing the court registry to affix the writ of execution to the lawyer's deed recording an agreement resulting from an amicable dispute resolution process. This procedure, which avoids the need for judicial approval in the strict sense, significantly speeds up the practical implementation of agreements and enhances the appeal of ADR. For legal departments, this means that an agreement properly formalised by the parties’ lawyers can quickly acquire enforceability equivalent to that of a judgment.

Dispute resolution strategy for SMEs, mid-market companies and legal departments

An effective dispute resolution policy cannot be improvised when a dispute arises. It must be developed in advance, based on several operational pillars.

Incorporating dispute resolution clauses into contract drafting

Clauses relating to amicable settlement, prior mediation or arbitration must be tailored to the nature of the contract, the amount at stake and the location of the parties. A standard clause copied without analysis exposes the parties to two symmetrical risks: ineffectiveness (a clause that is too vague or non-binding) or deadlock (a clause that is too rigid, which blocks access to the courts in an emergency). The involvement of our Paris-based firm, which specialises in commercial litigation, ensures these provisions are sound from the moment the contract is signed.

Anticipating the need for a business mediator

The business mediator offers a free, fast and confidential service for contractual disputes between economic operators. They are particularly sought after in cases of:

• failure to meet payment deadlines in a private or public contract – given that late payments are identified as a major cause of business failure;
• disputed application of a contractual clause;
• abrupt termination of commercial relations;
• difficulties in implementing the research tax credit (CIR) or the innovation tax credit (CII);
• disputes relating to intellectual property.

Referrals are made online and initiate a process which, if unsuccessful, does not prejudice legal recourse. For an SME facing a principal in a position of strength, this channel can serve as a valuable lever for restoring economic balance.

Deciding on a case-by-case basis between amicable settlement and litigation

Certain disputes do not lend themselves to amicable resolution: serious infringements of intellectual property, massive unfair competition, an urgent need for interim relief, or the necessity of establishing a public legal precedent to deter other parties interested in the dispute. In such cases, the judicial route – possibly preceded by urgent proceedings – remains unavoidable. In other situations, mediation or participatory procedures will offer a quicker and more sustainable outcome. Deciding between these options requires a strategic, legal and economic analysis that must be carried out for each case.

Documenting and formalising the agreement

A poorly drafted settlement agreement is a recipe for future litigation. The settlement agreement or mediation agreement must clearly define: the subject matter of the dispute that has been resolved, the concessions made by each party, the terms of payment or performance, any waiver of certain actions, the confidentiality clause, the non-disparagement clause and, where applicable, the procedures for seeking court approval or the affixing of a writ of execution.

Conclusion

Dispute resolution in France has undergone a profound transformation: the reform that came into force on 1 September 2025 establishes amicable settlement as the primary means of resolving civil and commercial disputes, and offers businesses a range of tools, the mastery of which is now a strategic skill in its own right.

The key points to bear in mind are clear: draft dispute resolution clauses rigorously, comply with the preliminary procedural requirements (notably the €5,000 threshold under Article 750-1 of the Code of Civil Procedure), choose the tool suited to the nature of the dispute, and secure the final agreement through court approval or the affixing of a writ of execution. Companies that incorporate these practices into their legal governance gain greater predictability, speed and control over their litigation costs.

Need support to prevent or resolve a dispute?

Every case requires a bespoke analysis, whether it involves securing a mediation clause, preparing a settlement agreement, initiating a collaborative process, or deciding between amicable settlement and litigation.

Our firm supports executives, finance and legal departments in defining and implementing their dispute resolution strategy, including in an international context. To discuss your situation and identify the most suitable approach for your company, contact us today.