Everything you need to know about corporate litigation

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1. Corporate litigation: definition

The term litigation refers to all disputes that can be brought before the courts. Legal litigation arises when a conflict opposes two or more parties. Its resolution requires the intervention of a third person: judge, arbitrator or mediator. The latter assesses the situation under the law before pronouncing a judgment or a solution to the conflict. But before reaching that point, companies call on a litigation service, whether internal with one or more lawyers specific to the company, or external by entrusting the matter to a legal expert.

The objective of the litigation department is to reach a resolution of the conflict through discussion. An amicable solution that makes it possible to avoid legal proceedings before the competent court, which is often long and expensive. In any event, it is appropriate to Clearly define your formalities and company procedures in order to limit possible conflicts.

The legal field is rich in litigation hypotheses. In business, he covers matters as varied as company law, banking law, commercial law, competition or consumer law, administrative law or labor law. They are complex matters, in constant legislative and regulatory evolution, in France and internationally. However, when it comes to litigation, businesses need specific and rapid responses because financial and social impacts can be huge.

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2. The different types of litigation in business

Commercial litigation

• Commercial leases

The commercial lease between the landlord and the tenant tenant is governed by specific rules. This lease, known as 3.6, 9, is an important source of legal litigation, in particular due to the lack of payment of rent, the assumption of work, but especially to questions of renewal and eviction compensation.

• Competition, Consumption, Distribution

Competition litigation specifically concerns businesses in cases of Unfair competition : defamation of a company, mergers that damage the market and other anti-competitive practices. Also pay attention to the relationships between companies and their consumers : misleading advertising, product regulation issues, etc. In addition, distribution litigation deals with disputes between suppliers and distributors: unfair commercial practices, abusive breaches, etc.

• Intellectual property

Disputes concerning intellectual property law are those relating to patents, trademarks and copyrights, as well as all of the company's other intellectual assets. It is important for the company to be well protected and to act quickly, in defense or to protect its rights.

Litigation in corporate law

Corporate law litigation specifically concerns disputes relating to business life like:

• The management of relationships between partners ;

• Conflicts between shareholders;

• Disputes relating to corporate governance ;

• The validity of decisions taken in general meeting : contestation of a capital increase, dismissal of a manager...;

• The dissolution of the company;

• Disputes related to a sale of a company or a merger-acquisition.

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Administrative and fiscal litigation

Administrative litigation refers to any dispute between the company and a public service or administration, such as a tax center or a prefecture. The mission of the administrative judge is to settle administrative disputes. In this area, we mainly think of the tax litigation concerning the calculation or collection of tax. Administrative litigation is handled by administrative bodies: the administrative court, the administrative court of appeal, the Council of State.

☝️ To note: The administrative decision may be appealed within a period of 2 months before the administrative court from the date of its publication, posting or notification. But this challenge does not put an end to the contested decision!

Labor litigation

Cases of conflict between an employee and the company are also frequent and concern:

• Questions relating to the payment of wages or bonuses;

• The contestation of a dismissal;

• Cases of discrimination in companies;

• The working and safety conditions of employees.

Labor litigation makes it possible to resolve a dispute, in particular related to a Termination of the employment contract. The main objective is to avoid possible litigation procedures by means of negotiations conducted in a company and with a lawyer. This makes it possible to find a amicable arrangement And a transaction solution. Sometimes, litigation is unavoidable and the conflict is managed before the Labor Court (CPH).

☝️ To note: The Conseil des Prud'homme does not intervene in disputes concerning a public law employment contract.

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3. The resolution of litigation in business

Negotiation in the pre-litigation phase

Businesses are facing a phenomenon of Strong judicial system Which presents a financial as well as economic and social risk. La legal risk management is therefore at the heart of the company's concerns. Upstream, a review of contracts ensures the clarity and compliance of the commitments, in order to reduce conflict hypotheses as much as possible. In addition, the internal litigation department makes it possible to limit the impact on the company performance.

The aim is to achieve a amicable settlement of the conflict through a commercial relaunch when it comes to a defect in performance (delivery, payment, etc.) and the negotiation of a solution to the problem with a counterparty. The objective of this pre-litigation resolution is toavoid delays and costs associated with legal proceedings. In the event of failure of an amicable settlement, one can opt for mediation, which always makes it possible to maintain the link without recourse to judicial authorities by leading to mutually beneficial solutions. The choice depends on the nature of the dispute, the importance of the issues at stake, and the long-term relationships between the parties.

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Litigation resolution of the dispute

The company can usearbitration to settle a commercial dispute for example, subject to the agreement of the 2 parties to the dispute. They then renounce the traditional judicial authorities, in order to submit to private justice. Arbitration has the advantage of fast and confidential settlement, but it is expensive. In particular, it is widely used in the fields of distribution and franchising.

Most contentious cases are brought before the competent jurisdiction with the assistance of a specialized lawyer in the field:

• Judicial court;

• Commercial court;

• Labor Court;

• Administrative court.

In conclusion, litigation can have significant consequences for a company, especially concerning its reputation and financial costs. Effective litigation management makes it possible to resolve disputes quickly and optimally, but also to protect the interests of the company and to maintain its position in the market.

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