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This chapter focuses on dispute resolution in French labor courts. We empirically investigate the forces that shape decision-making in the pretrial conciliation phase. For that purpose, we compiled a new database from legal documents. The results are twofold. First, conciliation is less likely when plaintiffs are assisted by a lawyer. Although this result might be interpreted in various ways, further analysis shows that the lawyers’ remuneration scheme is the most likely cause of this effect. Second, we find that the likelihood of settlement decreases as the amount at stake increases. These results contribute to the ongoing debate about French labor court reform.

We assess the impact of labor litigations on the ex post performance of firms. Using a sample of 44 French labor litigation cases, our empirical results confirm that the compensation amount requested by an employee has a significant and negative influence on the firm financial performance. Although that effect fades over time, it still remains significant four years after the employee has initiated the legal procedure. In addition, firms that have opted for a trial rather than a conciliation procedure improved their financial performance only in the first two years following the triggering of the litigation. That effect can be mainly explained by the long delays in the judgment of French labor courts. Our results contribute to the debate on the labor litigation impacts by assessing the financial opportunity of enacting pro-worker labor legislation dealing with employment redundancies.

This issue of Research in Law and Economics covers several areas of important research by a variety of international scholars. It contains technical papers on the appropriate way to estimate damages in patent disputes, as well as methods for evaluating relevant markets and vertically integrated firms when determining the competitive effects of mergers and other actions. There are also papers on the implication of different legal processes, regulations, and liability rules on consumer welfare, which range from the impact of delays in legal decisions in labor cases in France to issues of criminal liability related to the use of artificial intelligence.