Companies Avoid Courts After Judicial Reform: 'Businessmen Are Worried,' Says Laynez
Companies in Mexico are increasingly avoiding courts in favor of arbitration or mediation due to legal uncertainty following judicial reforms.
In Mexico, companies are increasingly shunning traditional courts in favor of arbitration or mediation, a trend attributed to the legal uncertainty that has arisen from recent judicial reforms. These reforms, initiated by President Claudia Sheinbaum, included the appointment of 881 judges, which many business leaders and former judicial officials suggest has led to a fracturing of the judicial system, characterized by inexperienced judges and erratic rulings that undermine confidence in judicial processes.
The concerns articulated by various stakeholders indicate that companies are re-evaluating their investment plans due to anxieties over the competence of the judiciary, which they believe has been politicized and suffers from a lack of expertise. Interviews with former officials and judicial employees reveal a pervasive sentiment that changes in the judicial landscape have resulted in decisions that are often riddled with errors and perceived biases, discouraging businesses from pursuing legal remedies through the courts.
This growing unease not only complicates the legal landscape for businesses but also contributes to broader economic challenges in Mexico, as President Sheinbaum's efforts to attract foreign investment are jeopardized. Companies' hesitance to rely on judicial outcomes could lead to delays or cancellations of investments, further entrenching a climate of uncertainty that is detrimental to economic growth and stability.