Authority of Res Judicata: Impossible to Revalue an Eviction Compensation Fixed by Judgment

Imagine: you are the owner of commercial premises in Salon-de-Provence, and your tenant, after years of tenancy, announces that he wants to renew his lease. You refuse because you have other plans for the premises. The court orders you to pay him an eviction compensation of 78,000 francs (about €11,900). But the procedure drags on, your tenant does not pay, and a few years later, with inflation, that sum no longer represents the real value of the business. You think you can ask for a revaluation? Think again: the Court of Cassation, in a judgment of 28 September 1982, ruled: once the compensation is fixed by a final judgment, it can no longer be modified, even if it remains unpaid. This is what is called the authority of res judicata. A principle that may seem unfair, but which guarantees legal certainty.

The facts: a story like many others

Mr. Dupont (fictitious name), owner of commercial premises in Gémenos, leases premises to a clothing sales company. In 1969, he refuses the renewal of the lease and the tenant sues him for payment of an eviction compensation. On 15 April 1970, the Tribunal de grande instance of Marseille fixes the compensation at 78,000 francs. But the owner appeals, and the procedure lasts. Meanwhile, the tenant remains in the premises without paying compensation. In 1978, the owner, considering that the compensation no longer corresponds to the real value of the business (notably due to monetary depreciation), again seises the court to request a revaluation. His request is declared inadmissible by the Court of Appeal of Versailles, and the Court of Cassation confirms. In short, the owner cannot go back on the amount fixed in 1970, even if the tenant has still not paid. The question is simple: can one, years later, request a new evaluation? The judges' answer is no.

The reasoning of the court — dissected

The Court of Cassation relies on the principle of res judicata, provided for in Article 1351 of the Civil Code (now Article 1355). This principle provides that what has been finally decided cannot be challenged between the same parties. In other words, once a judgment has become res judicata (i.e., it is no longer subject to appeal), it is final. The owner invoked two arguments: on the one hand, the lessor's failure to pay, and on the other hand, monetary depreciation. But the Court responds that the eviction compensation must be assessed at the date closest to the eviction. However, here, the eviction had not yet taken place; the tenant was still in the premises. The 1970 judicial fixing was therefore final. Consequently, any request for revaluation is met with res judicata. Note, however, that this reasoning is not an evolution of the law, but a classic application. What few people know is that the judge could, in some cases, have taken account of economic developments if the law so provided, but that was not the case here.

What this means for you — concretely

For landlord owners: if you obtain a judgment fixing an eviction compensation, do not delay in seeking payment. Once the judgment is final, you will no longer be able to obtain an upward revaluation, even if the value of the business increases or the currency loses its value. Concrete example: in Salon-de-Provence, a compensation of €100,000 fixed in 2020, if not paid until 2025, will have lost about 10% of purchasing power due to inflation. No recourse possible. For tenants: if you are ordered to pay compensation, know that its amount is final once the judgment is rendered. This protects you against any subsequent request for revaluation. For purchasers: if you buy premises burdened with an eviction compensation, check whether the judgment is final. An example in Gémenos: an owner had to sell his premises at a loss because the compensation fixed in 1980 had never been paid and he could no longer revalue it. If you are in this situation, you must act quickly: enforce the judgment (seizure, etc.) before the limitation period extinguishes your right.

Four tips to avoid this type of dispute

• Negotiate the compensation quickly: as soon as the renewal is refused, try to reach an amicable agreement with the tenant to fix the amount. This avoids a long procedure and a definitive fixing that you will no longer be able to modify.
• Demand payment immediately after the judgment: as soon as the judgment is final, put the tenant on notice to pay. In case of non-payment, initiate enforcement proceedings without delay (attachment of bank accounts, etc.). Do not let it drag on.
• Provide for an indexation clause in the lease: if you are still in the negotiation period, include a clause that automatically revalues the eviction compensation according to an index (for example, the construction cost index). Note: this clause must be accepted by both parties.
• Consult a lawyer before any action: the law on commercial leases is complex. A professional will help you assess the compensation correctly from the outset and avoid subsequent challenges.

Further analysis: related case law and developments

The Court of Cassation has confirmed this position on several occasions. For example, in a judgment of 4 May 1977 (No. 75-14.123), it held that the eviction compensation must be fixed at the date of the actual eviction, and not at a later date. More recently, in a judgment of 10 January 2019 (No. 17-24.987), the Court recalled that res judicata precludes any new claim between the same parties on the same subject matter. The trend is therefore constant: once the compensation is fixed, it is final. For the future, the question arises as to whether the law could evolve to allow a revision in the event of a major economic change, but nothing is on the agenda. In the meantime, legal certainty prevails.

Checklist before acting

• Do I have a final judgment fixing the compensation? If so, do not attempt to challenge it, unless you have a remedy still available (appeal, appeal to the Court of Cassation).
• Has the tenant paid? If not, initiate enforcement proceedings as soon as possible. Beware of the limitation period: the action for payment is barred after 5 years.
• Are there any new circumstances? For example, if the tenant has committed a fault after the judgment (damage to the premises), you could claim additional damages, but not a revaluation of the compensation.
• Have I signed a settlement agreement? If so, check that it does not contain a revision clause. Generally, a settlement is final.

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