The recent approval of the judicial reform in Mexico has generated great expectations in the business world. Now that it is a reality, businessmen and entrepreneurs must understand the changes that this new structure will bring with it. In this article, we explore the main aspects of the reform, its benefits and challenges, as well as the direct impact on the business environment and the real estate sector.
Historical Context and the Three Powers in Mexico
To understand the importance of this reform, it is key to remember how the political system works in Mexico. The three branches of government are:
- Executive Branch: Responsible for applying the laws and directing the public administration, under the figure of the president.
- Legislative Branch: Composed of the Congress of the Union, which creates, modifies and approves laws.
- Judicial Branch: Its mission is to interpret the laws and guarantee their fair application. The Supreme Court of Justice of the Nation is the highest authority.
Since the promulgation of the Constitution in 1917, these three branches have operated with a delicate balance that prevents abuse of power. However, the judicial system has been criticized for problems such as corruption and inefficiency, which have undermined confidence in justice. Therefore, the recently approved reform seeks to solve these failures and modernize the system.
What Does Judicial Reform Involve?
The judicial reform has been approved with the objective of making the system more efficient, transparent and accessible. This change is vital for the business sector, where judicial decisions affect both the resolution of commercial disputes and the legal security of investments.
One of the most notable points of the reform is the popular election of judges. This measure promises to make the judicial system more democratic, but also presents important challenges that business owners and investors must take into account.
Positive Aspects:
- Greater Representativeness: With the direct election of judges, the judicial system will be more aligned with the interests and needs of society, which could translate into more balanced and fair decisions.
- Transparency and Trust: Being subject to citizen oversight, judges will have to be held accountable more clearly. This will strengthen confidence in the judicial system, which is essential for the stability of investments in sectors such as real estate.
- Accountability: Accountability will become a key principle of judicial work, promoting faster and more efficient justice, crucial aspects for the business environment in Mexico.
Negative Aspects:
- Politicization of the System: The popular election could lead some judges to prioritize political or populist interests over legal principles, affecting impartiality in cases that involve large investments.
- Costs and Campaigns: Judges will now have to campaign to be elected, which can open the door to undue influence from interest groups or large corporations that finance their candidacies.
- Legal Uncertainty: Instead of making decisions based on case law, judges could be inclined to rule based on popularity, creating legal uncertainty, especially in long-term projects such as real estate developments.
Impact of Judicial Reform on Business
The recently approved judicial reform will have a profound impact on the business sector, especially in areas such as conflict resolution and investment protection. Here we detail some of the effects you may notice:
- Greater Legal Security: A more transparent and efficient judicial system will give greater confidence to national and foreign investors. With the certainty that their rights will be protected under the law, entrepreneurs will feel more comfortable making long-term investments in Mexico.
- Faster Dispute Resolution: With the reform, judicial processes will be more agile, which will reduce the time and costs associated with conflict resolution. This will be particularly relevant in the real estate and construction sector, where contractual disagreements can halt projects.
- Promotion of Foreign Investments: Greater transparency and the fight against corruption make Mexico a more attractive destination for international investors. In sectors such as Real Estate, where legal certainty is key, this reform could drive an increase in the acquisition of properties by foreigners.
Fairer Competition: An equitable judicial system will allow for fairer competition by protecting both large and small businesses. This will generate a more dynamic and fair business environment, where all actors will have equal opportunities.
Conclusion
The judicial reform in Mexico, already approved, is an important step towards the modernization of the justice system. While it brings with it a number of benefits such as greater transparency and representativeness, it also poses significant challenges, especially in terms of politicization and potential conflicts of interest. For key sectors such as Real Estate and business, where stability and predictability are fundamental, the success of this reform will depend on how representativeness is balanced with the impartiality and efficiency of the judicial system.
If you have questions or concerns about how this judicial reform may affect your business, do not hesitate to contact us. Follow us on our social networks like SILMÉXICO for more content about the business sector in Mexico. If you want to hear our CEO talk about relevant topics for business, follow her networks such as “REAL ESTATE Y NEGOCIOS” or “Dolores Pérez Islas”.
