How Businesses Can Navigate Mexico’s Evolving Legal Landscape

In June 2025, Mexico held elections to elect members of the judiciary for the first time in its history. When the constitutional reforms that allowed this were passed in Mexico, I realized that many people didn’t understand how these changes could affect them. In fact, most didn’t even consider that such legal reforms could have any connection to them, let alone impact their daily routines. I was surprised to hear similar indifference from, at that time, colleagues in the public administration, people who, working within the structure of the state and its governmental functions, should have some awareness of how court decisions and proper judicial functioning can influence, at the very least, the way they carry out their jobs.

It is frequently mentioned and can easily be assumed that people do not usually come into contact with the judicial system. Most do not need to appear before a tribunal on a daily basis. This perception may also extend to businesses or corporations, as the relationship between judicial decisions and daily operations can seem intangible. Despite the lack of direct and frequent contact, the judicial system and the effects of constitutional reforms are relevant to both individuals and organizations, influencing not only the administration of justice but also the day-to-day functioning of various sectors.

As individuals, companies too might find it difficult to grasp the full extent of the reforms' relevance to their operations. Yet the link is undeniable: an efficient judiciary is needed for the protection of rights, the resolution of disputes and enforcement of contracts, which are essential to a functioning business environment.

The scope of the Judicial Reform is broad. Judges who are already elected, as well as those who will be elected in the future, range from members of the newly created Judicial Discipline Tribunal to Supreme Court Justices, Circuit Magistrates, and District Judges. In some states, this also includes local judges. Judges at the first-instance level preside over matters involving civil, commercial, criminal, labor, and family law. District Judges also handle Amparo proceedings and Magistrates act as second-instance judges, reviewing appeals against decisions rendered by District Judges. At the highest level, the Supreme Court Justices are the ultimate interpreters of the Constitution, ensuring that laws and government actions align with constitutional principles and respect fundamental human rights.

Understanding the judicial structure and the significance of the ongoing reforms is not merely a matter of legal theory but one that has real and tangible implications for governance, business operations, and the protection of rights in Mexico. Judicial decisions shape the rule of law, influence the administration of justice, and create the legal framework within which both citizens and businesses operate. These decisions impact contractual relationships, property rights, regulatory compliance, and even broader market conditions.

Now, we will have to wait and see how the newly elected judges render their decisions to begin evaluating the real impact of the reform. In this regard, it is essential that businesses closely follow these decisions to assess whether their initial perceptions were correct or whether, on the contrary, they need to adjust their expectations and strategies based on how the judiciary evolves.

In the meantime, businesses can prepare themselves to operate within a new legal landscape. First, by staying informed,  this means regularly monitoring judicial decisions and working with legal experts to make informed choices and anticipate legal risks. This includes not only risks arising from how the law is interpreted or changes in its application but also compliance risks related to regulatory obligations.

In that sense, identifying legal and regulatory risks becomes an essential task for businesses. This involves not only recognizing existing areas of exposure but also anticipating new or emerging risks that could arise from changes in how laws are interpreted or enforced by the judiciary.

Businesses should stay up to date on regulatory changes, and work with legal experts who can help them understand how key decisions may affect their operations, and they could carry out regular legal audits. It is also essential for businesses to be aware of the specific risks related to their industry so that they can adequate their risk management strategies accordingly. Once the risks have been identified, a solid compliance system helps to meet legal obligations, through clear internal policies, employee training, monitoring and well-managed contracts. Compliance has to become a part of the company’s decision-making process and culture. This allows businesses to prevent disputes, protect their reputation, and operate with stability in a changing legal environment. 

Additionally, many businesses may prefer to avoid litigation altogether, often due to the costs and time involved. In this context, it is increasingly important for private parties to ensure their relationships are governed by well-drafted contracts that help anticipate and manage potential disputes. Consulting legal professionals is key — not every situation requires lengthy, overly detailed contracts, but rather well-tailored agreements that reflect the nature of the relationship and foresee possible conflicts.

In that regard, businesses in Mexico also have the option to include alternative dispute resolution (ADR) clauses in their contracts. Since January 2024, the General Law on Alternative Dispute Resolution Mechanisms, has established a comprehensive legal framework that sets out the principles, structure, and scope for the use of ADR mechanisms throughout the country.

These mechanisms include negotiation, collaborative negotiation, mediation, conciliation, and arbitration; they offer businesses flexible, confidential, and other efficient avenues to resolve disputes while maintaining control over the process. The law is considered fundamental principles such as access to alternative justice, party autonomy, good faith, confidentiality, equity, and impartiality; and it applies to civil, family, commercial, health-related, and even some administrative matters, including cases involving public entities.

Businesses can incorporate ADR clauses, with the guidance of legal professionals,to prevent conflicts from escalating but also reinforce solid commercial relationships based on fairness, dialogue, and legal certainty.

Therefore, alongside strengthening compliance and risk management, businesses can proactively adapt to these changes by exploring options that promote efficient dispute resolution. This scenario can offer an opportunity in which businesses can position themselves and continue growing.