Class of their own
Do class action proposals signify a trend towards the Americanisation of the French legal system?France is generally regarded as a not too unfriendly Continental European forum in which to litigate, although - quite unfairly - it is sometimes regarded as chauvinistic. As a country of civil law tradition, it is still inclined towards maintaining a balance of interests between the parties so that plaintiffs (including individuals) and defendants (including corporations) can litigate on an equal footing.
January 24, 2007 at 10:01 PM
6 minute read
France is generally regarded as a not too unfriendly Continental European forum in which to litigate, although – quite unfairly – it is sometimes regarded as chauvinistic. As a country of civil law tradition, it is still inclined towards maintaining a balance of interests between the parties so that plaintiffs (including individuals) and defendants (including corporations) can litigate on an equal footing.
Despite a recent trend towards an increase, the quantum of the damages awarded remains 'under control' and safeguards such as the absence of discovery/disclosure, punitive damages or jury trials, are generally seen as preventative measures from a possible drift of the French legal system. French lawyers are also bound by very strict professional rules concerning success fees and the prohibition of client soliciting which have traditionally limited the development of a 'plaintiff's bar'.
Against this background, France is about to introduce class action lawsuits (actions collectives) with a view to reinforcing access to justice for consumers, who already benefit from significant existing legal protection. The process was started in a speech given on 4 January, 2005, by President Chirac requesting "a modification to the legislation to allow consumer groups and their associations to bring class actions against wrongful practices".
Two years later, and following fierce debate between the consumers' associations and the employers' federations, a draft bill was submitted on 8 November last year to the weekly meeting of the members of the French Government.
This draft Bill is regarded as a middle-ground proposal. It does provide in substance that certified consumers' associations may file proceedings against a professional for the economic damages individually suffered by consumers due to the wrongful execution of a contractual obligation by a professional. As a first step, the court will decide on the liability of the professional by a judgment later to be published.
As a second step, having suffered a loss, the individual consumer may then request compensation from this professional within a specific period of time. The professional must issue a compensation offer.
If no offer is issued, or if such an offer is rejected by the consumer, the latter may bring a claim in court for damages, with the professional incurring the risk of an additional penalty.
This reform is generally considered as unlikely to trigger significant changes given the numerous restrictions contained in the draft Bill because:
l the two-step process as described should not have a huge impact;
l proceedings are not supposed to be lawyer-driven but managed by consumers' associations who will act as the plaintiffs in step one;
l the system would be an 'opt-in' one; the scope of the Bill is limited to consumer contract claims and would exclude, inter alia, the main bulk of product liability claims, employment, competition, environmental and securities disputes; and
l it will be limited to petty claims since a decree will set the maximum amount of the claim at stake at an amount which is likely to be e2,000 (£1,400) per plaintiff.
It is, however, far too early to express any relief since the draft reform actually raises more concern that it may prima facie appear. First, the draft Bill prepared by the current French Government still has to be approved by the Parliament and is likely to be put on hold pending the outcome of the presidential election which will take place in April or May this year. A swing in majority may well lead to a significant revision of the draft to further favour consumer interests.
In addition, the scope of French class actions may well be extended over time to encompass areas which are not presently included and that the e2,000 threshold is likely to be raised.
Then, and irrespective of the inclinations of the French voters, the proposed introduction of class action lawsuits arises in the context of underlying discussions aimed at twisting the traditional safeguards of the French system under the paradoxically combined influences of the US system and of EU-driven trends.
Although the concept is contrary to the civil law of liability, it has been suggested that punitive damages could also be introduced into French law. A pilot study for a revision of the French law of contracts and torts proposes the following provision be included in the French Civil Code whereby "the perpetrator of a manifestly deliberate fault, and in particular of a profit-making fault, could be sentenced, in addition to compensatory damages, to punitive damages".
The so-called Catala Report, which was handed over to the French Minister of Justice on 22 September, 2005, an academic proposal at this stage and punitive damages still remain contrary to French public order. But this is the sign of a worrisome trend which comes at a time when the European Commission has suggested a mechanism of double damages in cases of horizontal agreements.
Furthermore, France now seems more open to the concerns of the plaintiffs lawyers. The French Bar organisations support the implementation of broader rights to the plaintiffs and have complained about the limited scope of the current class actions proposal. In addition to this lobbying, the restrictions on success fees and client soliciting are also subject to suggested review.
It is too early to tell whether the developments described above will lead to actual changes in the French legal system. They may well be the result of some current fashion which could fade over time as the French legal community realises that plaintiffs do not need this additional legal protection.
But on the other hand, there is a risk that the safeguards referred to at the start of this article could be broken one after the other in the not so distant future, in a slowly but surely converging trend towards the US legal system.
It is fair to say that, taken on its own, the French class action proposal represents rather a limited danger for corporations. However, it may be the first of a series of radical changes to the French legal culture with potentially worrying consequences for businesses. n
Thomas Rouhette is a dispute resolution partner at Lovells in Paris.
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