March 31, 2014
While the concept of class actions has been implemented in the United States and many other European countries for decades, France has long remained an outlier in terms of collective redress and consumer protection. Indeed, attempts made by three successive French governments faced massive opposition from the French employer’s organization known as the Mouvement des entreprises de France (“Movement of the Enterprises of France”) and others. After an election promise made by the current French President FranÃ§ois Hollande, the French Minister in charge of consumers, BenoÃ®t Hamon, proposed a draft bill aiming at reconciling the rights of consumer associations with the need to avoid abusive litigation. In addition, the European Commission has encouraged the adoption by the EU Member States of collective redress mechanisms in order to ensure effective access to justice for victims of violations of competition laws.1
Against this background, the French National Assembly has adopted a new consumer law, also known as the “Hamon Law”, on 13 February 2014 (issued on 18 March 2014), providing for the limited introduction of class actions.2
A procedural remedy only for accredited consumer associations
The Hamon Law provides that only government-approved consumer associations (16 at present) are allowed to bring class actions on behalf of consumers. This restriction is intended to avoid the creation of ad hocassociations formed for the purposes of a specific case. Only consumer groups may initiate proceedings. The law does not permit a class of businesses that are allegedly victims of anticompetitive infringements. The law also limits the participation of lawyers: indeed, even though contingency fee arrangements are already strictly regulated under French law, additional measures were adopted to minimize the risk of abusive actions. The role of the French lawyer is thus limited to representing accredited consumer associations.
A limited field of application
A French class action can be initiated for any failure by a business company to comply with its legal or contractual obligations, in the context of the sale of goods or of the provision of services. The question of expanding the field of class actions to environmental and health issues has been raised several times, but the French government wants to proceed on a “step by step” basis, and any such expanded action will have to be authorized by the new law.
Antitrust follow-on actions
As regards to class actions based on the breach of antitrust rules, while the law does not preclude the ability of consumer groups to start proceedings before civil courts without waiting for the final decision of the relevant competition authority, the law specifies that a decision of a competition authority relating to the existence of an infringement of competition law can be used to establish liability if it is “definitive” (that is to say after all possible routes of appeal have been exhausted).3 A final decision ruling on the existence of a competitive infringement will create an irrebuttable presumption of liability, requiring the consumer group only to prove the damage it has suffered and a causal link with the infringement.
An opt-in scheme
In accordance with the principle of French civil procedure according to which “no one shall plead by proxy”(“nul ne plaide par procureur”), the French class-action model is based on an “opt-in with publicity” scheme: when an accredited consumer association (representing at least two consumers) brings an action, the court will make sure the conditions required to launch a class action are met and will then adopt a decision on liability (“declaratory judgment on liability”). The decision will then be made public so that other consumers with a similar or identical position can opt in. The Hamon Law also creates a simplified procedure for cases in which the victims are easily identifiable (“when the identity and the number of injured consumers are known and when these consumers have suffered a loss of the same amount or of an identical amount over a period of reference”): after having ruled on the liability, the court may, in such case, order the company at fault to pay damages to the concerned consumers directly.
The French concept of damages
Consumers may file a class action in order to obtain compensation for financial loss resulting from a legal infringement or a contractual breach, but not for physical or emotional loss. The financial loss will take into account the actual loss (damnum emergens) as well as the loss of earnings (lucrum cessans). Compensation for losses will be payable directly from the defendant company or through the consumer association. At this stage, French law excludes punitive damages.
Endnotes (↵ returns to text)
- Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, “Towards a European Horizontal Framework for collective redress”, COM(2013) 401. This recommendation complements the Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, COM(2013) 404, 11.6.2013.↵
- Consumer Law n° 2014-344 of 17 March 2014.↵
- Article L. 423-17 of the French Consumer Code.↵