Class actions in France

14 January 2008

Marc Lipskier

Whilst the debate over whether to introduce class action litigation in France has been around for 20 years, it has been revived recently following recommendations of the European Commission. The recommendations which took into consideration recent changes in consumer law, led to many EU countries adopting various forms of collective action.

A recent survey suggests that 84% of French consumers are in favour of some form of class action. However, French lawmakers have long opposed class actions for fear they would harm businesses and be a burden on the economy.

Whilst, under French criminal law, specific classes of victims may - in some cases - represent the collective interests of consumers seeking legal redress, there is little scope for such action in civil law. A form of collective action does exist in French civil consumer law but only registered associations of consumers can bring a claim and such actions are rarely used.

The scope of collective actions in criminal law has widened consistently since 1973, while the scope of collective actions under the civil law regime has remained constant.

Following a speech made by former President Jacques Chirac on 4 January 2005, in which he called for an act of Parliament to widen the scope of "collective legal actions", there was widespread expectation that the legislators would act. The speech by Mr Chirac was not in response to one case in particular but came at a time when various consumer scandals and extremely long criminal investigations were regularly being reported. Investigations by magistrates can frequently take up to a year and generally fail.

A proposal for a change in the law was drafted in April 2006, which would have introduced a class action in civil law by which an association comprising at least two consumers could bring an action for damages concerning goods bought under a standard form contract. The proposal foresaw that, once the lawsuit had been commenced, the association would have one month to identify additional consumers. Whilst the proposal gave discretion to the Court to determine the amount of global compensation to be awarded to the consumers who joined the claim, the proposal also suggested capping damages at €2,000 per claimant (with the intention of avoiding perceived excesses of class action litigation in the USA). The proposal also prohibited contingency fees arrangements for actions of this type.

Although the President of the French Supreme Court declared that "class actions are inescapable", the bill was withdrawn from the legislative agenda in January 2007 at the request of the former Prime Minister and Minister of Health.

Both the Ministry of Finance and the Ministry of Justice of the new French government oppose the introduction of class actions in France, mainly because of fears of the negative consequences on the financial sector. That said, the new President, Nicolas Sarkozy, has expressed his approval of civil class actions and so a new proposal may yet be drafted during his Presidency. At the same time, the European Commission has been consulting with businesses and consumer associations; the results of these consultations are expected in early 2008.

Any new French proposal is expected to be rather restrictive. Indeed, there is consensus that any proposals for class actions to compensate consumers should take all steps possible to discourage claimants from engaging in vexations and abusive litigation.