First condemnation on the basis on an infringement of the French blocking statute

09 September 2008

Anne-Cécile Colas-Bernié, Claire Romac

The French blocking statute (law n° 68-678 of July, 26, 1968) prohibits disclosure of certain information (whether of an economical, commercial, industrial, financial or technical nature) as part of legal proceedings outside France unless doing so is in accordance with the processes set out in law or international agreements. Any breach of this statute is punishable by imprisonment of six months and a fine of 18,000.00 Euros.

The statute prohibits “any person from requesting, setting, or disclosing,  in writing, orally or in any other form,  documents or information of an economic, commercial, industrial, financial or technical nature directed towards establishing evidence in view of legal or administrative proceedings abroad or in relation thereto, subject to international treaties or agreements and to laws and regulations in effect.”

This prohibition, in theory, applies to almost all data relating to a company’s activities. It also applies to all methods of disclosing the data, including electronic communications.  It applies to any disclosure of data whether ordered or not by a foreign court or authority, provided that such disclosure is intended to establish evidence in view of or in relation to legal or administrative proceedings abroad.

Until very recently this Act has never led to any prosecutions and was used as a procedural defence in the course of proceedings before foreign jurisdictions.

On December 21, 2007, the French Supreme Court (Cour de cassation of 12 December 2007) confirmed the decision to convict a French counsel for having communicated information to the American counsel in charge of legal proceedings in the United States against MAAF (a French insurance company) relating to the purchase of Executive Life.

The French counsel had contacted a former member of MAAF’s Board, in order to establish how Board decisions had been taken at the time Executive Life was being purchased.  The information was then provided to US counsel. The French counsel was sued for disclosing information in breach of the French Blocking Statute. The French counsel was fined 0,000 Euros by the Paris Court of Appeal on 28 March 2007, and this was registered in his criminal file. The Supreme Court confirmed the Paris Court of Appeal’s decision as the French counsel had not followed the specific procedures set out in Chapter II of the Hague Convention on the Taking of Evidence Abroad in Civil and Commercial Matters. He had failed to inform the French Ministry of Justice, which then transfers the matter to a French court or other French authorised representative. This body should then proceed with the disclosure abroad. The French Supreme Court ruled that this was not a disproportionate breach of the right of defence, as the right of defence was guaranteed when complying with the procedures set out by The Hague Convention.

The French Supreme Court has clearly ruled that disclosure of a document or information of an economic, commercial, industrial, financial or technical nature is forbidden, where directed towards establishing evidence in view of legal proceedings abroad. However, the disclosure will be permitted where the procedure set out by The Hague Convention is complied with notably the obligation to inform the French Ministry of Justice who has the authority to appoint a French court or other representative which proceeds to the disclosure.

Now there are two bases on which a French court could condemn legal entities or individuals who disclose information to foreign jurisdictions without following proper procedures.  They can claim a breach of the French blocking statute that can lead to a fine of up to €18,000 and a jail sentence of up to six months. Alternatively it could be argued that the disclosure could be a breach of the duty of confidentiality and of the security measures set out by the French Data Protection Act which can lead to a fine up to 300,000 Euros and a jail sentence up to five years.