Your business lawyer in Bordeaux

Chloé Fernström

The class action à la française is now in force

After decades of debates and several failed attempts, a law adopted on 17 March 2014 introduced a mechanism of class action into French law with the goal of reinforcing consumer protection and providing consumers fair compensation. A decree enacted on 24 September 2014 set the date of entry into force of this action to 1 October 2014 and defined the procedural rules.

1. Scope of the French class action

Unlike the well-entrenched US example, the class action à la française has a rather limited scope.

First, it limits the role of class representation to a list of government-approved consumer associations and thus excludes attorneys acting on behalf of a group of consumers.

Second, the scope of class actions has been limited to consumer and competition law violations and to compensation of material damages. This means that:

– only consumers may file group actions. Companies that are victims of anticompetitive infringements will thus not be entitled to join together and sue the infringing company(ies).

– the scope of the class action only includes matters relating to the sale of goods or provision of services and for competition law violations (in this last case specific rules apply), thereby excluding health and environmental law violations. However, this limitation of scope should be temporary as the new law provides that, 30 months after its promulgation, the Government shall consider the extension of its scope to health and environment issues.

– a class action can only be brought for material damages sustained by consumers as a result of one or more professional’s breach of legal or contractual obligations. Compensation through the class action process excludes non-pecuniary damages such as for moral and bodily injuries.

Third, unlike class actions in the US which provide for an “opt-out” procedure, class actions in France are based on an “opt-in” system requiring a positive act on the part of consumers wishing to participate.

2. Procedural mechanism of the French class action

The newly implemented law provides for a multiple stage procedure.

First, after having verified whether the conditions required to bring a class action are met, the Tribunal de grande instance (who has exclusive jurisdiction over such cases) will determine the liability of the professional on the basis of individual cases. In this respect, the court has extensive powers of investigation and may order in-kind compensation.

Second, if the professional is held liable, the court will determine (i) the group of consumers entitled to compensation by setting forth the criteria for group inclusion, (ii) the damages that can be awarded to each consumer/category of consumers forming the group and (iii) set out the exact conditions and deadline for the opt-in.

Third, the court will determine the appropriate publicity measures (to be borne by the professional) to inform the consumers of the class action.

Fourth, the association will receive financial compensation awarded by the judge on behalf of the members of the group. It will then put the amount into escrow before allocating the sums to each individual group member.

Beside this regular process, the French class action mechanism also provides for an alternative simplified process based on a “closed” opt-in model for specific cases where the identity and the number of concerned consumers is already known.

With the 24 September 2014 decree, the introduction of class actions into the French legal system is now official and a race has begun between associations eager to launch their first class actions in France. For the time being, two actions have been launched and several others are already being planned by consumer associations. Time only will tell whether, in practice, the French class action will be a success.