French legal reform: what is at stake if class actions are introduced in France?

• Author: Lutfalla, Emmanuele

CLASS ACTIONS may soon be introduced into French law. In a speech delivered on January 4, 2005, French President Jacques Chirac came out in favor of introducing class actions into French law, in the following terms:

Consumers must at long last be given the means to defend their rights: means that were unavailable to them up to now since, when taken separately, each individual injury suffered is not big enough to cover the cost of legal action. This is why I am asking the Government to draft changes to current legislation so that consumer groups and their associations can bring class actions against the unfair practices going on in certain markets. (1) In general terms, a class action is a lawsuit brought by one person on behalf of a group of people having suffered the same injury. This definition, when examining the possibility of introducing class actions in France, comes up against several principles of French procedural law.

President Chirac's desire to see class actions introduced into French law would therefore mean legislative reform. A working group was set up to this effect and produced its report on December 16, 2005. (2)

1. The Position of French Procedural Law

   1. What Types of Action are Currently Available?

      The provisions of French law pertaining to consumer protection can lead a consumer association to bring two types of action: an action to assert a collective interest and an action brought on behalf of several individuals.

      1. Actions in the Defense of a Collective Interest

         Since the Royer Act was passed on December 27, 1973, approved consumer associations are allowed to take legal action to assert the collective consumer interests. When consumer associations bring a collective action, they must ascertain whether or not the injurious event was a criminal offence.

      2. Where a Criminal Offence Has Been Committed

         First, Article 1 of law no. 88-14 of January 5, 1988 provides that associations entitled to act before Court may "exercise the rights of a plaintiff claiming damages in a criminal case in relation to events causing a direct or indirect injury to consumers collectively." (3)

         It is therefore evident that this type of action will only be admitted to the extent that the injury claimed by the association differs not only from the one suffered by the general public, but also from the one personally suffered by the direct victims of the offence. Approved associations can choose between initiating their civil action in a criminal or a civil court. In addition, when the association initiates that civil action, according to Article 3 of the January 5, 1998 law, it may, both in civil and criminal courts, request the judge, if need be under threat of penalty, to order "any measures designed to put a stop to the unlawful behavior or to remove an illegal clause from the contract or type of contract offered to consumers." (4) An action to have such measures implemented can therefore be brought together with the approved association's civil action. Whereas this last type of action gives rise to compensation for the injury, the first type tends to prevent that injury from continuing to occur. These actions are complementary.

         In the area of health legislation, one of the objectives of the law passed on March 4, 2002, pertaining to patients' rights and the quality of the health system is to achieve a kind of democratic health system in France. One concrete result of that objective has been to allow associations to take action against health institutions and also to bring actions in the criminal courts. (5) They may exercise the rights of a plaintiff claiming damages in a criminal case involving acts of manslaughter and intentional invasions of a person's bodily integrity, as well as offences provided for in the Code of Public Health, which harm, directly or indirectly, the collective interest of the users of the health system.

      3. Where No Criminal Offence Has Been Committed

         Pursuant to Articles 5 and 6 of the January 5, 1988 law, it is acknowledged that actions brought by approved associations to assert the collective interest of consumers are not conditional upon a criminal offence having been committed. Article 5 allows those associations to "enter civil court proceedings" in a liability suit brought by a consumer who has been the victim of acts not punishable under criminal law. (6) Article 6 allows those associations, at their initiative only, again in the civil courts and with no criminal offence having been committed, to initiate a suit to "remove unfair clauses from standard contracts typically offered to consumers by professionals." (7) The right of approved consumer protection associations to take autonomous action in a specific case has therefore been acknowledged. The courts have also ruled that a request to remove a clause may be filed spontaneously to assist a consumer in a case brought against him/her by a professional.

         To the extent that the purpose of this type of action is to pursue the collective interest, the injury to be repaired continues to be collective and the repair of an individual injury is not possible, unlike a true class action.

      4. Actions Brought on Behalf of Several Individuals

         This type of action, established by Article 8 of Law No. 92-60 of January 18, 1992, allows approved associations to take action on behalf of the individual interest of several consumers who have been injured due to the actions of the same professional. It brings together, in the same set of proceedings, the individual liability suits that could have been initiated by each of the consumers who are, for example, victims of the same defect in a mass-produced product or of a failure to perform a service offered to the same group of people.

         Only approved consumer associations representing consumers at a national level are permitted to bring this type of action. At least two consumers must give their prior written authorization to sue in their name and on their behalf. With a view to getting more victims to join in the action, the association can solicit their authorization in newspapers and magazines, or on television or radio if expressly permitted, or by distributing tracts or personalized letters.

         Once these conditions have been satisfied, the action may, according to Article 8-1 of the January 5, 1998 law, be brought "in any court," (either civil, criminal court, or an administrative court). However, without making any distinction between jurisdictions, Article 4 of Decree No. 921306 of December 11, 1992 provides that if a consumer withdraws his or her authorization, "the party having given that authorization may pursue the case as if he/she had initiated it directly." It is the individual's duty to inform the judge and the other party of this change.

         Finally, if the action fails, the represented consumers lose their individual right of recourse. However, if the professional is found liable, the damages and interest which that professional is sentenced to pay must be attributed to the injured consumers since this action only allows the repair of their individual injuries. Nevertheless, when bringing an action on behalf of several individuals, there is nothing to stop an approved association from initiating legal action, if need be, to assert the collective interest of consumers, as well.

   2. Recent French Initiatives

      Three initiatives were taken after President Jacques Chirac's January 4, 2005 speech. The first resulted in the "Class Action.fr" website affair and the second in a report being handed over to the Ministries for Finance and Justice on December 16, 2005. The third initiative is the impact of the Antitrust Commission decision taken on November 30, 2005.

      1. The "ClassAction.fr" Website Affair

         In May 2005, a website was created so that the general public can go online to join in court proceedings already in progress. Anyone can access the writ of summons, the legal grounds, and the amount being claimed directly on the website. Visitors to the website were therefore invited to join in the first collective action to uphold the law in relation to copies of DVDs. (Major Studios sold DVDs that could not be copied by the end users). Parties joining in the legal proceedings paid a contribution of only 12 [euro] in order to claim damages of 1,000 [euro]

         This attempt by lawyers to introduce class actions was the object of summary proceedings initiated by the members of the Lille Bar, as well as proceedings on the merits brought by several consumer associations.

         1. Ethics

            The Paris Court of Appeal Bar gave its opinion on June 14, 2005, in which it mainly requested that lawyers promoting the website not set up a commercial company as a...