France

Types of class action mechanisms. General characteristics

Until March 2014, the French law did not provide for a typical mechanism for collective pursuit of claims. However, under the French Act of 17th March 2014 on Consumer Protection, known as Loi Hamon, new provisions of the French Consumer Code (Fr. Code de la consommation) were adopted (Article 423-1 et seq.). The new regulations introduced a group action (Fr. action de groupe) into the French legal order. They are applicable as of 1st October 2014 (i.e. as of the date of entry into force of a suitable executive decree), whereby it is worth indicating that the action de groupe mechanism may also be applied to events to have occurred prior to the entry of the subject regulations into force.

Initially, the scope of application of the class action was limited to cases arising from consumer disputes and claims arising from the violation of the competition law. The entry into force of the new Act of 18th November 2016 on the Modernisation of the 21st Century Justice System and the decree of 6 May 2017 extended the objective scope of instigating the group proceedings. The new acts allow claimants to initiate group action proceedings in relation to:

  • discrimination in the workplace (Article L. 1134-6 et seq. of the French Labour Code)
  • environmental damages (Article L. 142-3-1 et seq. of the French Environmental Code)
  • damages sustained from the use of medicinal products (Article L. 1143-1 et seq. of the Public Health Code)
  • personal data protection (Article 43 of the Act of 6 January 1978 on the Information Technology Services and the Protection Of Freedom)

The French mechanism is based on the opt-in system. Only consumers who expressed their willingness to be part of the class are bound by the ruling issued in the group proceedings.

Class actions can be initiated by certified associations, e.g. national representative consumer associations accredited in the specific procedure have a sole standing for bringing a consumer law class action forth; labour unions are allowed to initiate class action proceedings in the case of discrimination.

Conditions of admissibility and the procedure

Under Article 423-1 of the French Consumer Code, consumer law class action is applicable when pursuing claims for the reparation of individual damages suffered by consumers who are in a similar or identical situation, and towards whom the same (one or more) entrepreneur/s (professional/s) violated legal or contractual obligations stemming from the common source:

  1. on the grounds of sale of goods or provision of services,
  2. when damage to property results from practices violating competition in light of the French Commercial Code and the Treaty on the Functioning of the European Union.

No separate stage of examining the admissibility of the class action was provided for in the act of 2014. The group is formally formed only with the issuance of a judgment establishing the defendant’s (defendants’) liability. The judgment also determines the group of consumers, the criteria for acceding to the group, documents to be provided by interested parties to be able to join the proceedings, time limit for acceding the group, principles for calculating the damages and means of judgment publication. The number of group members does not constitute a condition of admissibility of the above-described proceedings; a group may be formed by at least two people.

Class action based on Article 423-1 of the French Consumer Code (fr. Code de la consommation) may be divided into two phases.

The first phase aims at establishing whether the defendant (defendants) bears liability for the damage suffered by consumers as a result of the above-described events. In such a declaratory judgment, the Court only settles the issue of admissibility of the group action initiated by a consumer organisation, identifies the group and criteria deciding group membership, determines the basis of entrepreneur’s (professional’s) liability as well as the principles according to which the damage should be repaired (i.e. the manner of calculating damages for group members). Also at this stage, the Court decides whether to publish a suitable announcement with the view of notifying parties meeting the criteria indicated in the judgment on the possibility of acceding to the group.

Next, a final judgment is issued, obligating the defendant (defendants) to repair the damages to property (seeking reparation of non-property damage is excluded in this mode) suffered by consumers – members of the group. The amount of compensation is not limited.

Class action related to discrimination in the workplace may be initiated in cases of candidates for a job or employees being discriminated by an employer. Discrimination can be either direct or indirect however, the discrimination motive, falling within the scope of the Code’s motives, must be common for all the victims. The scope of Code’s motives is wide, among others including: origin, sex, religion, sexual orientation, age, political views, trade union activity, inability to communicate in a language other than French.

Class action related to environmental damages may refer to all activity resulting in direct or indirect damages to the common goods by violation of legal obligations concerning environmental protection, improving the living status, purity of water, air, and soil, protection of natural heritage monuments, urban space, fishing, nuclear safety, and radiation protection, as well as relating to unfair commercial or advertising practices misleading as regards the information on the product’s environmental impact.

Class action related to damages sustained from the use of medicinal products pertains to liability for so called serial losses (of the same type and source) related to the negligence of the manufacturer, supplier of health products or a service provider who uses the products. The term “medicinal products” is very broadly defined by law (including, among others, medicines, cosmetics, products used to make tattoos).

 Class action related to personal data protection is possible in all cases where several natural persons in a similar situation suffer damage resulting from the same type of violations of the French Personal Data Protection Act, caused by the personal data administrator or other parties responsible for their processing.

However, in the case of proceedings subject to the amendment of 2016, except for the requirement to indicate at least two natural persons in a similar situation who have suffered damage resulting from the violation of rights classified in the same group, there is also a requirement of prior determination for the perpetrator of a deadline for non-infringement – a minimum of 4 months. The initiation of proceedings is possible only after the lapse of this period.

The type of relief (legal protection) that can be obtained (court decision)

As a result of group proceedings based on the provisions of Article 423-1 et seq. of the French Consumer Code (fr. Code de la consommation), the court may order compensation for damages to property on the part of consumers – members of the group (this excludes the request for compensation for non-pecuniary damage). What is more, when the identity and number of all consumers are known before the court determines the defendant’s liability (in the first phase – see above)  and when they enjoy the rights to the same amount of compensation, the simplified procedure is applicable. In the frames of this mode, the Court may order an entrepreneur to compensate the damages to each of the group members individually, on the terms and within the time period provided for by the court. The court’s decision in this case is not made public, but it is served onto individual consumers who must accept the amount of compensation it specifies.

The solutions introduced by the 2016 amendment provide for a possibility to demand the defendant both to refrain from violations and to repair the damage. The latter option was not originally envisaged in the event of group proceedings in cases concerning breaches of rules on the protection of personal data. The right to claim compensation as a result of improper data collection and processing has only been introduced by the EU personal data protection regulation No. 2016/679 of 27th April 2016. In Article 80 it provides a possibility for a Member State to establish a collective redress mechanism to remedy such damages by a public benefit organisation. Then, on 14th May 2018, the French national assembly adopted an amendment that would allow a group investigation for group actions not only in the area of ​​personal data protection, but also in the resulting damage. The Senate postponed the entry into force of the aforementioned provisions for a period of two years, giving entities subject to EU regulations regarding the protection of personal data, time to fully adapt to statutory obligations.

Costs and manner of financing the proceedings

The proceedings at issue are financed according to general principles. Essentially, the unsuccessful party is obligated to reimburse the successful party for the court fees and costs of trial which are usually relatively low. However, at the first stage of action de groupe, the costs of proceedings are borne by an organisation representing consumers in the proceedings.

The French lawyers’ deontology code prohibits conclusion of fee agreements based on the “no win, no fee” principle. It is inadmissible to render the legal representative’s fee fully dependent on the resolution that will be made by the Court in the case. Only extra consideration for success is possible.

Practice and significance of the institution. Development trends

The first class action in France was filed on 1st October 2014 (i.e. on the very first date when this opportunity emerged) by UFC–Que Choisir consumer organisation. It was directed against a real estate agent and real estate administrator; it pertains to unlawful fees imposed on tenants. The claim was dismissed by the Appeal Court on Nanterre on 14th May 2018 giving an end to the case. The Court decided the unlawful fees in the rental of real estate field do not constitute a consumer class action according to the Act of 2014.

On 17th October 2018 a group of members of the Parliament brought forth a draft of a bill in the scope of disputes originally covered by the Act of 2014 (consumer law disputes) permitting initiation of class actions directly by the person concerned (without the need to engage consumer associations).