The French Consumer Law N° 2014-344 was finally enacted on 17 March 2014. The new legislation introduces class actions into the French legal system and more specifically into competition law matters. Class actions are covered by Articles 1 and 2 of the Law.
Unlike class actions in the United States which provide for an "opt-out" procedure, class actions in France are based only on an "opt-in" system whereby consumers need to express their consent to be part of the group and to be compensated after a judgment has been rendered on liability.
The scope of class actions has been exclusively limited to consumer and competition law violations. Class actions are limited to addressing the material and financial harms suffered by individual consumers when purchasing a product or when being provided with a service. Failure by a professional person to correctly execute his legal or contractual obligations is also covered by the law. On the other hand, damages claimed pursuant to physical and moral harm are excluded from the scope of the class action. The jurisdiction over class actions is granted exclusively to civil courts (Tribunaux de Grande Instance).
Concerning the specific conditions applicable to competition law violations, associations can only bring class action suits after a ruling from the competent authorities (whether national or European) finding a competition law infringement, after all appeals on the finding of the violation have been exhausted. The time period during which consumers can seek compensation is five years from the date on which the decision finding the violation is no longer appealable as regards the finding of the violation.
Class actions can only be introduced by one of the 16 accredited consumer rights organisations acting on behalf of at least 2 consumers. In practice, the procedure will operate in 4 stages. In a first ruling, the court will determine the liability of the professional on the basis of individual cases brought by the association. It will also determine the criteria by which consumers may receive compensation and the amount of such compensation. The decision will state the timeframe within which consumers may join the group: no less than 2 months and no more than 6 months. In the second stage, the company or the consumer association will "invite" injured consumers to step forward to receive compensation. At this stage, the professional will be able to verify or object to the consumer's claim for compensation. In a third stage, the association will receive the financial compensation awarded by the judge on behalf of the members of the group, will put the amount into escrow with the Caisse des dépôts et consignations (the French sovereign fund) and will then allocate the amounts to each individual group member. In a last stage, any difficulties related to the implementation of the judgment on liability (the "liquidation phase"), will be resolved by the same court in a second judgment.
Further, a simplified procedure may be followed in specific cases. When consumers are identified and their number is known, the judge can rule on the professional's liability and order the professional to compensate directly and individually the consumers within a time period and under conditions set by the court.
Finally, the association may decide to settle the case by mediation. If the court approves the agreement, the court will enter a binding judgment on the mediating parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.