French class actions given govt green light

Class actions in France were given the go-ahead last week (8 November) in a bill introduced by French finance minister Thierry Breton.

But lawyers say the proposals are unlikely to give France a class action culture because of the restrictions placed on consumers that do not exist in other jurisdictions such as the US.

“It won’t have the same impact,” said Emmanuel Rosenfeld, head of litigation at White & Case‘s Paris office. “It should make class action culture in France much more limited than in the US.”

The class actions proposed in France are very restrictive in scope, particularly compared with what was anticipated when President Jacques Chirac first mooted the idea in early 2005.

Herbert Smith partner Denis Chemla described the outcome as reflecting the French idiom of “a mountain which gives birth to a mouse”. “I don’t think it’s going to produce the effect we all feared it would,” added Chemla.

Under the draft legislation only consumer groups will be able to bring class actions and damages will be capped at E2,000 (£1,350). Individuals would have to opt in to the class in a manner similar to the UK rules on group actions.

However, France does not permit contingency fees and the trials would be before a judge sitting without a jury – both major differences from the US.

Chemla said: “I think the idea was to try and find a device for people with very small claims to congregate and bring that action together.”

France’s courts would be unlikely to cope with US-style class actions due to the country’s cumbersome legal process.

The bill was introduced at a cabinet meeting as part of a new consumer protection law, which will also put tighter regulation on financial services.