In consumer law, class actions are subject to a specific regime. It allows only for the compensation of losses, and only those resulting from a material damage.
Except in the case of health-related group actions, before bringing the class action, the plaintiff must give prior formal notice to the defendant to cease its wrongful actions or to compensate the damage suffered. The action is inadmissible until four months have lapsed from receipt of this formal notice (six months when in relation to a claim for discrimination)2. The filing of the class action interrupts the statute of limitation for collective proceedings, as well as the statute of limitation for individual actions for compensation based on the same facts as those underlying the class action.
There are two successive stages in French class actions:
- The Court first rules on the principle of the defendant’s liability. If the defendant is held liable, the Court must define the group of persons in respect of whom the defendant is liable and set the criteria for inclusion in the group. The decision must also determine the losses that may be compensated for each of the categories of persons making up the group. Finally, the decision must set the time limit within which persons who meet the criteria and wish to rely on the judgment on liability may join the group to obtain compensation for their losses.
- The judgment can then be enforced to obtain compensation for individual damages. The Court orders appropriate publicity at the defendant’s expense to inform people likely to have suffered losses as a result of the infringement giving rise to liability. Difficulties in enforcing judgments on liability in consumer law class actions must be referred to the Judge in charge of procedural matters.
1 A Government Bill tabled on October 31st, 2024 which has not yet been passed provides for compensation for all damages - bodily, material or moral - regardless of the field concerned by the action.
2 The Government Bill tabled on 31st October, 2024 removes this condition.
Rules for commonality of claims/class certification
French national law provides for a class action procedure when “several persons placed in a similar situation suffer damage caused by the same person, having as its common cause a breach of the same nature of its legal or contractual obligations.”
The victims must be in a similar legal situation with regard to the infringement allegedly committed by the defendant. This does not mean that their individual situations must be identical, particularly with regard to the value of the loss suffered.
In France, class actions can only be brought by:
- authorized organizations (in consumer law matters, only authorized organizations may bring class action); and/or
- organizations that have been duly registered for at least five years, and whose statutory purpose includes the defense of interests that have been affected; and/or
- representative trade union organizations at company, branch or national level when related to a discrimination or data breach claim.
The above-mentioned qualified organizations can take legal action to require compensation for individual losses suffered by several victims. The losses must be caused by the same professional and have a common origin3.
The qualified organization must be mandated by at least two of the consumers concerned. These individual cases of these consumers are presented as the basis for the class action. This means that procedurally speaking the claimant is an organization meeting certain criteria, and not plaintiffs themselves even though a few individual plaintiffs have to be named in the claimant brief.
3 The Government Bill tabled on October 31st, 2024, which transposes Directive 2020/1828, will open up legal standing to qualified entities from other Member States, by means of a cross-border approval procedure set up in each Member State in accordance with the principle of mutual recognition. A list published in the Official Journal of the European Union will identify the organizations that have such authorization
Class member participation (opt-in/opt-out)
Class actions in France are based on explicit adhesion, i.e. an opt-in system. Membership to the group is subject to the deadlines and conditions set by the judgment ruling on the defendant’s liability. Joining the group requires filing a request for compensation, which must notably contain the full name and address of the person concerned. It is necessary to prove that the criteria for inclusion in the group have been met.
By joining the group, the consumer mandated the qualified organization to act on their behalf to seek enforcement of the judgment on liability against the defendant company. Thus, the organization can then carry out all procedural acts on all members’ behalf in order to obtain compensation and falling within the scope of the class action, as well as exercise appeal rights.
If an individual fails to join the group within the time limits and in the form specified, his/her claim for compensation will be inadmissible, but only in the context of the class action. In other words, individual plaintiffs keep the right of initiating individual claims against the same defendant and for the same cause of action.
For defendants residing in France, the class action must be brought before the judicial court where the defendant has its domicile. For defendants residing outside France or having no known residence, exclusive jurisdiction is conferred to the Paris judicial court.
Once the court has ruled on liability, the procedure leading to a decision on compensation for damages can be of two types:
- Global agreement concerning all members can be authorized by the Court at the request of the claimant when the evidence produced and the nature of the losses allow it. This procedure is designed to deal with the simplest cases, i.e. those where the amount of damages is known at the time of the liability judgment or can be quantified. It implies a negotiation between the qualified organization and the defendant to determine the amount of the compensation for the members of the group. The agreement must then be referred to the Court for approval. The Court may refuse to do so if it considers that the interests of the parties and the members of the group are not sufficiently protected in the light of the judgment on liability. In such case, the Court will refer the matter back to negotiation.
- Compensation may also follow an individual procedure. Members of the group who meet the criteria and have joined the proceedings submit a claim for compensation, and the defendant pays individual compensation for the losses suffered.
The judgment on liability may be subject to appeal under a fast-track procedure.
Under the current legal regime for class actions, it is the qualified entity that bears the costs of the proceedings.
French law does not yet regulate third-party funding, so that it is neither organized nor forbidden as a matter of principle.
Note: Article 20 of Directive (EU) 2020/1828 provides that Member States must facilitate access to justice for entities (legal aid) and ensure that the costs of proceedings are not dissuasive by limiting the applicable fees or providing for public funding. The bill tabled by the French Government on 31 October 2024 does not appear to include such provisions.
However, Article 10 of the Government Bill does provide for a stricter framework for the funding of qualified entities and class actions, in order to prevent conflicts of interest. The Bill thus intends to regulate third-party funding in order to guarantee greater transparency and the absence of conflicts of interest. The absence of conflicts of interest will also be one of the criteria for cross-border approval as an authorized organization (as mentioned in question 3).