The Current Litigation Market in France

Commercial litigation is a very dynamic market in France. This year there were major changes in this field that we could cover, though arguably one of the more significant changes has taken place in class actions, specifically the regulation governing the space. In March the French National Assembly passed a bill to harmonize and encourage class actions in France.

The biggest change this bill brings is the creation of a common procedural framework for class actions, regardless of the sector it involves. This means standardizing procedure and providing a harmonious framework for class actions to be filed. This marks a significant improvement over the current framework, where the rules vary between each sector, creating unnecessary complexity for actors operating in the space.   

In addition to simplifying the process and framework for class actions, this bill also creates more appealing incentives for plaintiffs and broadens the scope of damages that can be awarded as compensation. Overall, these changes by the country’s parliament aim to foster a more prosperous environment for class actions and make them more appealing.

Class actions are far more common in the United States, the market that draws by far the most attention for these cases. Class actions are a newer phenomenon in other jurisdictions, and have grown only tentatively in markets like France.

Class actions were first introduced in France in 2014 by Law No.2014-344, commonly referred to as the “Hamon Law”. The scope of cases was expanded in both 2016 and 2018 to include areas such as healthcare, discrimination, and housing. Despite the attention the passing of this law garnered, however, uptake of class action suits has remained minimal. As of March 2023, just 32 class actions had been launched, initially focused on the consumer protection space, before expanding to other sectors in recent years.

As a result of those changes to the structure of class actions proposed under the new legislation discussed above, we would likely see a rise in the number of class actions in France. The bill was sent to the Senate following its passing in the National Assembly in March, but has yet to be passed at the time of writing. It is currently expected to be implemented in mid-2024.

Mediation is a type of alternative dispute resolution (ADR), which is structured very differently from litigation. Mediation sees the disputing parties resolve a conflict with the assistance of an impartial third party outside of traditional courts. Mediation can be chosen instead of litigation or as pre-litigation, and there is also Court-ordered mediation which we are increasingly seeing in France as well.

Although mediation is by no means a recent trend in France, we have seen an uptick in the use of this method of dispute resolution in 2023, partially due to mediation being seen as a cheaper and more efficient way of settling a dispute. Its greater efficiency is likely another reason why we are seeing an uptick in mediation given that courts are currently overburdened with case numbers and are struggling to reduce backlogs.

This situation was worsened significantly as a result of the recent COVD-19 pandemic, whereby courts in France were ordered to close for a period of time as a part of lockdown requirements. This resulted in a large number of pending cases accruing while the courts were closed, which the system is being slow to work through. The courts are now therefore struggling to play catch-up with old cases, while new ones continue to be filed. This environment has created significant need for efficiency, which may be increasing the appeal of mediation.

The environment, sustainability and climate change are of course major topics not only in France, but around the world. Various jurisdictions are seeing a rise in cases involving these topics, and France is no exception. The interest in this area has consequently affected the litigation market where we are seeing an increasing amount of work related to ESG and the environment.

This shift towards more sustainability has increased the number of often politically sensitive or high profile cases we see in the French market related to ESG, greenwashing and climate change litigation. However, a specific area worth highlighting is also the role of non-governmental organisations (NGOs) in this space.

Recently NGOs have taken more of an active role in the French market by initiating numerous claims using the Law of Corporate Duty of Vigilance to initiate litigation, and thereby have the courts investigate various companies. This approach has meant a significant growth in the number of cases currently pending in France relating to the environment, setting a precedent not only in terms of the volume of proceedings but also in terms of the type of cases we are likely to continue seeing in this ever-evolving space.