The new “Hamon Law” No 2014-344 of 17 March 2014 provides in particular for the introduction of class actions under French law. Class actions will provide the opportunity for a group of consumers who are victims of a breach by a same professional to join their claims for compensation within one and the same proceeding. We therefore need to consider the main innovations of the system and its possible implementation difficulties.

The new “Hamon Law” No 2014-344 of 17 March 2014 provides in particular for the introduction of class actions under French law. Class actions will provide the opportunity for a group of consumers who are victims of a breach by a same professional to join their claims for compensation within one and the same proceeding. We therefore need to consider the main innovations of the system and its possible implementation difficulties.

1. Exclusive competence of authorized associations.

The law reserves to authorized consumer associations the capacity to represent a group of consumers as such, without having to identify the victims first. Unlike the proposals of the Conseil national des barreaux, the legislator does not give lawyers the right to bring such actions. To benefit from the action, affected consumers will have to become members of the group within a maximum of 6 months from the publication of the decision finding the professional liable. The French legislator has therefore retained the opt-in system (voluntarily joining the group) rather than the American opt-out system.

2. Breaches by professionals which are likely to be sanctioned.

Class actions may concern the compensation of individual loss suffered by consumers for any type of breach by a professional of his statutory or contractual obligations in connection with the sale of goods or the provision of services or where the loss results from anticompetitive practices under Title II of Book IV of the Commercial Code or Articles 101 and 102 TFEU. However, class actions may only relate to the compensation of financial losses resulting from material damage suffered by consumers.

3. Risk of bringing more disputes before courts.

The new law does not cap the amount of the loss likely to be compensated. It does not limit the number of consumers who may be part of the same group. As a result, the limited financial impact or the high cost of a lawsuit should no longer dissuade victims from taking legal action. This new legal procedure might therefore increase the number of claims that previously would rarely have gone to trial and generate increased litigation.

4. Entry into force schedule organized according to competition law domain.

Under new Article L. 423‐10 of the Consumer Code, class actions will not be available for those decisions – taken at both national and EU level – that became final before the entry into force of the law. Clearly the legislator has tried to conciliate three conflicting objectives: i) compensating losses suffered by consumers who are victims of restrictive agreements or abuses of dominant position; ii) protecting undertakings from ill-considered risks and iii) preventing an overload in the  courts. Why not extend this system to all legal fields?

5. Immediate applicability except for the rules specific to competition law

The law does not contain any transitional provisions, except for those reserved for litigation specific to competition law. Although the issue will no doubt generate debate, the result is that class actions particularly relating to the sale of goods or the provision of services may relate to facts having occurred before the entry into force of the law. In that regard, the MEDEF (French Business Confederation) considers that the risk to undertakings would be “uninsurable” and “would seriously undermine” legal certainty.

6. A limited scope of application.

Health and the environment are not included in the new framework because in those areas, losses suffered are often not only financial but also physical and non-material. Thus, it would be difficult to conciliate the assessment of such losses, which is already tricky, with a facilitating of “mass litigation” as intended by the new law. The Government however should within the next few months propose the extension of class actions to those fields.

7. Jurisdiction of the tribunaux de grande instance.

Although initially the bill provided for the jurisdiction of specifically designated TGI, this restriction has been removed from the final version of the new law. In effect, the Hamon Law introduces a new Article L. 211‐15 into the Code of Judicial Organization, according to which the “tribunaux de grande instance […] have jurisdiction to rule on class actions […]”. Class actions will therefore lie with the Tribunal de grande instance, which has jurisdiction according to the general law rules, firstly because of the potential significance of the stakes at play and secondly because of the procedural safeguards assured by this court.

In all events, undertakings need to prepare themselves for the risk of an increase in litigation and think about how to fight such actions.