The main laws and regulations of the product safety legal regime in France are as follows.
In France, the authority that regulates the largest number of products, including some food products, is the Directorate General for Competition, Consumer Affairs and Fraud Control (Direction Générale de la Concurrence, de la Consommation et de la Répression des Fraudes or DGCCRF).
Besides the DGCCRF, there are other several regulators for product safety issues depending on the industry or the type of product at stake.
For instance, for food products of animal origin, the competent authority is the Directorate General for Food (Direction Générale de l'Alimentation or DGAL). The DGAL is only competent for food products of animal origin. All other food products fall under the jurisdiction of the DGCCRF.
The competent authority for safety issues relating to vehicles is the Directorate General for Energy and Climate (Direction Générale de l'Energie et du Climat or DGEC).
The French National Agency for Medicines and Health Products Safety (Agence Nationale de Sécurité du Médicament et des Produits de Santé or ANSM) controls and regulates health products.
The authorities perform regular investigations and controls. They monitor the products placed on the market and their conclusions are sent to the competent ministry, which can order appropriate measures if and when necessary. These authorities have been granted increasing powers, in particular the DGCCRF (since the Hamon Law of 17 March 2014), which can notably:
Other more emblematic powers are the ability to seize products (Article L. 512-51 of the French Consumer Code) and to use a fake identity to conduct its investigation (Article L. 512-16 of the French Consumer Code). Most importantly, French authorities can decide to sanction producers through administrative fines in exchange for not referring the case to the Public Prosecutor (who may decide to refer the case to a criminal court). Indeed, it is notable that in France most non-conformities with consumer law result in criminal liability.
Products are regarded as safe as long as they meet the required standard and/or have not caused any damage (Article L. 421-3 of the French Consumer Code). However, when they give rise to safety issues due to the breach of one of the two above-mentioned reasons, producers who have become aware of the risks have the obligation to implement all necessary actions to limit such risks. These actions can range from effective warnings to consumers to product withdrawals and recalls (Article L. 423-2 of the French Consumer Code).
There are no legal provisions on how the producer must advertise the warning or the product recall. In practice, the producer generally informs the consumers by way of press releases or individual letter, with the assistance of its distributors. Furthermore, product recalls are usually listed and published by the DGCCRF on its website to increase awareness if need be.
The competent ministries may also take corrective actions if the danger triggered by the products is serious or immediate. The production, importation, exportation, sale, distribution or availability of the products can be suspended for a period not exceeding one year. The authorities can also order the products to be withdrawn from the market or destroyed; or for the supplier to issue warnings and supplemental instructions, or carry out recalls, exchanges, modifications or reimbursements. Where temporary measures have been taken, the products may, however, be reintroduced onto the market before the end of the temporary suspension period, provided they have been certified as compliant with all applicable regulations (Article L. 521-17 of the French Consumer Code). These temporary measures require a ministerial order. Experience shows that they are quite rare as French authorities generally tend to engage with the producer in order to find common ground on what measures should be implemented.
When a product breaches the general principles of consumer safety, the authorities can also order permanent measures, including:
Such measures are taken by Decree of the Conseil d'Etat (French Administrative Supreme Court) (Article L. 412-1 of the French Consumer Code). These are quite rare measures given that the French authorities tend to create a dialogue with the producer to reach a common understanding of which measures would be most appropriate.
Failure to comply with either one of these decrees or ministerial orders is punishable by a fine of up to EUR7,500 per product or infringement for legal entities (Articles R. 452-4 and R. 532-1 of the French Consumer Code).
The trigger for notification to authorities in France is in line with what Directive 2001/95/EC on general product safety provides for, ie, a serious and immediate risk for consumers. Producers/distributors can, if they wish, file notifications, even in lower-risk cases, as this allows the authorities to better monitor the market and measures taken.
When a product presents an immediate serious safety risk, its producer or distributor must "immediately" inform the competent regulatory authorities (Article L. 423-3 of the French Consumer Code). The format of that notification will depend on the type of product:
The producer/distributor has to notify regulatory authorities immediately. However, the term "immediately" is not defined and will be assessed by the authorities on a case-by-case basis (Article L. 423-3 of the French Consumer Code).
In the absence of any notification, a fine will be imposed according to Article R. 452-5 of the French Consumer Code.
When an operator fails to implement withdrawal or recall procedures, despite being aware of the fact that a product may be dangerous for human health, the operator risks a maximum prison sentence of five years and a fine of up to EUR600,000, or up to a maximum of 10% of the average annual turnover for the three years preceding the infringement (Article L. 452-5 of the French Consumer Code).
In the case of products of animal origin or food products containing animal products that are dangerous for health, or feed products of animal origin or containing hazardous products of animal origin, the operator who placed these products on the market, or who failed to implement the above-mentioned withdrawal or recall procedures (please refer to 1.3 Obligations to Commence Corrective Action), risks a maximum prison sentence of five years and a fine of up to EUR600,000, or up to a maximum of 10% of the average annual turnover for the three years preceding the infringement (Article L. 237-2 of the French Rural Code).
In addition to potential civil penalties (such as the award of damages), the placing on the market of a non-compliant product may give rise to a level-five fine (EUR1,500 per product or offence, bearing in mind that this amount is multiplied by five for legal entities), when such non-conformity results from the ignorance of a Decree enacted further to the provisions relating to conformity (Article R. 451-1 of the French Consumer Code).
As mentioned in 1.3 Obligations to Commence Corrective Action, the competent Ministries can order the withdrawal, recall or destruction of products entailing safety risks (Articles L. 412-1 and L. 521-17 of the French Consumer Code).
Furthermore, if the product causes damage, the producer/distributor may be held liable before civil and/or criminal courts.
Tort liability can be sought by any plaintiff where compensation is claimed for damage that does not result from the manufacturer's breach of a contractual obligation.
The defendant can be held liable in tort only if the plaintiff can prove that:
The fault can result from the fact that the producer did not act "as a reasonable person would be expected to act."
The other regime that exists links liability to "things that are in one's custody," ie, a thing that a party has the power to use, control or manage (Article 1242 of the French Civil Code). The existence of a fault is not required, and the plaintiff only has to prove that the damage was caused by a "thing" (ie, any type of product, including vehicles). One could argue that the consumer has custody of the product as soon as he or she has purchased it. French case law considers that manufacturers are strictly liable and as such retain custody of the products they have manufactured despite their apparent transfer to users. This principle has been applied when the product, due to its nature, contained latent potential for harm (eg, the explosions of products such as televisions, gas cylinders, fire extinguishers and bottles of sparkling water or soda).
Strict Liability for Defective Products
Articles 1245 and following of the French Civil Code, which derive from Directive 85/374/EEC on liability for defective products, apply when the product is considered unsafe.
The producer is liable for damage caused by a defect in its product regardless of whether or not the parties have concluded a contract. As a result, this rule applies to any end user in possession of a product, whether or not the end user concluded a contract with the producer.
The rules laid down in these articles are based on strict liability. No fault or negligence or breach of contract is required in order to condemn the producer.
The plaintiff is free to choose which liability rules would best suit his or her interests. As stated above, the plaintiff is only required to prove the defect of the product, the damage suffered and the causal link between the defect and the damage.
A defective product is a product that "does not provide the safety which a person is entitled to expect," taking into account, notably, the presentation of the product, the use that can reasonably be expected of it and the time when it was placed on the market (Article 1245-3 of the French Civil Code).
This can be sought by a customer and direct purchaser of the product and by any end user and final buyer of the product. The final buyer will have a direct claim against the producer if the claim is brought against a French subsidiary of the producer. However, this rule is not applicable to international chains of contracts. There are two types of contractual claims available: breach of contractual provisions and statutory warranty against hidden defects.
Breach of contractual provisions
Three elements have to be established in order for contractual liability to be incurred by the producer: a breach (fault), a loss and a causal link between the breach and the loss (Article 1231-1 of the French Civil Code).
Under French law, a party that does not comply with its contractual obligations or is late in performing them commits a fault. One of the main obligations of a producer is to deliver products free of any defects. As a consequence, if a contracting party can demonstrate that the producer failed to comply with this obligation by delivering a defective product, it is entitled to claim damages.
Among the seller's obligations, Articles 1602 and 1603 of the French Civil Code have been interpreted by French courts as requiring that the seller provides the purchaser with a product that complies with the contractual specifications, that is, as described by the seller or as specifically agreed between the parties. In this respect, any claim made on packaging, advertisements or the internet will be deemed as a contractual specification.
Statutory warranty against hidden defects
Under Article 1641 of the French Civil Code, a seller is liable where a defect which was not apparent at the time of the sale renders the product unfit for its intended use, or reduces its usefulness to such an extent that the buyer would not have acquired it or would not have paid the same price had he or she been aware of the defect. This allows the end user to sue the producer even after the expiration of the statute of limitations for a standard contractual claim to be brought.
In product liability cases, a person who has an interest to act is automatically granted standing (Article 31 of the French Code of Civil Procedure). Therefore, in practice, any person who suffers bodily injury, or damage to products other than the defective product itself, has standing to bring claims for product liability.
Furthermore, according to Article L. 621-1 of the French Consumer Code, duly declared consumer associations may also bring collective civil actions under the specific conditions that:
If the conditions are met, these associations have standing to act for the collective interest of consumers as a whole.
However – concerning class actions involving the healthcare system, cosmetics and consumer goods – only approved nationally representative associations have standing. Therefore, even if the damage is suffered by the consumer or user of the health system, only an approved association can initiate proceedings (Article L. 623-1 of the French Consumer Code; Article L. 1143-2 of the French Public Health Code).
Contractual liability and tort actions are time-barred five years after the date on which the plaintiff knew, or should reasonably have known, of the facts on which the action is based.
Actions based on the statutory warranty against hidden defects must be brought within two years of the discovery of the defect.
Actions based on strict liability for defective products must be brought within three years of the plaintiff becoming aware, or being in a position where they should reasonably have become aware, of the defect, the identity of the producer and the existence of the loss. However, the manufacturer can only be found liable up to ten years after the product was placed on the market (Article 1245-15 of the French Civil Code).
As is clear, the date of the knowledge by the plaintiff is key to determining the starting point of the statute of limitations in France. This explains why producers doing business in France are very keen to specifically document the first complaint received from a consumer.
In civil matters, both national and EU laws make the defendant's domicile in the French territory the primary criterion of jurisdiction of French courts (Article 42 of the French Code of Civil Procedure). This principle, which was originally applied in order to share jurisdiction between French courts, has been extended by the French Supreme Court to cross-border cases (see French Supreme Court, 1st Civil Chamber, 14 March 2006, No 05-13.820) provided that there is no applicable provision that would preclude it.
The jurisdiction of the French Courts may also result from the location of the plaintiff's domicile in the French territory. Article R. 631-3 of the French Consumer Code allows the consumer to bring an action either before the court of the place where he or she resided at the time of the conclusion of the contract or the court of the place where he or she resided at the time of the event giving rise to the damage.
Similarly, Article 18 of EU Regulation 1215/2012 of 12 December 2012 states that, in matters relating to contracts concluded by consumers, the consumer may bring proceedings against the other co-contracting party "either in the courts of the Member State in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled."
Therefore, based on these provisions, a consumer domiciled in France is free to bring proceedings before the French courts against a professional producer/distributor/seller domiciled in another EU member state or in a third country.
No mandatory steps must be taken before proceedings can be commenced formally for product liability cases. The plaintiff simply has to summon the defendant to appear before court.
However, if the contract between the plaintiff and the defendant provides for a prior conciliation or mediation procedure, then this procedure must be respected by the parties or the court can declare the plaintiff's requests inadmissible. Only when parties have failed to reach a settlement during the conciliation procedure can the matter be referred to the court.
Furthermore, from 1 January 2020, Article 54 of the French Code of Civil Procedure states that, in their writs of summons, plaintiffs must justify the steps taken prior to the action to reach an amicable settlement of the dispute or justify their dispensing with these steps. In its current form, failure to do this is now sanctioned by the court rejecting the pleadings. But, if the amount in question is less than EUR5,000, there is no alternative dispute resolution requirement.
That being said, mediation is encouraged by the French Government. As such, Articles L. 611-1 and following of the French Consumer Code provide the circumstances when mediation should first be organised when there is a dispute between a consumer and a producer.
Another step that could be interpreted as a pre-action procedure is the request by the plaintiff to have an expert appointed by a court in order for that expert to determine whether or not the product is defective. This is part of the actual proceedings before the lower court, but the expert's opinion will not give rise to any judgment on the merits and any damages if the plaintiff does not then file a standard claim on the merits to ask for compensation.
In product liability cases, there are no specific rules for the preservation of evidence. Each party must preserve materially relevant evidence supporting their claims before submitting them to the court. As stated in Article 9 of the French Code of Civil Procedure, "it is the responsibility of each party to prove, in accordance with the law, the facts necessary for the success of its claim."
The court can order investigative measures, including the production of evidence, if it considers that there is not sufficient evidence (Article 10 of the French Code of Civil Procedure). In such a case, the parties must comply. If they fail to do so, the court can draw any conclusions from their failure or refusal to co-operate (Article 11 of the French Code of Civil Procedure). Such an order can also be issued under threat of a periodic penalty (Article 11 of the French Code of Civil Procedure).
Furthermore, parties can request legally permissible preparatory inquiries before proceedings, "if there is a legitimate reason to preserve or to establish […] evidence of facts upon which the outcome of the dispute depends" (Article 145 of the French Code of Civil Procedure). If the conditions are met, the court may order investigative measures for the collection of evidence (mesure d'instruction in futurum). This way, a party has the possibility to preserve or establish crucial evidence for use in a possible trial.
There are no procedures for disclosure/discovery of documents under French civil law. Parties are free to select the documents they wish to disclose during the proceedings.
They can, however, request the production of evidence not disclosed by the other party or detained by a third party but only under very strict conditions and proper identification of the document it wants. So-called fishing expeditions are not allowed (Articles 138 and 139 of the French Code of Civil Procedure).
Each party can be assisted by its own expert. Parties can either choose an expert who is listed by French courts of appeal or the Supreme Court as being knowledgeable in a specific area or even choose an expert who is not on such a list, bearing in mind that an unlisted expert's opinion may be looked on as less convincing than the opinion of a "listed expert". Either kind of parties-appointed expert would need to file a written report that would become evidence in the case. This report will be key as there is no oral testimony during trial in France.
In order to avoid a situation where the court has to determine which parties-appointed expert is the most convincing, courts tend to almost systematically appoint an expert in product liability cases. Such appointment can either be requested by the parties or at the court's discretion (Article 232 of the French Code of Civil Procedure). This expert is chosen from the above-mentioned official lists. The fees of the court-appointed expert are usually borne first by the plaintiff, who can ask for its reimbursement from the defendant if the latter is later found liable.
Various expert meetings are generally organised by the expert. They are attended by the expert, the parties' lawyers and/or representatives and, if needed, ex parte technical experts retained by the parties.
The merits of the case are not discussed at this stage. Experts can only address technical (but not legal) issues (Article 238 of the French Code of Civil Procedure). It is key that the expert does not legally qualify a defect in order to avoid any potential ambiguity during the proceedings on the merits.
French expert proceedings are based on the adversarial principle, whereby all documents submitted to the court or the expert must be sent to the opposing parties. No private conversations or communications can consequently be held with, or sent to, the expert. The parties can request for another expert to be appointed in order to provide assistance to the appointed expert should he or she not have all the technical skills needed.
The expert proceedings end when the expert files his or her final report with the clerk, a copy of which is sent to the parties' lawyers. It is important for the parties to request a draft report before the final one is filed in order to get a last chance to comment on the expert's position. Indeed, once the final report is filed, the proceedings are over.
The expert's report is not binding on the court and is legally merely an opinion given to the court (Article 246 of the French Code of Civil Procedure). However, the court generally tends to adopt the expert's conclusions on technical points.
At any time, one or more parties and/or appointed experts can decide that another expert should be appointed in order to assist the first expert. This second expert must have a different set of competences and specialisms to the first one and cannot replace the first expert in his or her mission. The number of possible additional experts is unlimited, as long as it is justified by the facts of the case and that the plaintiff or another party agrees to pay the fees upfront (with the possibility to ask later on for the reimbursement of the fees from the party which is found liable).
The burden of proof lies, in principle, with the plaintiff (Article 9 of the French Code of Civil Procedure). The burden of proof shifts to the defendant whenever the defendant invokes a limitation of liability.
This being said, in practice, French courts tend to shift the burden of proof to the producer. The latter often needs to demonstrate, when it cannot prove a flagrant misuse by the plaintiff of the product, that its product is compliant and safe in order to answer the plaintiff's claim that the product is, for instance, affected by a hidden defect. The producer also has the burden of proof to demonstrate that, even if a product presents a defect, there is no serial defect.
This is very important when looking at case law such as the Boston Scientific case, which gave rise to a judgment by the European Union Court of Justice on 5 March 2015 (Cases C-503/13 and C-504/13, Boston Scientific Medizintechnik GmbH v AOK Sachsen-Anhalt and Others). Interpreting Article 6 of Directive 85/374/EEC of 25 July 1985 on liability for defective products, the court notably ruled that where products belonging to the same production series have a potential defect, it was fair to classify all products in that production series as defective without the need to establish that any specific product was in fact defective.
More generally, in most product liability cases giving rise to preliminary expert proceedings, whereby a court-appointed expert tries to determine the origin of the damage, producers tend to put in much more work in order to demonstrate the lack of defect, notably by ordering tests, filing technical documents and providing explanations.
Product liability cases brought by consumers against corporations are handled by civil or commercial courts (at the plaintiff's choice).
Consumers generally bring their claims before the Tribunal Judiciaire, introduced on 1 January 2020. The change in court results from Law 2019-222, which reforms different aspects of French court procedure. The overall goals of the law and its application decrees relate to speeding up court procedures and pushing for more electronic communication with the court. Generally, the court sits as three judges, with exceptions depending on the subject matter of the case. The judges who compose the civil courts are career judges who, following law school, have been trained in the specific school for judges in France (Ecole Nationale de la Magistrature or ENM).
If the claim is brought by a professional, it is brought before the Tribunal de Commerce composed of a panel of three judges. In the largest commercial courts, however, cases are heard by a single reporting judge but later decided on by a panel of three judges. The judges composing the Tribunal de Commerce are not career judges but professionals who have been elected by their peers among professional unions.
There are no juries in the French legal system, except in criminal proceedings relating to the most serious criminal offences. Therefore, product liability cases will not be heard by a jury. The only step the plaintiff will have to take is to summon the defendant to appear before the relevant court.
It is notable that if an authority considers that a product is not compliant, the case will likely be analysed by criminal courts. Indeed, the latter have jurisdiction not only to rule on cases where there has been a personal injury due to the use of a product but also when there is deceit, misleading commercial practices or the use of a language other than French on the packaging. If criminal courts are seized, the consumers or any other plaintiff will be able to request compensation of their damages from the criminal courts which will rule on both the criminal liability and civil compensation.
Appeals in France are allowed in the majority of cases, with no filter being applied. They tend to be lodged quite automatically, despite recent changes regarding the enforceability of judgments. Since 1 January 2020, most judgments from courts of first instance are provisionally enforceable unless the judge decides otherwise. If the judgment is enforceable, the condemned party will be entitled to file a claim before the presiding judge of the Court of Appeal to request the suspension of the payment. It will have to demonstrate that enforcing the lower court judgment would have manifestly excessive consequences and that there are serious grounds for annulment or reversal of the judgment.
Appeals before the appellate courts must be lodged within one month of the date of the service of the decision (plus two months for appellants domiciled abroad), unless the amount of the claim brought before the lower court is less than EUR5,000, in which case the appeal can only be lodged before the French Supreme Court. The appellate courts rule de novo on both the factual and legal aspects. This means that the parties can file new evidence and that the appellate courts are not bound by the decision of the lower judges, whether on a question of law or fact.
Decisions of the courts of appeal can be appealed before the French Supreme Court, in principle, in civil matters, within two months of the date of service of the appellate decision (plus two months for appellants domiciled abroad). The French Supreme Court, which only reviews issues of law, either rejects the appeal or quashes the judgment and, generally, refers the case to a different Court of Appeal to be reviewed again. Lodging an appeal before the Supreme Court is a right in France, meaning that there is no early filter by which the court would reject the appeal without looking at the merits of the case.
Generally speaking, proceedings before courts of appeal generally take between 18 months and two years between the appeal and a judgment. Proceedings before the Supreme Court are generally a bit faster (a year). As mentioned above, if the case is then referred by the Supreme Court back to another Court of Appeal, another 18 months to two years should be added. In very specific circumstances, note that the Supreme Court can be seized again following judgment of the second referral Court of Appeal.
Defences will vary depending on the nature of the claim filed. It ought to be noted that French courts tend to be severe towards producers considering that they are the ones who know their product best and could therefore most easily avoid defects, misuse by and/or disappointment of users.
In contractual liability cases, the producer's liability can be excluded if it can prove:
In cases where the plaintiff alleges that the product is affected by a hidden defect, the fact that the producer was not aware of the existence of the defect is not a valid defence. Sellers are presumed to be aware of hidden defects affecting their products.
In practice, it is very difficult to avoid liability on the grounds of the hidden defects warranty. The producer could, in theory, avoid liability by demonstrating that the defect was apparent at the time of the sale. However, the definition of an apparent defect varies depending on who the purchaser is, ie, whether he or she is a knowledgeable professional who could have properly inspected the product and noticed a defect. This being said, case law specifies that buyers do not have to carry out a thorough verification at the time of delivery.
In strict liability for defective products cases, the producer will not be liable if it proves any one or more of the following (Article 1245-10 of the French Civil Code).
When the plaintiff is at fault, or his or her negligence contributed to the damage, the producer's liability can be reduced. In this case, the producer's liability can only be reduced and shared with the plaintiff (but not excluded) (Article 1245-12 of the French Civil Code).
The producer's liability can only be totally excluded if the latter can prove that the plaintiff's fault was unforeseeable and irresistible (as in force majeure cases). This is notably the case if the product is used by the plaintiff in an abnormal way that could not have been reasonably expected by the producer. Courts have a very strict approach to this defence, often considering that producers should always expect the worse and most unusual behaviour from the users.
The liability of the producer towards the injured will not be reduced where the act or omission of a third party contributed to the damage. However, the producer can bring an indemnity claim against the third party whose actions caused the damage (Article 1245-13 of the French Civil Code).
Finally, in tort claims, the producer's liability can be excluded if it proves the existence of an extraneous cause for the defect caused by force majeure or a fault committed by the plaintiff or a third party, or contributory negligence that could result in shared liability.
In product liability cases, adherence to regulatory requirements can be of relevant consideration, depending on the nature of these requirements. However, in practice, it is less and less relevant, even if Article 1245-10 of the French Civil Code states that if the producer/distributor proves that the "defect is due to compliance with mandatory legislation or governmental regulations" then they will not be held liable.
Indeed, according to Article 1245-9 of the French Civil Code, the fact that a product received an administrative authorisation, or was manufactured in compliance with the rules of the trade or existing standards, cannot constitute a proper defence. The number of products which have received an authorisation to be placed on the market that trigger the liability of their producer is significant. There are, as such, dozens of open cases against medical products, pesticides and motor vehicle manufacturers, for instance.
A distinction must be made between the procedural costs that are strictly necessary to the lawsuit (dépens) and the other expenses incurred by a party, such as lawyers' fees (frais irrépétibles).
The successful party can recover all procedural costs listed in Article 695 of the French Code of Civil Procedure (such as court-appointed experts' fees, witnesses' expenses or services fees) (Article 696 of the French Code of Civil Procedure).
Any other legal costs incurred by a party, such as legal fees, fall under the scope of Article 700 of the French Code of Civil Procedure, which states that the court will order the party bearing the court costs, or failing that the losing party, to pay to the other a sum determined by the court corresponding to the costs incurred that are not included in the procedural costs. When doing so, courts will not look at lawyers' invoices and what cost each party actually bore for presenting its case. The losing party will never have to reimburse all that was spent by the winning party. The court will assess, on a case-by-case basis, what amount would be fair to grant, taking into account equity or the economic position of the paying party and the amount of damages granted (generally no more than EUR20,000).
Third-party funding is not, as such, forbidden by French law (see Versailles Court of Appeal 1 June 2006, No 05/01038). However, third-party funding is not yet common practice in France even if it is growing. The fact that there is no legal framework for, and no public records of, this mechanism makes it difficult to assess how successful it will become.
There are many obstacles to the expansion of third-party funding in France, the main one being the rules governing lawyers' relationships with clients, in particular the rules governing conflicts of interest and those relating to lawyers' fees.
The French lawyers' ethical rules provide that lawyers can only receive fees from their clients or an authorised representative of their clients. Lawyers can, therefore, not be paid directly by the third-party funder.
Also, French lawyers are not entitled to communicate information to third parties. Lawyers must avoid bilateral discussions with the third-party funder in the absence of their clients. The third-party funder must always be considered a third party.
Purely results-based fee arrangements (pactum de quota litis) are furthermore forbidden in France as well as by the European ethical rules of the Council of European Bars, although the National Council of French Bars and the Council of European Bars are currently working on a possible change in the regulation on fee arrangements to allow results-based fee arrangements under certain circumstances.
The first-class action mechanism was introduced in France by the Hamon Law of 17 March 2014, which came into force on 1 October 2014, under the name of group actions. The scope of this group action was limited to consumer and competition law breaches only. This opt-in system can only be launched by a specific and limited list of consumers' associations which must find at least two people suffering from similar damage. Actions have until now mainly been brought against insurance and property management companies. None have been successful to date.
By the Law dated 26 January 2016, the group action mechanism was extended to the field of health products and cosmetics. The purpose of this specific group action is to enable users of the health system and consumers using cosmetics to obtain compensation for losses resulting from bodily injuries, including in product liability matters. It can be launched against manufacturers, suppliers and service providers using health products (including pharmaceuticals and medical devices). The particularity of this mechanism in this field is that it would allow corporal damage to be compensated and it applies to products placed on the market even before the Law came into force.
The "Justice of the 21st Century" Law of 18 November 2016 broadened the scope of group actions to discrimination, environment and personal data matters.
Group actions are not yet frequently used in product liability cases. However, recently, a group action was initiated under product liability against a pharmaceutical company. In a decision dated 20 November 2017, the Orléans Court of Appeal found the company liable for its defective drug (see Orléans Court of Appeal 20 November 2017, Case No 16/00141, confirmed on this point by French Supreme Court, 1st Civil Chamber, 27 November 2019, Case No 18-16.537).
At the EU level, the Collective Redress Directive is currently being debated in the European Parliament. The directive is designed to update an existing EU Directive allowing for injunctive relief. With the current proposal, cross-border claims are to be reinforced in the hopes that they will become more common. Product liability claims, under the 1985 Defective Products Directive will be subject to pan-European class actions.
Mass litigation is more common in France, ie, a significant number of individual claims filed by the same counsel before the same court and which are generally subject to the same procedural schedule and heard during the same trial hearing. Such cases are a challenge for defendants as plaintiffs will likely present these cases as one large case with exactly the same evidence for all plaintiffs, without that evidence being personal and showing specific damage. However, procedurally, these cases should be treated as individual cases, each of which could be tried individually. Defendants need to insist on this point in order to stand a chance and avoid a general sentence being passed against them.
On 27 November 2019, the French Supreme Court (Case No 18-16.537) ruled on a number of product liability issues linked to allegations that the medicine Depakine could be the cause of birth defects. Regarding the limitation period, the Supreme Court stated that it may only start once the claimant knew or could have known the origin of the damage and the identity of the producer at stake. It ruled that the claimant was not time-barred as the claim had been filed within three years following the conclusion of expert operations determining whether the birth defect was due to genetic anomalies or the medicine in question, and that the producer could not claim that the claimant could have known of the potential link earlier. Conversely, the Supreme Court ruled that the producer should have known earlier that there could be an issue with one of the ingredients of its medicine and should have warned consumers accordingly.
On 5 April 2019 (Case No 18-17.442) and 11 September 2019 (Case Nos 17-24.879 to 17-25.623), the Plenary Assembly of the French Supreme Court ruled that any employee who considers that he or she has been exposed to a hazardous substance that triggers anxiety relating to the development of a disease in the future can file a claim for damages on the ground of that risk. This "anxiety damage" was first recognised in claims related to exposure to asbestos. It has also been recognised in the scope of claims linked to medical devices. Last year's case law should be at the origin of claims linked to other substances and products.
Beginning in January 2019 (Case No 17-21.477) and continuing through 2019 (Case Nos 18-14.720 and 18-21.481) and 2020 (Case No 19-15.972), the French Supreme Court has clarified the limitation period for the statutory warranty against hidden defects resulting from B2C sales transactions. In France, a claim under the statutory warranty against hidden defects must be brought within two years from discovery of the hidden defect. With regard to commercial contracts, a claim must be brought within five years from the date that the contract was formed. In the aforementioned cases, the buyers had brought the sellers to court in order to have them cover the losses under the statutory warranty. The sellers would often then join the producers to the case, seeking indemnification under the commercial contract. However, the Supreme Court rejected claims against the producers stating that, in these circumstances, the limitation period is double: the claim under the statutory warranty must be brought within two years after discovery of the hidden defect and that the claim against the producer must be brought within the five year limitation period provided for commercial contracts. In all of these cases, the commercial sales occurred more than five years before the discovery of the hidden defect, which rendered the claims against the producers time barred.
Regarding product safety, the Directorate General for Competition, Consumer Affairs and Fraud Control (Direction Générale de la Concurrence de la Consommation et de la Répression des Fraudes or DGCCRF) launched the Signal Conso service nationwide after a beta test in the Centre-Val de Loire Region. Inaugurated in February 2020, Signal Conso is to be used by consumers who wish to make a complaint against professional producers/distributors/sellers (https://signal.conso.gouv.fr/).
The 2020 launch slightly modified the beta version, allowing for complaints to be made under the following themes:
Unlike the existing system of complaints addressed to the DGCCRF, the alerts recorded on the platform are also accessible to concerned professionals. If the professional wishes to participate, he or she can make the necessary corrections and even contact the consumer who made the alert (if the latter has agreed to being contacted). Therefore, the purpose of Signal Conso is to make professionals more aware of their legal obligations in order to better ensure product safety and consumer protection.
Recently, France has adopted legislation aimed at reducing waste and creating a circular economy. France's Anti-Waste Law (Law 2020-105) came into force on 10 February 2020, with some dispositions scheduled to come into force at later dates.
The major points of the law are as follows.
In January 2020, the European Parliament conducted a public hearing on an update to Directive 85/374/EEC creating the strict liability regime for defective products in the European Union. Discussions are in a preliminary phase, but a majority of stakeholders have called for a total update. The European technology industry's association, however, has only called for an adaptation.
Proposed updates include redefining the terms "product" and "producer" to better reflect the use of technology and software in products. Specifically, regarding the liability regime, some stakeholders have suggested that:
Nevertheless, it seems highly probable that an update will codify existing consumer friendly case-law from the ECJ, especially with regard to the burden of proof and causation.
On 12 February 2020, the European Parliament passed a resolution that calls for more regulation of automated decision making processes and consumer products liability (https://www.europarl.europa.eu/doceo/document/TA-9-2020-0032_EN.html). The resolution does not formally object to artificial intelligence (AI), but requests controls and notification requirements in order to avoid location-based discrimination and to offer consumers sufficient consumer protection. Regarding the liability provisions, the resolution calls for a risk assessment approach towards regulating AI's use and for the European Commission to develop an assessment regime. More than likely, this resolution will serve as a basis for new EU regulations on AI.
Moreover, on 19 February 2020, the European Commission published its white paper on the future of AI (https://ec.europa.eu/info/sites/info/files/commission-white-paper-artificial-intelligence-feb2020_en.pdf). The white paper calls for a broad consultation with stakeholders, civil society and academics in order to develop firm regulatory proposals for AI. Some of the initial proposals call for more transparency in AI and connecting its use to a physical or legal person. For example, a physical person operating a drone would be strictly liable for any damage caused during its use. However, manufacturers will more than likely have their liability extended to hidden defects involving AI, even after the product has been placed on the market.
Strictly speaking, the product liability and safety regimes have not been formally changed by the COVID-19 pandemic. But there is a general recognition that France was facing an emergency situation with government approvals in certain areas coming much faster, albeit temporarily.
On 23 March 2020, the French parliament approved Law 2020-290 declaring a state of emergency and therefore granting powers to the executive to issue emergency decrees. Law 2020-546, enacted 11 May 2020, will extend the state of emergency to 10 July 2020. During the government-ordered confinement period, partially lifted on 11 May 2020, the French courts were only taking critical cases (mostly criminal, though this included some insolvency proceedings and emergency cases involving civil rights). During the reopening period, the French courts will resume civil and commercial cases progressively, but will request that cases proceed without oral argument. Parties may refuse this request but could, as a result, be subject to a lengthy wait for a new hearing date. Videoconferencing may also be used in some cases, but it is not commonly used in the French courts at this time.
In the hopes of increasing medical supplies to hospital workers and the general public, the Minister for Health slightly relaxed restrictions in some areas and tightened them in others. For example, French pharmacies and cosmetics factories were allowed to begin making their own alcohol-based hand sanitiser in order to meet demand, under specific circumstances. In cases of control, the French authorities requisitioned all conforming masks (FFP2, N95, etc) to be distributed to frontline medical workers. France's standardisation body, with guidance from the European Commission, also published standards for non-medical masks for the general public so that supplies may be increased. A similar approach was taken regarding respirators. The European Commission allowed member states to provide rapid authorisations without going through all the conformity assessments, but they may only be placed on the market for a limited time and made available only to health care workers. In France, a consortium of car manufacturers, parts manufacturers and medical device manufacturers agreed to mass produce respirators for French hospitals.
As regards the existing manufacturers, the government relaxed some of the French Labour Code restrictions and the local authorities relaxed restrictions on the operating hours for the factories in order to allow them to constantly operate.
Consumer supply chains were heavily mobilised in order to guarantee delivery of essential goods to consumers (primarily food and medicines). Other non-essential supplies were heavily impacted due to the home confinement orders and workplace safety measures. For example, Amazon closed its French distribution centres until 13 May 2020 in response to court orders limiting its activities and ordering improved workplace safety measures.
The government has formally recognised a public health crisis and the executive has stated in some executive orders that in some cases force majeure shall apply. Of the few court decisions made public during late March, the Colmar Court of Appeal held that COVID-19 is grounds for force majeure in immigration and asylum law. We expect many more case law examples on force majeure in the next few years.
In the context of the ever-growing complexity of products, of their regulation and of the resulting liability, the development of new technologies appears to be the best response by operators.
The New Risks Facing Operators
Operators that place consumer goods on the French market are more at risk today than they were in the past.
The growing complexity of products
Mentioning the impressive development of the internet of things (IoT) is sufficient to illustrate this growing complexity of products, from a technical, as well as a legal, standpoint.
Indeed, the IoT raises the question as to whether the current legal framework, including in particular Directive 85/347/EEC concerning liability for defective products, is adapted to these new products.
The growing complexity of regulation
France has watched its British neighbour leave the European Union with sadness.
Those who are active in the field of product regulation have understood better than others one of the legitimate reasons for Brexit: the uncontrolled inflation of regulation.
The volume of regulation applicable to consumer goods in France, which stems from European and French law, is estimated to be over 50,000 pages. While the European legislature appears to have quieted down since Brexit, the same statement cannot be made regarding the French legislature as it continues to adopt its own rules.
On top of these laws come several thousand pages of standards, official interpretation guides of applicable regulation and professional practices.
Verifying the compliance of a product with regulation has become either hell or the task of a pure specialist.
Yet, there are several and well-known links between compliance, safety, and the liability for defective products.
The non-compliance of a product sometimes deems it to be unsafe and vice versa, as provided under Article 3 of Directive 2001/95/EC on general product safety.
This compliance (and safety) assessment is even more difficult to achieve in an international environment, due to the divergences in regulations and interpretations of each country, even within the European Union.
A few years ago, European institutions stated that, for the most part, assessing whether the operator is liable falls upon national legislation and judges, including in the presence of harmonised European legislation.
Compliance (regulatory) and liability are two different legal concepts even though there are several links between the two.
For the operator, having national, or even local, approaches in addition to a global strategy, is therefore crucial.
The aggravation of legal risks
It is undeniable that the risk of product liability is worsening on the French territory.
This may be illustrated with multiple examples.
The liability of public authorities
Ever since the French Revolution in 1789, France has enjoyed chopping heads off, be they those of its rulers or of its citizens. Covid-19 has not escaped this trend as more than 60 lawsuits have been filed by consumers and associations against members of the French government for poorly managing the crisis.
French judges are going to have to rule whether, taking into account the state of scientific knowledge at the time, the French Government adopted appropriate and proportionate measures to protect its citizens, consumers and workers who enjoy the right to the protection of health under the French Constitution.
These legal actions against rulers, which are distinctively French, appear regularly during great health crises (eg, the contaminated haemophilia blood products crisis).
Operators are not spared: several court orders have been issued to shut down production and logistics sites (eg, Amazon) for not sufficiently protecting workers.
The mitigation of the conditions of liability for defective products
A series of litigations related to the placing on the market of medicines with major side effects has led to significant case-law in France. This case-law first rejected the argument of pharmaceutical companies, which considered that they were not subject to the general liability regime for defective products on the ground that, by definition, a medicine is offered on a benefits versus risks approach and that the lack of risk cannot therefore be guaranteed.
French case law has also softened the requirements in respect of the causal link between the defect of a product and the injury suffered by a patient. It was traditionally taught that this causal link had to be certain and that in the event of doubt, liability had to be excluded. French judges now consider that the causal link may be established by simple clues and that scientific evidence can result therefrom, which considerably increases the risk for pharmaceutical companies.
The obligation to take emerging risks into account
Emerging risks are of both a scientific and a legal nature.
The law imposes an increasing number of obligations on operators, either in respect of the precautionary principle, or in respect of general obligations prior to and after the placing of products on the market (vigilance, monitoring, tracking etc).
The law requires that operators be informed of the risks posed by their products and of the evolution of scientific knowledge. For instance, a pharmaceutical company has been sentenced for not taking actions to verify the harmlessness of its product after the appearance of weak signals following the placing of its medicine on the market.
The aggravation of the liability of certification bodies
The case of defective breast implants fraudulently placed on the market by a French operator serves as a good illustration of the aggravation of the legal risk, not only for the operator which fell into bankruptcy and for its managers who were given prison sentences, but also for the certification body that had certified that the products, which were subject to medical devices regulation, were compliant and safe.
At first, French judges and the European Court of Justice held that the certification body had not made any mistake in conducting its verification role. They found that the certification body had complied with the obligations imposed in this area by both the regulation on medical devices and the contract it had signed with the operator. They considered that the auditors had the required qualifications and experience. In addition, they found that the operator had acted fraudulently by hiding its practices during the inspection of its factory.
The French Supreme Court (Cour de cassation) quashed the decision of the lower court by considering that two infringements could be held against the certification body. On the one hand, the certification body was not independent from the operator as it had acted as both counsel and controller of the operator. On the other, the auditors had not made any inspection of documents, including accounts, which had prevented them from making a connection between the raw materials and the final products. Had they done so, they would have been able to detect the fraud, which was undetectable through a mere visual inspection.
All these examples show that the risk of liability for operators that place products on the market continues to worsen.
We will now see the response to this aggravation of legal risks.
The Response to New Risks
The management of legal risks related to products requires the use of new tools, which have been developed over recent years, to guarantee the compliance and safety of the products. This is not enough, however, the internal organisation of the company in this area also needs to be restructured.
Several tools may be used by an operator to ensure the compliance and safety of its products.
Scientific and regulatory monitoring tools
For the past few years, international service providers have been offering global regulatory monitoring services in respect of both food and non-food products to operators. The use of such databases, which sometimes use artificial intelligence, is highly valuable to operators.
Scientific monitoring and/or health alert consolidation tools related to product recalls in the main developed countries also exist.
Case-law databases and predictive justice
Each country or even supra-national region (eg, the European Union) has its own case-law databases which list court decisions. These databases are a helpful supplement to regulatory databases because judges interpret, clarify and apply, or rule out regulations.
In addition, the legal value of the law is superior to that of regulation in the hierarchy of norms and even though the law takes regulation into account, it is not bound by it. Knowing the law is therefore necessary.
French databases are now using artificial intelligence on a massive scale. They allow users to set up particularly targeted alerts and monitoring systems on specific product risks, operators, jurisdictions and even lawyers. As soon as they are implemented, these tools become invaluable.
As for French judges, they are starting to use predictive justice tools which use the same approach.
Risk assessment tools
For those who practice product law, one of the most difficult questions to solve is risk assessment, especially for the purpose of deciding whether to set up a product withdrawal or recall. The hazards related to the product, the risk it poses, and the proportionality of the risk management measures to be implemented must be assessed.
The European Commission has published guidelines on risk analysis, and consulting its website on product recalls, which contains many precedents, is useful in this regard.
It should be noted that France has announced the creation, in 2021, of its own official website for product recalls.
A service provider has created risk analysis software that collects large quantities of relevant data and facilitates decision-making for operators.
Electronic specifications and blockchain
A few years ago, an alert was triggered in France regarding the risk posed by a specific colourant incorporated by many operators in their products. Many distributors, active in the mass retail market, were able to identify within a few seconds which of their products were targeted by this alert. They were able to conduct a complete and prompt recall.
These operators had put electronic specifications in place with their suppliers for all products sold under their own private label. All they had to do was type the name of the colourant into their databases to generate, within seconds, a list of all the products in which the colourant had been used.
These electronic specifications had one drawback: they only applied to their immediate suppliers (ie, the manufacturers of the finished products) but not to the suppliers of their suppliers.
Last year, another French distributor set up, with an external technological partner, blockchains for its products in which the information is registered in the system not only by the manufacturer of the finished product but also by all the suppliers in the supply chain.
The growing complexity of products and regulations, especially in an international environment, compels operators to set up networks of skilled experts in several fields: scientific experts, products experts, test and analysis laboratories, regulatory and legal experts.
These networks must cover all the countries in which the operator markets its products.
The structuring of the internal compliance framework
The tools described above are like the pieces of a puzzle; they are fully effective only if they are assembled in a coherent way within the relevant organisation, in a systemic approach. These tools must be connected to each other as well as to the law. This will soon be the case in the area of product compliance.
The compliance approach is recommended, if not required, by public authorities in several – but still insufficient – areas of law, such as the fight against corruption, competition law, financial law and data protection. This self-disciplinary approach can sometimes allow a company to avoid or mitigate its liability risk.
Public authorities encourage the structuring of this approach and the control thereof by independent operators, either within the company (compliance officers) or outside of it.
This first level of “private” control supplements the control by public authorities.
In the area of compliance/product liability, it seems that this compliance approach remains insufficiently used. However, in recent years, a few major operators have begun structuring their product compliance approach.
For instance, one of these operators had several tools (monitoring, standard operating procedures, technical specifications, commercial agreements) at its disposal but had not linked these tools to each other, and to the various people in charge of monitoring and compliance, in a systemic manner.
The structuring approach of this operator was based on the ISO standard 19600 on compliance-management systems, which, at the time, established simple guidelines in this area but was not certifiable. This structuring created a link between tools and people.
ISO has continued its work on compliance by setting up working groups to render its standard on compliance-management certifiable. ISO 19600 will be replaced with the future standard ISO 37301, which should be adopted in 2021.
This means that independent certification bodies are going to audit the compliance approach of operators and are going to be able to certify that this approach complies with the requirements of ISO standard 37301.
This certification is particularly interesting for the purpose of organising risk prevention and mitigating the liability of operators.
Admittedly, a certification system is not what allows the assessment as to whether a product is defective or safe within the meaning of the French texts transposing Directive 85/347/EEC concerning liability for defective products and Directive 2001/95/EC on general product safety.
Nonetheless, this certification can have important consequences on the criminal risk incurred by directors and companies.
Indeed, under French law, as under the laws of a number of other countries, the best way to avoid a criminal conviction when placing a non-compliant and/or dangerous product on the market is to demonstrate “due diligence”, that is to prove the prior implementation of risk prevention processes, in line with the legal obligation imposed on operators by article L. 411-1 of the French Consumer Code.
Such evidence may be provided in several ways but the fact that it takes the form of a certification made by an external, independent and recognised organisation, as will be the case with the future ISO standard 37301, is particularly compelling.
The international nature of the standard reinforces its value for operators that market their products in several countries.
The standard leads to a reversal of the burden of proof of due diligence by requiring that the prosecution authorities to demonstrate the inadequacy of this certification process.
French judges have held that an operator which has placed a dangerous product on the market could avoid criminal liability by demonstrating that it had conducted due diligence, in particular due diligence resulting from external audits and/or certifications such as the ISO standard 22000 on food safety.
By way of conclusion, in the context of the aggravation of liability risks of operators, the use of new technologies and the structuring of internal compliance procedures seem to be the most promising trend.
In the area of product liability and product safety, the time has come for “augmented lawyers”, that is for lawyers who master new technologies and see themselves as interfaces between the different departments in charge of compliance and safety within the company. And what an exciting time that is!