In 2014, France introduced a class action regime providing for “action de groupe” limited to the reparation of consumers’ material injuries in the fields of consumer law and anti-competitive practices. The regime is limited however by the requirement that only authorised consumer associations can bring proceedings. As such, the recent Afer decision has important implications for the way consumer claims are pursued in France.
The case goes back to the 2000s, when two CEOs of the French insurance association Afer were involved in the embezzlement of approximately €128 million to the detriment of the association’s members. Both CEOs were finally convicted in 2008 and part of the embezzled sums were confiscated by the Court. In 2013, each of the 55,114 members of Afer granted a power of attorney to Afer in order to file a collective request for the restitution of approximately €27 million that was held by the State after the convictions.
Afer’s first attempt was unsuccessful, with the Court of Appeal of Paris holding that the association could not act on behalf of others and that collective actions are generally prohibited under French Law (beyond the strict and limited consumer framework, described in our last Review). On appeal, however,the French Court of Cassation recognized the legitimacy of Afer’s application. The Court of Cassation referred the case back to the Court of Appeal of Versailles and on 6 July 2016, restitution of more than €27 million was ordered in favour of the 55,114 members of Afer.
This decision is significant as it may provide a parallel means to pursue collective actions in France, even though the circumstances were very specific and may therefore be of limited precedential value for subsequent damages claims. The Court expressly adopted the claimant’s position that the present case did not constitute a class action under French Law, which is subject to strict limitations, but recognised the standing of Afer by means of specific powers of attorney, grouping thousands of individual claims into a single claim asking for the restitution of sums held by the State.
Looking ahead, the possibility of extending the current French class action system to include environmental and health-related claims is due to be reviewed by the Parliament in the coming months.
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The Review: Class Actions in Australia 2015/2016 examines key class action decisions from July 2014 to June 2015 as well as current proposals for reform. It provides an analysis of how these decisions are likely to affect future proceedings for both plaintiffs and defendants, and also looks at emerging trends in class action regimes around the world.
This is the fifth annual report released by King & Wood Mallesons’ Class Actions & Regulatory Investigations Practice, which has worked on some of the largest and most complex class action matters in Australia.