The French Parliament has just adopted a reform of the class action regime, aimed in particular at aligning with the requirements of the EU Representative Actions Directive of 25 November 2020. The adoption follows nearly five years of intense debate.

What does the reform actually change?

While it does not represent the radical overhaul some had hoped for, given the range of proposals that have emerged in recent years, it introduces a number of notable features intended to make the regime more attractive:

• Partial harmonisation of the class action regime’s scope. With the exception of the health, labour, agriculture and fishing sectors, which remain partially governed by sector-specific regimes, class actions will now be available across all areas. This includes both injunctive and redress measures, and establishes a general framework for compensable harm, breaking with the fragmented approach under existing regimes.
• Limited broadening of the qualified entities empowered to bring class actions. As before, only approved associations may bring class actions for redress. However, for injunctive measures, the reform allows other associations that have been registered for at least two years to bring claims – though ad hoc associations will not have as much latitude to bring class actions as some had hoped. The new rules also implement the EU directive’s requirement that qualified entities from other member states may bring cross-border class actions. Another key development is that the public prosecutor may now initiate class actions for injunctive relief and may intervene in any class action as a third party.
• Expanded eligibility of beneficiaries. Class actions will no longer be limited to natural persons; legal entities will also be able to benefit from the regime.
• An extension of opt-in periods. The time limit for forming the group of beneficiaries has been extended to a maximum of five years from the publication of the liability judgment – intended to maximize the participation rate of the action's beneficiaries.
• A framework for third-party funding and conflict of interest prevention. Third-party funding is now expressly permitted—an important step for funders who were previously excluded under some reform proposals. However, safeguards are in place: (i) the funder must not have the objective or effect of influencing the case in ways that could harm the interests of the represented group; (ii) funding arrangements must be disclosed in accordance with rules set by decree; and (iii) qualified entities must avoid conflicts of interest and protect the action from undue external influence. A judge may order the qualified entity to produce documents justifying this absence of conflict of interest or even declare the action inadmissible if the conditions are not met.
• Introduction of a non-insurable civil penalty. Despite concerns expressed by the Conseil d’État, the reform retains the controversial introduction of a penalty mechanism. At the request of the public prosecutor (in judicial courts) or the government (in administrative courts), a judge may impose a civil penalty on a defendant who has deliberately committed a fault for the purpose of securing an unlawful gain or saving.

The penalty must be proportionate to the seriousness of the misconduct and the benefit derived, but cannot exceed twice the gain in the case of an individual or five times the gain in the case of a legal entity. Proceeds from the penalty will be directed to a dedicated fund for financing class actions, though the specifics remain to be defined.

• Early dismissal of manifestly unfounded actions. Courts may clearly unmeritorious claims at an early stage by issuing a reasoned decision, under procedures to be specified by decree.
• Improved public information. Qualified entities will be required to inform the public about initiation and progress of class actions. In addition, a public register of ongoing class actions will also be maintained and published by the Minister of Justice.
• Creation of specialised courts. Future class actions will be heard by designated specialised courts.

This new regime will only apply to actions brought after law’s publication, except for the civil penalty, which will apply only to actions where the underlying event occurred after publication of the law.