Observatory of Group Actions and other forms of Collective Redress: Overview

 

 

OBSERVATORY OF GROUP ACTIONS

 

AND OTHER COLLECTIVE ACTIONS

 

 

 

A multidisciplinary perspective

 

 

 

 

 

By Maria-José Azar-Baud

 

Translated by Fiona Rousseau (Master 2 Droit et Contentieux de l’Union Européenne, Paris II Panthéon-Assas) in charge of English translation

 

 

 

Created by Maria José AZAR-BAUD, an Associate Professor at Université Paris-Sud, as part of her research activities within the Institute for Private Law, Ethics, and Patrimony (IDEP), the idea of an Observatory for Group Actions and other Collective Actions is the result of various observations. 

 

 

 

First of all, although the field of group actions has become broader in the last years, it remains limited to sectors where the legislator specifically and explicitly consecrated them. Initially adopted for the defence of consumers (2014), group actions were later introduced in the field of health (2015), environment, discrimination, personal data (2016) and in the administrative sphere (in the form of collective actions and actions for a declaration). As such, some human, economic, social and/or cultural rights which do not fit in the aforementioned “boxes” cannot be upheld through the use of group actions. More recently (2018), the ELAN Act expanded the field of group actions by including the real estate field. 

 

 

 

Furthermore, group actions play an important part in the resolution of mass conflicts, alongside other collective actions existing in France. The latter consist in collective interest actions stricto sensu, actions for an injunction (cessation of illegal and unfair practices), actions for the removal of unfair terms and joint representation actions. They are all statutory based (Consumer Code) and their number does not seem to have decreased since the introduction of group actions. Other actions must also be mentioned, those created by case law whose effects are collective ; it is the case of actions introduced by organisations specifically created for the defence of the collective interests of their members, such actions are still relevant nowadays. 

 

 

 

More recently, Internet platforms offering consolidation of actions or extrajudicial mass dispute resolution have emerged, as well as a website gathering signatures to force France to fight against pollution. This new phenomenon deserves special attention. 

 

 

 

As collective actions represent a new societal challenge, our Observatory brings together professionals from a wide range of fields including Law, Economics, Management Sciences, Psychology as well as Sociology, Mathematics and Computer Science to provide the expert eye of all the disciplines involved. Artificial Intelligence also plays its part in our researches.

 

 

 

Our aim is to not only provide a multidisciplinary perspective on group actions and other collective actions but also to confront the French and International perspectives.

 

 

 

Maria José AZAR-BAUD

 

Associate Professor at Université Paris-Sud

 

Founder and Director of the Observatory of Group Actions and other Collective Actions

 

 

 

THE ORIGIN OF THE OBSERVATORY OF GROUP ACTIONS

 

 

 

 By Maria-José Azar-Baud

 

Translated by Fiona Rousseau (Master 2 Droit et Contentieux de l’Union Européenne, Paris II Panthéon-Assas) in charge of English translation

 

 

 

One event and one label are behind the creation of the Observatory of Group Actions and other Collective Actions.

 

 

 

The Observatory of Group Actions and other Collective Actions was created on 27 January 2017, following the Fourth “Académie Internationale de l’IDEP” held under the theme “From inaction to group action: new challenges”.

 

 

 

This event, organized under the scientific leadership of both Ms. Maria José AZAR-BAUD, associate professor at Université Paris-Sud and Ms. Véronique MAGNIER, professor at Université Paris-Sud, was held at the Maison du Barreau de Paris. The presentations given by both French and foreign experts in the field were structured around four panels. Debates then ensued with the participation of researchers, lawyers, other legal experts and actors from both the business world and the non-profit sector.

 

 

 

The Observatory of Group Actions and other Collective Actions was established with the support of the “Maison des sciences de l’Homme Paris-Saclay” thanks to the “Emergences-2017” label.

 

 

 

The Observatory comprises over a dozen researchers from various fields and laboratories. Associate researchers are also part of our teams. Students are involved in workshops organized by Paris-Saclay’s legal clinic as well as training projects from the IUT of Sceaux, all under the supervision of Maria José AZAR-BAUD. The Observatory thus plays an active role in training and improving professional skills among the student body, from their first year within the faculty up to their last year of Masters.

 

 

 

Our approach is based on multidisciplinary research – theoretical and practical – and innovating teaching (see section “Our Method”).

 

 

 

The Observatory’s aims rely on research and teaching and have an important societal root. It aims at bringing about a better understanding of group actions and other collective actions alongside with associations, victims and businesses.

 

 

 

 

THE AIMS OF THE OBSERVATORY OF GROUP ACTIONS AND OTHER COLLECTIVE ACTIONS

 

 

 

By Maria-José Azar-Baud

 

Translated by Fiona Rousseau (Master 2 Droit et Contentieux de l’Union Européenne, Paris II Panthéon-Assas) in charge of English translation

 

 

 

The Observatory aims at developing interdisciplinary and applied research.

 

 

 

For this purpose, the Observatory:

 

 

 

1.       Identifies all group actions and other collective actions which were either brought or merely announced as well as court decisions and settlement agreements.

 

 

 

In France, the first collective actions (lato sensu) were brought in the 1970s but it wasn’t until 2014 that group actions appeared in the French legal scene. As of today, over 400 decisions have been identified, combining all courts, in the field of consumer protection.

 

Some of those decisions are published (and therefore accessible on Légifrance and/or in legal journals), however, others are not.

 

The debate this field gives rise to is captivating (see, for example, the report on the Open Data of court decisions, known as the Cadiet Report, submitted to the French Garde des Sceaux in November 2017).

 

 

 

It must be noted that there is no Register listing all the actions brought or decisions handed in the field of group and collective actions. It is unfortunate as such publicity would be extremely useful. On the one hand, it would prevent the juxtaposition of actions, which itself would lead to increased effectiveness. On the other hand, the collective nature of the dispute requires full transparency, from its commencement to its conclusion.

 

 

 

This is why the Observatory of Group Actions and other Collective Actions’ primary vocation is to identify and then publish all relevant information on its website. 

 

 

 

2.       Popularizes information in order to increase awareness amongst individuals, businesses and institutions regarding the existence of such actions and their nature.

 

 

 

Mass litigation can affect a defined, more or less wide, group of people (such as in the cases pertaining to Helvent Immo products, Cler or even Jet 3, in which a list of customers enabled a clear and definitive definition the group affected), an indeterminate collective (as in the horse meat case) or determinable one (as in the cases pertaining to the pharmaceutical laboratories Servier for the Médiator, Sanofi with Dépakine, or Bayer with the Essure).

 

 

 

Either way, society sees the emergence of social conflicts that lead to psycho-sociological effects (the perception of the victims and of society) which live on for many generations. So that Group actions and other collective actions can be seen as a tool to deal with them. 

 

 

 

The multidisciplinary studies conducted by researchers at the Observatory thus ought to be popularized.

 

 

 

3.       Uses a multidisciplinary approach

 

 

 

Group actions and collective actions, because they reveal the existence of a mass conflict, cannot be the subject of compartmentalised research studies. Only multidisciplinary studies can capture the litigation in its entirety and this involves putting different skills to the benefit of analysing the data collected.

 

 

 

This is why our Observatory brings together professionals from a wide range of fields including Law, Economics, Management Sciences, Psychology, Sociology, Mathematics as well Computer Science and Artificial Intelligence.

 

 

 

See section “Our Method”.

 

 

 

4.       Broadens inter-institutional and international cooperation

 

 

 

Created as a research platform within the IDEP, the Observatory is open to any researcher, activist and practitioner wishing to be a part of this project and who is capable and willing to bring an original vision of the subject.

 

 

 

Inter-institutional cooperation is thus at the heart of the Observatory’s operation. Partnerships with other Research Centres and Laboratories in the aforementioned fields are therefore developed (for example, the CNRS funded a study in 2018). The same goes for any entrepreneur wishing to improve his position in order to avoid group actions, and associations wishing to be assisted in their strategic thinking.

 

 

 

Internationally, cooperation develops through partnerships with other researchers and other centres dedicated to collective actions in general, and more particularly to class actions and group actions.

 

 

 

 

OUR RESEARCHERS

 Maria-José AZAR-BAUD 

Associate Professor at Université Paris-Sud

 Founder of the Observatory

 

 

 Véronique MAGNIER 

 Director of the Institute for Private Law, Ethics, and Patrimony (IDEP)

 

 Sophie MORIN-DELERM 

 Director of Sceaux’s IUT

 

 Hélène AUBRY 

 Head of IDEP’s “contractual law” division 

 

 Nicolas DUPONT 

Associate Professor at Université Paris-Sud

 

 Lydiane NABEC

 Vice-President Digital Policy at Université Paris-Sud

 

Nathalie GUICHARD 

Univesity Professor

 

 Virginie DEMULIER 

Associate professor at Université Paris-Sud

 

  Dominique ROUX

Professor at Université de Reims 

 

Lucie MAYER 

 Head of IDEP’s “Arbitration and litigation” division

 

Yann AOUIDEF

 

Abidi ABDELHAMID

 

Hugo ACCIARRI

 

OUR TEAM

Students of the Faculté JEAN MONNET

 

 

Master 2 Team

 

 Julien ANDRIEU

 Responsible for / In charge of the website’s protection, data protection and GDPR compliance (2017/2018)

 

Benjamin BARATTA

 Responsible for / In charge of the website’s protection, data protection and GDPR compliance (2017/2018)

 

 Bouchra BOUKERMA

 Responsible for / In charge of the legal watch/jurisprudential monitoring

 

 Juliana SFEIR

 Responsible for / In charge of English translation

 

 Lisa PAINAULT

 Webmaster (2017/2018)

 

Pauline REBOLLO

Logo design creation (2017/2018)

 

Master 1 Team

 

Nicolas BOURGEOIS

 Documentary watch

 

Solène DONADIEU

Documentary watch

 

Students from the IUT of Sceaux

 

Students from the “2A Team”, Diploma in Marketing Techniques of Sceaux, responsible for the website’s creation

 

 Mélyna ACHOURI

 

 Léo FILIPPI 

 

 Steffy DELLON

 

 Laura VINOT

 

 Kilian SICHERE

 

 

 

 

 

 

 

GROUP ACTIONS

 

 

 

By Maria-José Azar-Baud

 

Translated by Fiona Rousseau (Master 2 Droit et Contentieux de l’Union Européenne, Paris II Panthéon-Assas) in charge of English translation

 

 

 

After a number of French and European attempts^[1], group actions were finally consecrated by the French Consumer Act of 17 March 2014^[2], which entered into force on 1 October 2014.

 

 

 

The stated objective is compensation for all individual damage suffered by consumers placed in a similar or identical situation, all resulting from a professional’s failure to comply with its statutory or contractual obligations. Compensation is limited to financial losses, resulting from material damage, which flowed from the sale of goods or services or from anticompetitive practices^[3]. In addition, the Public Health Code created a new group action aimed at repairing any harm to individuals’ health and safety^[4] and the Justice 21 Act (for the modernization of justice) further expanded it to fields such as discrimination, environment and GDPR compliance.

 

 

 

Group actions may be brought by approved consumer associations that are representative at national level, with the exception of local associations in overseas territorial communities. Acting directly on behalf of consumers is thus excluded, the stated objective being to avoid the instrumentalisation to which American class actions seem to be subjected. Other associations with standing (locus standi) may apply to court, requesting they be substituted for the initial plaintiff in case of failure on the latter’s part^[5].

 

 

 

The court rules on both the admissibility of the action and the professional’s liability in the same decision, having considered all the individual cases presented before it. The court must also define the group – or the criteria for joining the group –, the damage which can be compensated, the amount of damages awarded or the factors to be taken into account when assessing the extent of compensation as well as the modalities thereof.

 

 

 

With regards to competition law related group actions brought following a final infringement decision handed by competition authorities or jurisdictions at national or European level (so-called follow-on actions), the professional’s failures are deemed irrefutably established.

 

 

 

In every “group trial”, opt-in^[6] being the cornerstone, the court orders advertising measures designed to inform all consumers likely to belong to the group of the decision; such measures are at the expense of the professional and their implementation only takes place once the decision is final.

 

Where the number and identity of all affected consumers is known, a simplified procedure will apply. The professional is sentenced to pay damages to all consumers individually, in a manner specified by the judge. Information is provided for on an individual basis so that everyone “accepts” its compensation directly with the professional involved.

 

Where the information on the affected consumers is not available, accession to the group follows the conditions set by the judge regarding the deadline and the recipient (professional involved, the association or the professional who assists the association). Joining to the group equates to a mandate given to the association for the purpose of compensation, thus enabling the latter to accomplish all procedural acts and take all appropriate steps for damages to be awarded, in the name and on behalf of each individual consumer.

 

 

 

Compensation is awarded in the manner prescribed by the judge and any claim – by consumers represented by the association but not compensated or by the professional – may be made when the case is sent back to the pre-trial judge for the further proceedings.

 

 

 

Rules pertaining to the suspension of individual actions and to res judicata – which applies to all members of the group who were compensated on completion of the procedure – are provided for in the statutes in place.

 

 

 

To this day, less than ten group actions were brought in France since their introduction in 2014. The limited number of actions can be explained by some of the current mechanism’s defects which jeopardise its success^[7]. The opt-in feature could be said to lead associations to select cases depending on the estimated number of consumers likely to join the group. Indeed, a judgment in favour of the applicant, if not followed by a high number of consumers joining, robs the latter of any effectiveness: a court will have sentenced a professional who won’t have to pay damages, or pay only very little. The judgment will thus lack any compensatory and deterrent purpose. It is very unfortunate as the legislator himself could easily have overcome this difficulty by giving the court the possibility to produce a generalised assessment of the damage suffered by the group – sometimes easier to establish than each individual damage – and to allocate the compensation to a cause which is close to that of the initial application (cy-près doctrine^[8]). As such, associations would certainly be less hesitant when selecting their cases, businesses would never retain profit recognised as illicit by the court and a sense of justice will stem for the group trial.

 

 

 

Finally, the association may participate to a “group mediation”. If a settlement is reached, it will then have to be approved by the court who must verify that the said settlement complies with the group’s interests and determine the advertising terms as well as criteria for joining the group as consumers will have to join in order to be compensated^[9].

 

 

 

In some group litigations, favouring alternative dispute resolution mechanisms could prove useful for all parties involved: consumers and their association, the justice system and businesses would all benefit from increased effectiveness.

 

 

 

 

CURRENT GROUP ACTIONS / ONGOING GROUP ACTIONS

 

 

 

By Maria-José Azar-Baud

 

Translated by Fiona Rousseau (Master 2 Droit et Contentieux de l’Union Européenne, Paris II Panthéon-Assas) in charge of English translation

 

 

 

REAL ESTATE

 

 

 

1 - UFC - QUE CHOISIR / FONCIA

 

 

 

• The approved association challenges the invoicing of a notice of payment service.
• Affected consumers: Foncia tenants who were victim of this invoicing since 2009 (318 000 tenants)
• • Amount of the individual damage (valued by the association): 2,30€/month or 27, 50€/per year.
• Day when the action was brought: TGI Nanterre, 1 October 2014.
• Decision to dismiss the action confirmed by the Cour de Cassation: 6 July 2017.

 

 

 

 

 

2 - CONFEDERATION NATIONALE DU LOGEMENT (CNL, www.lacnl.com) / IMMOBILIER 3F

 

 

 

• The approved association challenges a penalty clause of 2% in case of late payment of rent, in the name of 3F tenants who have paid this penalty since November 2009. The applicant valued the individual damage between a couple dozen and a couple hundred euros.
• The action was brought before the TGI of Paris in December 2014.
• Decision: the application was dismissed both by the lower court and on appeal (Court of Appeal of Paris, Division 4, Chamber 3, 9 November 2014, n° 16/05321)

 

 

 

 

 

3 - SYNDICAT DU LOGEMENT ET DE LA CONSOMMATION/CONFEDERATION SYNDICALE DES FAMILLES (SLC-CSF, www.la-csf.org) / PARIS HABITAT-OPH

 

 

 

• The approved association challenges the invoicing of expenses, related to the remote monitoring of lifts, to tenants of the defendant, since November 2011 (around 100,000 tenants) for three years (2011, 2012, 2013). The applicant valued each individual damage at 10€/year per tenant.
• The actions was brought before the TGI of Paris on 14 October 2014.
• A settlement agreement that provided for the repayment of sums already paid in respect of the years 2013 and 2014 through the deduction of rental costs was signed on 19 May 2014.

 

 

 

FINANCIAL MATTERS

 

 

 

1 - CLCV (www.clcv.org) / AXA-AGIPI

 

 

 

• The approved association challenges the inobservance of the 4.50%/year guaranteed compensation rate for the CLER life insurance. It valued each individual prejudice, depending on to the amounts saved, between 1,500€ and 4,000€.

 

 

 

• The group is said to be constituted of CLER contract holders who contracted it before 1 June 1995.
• The action was brought before the TGI of Nanterre on 28 October 2014.
• The admissibility of the action is currently being examined. The subpoena’s formal regularity was examined in the decision CA Versailles, 3 nov. 2016, 16/00463.

 

 

 

2 - UFC-QUE CHOISIR (www.quechoisir.org) / BNP PARIBAS

 

 

 

• The approved association challenges the breach of a promise according to which either the paid capital would be tripled or the entirety of the investment would be reimbursed in the fund (capital guarantee); product “FCP Garantie Jet 3”. The association deemed the amount of the individual damage depended on the victims.

 

• The group is constituted by consumers who subscribed to the FCP through a life insurance contract or an ordinary account in 2001 and who maintained their investment until 19 July 2011 – between 2,000 and 5,000 victims.
• The action was introduced before the TGI of Paris on 18 July 2014 and the first instance judgment was handed in December 2017. The said judgment held the action was admissible but unfounded (TGI Paris, 1^st Chamber group action, 20 dec. 2014, n°16/13225).

 

 

 

3 - CONSOMMATION, LOGEMENT ET CADRE DE VIE (CLCV) / BNP PARIBAS PERSONAL FINANCE (BNP PPF)

 

 

 

• The approved association challenges the marketing of a mortgage loan in Swiss franc, for a rental investment project. Some of the defendant’s commercial practices were allegedly likely to mislead consumers on the safe nature of the loan. The amount of the individual damage varies depending on the amount of the loan.
• The group consists of holders of the “Helvet Immo” mortgage loan contract subscribed between 2008 and 2010 – around 4,655 individuals.
• The actions was brought before the TGI of Paris on 16 November 2016 (http://www.clcv.org/actualites/credit-immobilier-en-franc-suisse-la-clcv-engage-une-action-de-groupe-contre-bnp-ppf.html)
• The pre-trial judge ordered the staying of proceedings until the final decision in the criminal proceedings before the TGI of Paris, remitted to the criminal court of Paris through an ordinance dated 29 August 2017 (TGI Paris, 1^st chamber group actions, 9 nov. 2017, n°17/°1643)

 

 

 

DEFECTIVE GOODS AND SERVICES

 

 

 

1 - FAMILLES RURALES (www.famillesrurales.org) / SFR

 

 

 

• The approved association challenges the marketing of 4G mobile services, calling it a misleading commercial practice as the buyers of a 4G mobile phone is not informed of the coverage’s limits. It applied for compensation of the damage which consists in the difference between the price of a 3G plan and a 4G plan for contracts concluded at the end of 2013.

 

 

 

• The action was brought before the TGI of Nanterre on 12 May 2015. Thus far, the application for declaring the subpoena void was dismissed by the TGI of Paris (1^st chamber group actions, 15 April 2016 n°15/07353) and this was confirmed on appeal (Court of Appeal of Paris, Division 2, Chamber 2, 20 April 2017, n°16/09997). 

 

 

 

2 - FAMILLES RURALES (www.famillesrurales.org) / MANOIR DE KER AN POUL

 

 

 

·       The approved association challenges the practice consisting of the obligation to renew mobile homes to tenants of a land parcel on a campsite.

 

·       The action was introduced before the TGI of Vannes in August 2015.

 

 

 

3 - CLCV / BMW MOTORRAD FRANCE

 

 

 

• The approved association challenges the marketing of motorcycle pieces it deems to be defective. The association values the damage suffered at, at least, 1,000€ (according to information from the INC: https://www.inc-conso.fr/content/laction-de-groupe-consommation-9-actions-introduites-en-deux-ans) 

 

• The group consists in 1,300 consumers.

 

• The action was introduced before the TGI of Versailles in December 2015. The admissibility of the action is being examined (www.clcv.org)

 

 

 

4 - UFC-QUE CHOISIR / FREE MOBILE

 

 

 

• The approved association challenges the marketing of an offer for the provision of internet service because the broadband did not correspond to what was advertised.
• The group consists in 14,100 individuals who subscribed to a plan costing 15,99€ or 19,99€ between January 2012 and October 2015 and whose contract was not terminated, excluding those who benefited from a “commercial gesture”.

 

• The parties entered into negotiations and reached a settlement according to which was to be reimbursed an individual damage of 12€, at the rate of 1€ per month for a year for subscribers  (https://www.quechoisir.org/questions-juridiques-qualite-de-service-mobile-accord-ufc-que-choisir-free-mobile-n43628). 

 

• We unfortunately have no information on the settlement’s approval by a court.  

 

 

 

HEALTH

 

 

 

1 - APESAC-SANOFI (Dépakine)

 

 

 

• The association acted to defend users of antiepileptic called sodium valproate, before being granted approval and before the decree pertaining to the introduction of group action entered into force. The action was thus dismissed (TGI of Bobigny, 1^st Chamber, 5^th section, 17 June 2016)

 

• Subsequently, the association was granted approval and the decree entered into force. The association thus summoned the laboratory in the name of the 2,900 families reunited within the APESAC alleging lack of information and applying for the compensation of the damage suffered by families of children suffering autistic disorders.

 

• The action was introduced on 13 December 2016. The court concluded to the inadmissibility of the action.
• Thus far, a court decision dismissed the application of the applicant calling for evidence to be presented (TGI of Paris, 1^st chamber group action, 21 March 2018, n°17/07001)

 

 

 

2 - OTHER (UN)LIKELY ACTIONS – HEALTH

 

 

 

• Servier Médiator (announced) : appetite suppressant

 

 

 

• Influenza virus type A (H1N1)

 

 

 

• Bayer (Essure)
• • Challenged practice :
  • • Sterilization method commercialised since 2002
    • Reinforced surveillance in 2015
  • Women who were implanted with the virus
  • Group action brought before the Tribunal of Bobigny in April 2017 for medical expertise (women carrying the virus and who used to carry it)

 

 

 

3 - CGT-SAFRAN (announced)

 

 

 

• https://collectif-roosevelt.fr/revue-de-presse/veille-collaborative-flux/safran-visee-par-la-premiere-action-de-groupe-pour-discrimination-syndicale-en-france/
• Formal notice (May 2017) : salary difference (payroll difference) for unionised workers (200 to 400 euros difference for an equivalent position)
• Consultation period
• Group action

 

 

 

4 - MEGAFICHIER TES "HALLOWEEN"

 

 

 

• « Collective action » – 30 November 2016 – Action brought on the ground of ultra vires
• Annulment of the decree TES of 30 October 2016 – Data from identification cards and passports of 60 millions of French citizens.