Institute of Global Law

French Legal News

May 2005

In a referendum on 29 May 2005, the French people rejected the Draft European Constitution. The Constitution will therefore not be ratified by France. In the wake of the ballot, Prime Minister Jean-Pierre Raffarin resigned and former Minster of the Interior Dominique de Villepin was appointed his successor on 31 May 2005.

On 13 May 2005, a decree pursuant to the 26 January 2005 Act relating to civil procedure and the organisation of the courts was published in the Journal officiel. The decree confirmed that, in general, Juges de proximité will handle trivial claims of up to € 4,000. However, claims of less than € 4,000 which relate to certain specific areas detailed in the decree will be heard by the tribunaux d’instance. In such cases, decisions of the tribunaux d’instance will not be subject to appeal. Where claims relating to these areas are between € 4,000 and 10,000 the tribunaux d’instance will again preside but decisions will be subject to appeal. Claims in excess of € 10,000 will be heard by the tribunaux de grande instance.

On 11 May 2005, the lower house of the French Parliament approved a text intended to promote sexual equality in pay and working conditions. Under the text, employers are expected to initiate negotiations and agreements by mid-2006; if they fail to do so, employee representatives may make an official request to begin negotiations and, in case of persistent failure by the employer, a commission comprising representatives of both employers and employees will be established by the Ministry of Employment. A national conference is to draw up conclusions from these negotiations by 2008. In addition, specific provisions under the text are designed to counteract the adverse effects of maternity leave on salary scales. Women returning to work will now be entitled both to a rise in salary equal to any increase granted to employees collectively during their maternity leave and to a rise equal to the average increase granted to individual employees. Firms of less than 50 salaried employees will receive financial support from the state for the replacement of employees on maternity (or adoption) leave.

On 19 April 2005, the Government issued guidelines relating to the interpretation of the 9 March 2004 Act on plea bargaining. The guidelines reiterated the Government’s position, as stated in September 2004, that the attendance of the public prosecutor at the second stage of the plea bargaining procedure (after the accused has confessed) was optional. In an opinion issued on 18 April 2005, the Cour de cassation had held that attendance was compulsory. Pending nullity proceedings, the French Bar Society instigated emergency proceedings in the administrative courts requesting that the application of the two ministerial texts be suspended. On 11 May 2005, the Conseil d’Etat decreed that the provisions relating to optional attendance should be temporarily set aside until the matter was decided on its merits.

On 10 May 2005, the first civil section of the Cour de cassation confirmed and clarified case law relating to the balance between image rights and freedom of expression. The case concerned two police officers who brought a complaint relating to the publication of photographs taken whilst they were participating in a reconstitution of a robbery. The Cour d’appel had found in favour of the officers, highlighting the fact that they were perfectly recognisable and that publication had taken place without their consent. However, the Cour de cassation overturned this decision, confirming decisions of 2000 and 2001 which gave precedence to freedom of expression. The fact that the photograph related to a newsworthy event and was taken in a public place and/or in a professional context helped to sway the balance in favour of freedom of expression, as did the fact that the photograph did not focus specifically on the complainants.

In French law, parties to chain contracts may sue in contract despite the absence of a directly binding contract between the plaintiff and the defendant. Thus, a site-owner may sue his contractor’s contractor in contract. Similarly, a consignor may sue the final carrier of goods in contract. The contractual nature of such claims has been confirmed by the 31 December 1975 Act (subcontracts) and the 6 February 1998 Act (known as loi Gayssot; law of carriage). On 10 May 2005, the commercial section of the Cour de cassation had to decide whether such claims could be brought for contracts entered into before the legislation was passed. The Court found that the 1975 Act could be invoked in such circumstances because the right to sue derived from statute rather than contract. However, it refused to apply the same reasoning to claims brought under the 1998 Act on the grounds that here the right to sue derived from contract.

On 30 June 2004, the Government decreed that Pentecosta Monday, traditionally a public holiday in France, would become a normal working day. The move sparked considerable popular resentment but the Government claimed that it was necessary for salaried employees to work an extra day without any financial compensation in order to fund recent legislation granting increased benefits to the elderly and the disabled. This charitable justification failed to impress and emergency proceedings were instigated before the Conseil d’Etat on the grounds that the ‘new solidarity working day’ infringed basic freedoms. On 3 May 2005, the Conseil d’Etat held that requiring employees to work an extra day out of solidarity towards the elderly and the disabled did not constitute a serious and obviously illegal infringement of the individual freedom to work, freedom of religion, freedom of assembly, or privacy rights.

April 2005

A proposal relating to patients’ rights and the end of life was adopted by the upper house of the French Parliament on 12 April 2005 and became the 22 April 2005 Act. Far from legalising euthanasia, the text merely clarifies the position on withholding treatment which is disproportionate and can only lead to the artificial prolongation of life. The procedure for withdrawing treatment varies according to whether or not the patient has lost consciousness. A patient who is conscious may refuse to undergo treatment for a life threatening and terminal condition provided that he/she is made fully aware of the consequences of his/her decision (art. L. 1111-10 of the Code of Public Health). If the patient is not able to express his/her wishes, medical staff must make a collegiate decision as to whether to withdraw treatment in consultation with relatives or the patient’s designated representative. Under the new article L. 1111-6 of the Code of Public Health, a patient may designate in writing a “trustworthy person,” for example a relative, doctor or close friend, who should be consulted in the event of he/she becoming unable to express his/her wishes. A general provision (incorporated under art. L. 1110-5 of the Code of Public Health) also purports to help avoid disproportionate and unnecessary treatment. The clause provides that the primary obligation of doctors is to relieve patients of pain, even at the expense of life expectancy, so long as either the patient, the person designated as trustworthy, or a close relative is informed.

Following a request from President Jacques Chirac, a working group was established on 13 April 2005 to investigate the possibility of introducing a class action in French law. A report is to be submitted to the National Committee of Consumers by October 2005.

On 22 April 2005, the Cour de cassation in chambre mixte clarified the concept of “faute lourde” in contract law. A defendant who is guilty of faute lourde cannot avail himself of any contractual clause excluding or limiting his liability. In two cases known as Chronopost 3, the Cour de cassation was called upon to consider whether non-performance of an essential obligation under a contract amounted to a faute lourde. The company Chronopost, which specialises in quick deliveries, had failed to deliver a letter on time and then tried to limit its liability by relying on a limitation clause in the contract. In Chronopost 1, the Commercial section of the Cour de cassation set aside the clause, holding that it conflicted with an essential obligation under the contract and that, consequently, it deprived the contract of its basis. In Chronopost 2, however, the Cour de cassation held that the clause could not simply be set aside but had to be replaced by a corresponding clause found in standard transport contracts, which was drafted by the Administration, and applicable in the absence of contrary provisions by the parties. This reasoning ironically led to the insertion of a clause identical to the one which had been set aside in Chronopost 1. In Chornopost 2, the Court suggested that the only way to avoid the application of the clause was to prove that the defendant was guilty of faute lourde. This was the issue considered in Chronpost 3. In previous decisions, the first civil section of the Cour de cassation had considered that non-performance of a substantial contractual obligation equated to faute lourde. By contrast, in Chronopost 3 the Cour de cassation held that late delivery could not amount to faute loure even in the absence of an explanation for the delay and notwithstanding the fact that timely delivery was considered to be an essential obligation in Chronopost 1.

To what extent can an employer rely on CCTV footage to establish that an employee has been guilty of misconduct? On 19 April 2005, the social section of the Cour de cassation held that proof obtained from CCTV was admissible and did not violate privacy rights since the cameras had not been installed specifically in order to spy on employees but only to ensure safety at the entrance to the building. This decision constitutes another exception to the general prohibition – contained in article L. 121-8 of the French Labour Law – on the use of information obtained through covert surveillance of salaried employees. A previous exception had already been formulated in two 2001 cases whereby employers are permitted to install CCTV in storage areas without notifying salaried employees. Thus, where employers can claim that the main objective behind installing covert surveillance was to ensure safety on the premises, incidental recording of misconduct by employees may be used in redundancy proceedings.

On 19 April 2005, the commercial section of the Cour de cassation clarified the sanctions attaching to a manager’s failure to present his associates (in compliance with article 1856 of the French Civil Code) with a yearly written report on his management. Decisions taken in the absence of such a report will only be held void where damage has been suffered as a result of the irregularity.

On 18 April 2005, the Cour de cassation rendered an opinion on the operation of plea bargaining, which was recently introduced in French criminal procedure by the 9 March 2004 Act. Under the new procedure, the public prosecutor, the accused (having first admitted his/her guilt), and the accused’ barrister attend a preliminary hearing. Judicial proceedings then follow, whereby a judge may either approve or reject the criminal sanctions requested by the public prosecutor. The question put to the Cour de cassation was whether the public prosecutor was required to attend the judicial proceedings. Surprisingly, the Cour de cassation ruled that such attendance was compulsory. This procedural burden runs counter to the main objective behind the plea bargaining process, which is intended to increase simplicity and efficiency. The grounds for requiring the public prosecutor’s presence at this stage are unclear as it seems the effect will be to replicate the debate that has already taken place at the first stage.

According to a decision of the social section of the Cour de cassation of 13 April 2005, a clause in an employment contract requiring that employees live on work premises may be held void where it is established that employees can fulfil their work commitments whilst living outside the premises.

March 2005

As expected, proposals relating to the reform of working hours were adopted by the lower house of the French Parliament on 22 March 2005 and became the 31 March 2005 Act on the reform of company working hours. The Act introduces more flexibility by allowing salaried employees to extend their working hours in exchange for extra pay or time off in lieu. Some critics have argued that it thereby reduces the level of protection available to employees. In addition, the Act extends the period of exemption for small firms (with up to 20 salaried employees) from the statutory 35-hour working week. When legislation on the 35-hour working week was first passed such firms were allowed to continue with the old 39-hour week for a prescribed period. This period was initially extended to the end of 2005 and the Act now extends it once more until 31 December 2008.

On 29 March 2005, the Upper House of the French Parliament adopted a text on the prevention and punishment of domestic violence. Traditionally, penalties have been more severe in the case of violence against a spouse or an unregistered partner. However, similar penalties will now apply to violent acts between registered partners, ex-spouses, ex-unregistered and registered partners. The new text also states that rape of a spouse or a registered or unregistered partner will be punished as severely as any other rape. This merely confirms the approach already developed by the courts. A more unusual and potentially more practical provision makes it an offence to withhold a partner’s ID or residence permit. While these measures relate to the punishment of domestic violence, on the preventative side the text introduces new powers to prevent a violent partner from returning to the common home. Finally, despite the lack of any obvious link to the issue of domestic violence, the text also raises the legal age of marriage for women. In the interests of equality, the minimum age for marriage will now be 18 for both men and women.

On 9 March 2005, the Lower House of the French Parliament approved a text on insolvency. To enable early detection of financial difficulties, the text reinforces controls on company accounts and introduces a new preventive procedure (in addition to the existing judicial procedures of administration and liquidation). Under the new procedure, to be known as the rescue procedure, a company’s creditors are invited to agree to reorganise debt instalments in order to enable the firm to continue (at least partially) its business. The main innovation is that the procedure is available before the firm actually goes bankrupt. As well as introducing a new procedure, the text also extends insolvency law (which previously only applied to companies) to freelance professionals. There are no major changes in the procedure of liquidation itself except that provision is made for a simplified procedure (up to a maximum of one year) for simple cases. The main thrust of the initial government paper has thus been adhered to. The Lower House also accepted government recommendations on bankers’ liability; for the sake of economic stability, bankers who have granted unreasonable loans will no longer be liable (except where there is fraud, obvious involvement in the management of the debtor’s business, or where disproportionate securities are demanded as consideration for a loan). Whilst consistent with the philosophy behind the new insolvency text, this limitation of bankers’ liability is a major exception to the basic principles of French Tort Law whereby any fault or negligence that causes damage should lead to liability (article 1382 of the French Civil Code).

In a judgement of 22 November 2001, the European Court of Justice held that protection against unfair contract terms provided under the 5 April 1993 EU Directive on consumers applied only to individuals. By contrast, on 15 March 2005 the first Civil Section of the Cour de cassation held that protection could be extended to a professional body. The 1 February 1995 Act which incorporated the EU Directive into French Law relied on the concept of the “non-professional” – seemingly a broader concept than that of a “consumer” as employed in the Directive. The Cour de cassation therefore found that, since non-professionals and consumers are distinct concepts, the restrictive approach adopted by the European Court did not need to be followed. Moreover, a higher degree of protection would comply with the Directive which only established a minimum standard. However, one might argue that these minimum standards were granted to consumers and not to non-professionals. In any case, professional bodies and companies will effectively only benefit from the protection against unfair terms when acting outside their professional capacity. Here the professional body ultimately did not benefit from protection against the unfair contractual terms because the contract (hire for computer and IT equipment) was said to have been concluded for the purposes of the professional body’s business.

On 9 March 2005, the Social Section of the Cour de cassation clarified the status of temporary employees employed to cover the leave of absence of a permanent employee. The French Labour Code states that such temporary contracts end upon the return of the absent employee (article L. 122-1-2, III) but does not specify what happens when the absence is prolonged on different grounds. In this case, a temporary worker was employed to replace an employee on maternity leave but continued in post when the latter then took annual parental leave. The Cour d’appel took the view that the prolongation of the temporary contract beyond the end of the initial leave of absence had the effect of transforming the temporary contract into a permanent one. However, the Cour de cassation disapproved of this reasoning and held that any prolongation of the permanent employee’s leave of absence would simply postpone the termination of the temporary contract, no matter what the cause.

On 9 March 2005, the third Civil Section of the Cour de cassation ruled that, where a contract of sale is void because the vendor is found to have had no rights in the property, only the purchaser can invoke the invalidity of the contract and not the alleged owner. In this case, a son challenged the sale of a block of flats by his father’s executors arguing that he had acquired inheritance rights to the property on his father’s death. The Court of Appeal had allowed his claim that the contract of sale was therefore void. However, the Court de cassation quashed this decision and ruled that the heir could not invoke the contractual remedy of nullity of sale as this action was reserved for the other contracting party, the purchaser, and could therefore only claim under inheritance law (action en pétition d’hérédité)

What are the civil sanctions available where a lender advances a loan without a valid licence for banking activities? This question was addressed by the Cour de cassation in its full formation on 4 March 2005. The Court’s decision approved that of the first Civil Section of the Cour de cassation which – unlike the Commercial section – held that the lack of a licence did not render the loan void. However, the ambit of the solution is unclear and many questions remain unanswered. Firstly, it is unclear whether the decision will apply to all irregularities (e.g., where there is no licence at all) or only to cases where the loan was advanced outwith the scope of a valid licence. Secondly, does the decision apply to loans granted to private persons? In this case, the loan was advanced to a professional but would loans granted to private persons be treated in the same way and so easily escape the protective requirements of a licence? Finally, should the solution extend to acts done in violation of other professional licences?

February 2005


On 1 February 2005 and 15 February 2005, the two Houses of the French Parliament approved amendments to the French Constitution. Most of the amendments followed a decision of the Conseil constitutionnel stating that several provisions of the Constitution (relating to the delegation of powers) would require amendment before the European Constitution could be ratified by France. However, Parliament also approved two further amendments. First, amidst fears that political controversy over the possible accession of Turkey to the EU would undermine the campaign for a “Yes” vote in the referendum on the European Constitution, an amendment was passed providing that French ratification of any future accession treaties would require a referendum. Second, an amendment was passed requiring the Government to forward any EU proposals falling under the ambit of French statute law to the Houses of Parliament for discussion. Once the amendments were agreed a qualified majority (3/5) of Parliament sitting in full (en congrès) approved the entire Constitution (as amended) on 27 February 2005. The alternative mechanism for approval would have been by way of a referendum. The way is now open for ratification of the European Constitution and a referendum will be held on 29 May 2005.

On 24 February 2005, the Government introduced regulations to promote the reliability and quality of performance of tour operators and providers of short-term holiday lettings.

On 24 February 2005, the Government exercised powers conferred on it under the 9 December 2004 Act (on the simplification of legislative texts) and issued an ordinance incorporating the EU directive on financial securities into French law. From the perspective of French commercial law, the most novel aspect of the provisions is undoubtedly the near total lack of formalities required in the setting up of financial securities by public bodies or bodies subjected to State control. A written statement is required but this can simply be in the form of an email.

On 19 February 2005, the Government issued an ordinance on the reform of the French executive. Under the reforms, seven of the existing departments will be replaced by three new departments under the authority of the Prime Minister. The new departments will have a threefold mission: (1) to adapt public structures to the objectives and challenges of decentralisation; (2) to improve phone, email and over-the-counter services to citizens; and (3) to enhance the use of technology and especially computers in the day-to-day running of State affairs.

On 17 February 2005, the Government issued an ordinance incorporating the EU directive on the sale of consumer goods (approved 19 May 1999) into French law. Incorporation of the directive had given rise to heated debate as to which Code should house the new provisions: the Civil Code or the Code of Consumer Law. The debate raised questions regarding the scope of the new provisions and the fate of the two existing remedies (garantie des vices cachés and défaut de conformité) available under the Civil Code to all buyers of goods. If the new provisions were enshrined in the Civil Code, their scope would extend to all contracts and could possibly replace the two existing remedies. If, however, the new provisions were enshrined in the Code of Consumer Law, their scope would be limited to consumer contracts and they would have to be applied in combination with existing remedies contained in the Civil Code. On 17 February 2005, the opportunity for root and branch reform of French sales contract law was rejected in favour of the latter approach and the new provisions were enshrined in the Code of Consumer Law. The only amendment to French sales contract law relates to article 1648 of the Civil Code, which previously barred action on the basis of a hidden defect (garantie des vices cachés) once a ‘short delay’ had elapsed. The indistinctness of the notion of ‘short delay’ was a continual source of litigation and has now been replaced by a specific time limitation of two years. Under the new provisions, consumers will be entitled to claim either repair or replacement of goods for up to two years after the purchase date and where they do not comply with (1) the specifications of the contract; or (2) the qualities which the buyer could reasonably have expected; or (3) any special quality which the buyer specifically had in mind and which was known by the seller. There will be a rebuttable presumption of non-compliance where the defect arises within six months of the purchase. The purchaser may choose between the two forms of remedy (repair or replacement) but his or her choice may be disregarded by the seller where the chosen remedy would involve a disproportionately high cost in comparison to the value of the goods or the importance of the defect. Where both repair and replacement are impossible, the purchaser may claim termination of the contract unless the defect is very minor. Provision is also made for the buyer to claim damages – a remedy which is not provided for in the directive.

On 21 February 2005, the Court of Appeal in Paris rejected a request from the public prosecutor that an investigation be carried out into the possible causes and consequences of the wrecking of the oil spill caused by the Erika oil tanker off the shore of Brittany more than five years ago. If the request had been granted, the trial could have been postponed for several months or even years.

On 15 February 2005, the first civil section of the Cour de cassation restated its decision in the Mitterand case in 1999 limiting privacy rights to the lifetime of the victim. The right to privacy cannot therefore be claimed on behalf of a deceased person.

On 8 February 2005, the Commercial Section of the Cour de cassation confirmed a decision rendered on 14 October 1997 and found that a contract concluded between a beer distributor and a beer provider was void for a quasi lack of consideration from the provider. In the recent case, the defendant provider offered to act as a secondary guarantor of one of the claimant distributor’s loans in exchange for a commitment that the distributor would only buy beer (for a set low quantity and a period of seven years) exclusively from the defendant. In reaching its decision, the Cour de cassation commended the Cour d’appel for reasoning that, since he was immune from any financial risk, the defendant had failed to offer any tangible consideration for the stringent contractual duties imposed on the claimant.

On 8 February 2005, the first civil section of the Cour de cassation drew a distinction between agreements whereby spouses give up a proportion of the allowance granted to them in advance of any divorce proceedings and agreements relating to allowances already granted by a judge. Whereas the former are illegal, the latter were held to be valid.

On 9 February 2005, the third civil section of the Cour de cassation held that a tenant who waited for eight years before alerting his landlady to a sinking floor was liable for contributory negligence. As a consequence, the damages awarded to him were reduced.

On 1 February 2005, the first civil section of the Cour de cassation confirmed that the denial of justice in a plaintiff’s country of citizenship constituted a valid ground for jurisdiction by the French courts. The case concerned a private person of Israeli nationality who was denied the opportunity to petition the court for the appointment of an arbitrator after the Israeli State failed to appoint one.


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