Access to justice and the new French Act on the duty of care: main opportunities and challenges for plaintiffs
In March 2017, France took a landmark step to implement human rights due diligence through legally-binding legislation. This presents a unique opportunity to prevent risks of abuse linked to corporate activity while providing easier access to remedy for victims. However, the devil lies in the details, as this legislation does not address some existing problems and creates uncertainty as to corporate liability standards.
After years of a difficult debate between the government, business lobbyists and NGOs, France finally adopted Act 2017-399 (Act on the duty of care)*, which creates a new type of duty of care for multinational enterprises (‘MNEs’). In a nutshell, parent and controlling companies of MNEs, which are headquartered or registered in France and are above a certain size, must establish and implement a ‘vigilance plan’ (plan de vigilance). This plan must contain due diligence measures to identify and prevent potential human rights abuses, human health and safety risks, and environmental damage. Importantly, if a company neglects to effectively draft and/or implement a vigilance plan, a court can impose fines and order compliance.**
Perhaps more interesting, the Act on the duty of care goes beyond a preventive approach, as it also incorporates an access to justice component. It inserts a new Article L225-102-5 in the Commercial Code, which enables courts to hold MNEs liable in tort law for any damage to humans or the environment arising from the failure to draft and implement a vigilance plan. The law therefore creates an opportunity for victims of business abuse to obtain remedy. This pragmatic interlinkage of human rights due diligence and access to justice should be praised in view of the difficulties victims regularly face when suing MNEs.
The Act on the duty of care could further enable the development of civil litigation against MNEs in France. So far, victims have mainly used criminal proceedings to hold MNEs liable for human rights abuse or environmental damage. Choosing criminal courts over civil courts is quite common in France, especially when bringing strategic litigation. However, criminal proceedings present a number of disadvantages for victims, as they are usually drawn out affairs, and there is no guarantee that victims will be compensated for the harm they have suffered. Furthermore, prosecutors have been quite hostile to litigation against French companies for abuse taking place in the context of their activities abroad. In such a context, Article L225-102-5 of the Commercial Code is likely to enable faster and more efficient access to remedy before civil courts. Moreover, any person who has a legitimate interest, within the meaning of tort procedure, can bring a liability claim. The scope of application is therefore broad enough to include victims of business abuse taking place both in France and abroad. These two aspects are likely to make it easier for victims to have access to remedy.
At the same time, some aspects of the Act on the duty of care are likely to create obstacles to victims when seeking justice. For instance, the act does not create an obligation of result for companies (i.e., cause no harm), instead imposing an obligation of means (i.e., the production and implementation of a vigilance plan to prevent harm). This aspect raises various challenges for victims. First, the burden of proof will remain on victims, placing them at a clear disadvantage in civil proceedings against MNEs. Past cases against MNEs have shown that MNEs are usually in possession of evidence demonstrating their liability. When the legal system does not provide fair rules on disclosure and production of evidence, victims generally struggle to access information crucial to the justification of their claims, limiting their ability to bring claims or be successful in courts.
Second, it is unclear how a MNE’s liability might be triggered under the legislation. The Act on the duty of care provides that the breach of the MNE’s obligations regarding the adoption and implementation of due diligence measures will engage its liability. However, it does not establish a standard to determine whether the MNE has complied or not with its obligations, and the French government has not adopted any decrees that could provide such a standard, although it has discretion to do so. Furthermore, there is currently no official guidance detailing what the vigilance plan must cover and how it should be implemented. Ultimately, these aspects are left to courts and, more worryingly, to MNEs themselves. A parliamentarian report used to prepare the original bill explicitly provides that, ‘[u]nder the supervision of the judge, due diligence measures to identify and prevent the occurrence of risks are left to the discretion of the company according to the circumstances of law and fact in which they are intended to be applied. Companies retain some power to determine the standard that will be applied to them […].’*** In future litigation, the absence of a clear standard regarding the scope of corporate obligations is likely to create uncertainty for victims on how to demonstrate the existence of a breach.
The first vigilance plans were only published at the beginning of 2018. It is therefore too early to assess the concrete impacts of this new legislation on access to justice. However, one should hope that vigilance plans will do more to ensure accountability, rather than provide an opportunity for MNEs to shield themselves from liability, when their wrongful conduct causes harm to communities and the environment.
* Loi No. 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre.
**For a description of the Act, see Sandra Cossart, Jérôme Chaplier and Tiphaine Beau De Lomenie, ‘The French Law on Duty of Care: A Historic Step Towards Making Globalization Work for All’ (2017)2 Business and Human Rights Journal 2, 317.
***Rapport n° 2628 fait au nom de la Commission des lois constitutionnelles, de la législation et de l’administration générale de la République sur la proposition de loi (n° 2578), relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre (11 March 2015), 31-32.
Dr. Virginie Rouas is a Post-Doctoral Research Associate at the School of Oriental and African Studies (University of London) and a Legal Advisor at Milieu, a Brussels-based consultancy specialized in EU law. She wrote her doctoral thesis on access to justice in France and the Netherlands in the context of business and human rights litigation.