France Looks to Class-Action Lawsuits to Boost Consumer Rights
April 12 (Bloomberg) -- French government ministers said they will begin the process of legalizing class-action lawsuits, which allow claims on behalf of a group of people, in a bid to strengthen consumer rights.
``We want to devise a system that protects consumers as well as companies,'' Finance Minister Thierry Breton said at a press conference in Paris that was also attended by Justice Minister Dominique Perben and Christian Jacob, the minister for small businesses. The officials backed plans to form a working group of lawyers, companies and consumers to propose legislation.
French President Jacques Chirac pledged in January to introduce mass civil suits by the end of this year. The U.S. Congress meanwhile has been trying to curtail such claims by approving a bill in February to move most class-action suits from state to federal courts. French lawmakers may be able to strike a better balance than in the U.S., lawyers said.
``Class actions are a formidable tool to establish a counterweight to companies' power,'' said Francis Caballero, a Paris-based lawyer and a professor of civil law at Nanterre University who drafted a bill to introduce class-action lawsuits in France in 1986. ``We just have to make sure we avoid the excesses they have in the U.S.''
One of the goals of the group will be ``to avoid an excessively litigious society,'' Breton said. ``We'll be looking at the experience of other countries, but we want to take into account the situation in France.''
October Deadline
The Ministry for Small Business will set up the working group to study how to implement class-action suits, Jacob said. The group will produce a document by October, as well as an update on its work ``before the summer.''
Consumers in France must file lawsuits against corporations individually. While consumer groups can sue companies, the judgments in such cases are on their rights in principle.
A class-action law would enable courts to decide issues more quickly and less expensively by judging them once and distributing any damages to everyone affected, Caballero said. France should address concerns that have led to abuses in the U.S., he said.
Fear of a class-action lawsuit against Merck & Co., for example, prompted a 27-percent plunge in the company's shares on Sept. 30, 2004, after the drugmaker announced its painkiller Vioxx may be responsible for heart attacks in patients who had been on treatment for more than 18 months.
To contact the reporter on this story:
Gabriele Parussini in Paris at gparussini@bloomberg.net.
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