French Class Action

Transcription

French Class Action

IAG Specialist Litigation Bulletin
May 2014
This is the second edition of the Specialist Litigation Group's quarterly newsletter featuring
litigation developments from around the globe. If you are interested in submitting articles for
future editions please contact Ron Kravitz or Daden Hunt on the contact details below.
Contributors to this bulletin:
Sophie
DecheletteRoy
Sophie
is
a
member of the
Technical
Litigation
and
Industrial
Risks,
Competition
and
antitrust
Law, Distribution
Law,
Business
and
Commercial
Law team at
Colbert avocats
d’affaires.
French Class Action
After many years of debates, the French Law on Consumer
Protection “Loi Hamon”, hereafter the “French Class
Action”, which entered into force on March 17th, 2014, has
finally introduced a “Class Action” in French law.
The goal is clearly to rebalance power between
professionals and customers by reinforcing consumer
protection against pecuniary losses resulting from anticompetitive practices, without reproducing the excesses of
class action as seen in the USA.
This is why we call it “French Class Action”, as opposed to
the American model and other class action mechanisms in
Europe.
Some people say that introducing this type of claim in
French law was necessary, and that it is bound to improve
consumer rights. On the contrary, others say that it is the
“Canada Dry” of civil liability: it looks like it, it even tastes like
it, but it is not it…
Main characteristics of the French Class Action
The French Class Action
mechanisms in many ways:
distinguishes
from
other
Restrictive and identified actors – Consumers may only
bring their claim through officially recognised consumer
protection associations. So far, only 16 associations are duly
authorised for this purpose. Lawyers are not authorised to
represent consumers groups. This has been highly criticised
by the National Council of Bars, without success. Lawyers
will therefore represent an authorised association before
the court;
IAG, 3a Westgate, Oakham, Rutland, LE15 6BH, United Kingdom - www.iaginternational.org
Tel: +44 (0) 1572 724733 Fax: + 44 (0) 1572 757797 Email: [email protected]
Limited scope – Class actions shall only be available to
consumers who have been wronged by one or several
same professionals in the context of a sale of goods, a
provision of services, or an infringement of competition law.
Health and environmental issues therefore fall outside the
scope.
Furthermore, consumers can only obtain financial or in kind
compensation of individual material damage. Punitive
damages and non-pecuniary losses - such as bodily harm
or moral harm - therefore also fall outside the scope of the
French Class Action (other types of actions however remain
available for such claims).
Opt in system – In accordance with the adage “no one
shall plead by proxy”, the French Class Action exclusively
provides for an “opt-in” system. This means that, contrary to
the American framework, consumers shall not be added
automatically in the class with an “opt-out” choice. They
need to express their consent to be part of the group.
Jurisdictions – Class actions shall resort to the exclusive
jurisdiction of civil courts (French Tribunal de grande
instance).
Specific features for competition law violations
French Class Actions pursuant to competition law violations
are based on a “follow-on” model. They may only be
introduced on the basis of a decision by a jurisdiction or
competition authority of the EU or an EU Member State
which can no longer be appealed against as to the finding
of the professional’s breach (within 5 years).
This system is bound to undermine the advantages of
French cartel leniency programs. Indeed, as long as the
breach is asserted by a jurisdiction, grounds for a class
action is available. Under the French leniency framework
program, an undertaking which has participated in
anticompetitive agreements or concerted practices,
informs the competition authority, in exchange for immunity
and fine reduction. Such applicants therefore obviously do
not dispute their breach this offers consumer associations a
spoon-fed cause of action.
Procedure
Basically, indemnification through a class action can be
reached through three types of proceedings.
First, a mediation procedure.
The parties reach an amicable settlement, defining the
means of compensation, the time limits to opt-in, and the
publicity measures that shall apply. Upon court approval,
the settlement is enforced.
This alternative dispute
resolution is bound to allow consumers to get a faster and
more efficient response, while at the same time ensuring
that the terms of the settlement are fair.
Secondly, a standard judicial procedure.
In a first decision called “judgment of liability”, the court
rules on the conditions of admissibility of the class action
(i.e. whether or not the group of consumers is entitled to
such claim) on the basis of individual cases submitted by
the association. The court further defines the eligible group
of consumers (who may opt-in), circumscribes the
professional’s liability, decides on the amount of
compensation or the applicable methods of calculation,
determines the practical means for consumers to join the
group, together with the means of publicity to invite
consumers to opt-in, and determines the time limits for this
purpose. For this purpose the court can order all necessary
investigatory and interim measures.
In a second judgment, the same court addresses - as
necessary - “implementation” issues such as difficulties of
enforcement.
Finally, a simplified judicial procedure.
In cases where the identity and number of consumers are
identified, and the amount of damages is identical or
follows identical criteria, the court may, in a single
judgment, rule on the undertaking’s liability and order that
consumers be directly and individually compensated
(within a time limit and following the terms detailed in the
same decision).
Many issues and uncertainties concerning this new class
action require further clarification. The upcoming
implementing decree will address them.
However, concerns on the opportunity of introducing such
an action in French law seem not to be alleviated so soon.
Indeed, the scope of the French Class Action obviously
turns out to be very narrow, and we shall wait for case law
to evaluate its impact on the French legal system. A first
governmental report on the enforcement of French Class
Action is due by 2017: the question of extending its scope,
in particular to health and environment, will certainly
provide fuel for new debate.
James Miller
James
is
a
member of the
Commercial
Litigation team
at SFMS Law.
Mobile Devices and Remote Access: Balancing
Productivity with Liability
The digital age has witnessed the advent of mobile
electronic devices - smartphones, tablets, PDAs, and the
like - offering employers the opportunity to increase
productivity as never before. Yet as employees increasingly
utilise mobile devices to work or communicate remotely
during “off-the-clock” periods, a tide of wage and hour
cases resulting from the use of such devices marks a new
trend in labour-employment class action litigation.
Wage and hour cases typically are brought under the Fair
Labor Standards Act (“FLSA”, 29 U.S.C. § 201, et seq.) or
concomitant state laws, which provide guidelines for
determining the eligibility of workers to receive overtime
compensation and the work-related activities qualifying for
the same.
Eligibility for overtime compensation is most easily
addressed within the context of rules which exempt certain
segments of employees from the receipt of overtime.
Exemptions generally apply to salaried employees and
“white collar” employees, so long as they are
compensated above the minimum wage on a per-week
basis (Id. At § 213(a)-(b)). Such employees are generally
excluded from all overtime consideration and, thus, have
not participated in the class actions discussed herein.
Work outside of “on-the-clock” hours is delimited by a de
minimis doctrine and standard of “indispensability”(29 CFR
§ 785.13) - in other words, whether or not the “off-the-clock”
work is substantial and essential to an employee’s job
function. Additionally, state laws - in contrast to federal
statutes (i.e. FLSA) - represent an important factor in
determining the eligibility of workers and work activities for
qualified overtime compensation.
It is important to note that employers may not absolve
themselves of the duty to compensate for overtime by
waiver or claim that the work was not desired - any work
completed for the benefit of the employer must be
compensated (Id. At § 785.13). Recent case law suggests
that the courts have and will continue to take this guideline
seriously.
In Allen v. City of Chicago, Case No. 10-CV-03183 (N.D. Ill.
May 24, 2010), a group of police investigators were issued
BlackBerry smartphones and, accordingly, answered calls
and emails during “off-the-clock” periods in excess of the
de minimis amount (either by isolation or aggregation). The
Defendant, the Chicago Police Department, had no
written policy describing BlackBerry use, though Plaintiffs
alleged that there was an implicit sense of obligation. The
class achieved conditional certification and the case is
pending in the Northern District of Illinois.
In Rulli v. CB Richard Ellis Inc., Case No. 2:09-CV-00289 (E.D.
Wis. Mar. 13, 2009), a maintenance worker for the
Defendant company filed a complaint on behalf of all
employees who were issued BlackBerry devices and were
required to attend to messages while “off-the-clock.” The
Court certified an “opt-in” class before the case was settled
under confidential terms.
Paul
Matthews
Paul
is
a
member of the
Dispute
Resolution team
at Birketts LLP.
Contractual duty of good faith
Parties in dispute often expect a Court to interpret their
contracts on the basis of fairness. This article tells you that
this is not often the case.
From early on in our lives, a sense of fairness is something
that we are encouraged to develop and hold dear. It can
come as some surprise, therefore, to discover that in many
areas of the law, and in particular the law of contract,
fairness
has
almost
no
place
at
all.
Historically, the English Courts have declined to adopt any
general principle that parties to a commercial contract
have a legal duty to act in ‘good faith’. This contrasts with
the approach taken by other jurisdictions. However, the
desire of judges to do justice between the parties before
them has led to a willingness to find ways of construing
contracts that produce results consistent with such a duty,
as
has
happened
in
recent
case
law.
Contractual rights and liabilities are determined by the
bargain struck by the parties and cannot (save in
exceptional circumstances) be avoided, or even
mitigated,
by
unforeseen
events
or
innocent
misjudgements. The courts are not concerned to attribute
blame or temper the benefits of the undeserving. Contracts
are concerned with the allocation of risk and reward and
form the backbone of our commercial law which is
designed to promote trade. The law of contract strives to
provide a simple, well understood framework for the
enforcement of promises freely negotiated. Any sense of
doing justice between the parties is welded to the principle
of holding them to the bargain they have made.
However, whilst Courts cannot re-write the terms of a
contract, they are permitted to imply terms that fill the gaps
that inevitably get left when a contract is made, and they
will assume that such terms will have been made assuming
mutual good faith. Similarly, where a contract confers a
discretion on one party the court will imply a term that this
must not be exercised arbitrarily, capriciously, unreasonably
or irrationally. However, express provisions in the contract
remain sacrosanct. So where an express term (such as a
term governing a right to terminate the agreement) is plain
and complete, it cannot be modified by general obligation
to
act
in
‘good
faith’
or
‘to
co-operate’.
Whilst these developments may be a ‘good thing’ they
create uncertainty which leads to more disputes which is a
‘bad thing’. Getting the terms of the contract clear from
the
outset
becomes
even
more
imperative.
James Miller
James
is
a
member of the
Commercial
Litigation team
at SFMS Law.
Practical Implications To Licence Agreements
Following
The U.S. Supreme Court’s Decision In Medtronic
On January 22, 2014, the U.S. Supreme Court issued a
decision reversing the U.S. Court of Appeals for the Federal
Circuit in Medtronic, Inc. v. Mirowski Family Ventures, LLC,
No. 12-1128. The Supreme Court held that a patent owner
bears the burden of proving infringement when a licensee
seeks a declaratory judgment. In a previous case before
the Court, Medlmmune, Inc. v. Genentech, Inc., 549 U.S.
118 (2007), the Court held that a licensee may file a
declaratory judgment which challenges a patent without
having to terminate the license. The issue of who bears the
burden of proving infringement in that situation, however,
had not been decided until last month in Medtronic. The
licence agreement at issue in Medtronic involved patents
for implantable heart stimulators. The Supreme Court
examined the issue of whether the licensee must prove that
products do not infringe or whether a patent owner must
prove infringement. The Supreme Court concluded that
when a licensee files a declaratory judgment action, the
burden of proving infringement is not shifted.
Practically speaking, an owner of a patent who is a party to
a license agreement should consider provisions that limit or
discourage licensees’ ability to bring challenges
concerning the patent. One option may be to include a
provision to terminate the license in the event of a
challenge by the licensee. A second option is to indicate
that royalty payments will increase in the event a challenge
is brought by the licensee. In addition, it may be advisable
to include an alternative dispute resolution provision to
avoid public litigation with respect to such disputes.
Andy
Balaura
Joe Conte
Andy and Joe
are members of
the Privacy Law
Group at Pallett
Valo LLP.
Update on Canada’s new Anti-Spam Legislation –
Are you ready?
In May 2013, we advised that it was merely a matter of time
for Canada s new Anti-Spam law to come into force. Now,
after much anticipation, most of the Canadian Anti-Spam
Legislation and its regulations (collectively, “CASL”) is set to
come into force on July 1, 2014. The provisions of CASL
related to the unsolicited installation of computer programs
will come into force on January 15, 2015 and the provisions
of CASL providing for a private right of action are set to
come into force on July 1, 2017.
This article recaps the major points about CASL and its
impact on the business community. Take note of CASL and
its requirements if your business markets to, or
communicates with, customers through email or other
electronic means, whether directly or through third-party
service providers.
The Crux of CASL
CASL prohibits sending a “commercial electronic message”
(“CEMs”) without obtaining the recipient’s prior express
or implied consent. The definition of “CEM” captures many
different types of electronic communication, including
emails, text messages, and instant and social media
messages. CASL also regulates the alteration of transmission
data in an electronic message and the installation of
computer programs. In both cases, transmission data
cannot be altered and a computer program cannot be
installed without the user’s prior express or implied consent,
subject to certain exceptions. The focus of this newsletter is
on CEMs.
Certain exceptions do apply where a recipient’s consent
may not be required. A CEM either (i) must have been sent
with the recipient’s express or implied consent, or (ii) must
rely on one of the exceptions.
In addition to obtaining consent (or fitting into one of the
exceptions), CEMs must set out prescribed information.
Essentially, the CEM must identify the sender and the person
on whose behalf the message is sent (if different from the
sender), provide the sender’s contact information and
provide a means for the recipient, at no cost, to
unsubscribe and avoid receiving future CEMs from the
sender.
What are the Penalties for Non-compliance?
Penalties for non-compliance can be severe. Once in
force, a CASL violation could result in administrative
monetary penalties of up to one million dollars ($1,000,000)
per violation for an individual and up to ten million dollars
($10,000,000) per violation for a corporation. The amount of
the penalty will depend on certain prescribed factors.
CASL violations by corporations could also result in
directors’ and officers’ liability. Employers can also be
vicariously liable for the violations of their employees. This
type of liability may be avoided if the director, officer or
employer can successfully establish that they exercised due
diligence to prevent the commission of a violation. Once
completely in force, CASL’s private right of action provisions
will also expose companies to the risk of law suits for noncompliance, including class-actions.
Enforcement
The CRTC, Competition Bureau, Privacy Commissioner of
Canada and the courts will be primarily responsible for
enforcing CASL’s provisions. CASL’s reach is broad and
affects many uses of electronic communication that
businesses rely on every day.
How can your business get ready for Compliance?
Businesses should take steps now to prepare for
compliance with CASL. These should include the following:
1.
2.
3.
4.
5.
6.
7.
Compile and review CEMs previously sent to your
customers to determine whether they contain the
required information and a functioning unsubscribe
mechanism.
Review your customer email or distribution lists to
determine whether consent is required or if one of the
statutory exceptions apply.
Review business agreements with service providers
and strategic partners to ensure appropriate
compliance requirements are included.
If required, obtain the express consent from your
customers to receive CEMs from your business and
keep a record of all consents received. Ensure your
request for consent complies with CASL’s regulations.
Develop a system to ensure that you keep a record of
consents received from your customers.
Develop or revise your internal communication policies
and procedures to address CASL’s requirements.
Train your employees on CASL and best practices for
sending CEMs.
If you require assistance with any of the above, the
members of our Privacy Law Group would be pleased to
assist you.
Next Edition: To be included in the bulletin, members should submit articles by the end of August 2014 to: Ron Kravitz at SFMS Law
[email protected]
Daden Hunt at Birketts LLP
[email protected]

French Class Action

Transcription

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