Category: Legal news

In principle, the management of the company employing the employee concerned is responsible for carrying out the redundancy procedure.

However, the CEO may delegate this power to another employee of the company involved in human resources management (for example, the human resources director (Cass. Ch. Mixte 19.11.2010 No. 10-10.095) or the financial director (Cass. Soc. 18.11.2003 No. 01-43.608), but not a person from outside the company (Cass. Soc. 20.10.2021 No. 20-11.485).

Recent case law has defined more precisely the concept of “foreign person” in groups of companies and has accepted (Cass. Soc. 28.06.2021 No. 21-18.142) that a managing director of a parent company may, under certain conditions, dismiss an employee of a subsidiary whose activities he supervises (Cass. Soc. 13.06.2018 No. 16-23.701), as may the manager of another group company who has received a mandate from the CEO of the employer company to manage the subsidiary’s commercial operations and human resources (Cass. Soc. 28.06.2021 No. 21-18.142).

Nevertheless, the human resources director of a group subsidiary may not dismiss an employee of another group subsidiary unless he has management authority in that other subsidiary (Cass. Soc. 20.10.2021 No. 20-11.485).

Since the dismissal with irregular representation can be considered as an unjustified dismissal followed by important damage claims, it is advisable to carefully check the powers of representation before initiating a dismissal procedure in a subsidiary in France.

France has once again strengthened and extended its foreign investment control regulations (“FDI“) with a decree and an order dated December 28, 2023. These measures came into force on January 1, 2024.

1 – Permanence of the 10% trigger threshold

As from 2020, the FDI procedure was adapted by lowering from 25% to 10% the threshold for holding a company’s voting rights triggering the authorization procedure for investors from third countries (outside of the European Union and the European Economic Area). The Decree of December 28, 2023, makes this – initially transitional – measure permanent.

2 – New sectors subject to authorization

The decree also added to the activities subject to the FDI procedure those ensuring “the integrity, safety or continuity of the extraction, processing and recycling of critical raw materials“, as well as the security of penitentiary establishments. The list of critical technologies has also been extended to include all technologies involved in low-carbon energy production (and not just renewable energies) and photonics.

3 – Exemption for intra-group transactions in two cases

In the first case, the investor is exempted if such investor is the last in the chain of control and has already acquired control of the target company within the meaning of Article L. 233-3 of the French Commercial Code. This chain of control is made up of the group formed by the investor – a foreign-law entity or a French-law entity controlled by one or more foreign-law entities – and the persons or entities controlling it.

An investor is also exempt from the authorization requirement when that investor crosses, directly or indirectly, alone or in collusion, the threshold of 10% of the voting rights of a listed French company, provided that the investment project has been notified in advance to the Minister of the Economy. In this case, unless the Minister objects, the exemption from the authorization requirement is valid at the end of a period of ten working days from the date of notification.

4 – Principles applicable to FDIs: for additional information regarding the applicable principles, you can refer to our previous articles on Alerion’s website.

For any additional information, please contact the Compliance and Regulatory team.

Frédéric Saffroy, Partner & Alice Bastien, Attorney

The remittance basis could eventually come to an end according to Jeremy Hunt, the Chancellor of the (British) Exchequer who announced the abolition of this highly disputed regime for future income and gains arising after April 6^th, 2025.

A new regime seen as simpler and more attractive than the current approach will be adopted. The individuals will be able to bring their foreign income and gains into the UK without attracting any tax charge, encouraging them to spend and invest these funds in the UK.  

• The remittance basis is a tax treatment that is available to individuals who are resident but not domiciled in the UK. Thus, they are liable to UK tax on their UK source income and gains and on any remittances (amounts) of foreign income and gains that they remit to the UK (i.e. brought to, or received in, or used in the UK).

The remittance basis is free of charge the first 6 years. Indeed, there is a remittance basis charge of:

• £30,000 for non-domiciled individuals who have been resident in the UK for at least 7 of the previous 9 tax years;
• £60,000 for non-domiciled individuals who have been resident in the UK for at least 12 of the previous 14 tax years.

• The “New Four-Year Foreign Income and Gains (FIG) Regime” will replace the current remittance basis regime with effect from April 6^th, 2025.

According to the “4-year FIG regime”, individuals will not pay any UK tax on foreign income and gains arising in the first 4-years of tax residency in the UK and can freely bring such income into the UK.

To be eligible, individuals must not have been UK tax residents during the 10 tax years preceding the 4-year period.

After the 4-year period, individuals will be liable to UK tax on their worldwide income (i.e. on any newly arising foreign income and gains).

• The UK Government announced transitional arrangements for existing “non-domiciled residents”. There will be:
• a temporary 50% reduction in the personal foreign income subject to tax in 2025-26 for non-domiciled individuals who will lose access to the remittance basis on April 6^th, 2025 and are not eligible for the new 4-year FIG exemption regime;
• re-basing of capital assets to April 5^th, 2019 levels for disposals that take place after April 6^th, 2025 for current non-domiciled individuals who have claimed the remittance basis. This means that when foreign assets are disposed of, affected individuals can choose to be taxed only on capital gains from that date;
• non-domiciled residents will be able to remit foreign income and gains that arose before April 6^th, 2025 to the UK at a rate of 12% under a new Temporary Repatriation Facility in the tax years 2025-26 and 2026-27. 

• While the government is removing protections on non-resident trusts for all new FIG that arise within them after April 6^th, 2025, FIG that arose in protected non-resident trusts before April 6^th, 2025 will not be taxed unless distributions or benefits are paid to UK residents who have been here for more than 4 years.

• We should also see changes regarding the inheritance tax since the exposure should thus be determined by reference to the concept of residence rather than of domicile.

Finally, the precise scope of these modifications remains uncertain (especially if the Labour wins the next election).

The new FIG regime might significantly impact the taxation of individuals moving to and from the UK.

We are now awaiting more clarity.

ESG has become an unavoidable factor in investment that can nevertheless be “avoided”. This is the paradox for companies that are committed to social responsibility, but whose social “window-dressing” does not always reflect the reality of the commitments they have made.

Faced with this dilemma, what are the expectations of those who hold most of the decision-making power in terms of the impact of ESG? What do investors see as their role in participating in climate transition, and how will they convey their expectations of companies?

There are many questions to be answered, starting with the key issue of corporate governance.

The sustainability of the decisions taken by a company is a reflection of the governing bodies from which they emanate

The struggle against greenwashing is often first and foremost reflected in the presence of governing bodies set up to enable the deployment of strategy for economic performance. Such a strategy incorporates the constraints associated with the ecological and social transition, with the idea that the sustainable transformation of the company helps both to enhance it as well as to optimise its financial value.

The European legislator has always taken the view that the “E” for Environmental and the “S” for Social are necessarily correlated with the “G” for Governance, whose bodies must instil the reality of the commitments made in terms of environmental transition.

In France, the AFEP-MEDEF Code, conceived by the employers’ union, introduced the idea that the “quality” of any board of directors should be assessed on the balance of its membership. At the European level, the 12th cross-sectoral Technical Standard RS, G1 Business Conduct stipulates that companies must disclose information on the composition, diversity and expertise of their boards of directors: gender, age, nationality, qualifications, expertise, experience, independence of directors, representation of employees, shareholders, the role given to stakeholders and the setting up of specialised diversity committees.

In English-speaking countries, employees are generally not involved in corporate governance and therefore do not have access to the boards, supervisory or auditing bodies. The German and French models draw their inspiration from a participative approach, with representation on boards.

Dedicated governing bodies

In France, the AFEP-MEDEF Code recommends that the remit of audit committees should no longer be limited strictly to purely financial and accounting considerations, but should be extended to include extra-financial and therefore sustainability considerations. For example, the audit committee’s review of the financial statements should be accompanied by a presentation by management of an analysis of the company’s exposure to social and environmental risks.

The French Financial Markets Authority (AMF) considers that, in the absence of a CSR committee, it is up to the Board of Directors to explain how it intends, for example, to take account of the social and environmental issues facing the company. As of 2023, all CAC 40 companies have a CSR committee.

According to the AMF, the CSR committee’s task is to assess the risks and opportunities associated with taking CSR issues into account in the company’s economic performance. Similarly, the AMF considers that directors’ CSR skills are a key factor in the sustainable functioning of boards of directors, and that the appointment of a CSR lead director is a convincing indicator that the board has taken into account the issues associated with the environmental and social transition.

The need for Boards of Directors to take into account social and environmental issues in its policy decisions

The inclusion of stakeholders (customers, principals, NGOs, consumers, employees) in corporate governance bodies is a first guarantee of the company’s transparency with regard to its sustainability commitments.

However, article L.225-35 of the French Commercial Code now specifies that these decisions must be taken in the company’s social interest, taking into account social, environmental, cultural and sporting issues[1]. This means that companies must no longer limit themselves to serving the interests of individuals (or their shareholders).

Implementing a working methodology based on sustainability

Taking CSR issues into account when defining strategy involves identifying and analysing the demands of the market and stakeholders by :

– mapping the CSR risks associated with the company’s activities in order to determine the positive and negative consequences of its CSR activities, as well as the impact of the environment on the company’s activities;

– prioritising the issues at stake in order to justify certain decisions;

– drawing up a strategy for different time frames, taking into account a risk analysis grid, as well as the impacts and opportunities in each of the company’s sectors of activity;

– the introduction of CSR performance indicators.

In conclusion, there are many indicators that allow us to measure the degree of sustainable commitment from each governing body in an increasingly concrete way.

A pioneer with its “duty of vigilance” (devoir de vigilance) law, France has confirmed its determination to act in this field by creating a specialized chamber to handle litigation arising from the duty of vigilance.

In early 2024, the Paris Court of Appeal announced the creation of a new chamber specialized in emerging litigation[1] , which held its first hearing on March 5^th, 2024.  

This new chamber, located within the economic division, has jurisdiction over litigation relating to the duty of vigilance,[2]CSRD sustainability reporting,[3]environmental liability,[4] as well as appeals against interim relief and pre-trial orders in these matters.[5]

The inauguration of this chamber illustrates the Paris Court of Appeal’s intention to “better highlight the interactions between the Paris Court of Appeal and the economic sphere”, which had led to the creation of the Economic Justice Council (Conseil de justice économique) of the Paris Court of Appeal on November 30^th, 2023.[6] 

In a context where the legal issues surrounding corporate responsibility are increasingly significant, this initiative is particularly welcome.

Indeed, the specialization of a chamber with national jurisdiction should guarantee unified caselaw across its various fields of jurisdiction and contribute to better legal certainty for businesses.

The stakes are high since, for this first hearing, the new chamber was hearing three cases concerning the duty of vigilance of TotalEnergies, Suez and EDF.

As a reminder, the law of March 27^th, 2017, imposes in France a duty of vigilance on large companies concerning environmental, social, and governance matters. Companies with at least 5,000 employees in France or 10,000 worldwide must establish and implement a “vigilance plan” (plan de vigilance). Failure to comply with these obligations can result in liability for the companies.

In the three cases brought to the hearing on March 5^th, 2024, the companies involved are being accused by local authorities and NGOs of the non-conformity of their vigilance plans with environmental stakes.

TotalEnergies, Suez and EDF cases

The TotalEnergies case involves accusations of the company’s vigilance plan failing to align with the Paris Agreement’s objective of limiting global warming to below 1.5°C due to its pursuit of new hydrocarbon exploration projects.

Concerning Suez and EDF cases, the criticisms revolve around projects undertaken in Chile and Mexico, respectively. Suez is accused of repeated failures in one of its plants in Chile, affecting the drinking water network. EDF faces allegations of failing to consult indigenous populations regarding a wind farm project in Mexico.

Before ruling on the merits of these matters, the Paris Judiciary Tribunal (Tribunal judiciaire) had dismissed several requests in these cases, considering that the plaintiffs – local authorities and NGOs – were not admissible to take legal action.[7] In one of these cases, for instance, the Tribunal ruled that the obligation to issue a formal notice had not been fulfilled by the plaintiffs because their formal notice did not target the same vigilance plan as their lawsuit. In another case, the Tribunal ruled that certain local authorities, including the cities of Paris and New York, lacked standing, as their territories were deemed not directly affected.

These much-discussed rulings provided some initial insights into the law on the duty of vigilance.

Stakes surrounding the upcoming decisions

The Court of Appeal will have to rule on the admissibility of the actions brought by the local authorities and NGOs, who argue in particular that the Judiciary Tribunal did not correctly assess the facts of the case and applied a “conciliation phase” requirement not provided for by the law[8].

This is an essential question! The solution will determine the engagement of litigation likely to develop.

Alerion Climate Litigation Observatory is closely monitoring the development of these cases.

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[1] Paris Court of Appeal, Création d’une chambre des contentieux émergents – devoir de vigilance et responsabilité écologique à la CA de Paris, January 18^th, 2024, https://www.cours-appel.justice.fr/paris/creation-dune-chambre-des-contentieux-emergents-devoir-de-vigilance-et-responsabilite.

[2] Suits relating to the duty of vigilance of parent companies and contractors based on Articles L. 225-102-4 and L. 225-102-5 of the French Commercial Code.

[3] Corporate sustainability reporting, Directive (EU) 2022/2464 of the European Parliament and of the Council of December 14, 2022.

[4] Suits based on Article L. 211-20 of the French Code of Judicial Organization in cases that are or appear to be of significant complexity, notably due to the large number of parties, the technical nature of the dispute, its originality, or the geographical extent of ecological loss.

[5] Paris Court of Appeal, PÔLE 5 – Economique et commercial, February 5^th, 2024, https://www.cours-appel.justice.fr/paris/pole-5-economique-et-commercial#5-12.

[6] Paris Court of Appeal, Conseil de justice économique, December 5^th, 2023, https://www.cours-appel.justice.fr/paris/conseil-de-justice-economique.

[7] Paris Judiciary Tribunal, July 6^th, 2023, no. 22/03403, TotalEnergies SE (Total – Climat); Paris Judiciary Tribunal, June 1^st, 2023, no. 22/07100, SUEZ SA; Paris Judiciary Tribunal, November 30^th, 2021, no. 20/10246, EDF.

[8] Sherpa, Crucial hearing in the climate litigation against TotalEnergies, March 4^th, 2024, https://www.asso-sherpa.org/proces-climatique-contre-totalenergies-audience-decisive-devant-la-cour-dappel.

We are reasonably well aware that on the other side of the Atlantic, Diversity, Equity and Inclusion (DEI) are major societal issues, probably for sociological and historical reasons, with high stakes and legal ramifications.

Exchanges with some of our American colleagues a few months ago in NYC finally convinced us that these issues were not only at the heart of Employment law, but, more surprisingly for us Europeans, also a recurring theme in business law in its entirety. Thus, in corporate law, contract law etc., “DEI” questions are systematically integrated into the services that business law firms offer.

This is not to say that issues of inclusion and non-discrimination are not debated in France, nor that national and European legislation in this area offers employees less protection than in the US.

“DEI” is leading the debate in French Companies ; not systematically a legal issue

However, it must be acknowledged that the intensity of the risk associated with the criminal offence of discrimination is lower in France than in the United States, where American legislation and courts can have devastating financial and reputational effects on companies.

While these issues are obviously present in French courts, they simply occur less frequently; but their media impact is feared by companies, particularly those that have become accustomed to criticizing practices and, as such, are becoming the target of Trade Unions.

In this context, it is very interesting to note an evolution in our case law which, apparently, tends to draw inspiration from North American judicial practices (Canadian National vs action Travail des femmes CN 1987 40 DLR 4e, 193) ; thus, a decision handed down on December 14, 2022 by our “Supreme Court” resorted to the concept of “systemic discrimination”.

This term might lead one to believe that the company wishes to “institutionalize” discriminatory processes among its employees.

A methodology based on general statistics

In reality, it is no more than a methodology developed by the judge based on general statistics intended to reveal or not reveal discrimination against an employee by the sheer force of numbers; it is specified that the evidence derived from these statistics can be replicated for the benefit of other people.

While these figures are not intended to provide proof per se, they do open the way to sufficient suspicion, and thus to the employer’s obligation to justify the difference in treatment observed between several employees… which could be nearly impossible in some situations, as the challenged practices may not be conscious at all, but ultimately resulting in a discrimination.

Indeed, while on a criminal law standpoint, a discrimination shall be intentional to characterize an offence, there is no such requirement on a civil standpoint, which is especially interesting in the case of “systemic discrimination”, is the intention being usually non-existent, since it exists as a result of the combination of recruitment, internal promotion, mobility and sociability processes, the sum of which reveals a situation prohibited by law.

Regardless of the employer’s lack of intention or will, the figures are intended to arouse suspicion, and the onus is on the employer to explain the differences in treatment, failing which discrimination will be established.

Above all, combat bias

While it is undoubtedly premature to conclude that there has been a paradigm shift in terms of the recognition of discrimination, the Court’s decision is nonetheless evidence of a real trend whose primary aim is to combat bias such as agism; and there is no doubt that its purpose is to increase the pressure on companies to redouble their vigilance on this issue.

Jacques PEROTTO

According to a press release from the Council of the EU dated 15 December 2023, a provisional agreement on the EMFA[1] has been reached between the Parliament and the Council, incorporating the 295 amendments voted by the Parliament on 3 October. There is still a long way to go before this provisional agreement is adopted: it still has to be approved by the Committee on Culture and Education (January 2024), by the full Parliament (March 2024), and by the Council[2] (estimated date unknown).

This provisional agreement is nonetheless an opportunity to look at the above-mentioned amendments adopted in October 2023 and thus measure the progress made by the trialogue in relation to the Council’s proposal. Some of these amendments appear to be relevant in the light of the Digital Services Act (DSA), which will come fully into force on 17 February 2024.

Firstly, the EMFA establishes a principle of transparency for the operation of media service providers. A greater transparency obligation would thus be imposed on media owned by a Member State (amendment 128 relating to Article 6(1)). Similarly, transparency would also be required with regard to the contact details of the editorial director (amendment 129) and with regard to any capital links with other press or other companies (amendment 130). This last point could finally help to rebalance the current trend towards media concentration. Generally speaking, several amendments focused on the absence of ambiguity regarding the links maintained by a media outlet or press group with state authorities or commercial or political interests.

Secondly, the provisional agreement finally seems to reject the national security exception, which could have allowed Member States to misuse the protection afforded to journalists (amendments 113 to 116). The system adopted provides for the necessary protection of journalists’ sources, a ban on gag orders and the impossibility of using spyware.The provisional agreement also settles the question of relations between providers of very large online platforms, probably within the meaning of the DSA, and media service providers. It is envisaged that particular care will be taken with content provided by the media. With this in mind, amendment 208 on article 17§1 stipulates that these platform providers “shall ensure that decisions regarding content moderation and any other action they take do not have a negative impact on the freedom and pluralism of the media”. Importantly, the provisional agreement also incorporates amendment 220 to article 17(2), which allows a media provider to react within 24 hours if one of its content items is removed by the provider of a very large platform. The latter will then be able to refer the matter to the national authority if it considers that the content is still in breach of its general terms and conditions (amendment 221).

Lastly, the provisional agreement takes a stand on the European Committee for Media Services, providing for a broader remit for the Committee, which will be able to issue opinions on its own initiative, but also establishing its independence in principle and providing for its own allocated budget as well as the creation of an Advisory Expert Group. In particular, the Committee should be able to enter into dialogue with the providers of very large online platforms or search engines (amendments 229 to 233 to Article 18) on issues such as access to the media and the control of disinformation or manipulation of information. It would also have the opportunity to give its opinion on measures adopted by the national authorities that have a direct impact on a media provider, at its request (amendment 242 on Article 20(5)). Lastly, it would be able to assess market concentration and its consequences for media pluralism (amendments 258 to 261 on Article 22), given the current trend for European competition law to influence a large proportion of sectoral regulations on online services.

However, this encouraging observation must be qualified by the concern raised by the possible introduction in the provisional agreement of a restriction on the scope of action of publication directors (amendment 30). While the latter remain criminally liable in France due to the mechanism of cascading liability provided for by the law on freedom of the press of 29 July 1881, they would no longer be able to intervene in published content, once the editorial line has been established between the editor-in-chief and the publication director. If necessary, the publication manager would still be able to argue that the content did not comply with the agreed editorial line.

In conclusion, while there are still several stages to go before the final adoption of this text, the EMFA deserves particular attention in that it lays down obligations that can already be anticipated by the entities concerned, particularly in the context of compliance with the DSA.

The teams in ALERION’s Intellectual Property and Digital Technology Law departments are available to assist you with any questions you may have on these subjects.

Corinne THIERACHE, Partner, Caroline LEROY-BLANVILLAIN, Associate and Romane CUSSINET, Student-Lawyer, from ALERION’s Intellectual Property and Digital Technology Law departments.

[1] Council and Parliament reach agreement on new rules to safeguard media freedom, pluralism and editorial independence in the European Union – Consilium (europa.eu)

[2] Agreement on European legislation on media freedom | News | European Parliament (europa.eu)

⚖️🔍 The craze for perfume and the quest for legal protection through intellectual property are nothing new, as demonstrated by the legal saga surrounding Jean-Paul Gaultier’s perfume “Le Mâle” at the beginning of the 21st century. At a time when the holders of the rights to this perfume, despite its renown, were dismissed by the Lyon Court of Appeal on 16 March 2023 on the grounds of copyright, designs, trademarks and tort claims, it is important to remember certain rules.

A member of the Paris Bar since 1994, Corinne Thiérache is a partner at Alerion and is responsible for the Technology and Digital Law/Intellectual Property departments.

👉 To read the full article: https://lnkd.in/efp5vMFx

As the world gathers in Dubai for COP28, climate change is more than ever humanity’s main challenge. Courts everywhere are echoing the mobilization of citizens, making climate litigation the most significant development in the legal world. Discover the main trends in this global phenomenon with Alerion Climate Litigation Observatory.

3 significant developments:

Massive increase in cases: surging from 884 in 2017 to 2180 in 2022.

Broader scope: all sectors of the economy concerned.

Personalization of claims: claims are no longer focused on states and companies, but now target executives.

Law no. 2017-399 of March 27, 2017, introduced, in France, a “duty of vigilance” (devoir de vigilance) imposed on the largest companies in environmental, social and corporate governance matters.

The legal framework, codified in Articles L. 225-102-4 and 5 of the French Commercial Code, requires companies with at least 5,000 employees in France – parent company and subsidiaries combined – or 10,000 employees worldwide, in particular, to draw up and implement a “vigilance plan” (plan de vigilance). Failure to comply with these obligations may result in liability for the companies concerned.

The European Union has drawn inspiration from this law in the development of a European directive on the duty of vigilance of companies with regard to sustainable development.[1]  This directive is currently being negotiated between member states following the European Parliament’s adoption of the draft directive on June 1^er 2023.[2] This duty of vigilance may provide support for climate actions, as the rise of climate litigation in France and around the world mobilizes civil society.

Alerion Climate Litigation Observatory analyzes the first decisions of the French jurisdiction on the duty of vigilance, which at this stage concern procedural and preliminary issues.

1. Exclusive jurisdiction of the Paris Judiciary Tribunal

Until the adoption of Law no. 2021-1729 on December 22, 2021, which gave exclusive jurisdiction to the Paris Judiciary Tribunal (Tribunal judiciaire) for all actions relating to the duty of vigilance set under the new articles of the French Commercial Code, the jurisdiction of the judiciary tribunals conflicted with the jurisdiction of commercial tribunals, natural forum of business affairs.

In the TotalEnergies SE case, the Nanterre Judiciary Tribunal rightly ruled itself incompetent in favor of the Commercial Tribunal, on the grounds that establishing and implementing a vigilance plan is an integral part of the company’s management.[3] The Versailles Court of Appeal approved the approach adopted by the first judges and rejected the notion of a mixed act,[4] which would have allowed an option between civil and commercial jurisdictions. The Commercial Chamber of the French Court of Cassation (Cour de cassation) overturned this ruling, stating that “the non-commercial plaintiff who intends to act as such has, however, in this case, the choice of bringing the matter before the civil court or the commercial tribunal”. However, the Court confirmed the position of Nanterre judges, considering that “the establishment and implementation of such a plan have a direct link with the management of this company”.

The legislator has definitively settled the question of jurisdiction by granting exclusive jurisdiction to the Paris Judiciary Tribunal.^[5] 

• 2. The limits of summary proceedings

Article L. 225-102-4 of the French Commercial Code allows the plaintiff to bring either a summary action or an action on the merits to ensure that the company which fails to fulfill its obligations is ordered to comply with them.

In the Total-Uganda case, the summary judge of the Paris Judiciary Tribunal considered whether the summary action was suitable for controlling compliance of the obligation to establish a vigilance plan in the areas of human rights and fundamental freedoms, personal health and safety and the environment.[6]

After ruling that the plaintiffs were inadmissible for failure to issue a prior formal notice, the judge, in a welcomed obiter dictum, expressed reservations about the possibility for the summary jurisdiction to control the establishment of a vigilance plan. The judge specified that “the grievances and breaches of duty of vigilance alleged against TotalEnergies SE in the present case must be the subject of an in-depth examination of the facts of the case, which goes beyond the powers of the summary judge”.

This solution clarifies the procedural framework in which actions based on the duty of vigilance can be brought. It also reveals the difficulties that plaintiffs will face when bringing an action before the summary judge, when the subject of the dispute is the compliance of the vigilance plan, and not simply its publication by the given company. A commentator suggests that plaintiffs could, at the same time, bring a claim on the merits relating to the compliance of a company’s vigilance plan and an application for interim relief seeking to suspend the measures taken by the company.[7]  

• 3. Requirement for formal notice

Article L. 225-102-4, II of the French Commercial Code provides that, before a case is referred to the courts, the company in question must be given formal notice to fulfill its vigilance obligations.

“II – Where a company served with formal notice to comply with the obligations set out in I fails to do so within three months of the formal notice being served, the competent court may, at the request of any person with an interest in the matter, order the company to comply, subject to a fine if necessary.”

In the absence of a decree specifying certain aspects of litigation relating to the duty of vigilance, the Paris Judiciary Tribunal has established requirements, set out below, on this formal notice in the Total-Uganda[8], Total-Climat[9], Suez[10] and EDF[11] cases.

• Mandatory prerequisite

Firstly, the formal notice is considered a mandatory prerequisite to any referral to the courts. In the absence of prior formal notice, the plaintiff’s request is inadmissible.

In the EDF case, the Preliminary Issues Judge (Juge de la mise en état) of the Paris Judiciary Tribunal specified that the purpose of this condition was to establish a dialogue between the plaintiffs and the target company, so that the latter could take account of the comments made on its vigilance plan and modify it accordingly.[12] 

• Identical scope of the formal notice and the writ of summons

Secondly, the formal notice and the writ of summons must have the same subject matter. Thus, the writ of summons must address the same issues raised by the formal notice, and in particular target the same vigilance plan.

For example, in the Total-Uganda case[13] , the plaintiffs had referred in their writ of summons the most recent version of the vigilance plan of the year 2021, whereas the formal notices referred to an earlier version of the year 2019. This led the Preliminary Issues Judge to conclude that the defendant had not been put on formal notice with regard to the vigilance plans that were the subject-matter of the case.

• The completeness of the formal notice

Thirdly, the formal notice must be sufficiently specific as to the subject of the grievances raised against the company in question.

In the Total-Climat case[14] , the Preliminary Issues Judge considered that the formal notice sent by the plaintiffs was imprecise in that it required TotalEnergies to implement a list of measures “without prejudice to other measures that may be identified”. Thus, to comply, formal notices must be sufficiently precise as to the grievances in question to serve as a basis for discussion between the parties involved prior to referral to the tribunal.

• 4. The relationship between Article 1252 of the French Civil Code and Article L. 225-102-4 of the French Commercial Code

Article 1252 of the French Civil Code provides the possibility of requesting French jurisdictions to prescribe measures to prevent or stop damages to the environment. This gave rise to a question about the relationship between this text and Article L. 225-102-4 of the French Commercial Code, which enables a judge to order a company to comply with its obligations under the duty of vigilance.

In the Total-Climat case,[15] two claims were brought before the Judiciary Tribunal, one based on Article L. 225-102-4 of the French Commercial Code, seeking an injunction to require TotalEnergies to publish its vigilance plan, and the other based on Article 1252 of the French Civil Code, seeking to “publish and implement” actions to reduce greenhouse gas emissions.

TotalEnergies raised an incident regarding the admissibility of the claim based on Article 1252 of the French Civil Code. Taking up the defendant’s arguments, the Preliminary Issues Judge declared the claim inadmissible, considering that the two claims had the same object, and that by relying on Article 1252 of the Civil Code, the plaintiffs were attempting to bypass the formal notice requirement set out in Article L. 225-102-4 of the French Commercial Code. Categorizing the provisions of the Commercial Code as “special”, the judge noted that they deviate from the general provisions of the Civil Code.

This solution has been challenged by certain authors, who question the exclusive application of Article L. 225-102-4 of the French Commercial Code to the issue of duty of vigilance, particularly in view of the reference in Article L.225-102-5 of the same code to articles 1240 and 1241 of the French Civil Code concerning ecological loss.[16]

In any case, following the decision of the Preliminary Issues Judge in the TotalEnergies case, it is not possible to rely on article 1252 of the Civil Code to ensure compliance with the duty of vigilance.

• 5. Defendants’ standing

According to Article L. 225-102-4 of the French Commercial Code, the duty to establish the vigilance plan lies with the group’s parent company, while controlled subsidiaries as defined in Article L. 233-3 of the French Commercial Code are exempt from this obligation. Therefore, the obligation relies upon the parent company, even though subsidiaries may voluntarily establish a vigilance plan. As a result, only the parent company or a company having established a given vigilance plan can be sued.

In the Suez case,[17] the defendant, a subsidiary of the Suez group, alleged that it had not established the relevant vigilance plan and that it had been established by its sole shareholder. Having noted that the vigilance plan did not mention precisely which Suez group company had established it, the Preliminary Issues Judge ruled that “the [subsidiary’s] standing to defend (…) has not been established”.

As a result, there must be an identity between the company issuing the vigilance plan and the company being summoned.

• 6. Plaintiffs’ standing

The inadmissibility of claims on the grounds that the plaintiff associations and local authorities lack standing to bring the action has been raised on several occasions. While in some cases the judge did not rule to this ground, in the Total-Climat case,[18] the Preliminary Issues Judge of the Paris Judiciary Tribunal specified – again in an obiter dictum – that certain plaintiffs did not justify a standing.

The Parisian judge referred to article 1248 of the French Civil Code – specific to compensation for ecological loss – to interpret the terms “any person with a standing” provided in article L. 225-102-4 of the French Commercial Code.

Article 1248 of the French Civil Code sets out the categories of persons who may bring an action for compensation for ecological loss, namely: “the State, the French Biodiversity Office, local authorities and local communities whose territory is concerned, as well as public establishments and associations accredited or having been established for at least five years from the date the proceedings are brought, whose purpose is the protection of nature and the defense of the environment”.

The Preliminary Issues Judge thus declared inadmissible the claims of certain associations that had not been accredited or established for over five years. Similarly, he ruled inadmissible the claims of certain local authorities – including the cities of Paris and New York – on the grounds that they can only act “when their territory is affected by the ecological loss”.

            ***

These initial rulings on jurisdiction, requirement of prior formal notice, and parties’ standing, have provided welcome clarification of the conditions for bringing an action. These debates on formal issues highlight the complexity of the substantive questions that the judge will have to resolve.

MAIN CASES INVOLVING THE DUTY OF VIGILANCE

Judiciary decisions

Nanterre Judiciary Tribunal, order, January 30, 2020, no. 19/02833, TotalEnergies SE

Versailles, December 10, 2020, no. 20/01692, TotalEnergies SE

Cass. com., December 15, 2021, no. 21/11.882, TotalEnergies SE

Paris Judiciary Tribunal, November 30, 2021, no. 20/10246, EDF

Court of Appeals of Paris, March 17, 2023, n° 22/00749, EDF

Paris Judiciary Tribunal, 1er June 2023, no. 22/07100, SUEZ SA

Paris Judiciary Tribunal, February 28, 2023, no. 22/53942 and no. 22/53943, TotalEnergies SE (Total-Uganda)

Paris Judiciary Tribunal, July 6, 2023, no. 22/03403, TotalEnergies SE (Total-Climat)

Cases pending before the Paris Judiciary Tribunal

Paris Judiciary Tribunal, writ of summons dated March 23, 2022, YVES ROCHER

Paris Judiciary Tribunal, writ of summons dated December 22, 2021, GROUPE LA POSTE

Paris Judiciary Tribunal, writ of summons dated March 3, 2021, CASINO

Paris Judiciary Tribunal, writ of summons dated July 29, 2022, IDEMIA

Formal notices

TELEPERFORMANCE was served with a formal notice on July 18, 2019

XPO LOGISTICS was served with a formal notice on October 1, 2019

TOTALENERGIE was served with a formal notice on March 14, 2022

MCDONALD’S was served with formal notice on March 30, 2022

DANONE, AUCHAN, CARREFOUR, CASINO, LACTALIS, LES MOUSQUETAIRES, PICARD SURGELÉS, NESTLÉ FRANCE AND MCDONALD’S FRANCE were served with a formal notice on September 28, 2022

BNP PARIBAS was served with a formal notice on October 17, 2022

BNP PARIBAS was served with a formal notice on October 26, 2022

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^[1]            Proposal for a Directive of the European Parliament and of the Council on corporate sustainability due diligence and amending Directive (EU) 2019/1937, February 23, 2022

[2]        Amendments(1) of the European Parliament, adopted on 1 June 2023, to the proposal for a directive of the European Parliament and of the Council on corporate sustainability due diligence and amending Directive (EU) 2019/1937

[3]        Nanterre Judiciary Tribunal, January 30, 2020, no. 19/02833, TotalEnergies SE

[4]        R. Dumont, “Devoir de vigilance des sociétés mères et compétence des tribunaux: la Cour de cassation et le législateur rend rendent concomitamment deux solutions différentes”, Recueil Dalloz, Dalloz, 2022, p. 826

[5]        Article L. 211-21 of the French Judicial Organization Code (Code de l’organisation judiciaire) stipulates that “the Paris Judiciary Tribunal hears actions relating to the duty of vigilance based on articles L. 225-102-4 and L. 225-102-5 of the French Commercial Code“

[6]        Paris Judiciary Tribunal, February 28, 2023, no. 22/53942 and no. 22/53943, TotalEnergies SE (Total-Uganda)

[7]        A. Lecourt, “Nouvelles précisions sur l’action en responsabilité découlant du manquement à la vigilance climatique”, RTD com, Dalloz, 2023, p. 369

[8]        Paris Judiciary Tribunal, February 28, 2023, no. 22/53942 and no. 22/53943, TotalEnergies SE (Total-Uganda)

[9]        Paris Judiciary Tribunal, July 6, 2023, no. 22/03403, TotalEnergies SE (Total-Climat).

[10]       Paris Judiciary Tribunal, June 1^er 2023, no. 22/07100, SUEZ SA

[11]       Paris Judiciary Tribunal, November 30, 2021, no. 20/10246, EDF

[12]       Paris Judiciary Tribunal, November 30, 2021, no. 20/10246, EDF

[13]       Paris Judiciary Tribunal, February 28, 2023, no. 22/53942 and no. 22/53943, TotalEnergies SE (Total-Uganda)

[14]       Paris Judiciary Tribunal, July 6, 2023, no. 22/03403, TotalEnergies SE (Total-Climat)

[15]       Paris Judiciary Tribunal, July 6, 2023, no. 22/03403, TotalEnergies SE (Total-Climat)

[16]       J.-B. Barbièri, “Devoir de vigilance, la porte se referme”, Dalloz actualité, Dalloz, July 13, 20233

[17]       Paris Judiciary Tribunal, June 1^er 2023, no. 22/07100, SUEZ SA

[18]       Paris Judiciary Tribunal, July 6, 2023, no. 22/03403, TotalEnergies SE (Total-Climat)