Reed Smith Client Alerts

Authors: Marie Albertini

Type: Client Alerts

Billed as a “major step forward for democracy” by the French Minister of Health, the French draft law on ‘health class actions’, adopted on 17 December 2015, enters into force on 1 July 2016. But it is an unsuitable means to compensate for personal injury. Its complexity denies patients the speedy and efficient justice promised and it creates legal uncertainty for professionals, whether they are practitioners or health care manufacturers.

The 486 approved associations of users of the health system may take legal action for the same or similar damages suffered by users of the health system based on the breach by a producer or supplier of a health product (drugs, contraceptives, contact lenses, cosmetics, etc.) or a service using one of these health products.

The action will be rolled out in two phases. In the first, the court will determine, inter alia, the liability of the professional for “personal injuries which may be compensated for” and the notice measures to inform persons who may have suffered personal injuries as a result of the breach.

Long and uncertain proceedings for users During this first phase, three factors will significantly slow down proceedings. Recourse to medical and scientific experts to establish whether the breach is attributable to the professional from whom liability is sought will be systematic. The notice measures will only occur after all appeals have been exhausted. The time limitation set by the court to join the class as a user could be anywhere between six months and five years.

In plain language, five to ten years will elapse before the second phase – compensation – can even start. During this second phase, users will make their claims for compensation known to the professional held liable. In the event the practitioner or health care manufacturer refuses to compensate the user, individual legal action will have to be brought.

This stage will require a new court-ordered appraisal to, on the one hand, establish that the user’s personal injury is attributable to the health product in dispute in accordance with the judgment rendered on liability and, on the other, to assess damages. If we exclude any appeals the professional might bring, about two years will be needed to obtain an enforceable compensation award.

In total, about seven years may elapse before a health class action reaches its conclusion.

Legal and financial uncertainty for professionals The Public Health Code does not provide an exhaustive list of products in respect of which a class action may be initiated, leaving open a wide scope of application.

There will therefore be no way for professionals to know the scope of their legal and financial risks ahead of the legal proceedings. Only during the second phase of proceedings will they know the number of claimants and the amount of compensation sought. For five to ten years (the first phase), businesses will face significant challenges, from an accounting perspective, in funding their risks.

Moreover, class actions could be initiated based on health products that are no longer on the market or for breaches that no longer exist as of the effective date of the draft law, providing yet more legal uncertainty for professionals.

Media pressure Due to the media coverage it may generate, a class action is a heavy weapon of persuasion in the hands of associations.

Faced with continued media exposure as a result of lengthy proceedings that may cause significant damage, practitioners or health care manufacturers may prefer to resolve disputes amicably. In fact, mediation as an option in any class action was largely provided for by the legislature – which is certainly no coincidence.

However, resorting to mediation when a media storm has been triggered by the announcement of the launch of a class action is too late to protect the image, reputation or market price of the company criticised.

Also, it is regrettable that, as is required in class actions for discrimination, prior formal notice has not been made mandatory to allow, in the interests of health users and professionals, an amicable and speedy resolution to be sought.

How Reed Smith can assist The Paris Litigation Team represent parties in a large range of complex commercial disputes including product liability, industrial risk, class action and mass tort lawsuits. Our attorneys are highly experienced at managing litigation process and collaborate with our colleagues around the world to ensure each client receives sound advice based on multi-disciplinary and multi-jurisdictional approach.

This client alert was published in its French version as an article on the French publication L’Usine Nouvelle in June 2016.

 

Client Alert 2016-173