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Businesses could face multiple financial penalties


NANTES, France—A proposed class-action law in France could create a double-jeopardy for businesses in which they could face multiple financial penalties over the same complaint or case, according to workshop participants at France's annual conference of risk managers.

"We'll find ourselves facing a double penalty in business. First the Conseil de la concurrence—France's competition watchdog—could levy a fine, and then you could also be penalized by a class-action judge for the same case," said Rémi Pendariès-Issaurat, president of the civil liability commission of the Association pour le Management des Risques et des Assurances de l'Entreprise.

"Why not just use the money from the Conseil de la concurrence fine to compensate the victims in a complaint?" asked Mr. Pendariès-Issaurat.

In early February, the French parliament is set to consider a consumer rights bill that, among other things, introduces a mild form of class actions.

It creates a four-step process in which judges could hear class-action complaints only for consumer goods linked to a contract, and only cases filed by government-approved consumer organizations, with damages capped at €2,000. Risk managers at the AMRAE gathering expressed worries that Parliament could substantially expand the bill's range.

Claude Delpoux, director of asset insurance and liability at the Fédération Française des Sociétés d'Assurance, said French politicians were rushing to pass the bill, under pressure of a looming presidential election in April. "There are many other technical problems with this bill that they are not considering." For example, he said, the bill could allow more than one association to file suits over the same case.

"We have made suggestions and hope that at the very least, Parliament will correct these problems," said Mr. Delpoux.