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You are currently viewing The limits of the duty of vigilance under French law

In French law, the law of March 27, 2017 stipulated that large companies must draw up a due diligence plan. Article L.225-102-4 I paragraph 3 stipulates that companies must implement a plan comprising “reasonable vigilance measures suitable for identifying risks and preventing serious harm to human rights and fundamental freedoms, the health and safety of individuals and the environment”.

The notion of duty of care was coined by the French legislator to remedy the legal compartmentalization resulting from the principle of legal personality of ordering companies and their subcontractors or suppliers. Duty of care thus requires the adoption of instruments capable of preventing risks arising from the activities of ordering companies and those of the entities making up their supply chain.

Although promising on the surface, this concept has its limits. 

An obligation that does not apply to all companies : 

Under this obligation, large companies are required to publish and implement a plan setting out due diligence measures to identify and prevent environmental damage in particular. Failure to do so may result in civil liability. This obligation does not apply to all companies, but only to those with a minimum of 5,000 employees, or with 10,000 employees in one company and its subsidiaries.

A non-binding obligation : 

The duty of vigilance is therefore a purely informative obligation. The terms used by the legislator are also vague, giving companies a great deal of leeway and freedom in the information to be provided as part of the due diligence plan.

There are no economic penalties for non-compliance with the duty of care. Compliance with this duty therefore depends on the goodwill of companies. Other sanctions are also available. A court injunction enables a person to enjoin a company to respect its duty. Another sanction is the company’s civil liability, as provided for in article L.225-102-5 of the French Commercial Code. To engage this liability, 3 conditions must be met (the fault must be named, the damage must be named and there must be a causal link). The third condition is difficult to meet: the causal link refers to the fact that the company, by failing in its duty of vigilance, has contributed to the occurrence of damage. In practice, this can be difficult to prove. For example, the difficulty is encountered when it is necessary to prove damage resulting from the participation in climate change of a subcontractor abroad, the cause of which is the failure to exercise due care on the part of the ordering company, whose head office is located in France.

Uncertainties concerning the jurisdiction of courts :

Another obstacle to duty of care proceedings relates to the uncertainty surrounding the jurisdiction of the courts. Indeed, the 2017 law on duty of care did not specify which court had jurisdiction, which has the consequence of slowing down proceedings. A divergence has arisen between civil society and companies. The civil society wants this litigation to come under the civil judge and the companies want it to come under the commercial judge.

For example, in the “Total and climate inaction” case, NGOs and local authorities took Total to court in Nanterre for breach of its duty of care with regard to climate change. They claimed that the company had failed to take the necessary measures to reduce its carbon footprint. Total raised the objection of lack of jurisdiction before the Nanterre court, considering that the commercial court had jurisdiction. 

The pre-trial judge considered that the vigilance plan was a civil act and therefore confirmed the associations’ position, stating that the competent court was the judicial court. The Versailles Court of Appeal confirmed the position of the pre-trial judge.

Lastly, there is still a great deal of progress to be made when it comes to integrating climate issues into corporate compliance plans. In this respect, the NGO Notre Affaire à tous published a report in 2021 which indicates that “7 out of 27 companies still do not include climate in their vigilance plan”. The report also denounced the fact that “while 20 companies now include climate in their vigilance plans, almost half of them do so only very partially, and none of them fully comply with all the requirements of this law”. One of the recommendations made in this report, which seems pertinent, is that companies should make greater mention of their climate strategy in their compliance plan, and also in the mapping of risks included in the compliance plan. Companies should also provide more details on measures taken to mitigate climate change.

A propos de Romane Girard