A comprehensive rewriting of French civil law – the first since the days of Napoleon I – could threaten the validity of almost every commercial contract signed in the country, leading lawyers said this week.
Reform of the 1804 ‘Code civil’ was announced by justice minister Christiane Taubira (pictured) in February this year. The aim is to simplify the law and bring it into line with international standards. It will also modernise the language, for example dropping expressions like ‘bonnes moeurs’ (good morals).
‘The language of the 18th century, admirable as it might be, is not well adapted to 21st century conversations,’ Carole Champalaune, head of civil affairs at the ministry, said.
However, City lawyers and academic experts say the reform is being conducted in haste, with inadequate consultation, and that it introduces measures which would open commercial contracts to judicial challenge if a party later changed their mind.
‘It is extremely worrying,’ said Michel Frieh, France managing partner of international firm DLA Piper. ‘This is a key reform of all aspects of contract law which introduces completely new concepts which threaten the security of contracts.’
The 49-page reform is being introduced under umbrella legislation which allows regulations to become law without full parliamentary scrutiny. As a result, Frieh said, inappropriate concepts such as ‘unforeseen circumstances’ and ‘economic violence’ have been transferred to general commercial law. These would allow parties to apply to judges to have contracts rewritten, he said.
‘It gives the judge the right to define both unforeseen circumstances and onerous terms,’ he said, contrasting the competence of a civil law judge, who might be newly qualified, with that of an English judge backed up with volumes of case law, to decide. The result would be ‘open season for challenges’ – especially as the draft sets no time limit, he said.
Although formal consultation on the draft legislation has now closed, DLA Piper, thinktank Cercle Montesquieu and a panel of general counsel from leading French companies have set up a group to propose amendments.
Under the enabling ordinance, the government has until February 2016 to pass the new regulations, though Frieh said he expects them to be in place later this summer.
City lawyers may find an ally in economy minister Emmanuel Macron, who is reported to be ‘incensed’ that he was not consulted about the reform. However, he is embroiled in other controversies over his plans for legal service deregulation.