France’s economy continued to perform well in 2018 and is predicted to grow again in 2019, by 1.6 per cent. Emmanuel Macron’s election in May 2017 has led to significant policy changes over the past year, such as eased tax rates on investment income and changes to the country’s labour laws. Some key focus points of Macron, going in to his presidency, were to boost investment and create a “new growth model” in order to improve social mobility and help the environment. While the economy performed well last year, it did not flourish to the levels predicted by the government at the start of 2018. Positive developments include a decline in unemployment and an increase in wage growth. Despite the violent “gilet jaunes” protests, the National Institute of Statistics and Economic Studies found that French GDP rose by 0.3 per cent in the final quarter of 2018. These protests first began last November as a demonstration against Macron’s fuel tax rise and have continued in the first part of 2019. Tax cuts and a sympathetic financing environment are expected to increase business investment further.
Many practitioners we interviewed highlighted an increase in complex disputes over the past year. France maintains its position as a hub of arbitration, with practitioners predicting even more arbitration proceedings will take place in France after Brexit. One significant trend observed was the increased control of public policy by the French courts. For instance, In January 2018 the ICC award in MK Group v Onix was set aside by the Paris Court of Appeal on international public policy grounds. This ruling was made on the basis that the award had given legal protection to a fraudulent investment. The act of a French court taking control of an arbitrator’s decision where allegations of fraud were involved has sparked a debate between practitioners and scholars, with some welcoming the increased control of public policy by the courts while others expressed scepticism towards this development.
The Achmea judgment remains a hot topic, with practitioners noting it still remains “very difficult to see the potential consequences of the decision”. Lawyers in the region are observing the increasing importance of enforcement, with some seeing cases reopen as a result of the decision. One practitioner told us that they see “more and more enforcement out of Europe where EU disputes are seated in the US”. In addition, mediation is expected to gain traction in coming years, as one interviewee commented: “We see the number of court-ordered mediations grow significantly in France – whether from the first circuit or the Court of Appeal.” This is partly due to “increasing formalisation of mediation by the courts in France”.
The National Commission on Informatics and Liberty (CNIL), France’s data protection office, in an unprecedented move, instigated proceedings in which it found Google guilty of violating the GDPR. As a result, Google was fined €50 million and became the first large US tech company to be so punished under the new EU privacy regulation. Cybersecurity and privacy researcher Lukasz Olejnik, quoted in the Financial Times, remarked: “The first decisions and fines will be very important because they will define how GDPR is actually understood and enforced in practice.” This case came after the CNIL had provided guidance in December 2018 on sharing data with third parties for marketing purposes. Whether other similar cases will follow remains to be seen.
Developments and issues surrounding technology were raised by practitioners working in several and varied fields in our research. On the insurtech side, one practitioner commented that they are “seeing a lot of insurers partnering up with start-ups or tech companies not already in the insurance market, for the offering of added-value services”. One example is the partnership of AXA and the French carpooling app BlaBlaCar. Clyde & Co, in their 2019 annual report into the insurance market, commented, “French (re)insurers are increasingly eyeing opportunities in the technology sector as they seek access to new distribution channels, either by taking an equity stake or developing a strategic partnership with a start-up.”
The competition law space has also seen significant developments over the past year. One respondent remarks: “It’s fair to say that after a certain period of transition when the new president of the French Competition Authority (FCA) was appointed, it was quieter, but now we’re back to full speed with more cases than before.” Competition lawyers were extremely busy in 2018, and experienced “very intense” competition for work in the field. Interviewees highlighted several trends in the space, particularly as a result of the FCA being “very active and creative at the moment”. One practitioner comments that there is a “real trend for criminalisation of antitrust matters – the FCA has now initiated dawn raids with assistance of a criminal judge, which is a very new development”. More than one of the lawyers we spoke to noticed an “important increase in settlements”. One practitioner highlighted, “In the past you would defend a company, avoid the fine, but if you were imposed a fine you would go before the courts, whereas now if you settle there is no court case and administrative proceedings are quicker.”
The French legal market, meanwhile, remains extremely competitive, and “the pool of cases has not grown, making competition even fiercer”. One practitioner commented that “some very prominent practitioners have retired or are expected to retire, and so a generation change is ongoing at the moment”. With fiercer competition, “Parisian firms are trying to look abroad, often to Africa, which is now the playground of French arbitrators.” Respondents continue to see a “steep rise in cases relating to Africa”, a trend noted previously in our research. One interviewee remarked that “more and more cases are going to arbitration in Africa”, which was not necessarily the case before. It seems highly likely that Macron’s presidency will certainly lead to more changes and developments to the country’s administration, which will naturally impact legal activity next year.