France brings up to date its Blocking Statute against foreign discovery proceedings
A specific and extremely original French regulation impacting proceedings carried out outside of France against French parties has recently been updated. Litigation lawyers must be aware of these provisions, as the enforcement of this Statute can have critical consequences in court cases involving French parties.
In 1968, France implemented a unique piece of legislation. The “Loi de Blocage” (Blocking Statute) created a set of rules purportedly designed to protect national sensitive business-related information by preventing its use as evidence in foreign pre-trial and litigation proceedings, targeting the United States’ broad discovery rules.
As a result, French parties are prohibited from providing “sensitive evidence” related to economic, commercial, industrial, financial or technical information in foreign proceedings outside the scope of Letters of Request, which are regulated by the Hague Convention of March 18th, 1970.
The scope of the “sensitive information” covered by this text is so large that in essence, a French party sued before a foreign court can refuse to testify or disclose evidence, arguing that they are legally forbidden to do so under the Loi de Blocage.
Failure to comply with these legal provisions can result in criminal charges for French citizens, punishable by imprisonment and/or fines up to 18.000 €.
Yet violations of this Statute have, to this day, rarely been prosecuted in France, and have even more rarely resulted in convictions.
As a direct consequence of the lack of enforcement of the Statute by French authorities, U.S. courts were reluctant to acknowledge the Loi de Blocage as a legitimate shield against their evidence discovery proceedings.
In 1987, the U.S. Supreme Court issued a balancing test[1] to evaluate whether the Statute could effectively be enforced in American cross-border discovery proceedings. Applications of this case-law has shown in the following years that the interests attached to discovery often prevail over the French Blocking Statute before American courts, considering the Statute to be too little of a threat.
As a result, the Blocking Statute has failed to live up to its ambitions.
However, in the last few years, French lawmakers have passed several amendments to this Statute, with the idea that a stronger implementation of the regulation in France is bound to increase its effectiveness and authority abroad.
An amendment to the Blocking Statute was last passed in February[2]. A designated department within the Ministry of Finance was created and is now in charge of handling applications from French citizens faced with evidence discovery proceedings that could lead to a breach of their duties under the Loi de Blocage. Official opinions on the application of the Statute will now be issued by the Ministry upon request, and theses opinions will potentially be turned over to foreign courts if disputes arise regarding the disclosure of evidence.
These new provisions will come into force on April 1st of 2022.
The passing of this decree confirms that France wants to strengthen the Statute and enhance its enforcement abroad. Issuing official opinions against American discovery orders will force U.S. courts to reconsider their own assessment of the Blocking Statute.
Legal counsels acting on behalf of or against French parties in trials taking place abroad, especially in the United States, should therefore keep in mind that the Blocking Statute can be used as a defence mechanism during discovery proceedings and anticipate their consequences on the evidentiary process.
[1] Société Nationale Industrielle Aérospatiale v. U.S. District Court for the Southern District of Iowa, 482 U.S. 522 (1987)
[2] Décret n° 2022-207 du 18 février 2022 relatif à la communication de documents et renseignements d'ordre économique, commercial, industriel, financier ou technique à des personnes physiques ou morales étrangères
