France strengthens its whistleblowing regime: Focus on 3 key changes
France’s new whistleblowing law, No. 2022-401 of 21 March 2022, places France at the fore in terms of whistleblower protection.
The whistleblowing law not only transposes the EU whistleblowing directive 2019/1937 into French law, strengthening the country’s previous regime, but actually goes beyond the directive’s requirements.
The new provisions will enter into force on September 1, 2022. An upcoming decree will set out terms and conditions of the new provisions. Here, we look at three important aspects of the new law.
1. Some key definitions have been adjusted
A whistleblower is now defined as "a natural person who reports or discloses, without direct financial compensation and in good faith, information relating to a crime, or misdemeanor, a threat or harm to the general interest, a violation or an attempt to conceal a violation of an international commitment duly ratified or approved by France, of a unilateral act of an international organization taken on the basis of such a commitment, of the European Union legislation, or of a law or regulation."
The new regime maintains the condition of "good faith," but replaces an earlier requirement that reports be made “in a disinterested manner” (which was deemed unclear) with a reference to lack of "direct financial consideration." Moreover, the condition of "personal knowledge” no longer applies when the reported information was obtained in a professional context. This condition is maintained regarding whistleblowers who do not report information obtained in a professional context.
The new regime can be expected to increase the number of internal investigations in France and to create additional external exposure for companies affected by whistleblower reports.
In addition, the scope of persons entitled to report information which they obtained in a professional context has been expanded in line with the Directive. In private sector, this covers "employees and external and occasional collaborators," already covered previously, but also former employees, applicants to a work position, shareholders, members of administrative, management or supervisory bodies, and co-contractors and subcontractors of an entity.
Regarding reportable situations, the definition now refers to EU regulations aligned with the Directive, otherwise maintaining the previous scope. The new regime, however, modifies some of the conditions for reporting. As such, it is no longer required that the violation be "serious and manifest" and the report may also concern "attempted" violations.
Finally, information covered by "the secrecy of judicial deliberations, the secrecy of investigation or of judicial inquiry" is excluded from whistleblowing. This widens previous exclusions relating to national defense secrecy, medical secrecy and confidentiality between a lawyer and a client.
2. More choices in how to report
Previously, internal whistleblowers were required to first file a report through an entity’s internal reporting channels. The new regime allows whistleblowers to choose between:
- Making an internal whistleblowing report
- Sending an external report to a competent external authority, a list of which will be set by a decree, or
- Making a public disclosure – however, this is possible only in certain specific cases, defined by the law and relating to such situations as urgency, risk of retaliation, or existence of a serious and imminent danger.
It is noteworthy that removal of the priority of internal reporting does not put an end to the obligation for companies to establish a procedure for collecting whistleblower reports. This requirement still applies to companies having at least 50 employees. The law also specifies that groups of companies employing up to 250 employees may establish common whistleblowing reporting and related processing mechanisms in compliance with conditions to be determined by a decree. Limiting this possibility to groups employing up to 250 employees, if confirmed, could require significant changes in the way companies address their reporting obligations.
3. Stronger protection of whistleblowers and certain related persons
The law also strengthens and details protections available to whistleblowers and certain related persons, notably including:
- Detailing prohibited retaliation measures: 15 specific illustrations are set forth, among them "coercion, intimidation, harassment or ostracism,” "discrimination, disadvantageous or unfair treatment,” and "improper referral for psychiatric or medical treatment."
- Extending certain protections to "facilitators," defined as "any individual as well as not for profit legal persons in the private sector, who assist a whistleblower in making a report or a disclosure.” Individuals associated with the whistleblower and legal entities controlled by or in a business relationship with the whistleblower also benefit from certain protections.
- Strengthening whistleblower protection in case of judicial proceedings following or linked to the report. In such cases, the burden of proof lies with the entity claimed to have taken prohibited retaliative measures; penalties for dilatory or abusive procedures are increased to €60,000. The whistleblower can also benefit from coverage of various legal costs as well as support from the French Human Rights Defender (Défenseur des Droits) and also may be offered psychological support.
- Excluding criminal liability of a whistleblower who may have misappropriated or concealed "information of which s/he has lawful knowledge and which s/he reports or discloses" in compliance with the law. The law also creates protection against civil liability.
While the new law undoubtedly will encourage whistleblowing and strengthen whistleblower protection in France, it is also likely to have other consequences. In immediate, practical terms, the new regime can be expected to increase the number of internal investigations in France – which already had significantly grown in recent years – and to create additional external exposure for companies affected by whistleblower reports.
Furthermore, because French anticorruption authorities in particular are increasingly encouraging self-reporting, it appears essential that the French out-of-court criminal settlement mechanisms in turn need to evolve – in particular regarding cooperation credit issues and any consequences thereof for individuals.
Find out more about the implications of France’s whistleblower law by contacting any of the authors.