France and the law? On the one hand there is the old love story, with prestigious legislators, famous lawyers, the Declaration of the Rights of Man, much admired codes, a passion for public law, constitutions neatly succeeding one another.

On the other, let’s not delude ourselves, Chamfort (an 18th century French philosopher) turns the clock back with a single deadly phrase: he reminds us that, in contrast to the English, the French do admire authority but they despise the law.

Paradoxically, a sign that the French are subject to what could be coined as a certain « decline in the law » is the relentless pursuit of normative inflation, recently denounced in the annual report of the « Conseil d’Etat » (the highest French administrative law court).

We all learnt at university that « too many laws kills the law » (this multiplication becomes a source of uncertainty and legal complexity). Yet nothing can stop certain legislators from what is in effect, « permanent legislative strobe lighting ».

By way of example, the « Conseil d’Etat » noted in its last report that work time has been amended by 8 laws or orders in less than 12 months; the tax reduction regime for grants to charities has been modified on average twice a year between 2000 and 2005; and that 6 laws have been passed in 3 years on the subject of apprenticeships.

To fully loop the loop, one needs to bear in mind the existence of the law of 9 December 2004 « to simplify the law »…. Kafka, Borgès? It’s up to you!

A recent illustration related to the new French insolvency law (dated 26 July 2005) demonstrates this legal loss of direction. The economic daily « La Tribune » issued on 27 April, announced the opening of 125 protection procedures, during the first trimester of 2006. The French Minister of Justice stated in relation to this (in what was, I imagine, a rather smug tone): « Such figures are very revealing as to the immediate nature of the awareness of interest in reform throughout the whole country, by courts of all sizes ».

Sad jargon, sad reports; bureaucrats and the media agenda dictating their own laws…

Turning to the bigger picture, and the current crisis which hit the country last autumn (rioting in the suburbs), and this spring (student demonstrations against the « contrat première embauche » or « first employment contract »), many foreign observers and journalists made relevant and accurate comments about a dangerous accumulation of:

– Economic structural crisis (lack of flexibility and accumulation of selfish protected interests);

– Crisis of identity (the French Republic’s trinity ‘liberty, equality, fraternity’ no longer has the magic totemic effect it used to enjoy);

– Crisis of authority and decline of cultural values;

– Difficult integration of cultural minorities within the French society etc.

I suppose one can argue that this global « malaise » is not uniquely French but also applies to other European countries.

However, at the core of this turmoil it seems to me that there is a simple structural explanation, which has to do with the issue of law (law and the French society), which has been overlooked.

Historically the French trump cards have always been the State, the administration and public order. France is, and has always been, a monarchy (whether you call the monarch a king, an emperor or a president).

The French social model (legal, political, economical) is « Jupiterian » (i.e. from top to bottom), by contrast to a horizontal decentralized « Mercurian » model championed in the majority of other western countries.

The French pyramidal system becomes an oddity in a global modern refeudalized world. and France was not prepared for the globalisation wave (or Tsunami !).

The future is simple; there is no alternative but to adapt and to re-invent a new social contract.

The good news is that a large and growing minority (an optimist might go as far as calling it a majority) of French people are now aware of this social deadlock and understand that they can no longer indulge in pipe dreams and the generosity of an expiring welfare state.

The French would probably be prepared to undertake the necessary reforms. The difficulty will be to find and elect a sufficiently brave, inspiring and credible leader and government who would undertake such an in-depth transformation of the country.

In the meantime, while waiting for the « big bang » to occur, foreign and other European models can help France.

Right at the top of the pyramid of norms, a very important judgment from the European Court of Justice of the European Communities has recently been handed down in relation to international insolvency law (Eurofood IFSC Ltd, 2 May 2006).

It concerns the interpretation of certain provisions of Regulation 1346/ 2000 on Insolvency Proceedings. This Regulation allows insolvency proceedings to be opened in a forum which is not necessarily the debtor’s registered office, as long as it is the debtor’s « centre of main interests » (the latter not being necessarily the same as the former).

The Court clarifies the concept of « centre of main interests » and confirms that recognition of judgements delivered by the courts of the member states should be based on the principle of mutual trust.

This decision is particularly dear to us because it marks the end of a three-year legal battle led by the firm (the Paris office together with our Leeds Finance Law colleagues) in favour of applying the Regulation (against the restrictive interpretation of a French Public Prosecutor), and which has given rise to two very publicised judgments by the Court of Appeal of Versailles (Isa-Daisytek case, 4 September 2003, and Rover case, 15 December 2006). The decision of the Cour de Cassation (the highest French civil law court) in the Isa-Daisytek case is expected in June 2006.

This ECJ judgment should help to limit doctrinal arguments and allow for construction of a trans-national jurisprudential definition of the « centre of principal interests ». However this will take time and we will unfortunately not be able to avoid a certain degree of legal uncertainty.

With regard to the « decline in the law » (without going as far as the law of decline) I shall once again turn to Chamfort for the final word:

« It’s a well-known fact that at the time when Mr de Guibert was named Governor of Invalides [a famous military hospital in Paris], they found 600 alleged soldiers who were hardly injured and who, nearly all, had never taken part in any siege or battle, but who managed to be there by way of recompense, having been coachmen or footmen of lords or influential people ».

That was 250 years ago. That was under the « Ancien régime » – at least five constitutions and as many Republics ago. Nonetheless, facts are stubborn and good habits die-hard. Could there be a French curse of governance?!

I do not want to conclude on such a sad note; at the end of the day the proof of the pudding (or the brioche) is in the eating (or the drinking); a country which remains the fifth economic power, a country which produces « Petrus » and « Romanée Conti », and a country in which Kristin Scott Thomas has elected residence for some 26 years cannot have it all wrong….!