FRANCE Law and Practice Contributed by: Carine Le Roy-Gleizes, Corentin Chevallier, Alice Messin-Roizard and Antoine Juquin, UGGC Avocats
8. Insurance 8.1 Environmental Insurance
financial institution is, the more likely it is to be held liable for a damage or breach, including an environ- mental damage or breach. This is why thorough due diligence is necessary (see 17.1 Environmental Due Diligence ). In this respect, the 2019 Energy Climate Law requires investment companies to include in their policies information about the risks associated with climate change and biodiversity. As mentioned in 5.1 Key Types of Liability and 5.3 Key Defences , some of the key concepts of civil liabil- ity applied to the environment are “disturbances of the neighbourhood” and the “control over the things under one’s guard”. The former provides that no one should cause exces- sive damage to their neighbourhood, even if an envi- ronmental permit authorises the industrial activity. However, the theory of “prior occupation” applies under certain conditions ‒ ie, one could not bring claims over a nuisance that already existed prior to their occupation of the neighbouring site. 10. Civil Liability 10.1 Civil Claims The second concept provides that a person may be held liable for the harms caused by the things under their effective control. Moreover, the French Civil Code provides for tortious liability, which may impose an obligation to repair the damage resulting from wrong- ful acts or negligence. Finally, since 2016 the French Civil Code states that anyone who causes environmental damage can be held liable and be obliged to repair it in kind. If impos- sible, the reparation ought to be pecuniary. This pro- vision incorporates what is referred to as a “pure” environmental damage, meaning that it is no longer necessary to prove the violation of a “human inter- est” ‒ for example, financial loss, physical injury or property damage.
In France, environmental insurance may be purchased specifically to cover any type of contamination or nuisance. However, French law does not impose any obligation on operators to purchase an environmental insurance. Almost all environmental risks can be covered by envi- ronmental insurance, except for: • environmental damage resulting from contamina- tion identified prior to signing the contract; • chronic contamination due to the operator’s activ- ity; or • damages resulting from a lack of maintenance of the facility. Environmental insurance contracts are available for events that can occur in the course of operating activi- ties, including events causing ecological prejudice. There is also a special insurance for historic pollution, but it only covers currently unidentified pollution and is yet to be further developed in France. Financial institutions and/or lenders can be held liable for damages arising from projects they fund, depend- ing on their level of involvement and their awareness of the risks. The same liability regime applies to finan- cial institutions as to any corporate entity. Furthermore, the French government has demonstrat- ed its will to promote green finance by launching a new label, Greenfin. This certification aims at ensuring transparency and the environmental involvement of financial products. 9.2 Lender Protection Since financial institutions and/or lenders’ liability is not specific to environmental project funding, these entities should be aware of the risks taken in becom- ing involved in their borrower’s projects and of the level of involvement. The more involved a lender or 9. Lender Liability 9.1 Financial Institutions/Lenders
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