FRANCE Law and Practice Contributed by: Emmanuèle Lutfalla and Louis Fer, Signature Litigation AARPI
insurers seeking recovery from the liability insurer of the party responsible for the loss. In construction dis- putes, where several contractors and insurers may be involved, direct actions against the relevant liability insurers are routine. The third party’s recovery remains subject to the terms of the policy, so the insurer can generally rely on appli- cable exclusions, limits and deductibles. However, certain defences arising after the loss, such as cancel- lation of the policy for non-payment of premium, may not be enforceable against the third party. This cre- ates an important asymmetry: the insurer may have a defence against its insured which it cannot necessarily use against the injured third party. This is a recurring source of coverage disputes, particularly in complex multi-party litigation. 6.2 Emerging Liability and Defence Trends Several developments are reshaping how claims against insureds are defended in France. Regulatory scrutiny has increased, particularly in financial servic- es and corporate governance, with regulators taking a more active approach. This can create a dual track sit- uation, where the insured has to manage a regulatory investigation while preparing for potential civil claims arising from the same facts. Defence strategy there- fore often needs to be coordinated from the outset. Reputational risk is also playing a greater role, par- ticularly in disputes involving consumer products, environmental damage or allegations of corporate misconduct. In high profile cases, the commercial consequences of the dispute can influence settle- ment decisions alongside the legal merits. Insureds and insurers may consequently involve crisis commu- nications advisers as well as litigation counsel. Co-ordinated multi-claimant actions are another growing feature. France does not have a US-style class action system, although certain collective claims can be brought by approved associations, including in environmental and health matters. In practice, mass claims are also commonly managed through co-ordi- nated individual proceedings or joinder of parties. This can significantly increase the complexity and cost of the defence, particularly where numerous claimants are pursuing similar allegations. Insurers are therefore
paying greater attention to early coordination of coun- sel, experts and defence costs.
7. Geopolitical Factors 7.1 Geopolitical Drivers of Insurance Disputes Geopolitical developments are having a tangible impact on insurance disputes in France, although the effect is currently felt more through coverage analysis and underwriting than through a dramatic increase in litigation volumes. The conflict in Ukraine has been the most significant driver, raising coverage ques- tions across several lines, including political risk, trade credit, marine cargo, aviation and property dam- age. Insurers with exposure to Ukrainian or Russian risks have had to address difficult questions around war exclusions, territorial scope and the interaction between contractual obligations and sanctions com- pliance. Trade tensions, particularly between the EU, the USA and China, are also affecting the insurance landscape. Export credit and political risk insurers are facing increased uncertainty, while tighter technology export controls are creating new risks for manufacturers and their insurers. Energy market volatility has had a simi- lar effect, increasing both property damage and busi- ness interruption exposures in the industrial sector. More broadly, these developments are making geo- political risk harder to isolate within a single policy. A political event can trigger supply chain disruption, property damage, business interruption and sanctions issues at the same time. This is likely to make alloca- tion, causation and aggregation increasingly impor- tant in future coverage disputes. 7.2 Sanctions and Payment Challenges The EU sanctions regime, significantly expanded since 2022 in response to the conflict in Ukraine, has created practical difficulties for insurers operating in France. The first challenge is determining whether a claim involves a sanctioned party, sector or goods, and whether payment would breach applicable restrictions. This requires screening throughout the claims process, from notification of the claim through to payment.
112 I NSURANCE L I T IGATI O N 2026
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