A greater role for lawyers in support of corporate compliance with the duty of vigilance

Lawyers are, in essence, defenders of human rights. We already defend our clients and their rights in the courts. But our mission extends beyond the courts. In addition to our participation in the amicable resolution of disputes, through negotiation or mediation for example, other fields of activity are open to lawyers for the defense of human rights, this time outside the courts, within companies. This concerns missions entrusted to us by companies to help them comply with their duty of care.

This duty has recently been extended by the adoption of a European Directive, which calls for strong intervention by lawyers to ensure its effective implementation.

European Directive (EU) No. 2024/1760, of the European Parliament and of the Council, of June 13, 2024, on the duty of care of companies with regard to sustainability, will considerably broaden the scope of the duty of care compared with existing national legislation, such as French Law No. 2017-399, of March 27, 2017, by lowering thresholds and including more companies. It has an extraterritorial effect, as it also targets non-European companies, but which generate sales of over €450 million within the Union.

It will oblige many companies to implement vigilance procedures in their supply chains for the first time. The sanctions mechanism, with fines of up to 5% of worldwide sales, is a strong incentive for companies to take these new obligations seriously. The companies concerned will have to rapidly adapt their governance and internal processes to ensure compliance within a tight timeframe - the transposition of the directive into national law is set for July 26, 2026 at the latest.

By capillary action and trickle-down effect, this duty of vigilance will extend, thanks to contractual, hard-law and soft-law techniques, to all small and medium-sized companies upstream or downstream in the chain of activities of those directly targeted. Case law has already expressed itself on this point: in a ruling dated November 20, 2019, the Commercial Chamber of the French Supreme Court (Cour de cassation) recognized that the breach of compliance obligations (in this case anti-gift, transparency and anti-bribery schemes) inserted in a commercial contract constitutes a serious fault justifying the termination of said contract without notice: "Taking into account the rules set out in the compliance program and the agreement reached, the [Sales Agent's] breach of its contractual obligations, in that it was likely to engage the [Company's] own liability, was sufficiently serious to justify termination of the commercial relationship without notice" (Cass. com, November 20, 2019, n° 18-12.817, F-D N° Lexbase : A4677Z3M). The same will apply to the duty of care: supplier or subcontractor companies that fail to comply with contractual clauses relating to the duty of care will be at risk in their contractual relations with their business partners.

While these obligations represent an organizational and financial challenge, they are also an opportunity to strengthen risk management and the sustainability of business models. This is where the lawyer comes in as a true partner to companies and stakeholders in respecting human rights, whether as advisor, trainer, auditor, negotiator, mediator or defender in the strict sense of the term.

Architect of the vigilance plan

The lawyer's role begins with the design and implementation of due diligence processes. Although the Directive does not explicitly mention the term "due diligence plan", it does impose clear obligations on companies to prevent and detect serious violations of human rights, health, safety and the environment. Lawyers are the architects of these vigilance plans, helping companies to understand the risks associated with their activities, and to establish compliant and appropriate procedures. He also designs internal alert processes, which are essential for the rapid detection of problems.

Trainer

Through training initiatives, the lawyer plays a fundamental educational role. Training teams in the challenges of the duty of vigilance is not limited to technical presentations: it involves instilling a culture of corporate social responsibility within the company, and making employees and managers aware of the risks and behaviors to adopt. By developing this culture, the lawyer plays an active role in preventing violations and anchoring respect for human rights in the company's day-to-day operations.

Internal auditor or investigator

The lawyer may be asked to carry out internal audits to assess the effectiveness of the vigilance plan in place. He identifies any gaps and suggests improvements to reinforce existing systems. This ongoing assessment is essential to ensure that the vigilance plan remains in line with legislative developments and the specific features of the company's activities. It can also act as an objective and impartial internal investigator in the event of an internal alert or complaint.

Negotiator or mediator with stakeholders

Companies will often be confronted with concerns expressed by trade unions, NGOs or other stakeholders. In these situations, the lawyer takes on the role of negotiator, seeking to resolve conflicts outside the courts. If mediation is necessary, another lawyer can act as mediator to facilitate constructive dialogue. This pragmatic approach is essential to finding solutions that respect both legal requirements and stakeholders' expectations.

Litigation defense

If a company is accused of failing to comply with its duty of care, the company's lawyer defends it before the relevant courts. He develops an appropriate strategy to contest the allegations or, where necessary, negotiate amicable solutions. His in-depth knowledge of the legal and jurisprudential framework is a major asset in protecting the company against legal and financial risks.

An essential role in ensuring respect for human rights within companies

Thus, the many facets of the lawyer's role in compliance with the duty of care contribute to the effectiveness of this obligation. By assisting companies in implementing their duty of care, lawyers play an active role in strengthening their corporate social responsibility and preventing their clients' legal, reputational and social risks. As lawyers, it is up to us to take full ownership of these new responsibilities, and thus confirm our central role in defending and promoting human rights, both inside and outside the courtroom.

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Matthieu Boissavy

(article also published in Lexbase Avocats on November 8, 2024)

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