Public Procurement and Builders' Liability: When the Judicial Court Must Wait for the Administrative Court

Imagine: you are mayor of a town like La Garde, in the Var. You entrusted the roof repair of the school to a local company. A year later, leaks appear. Major damage. You trigger the company's insurance. And then, surprise: the insurer tells you 'no question of paying until my insured's fault is established by the competent judge.' You find yourself in a legal deadlock. Who should decide? The judicial court or the administrative court? The question is crucial for all owners, landlords and local authorities who enter into public contracts.

The Court of Cassation answered this question on 11 December 2019 in a case involving the commune of Fréjus and several insurers. And its answer is final: the insurer cannot be condemned by the judicial court until the administrative court has decided whether the contractor is liable. A reminder of the separation of judicial orders dating back to the French Revolution.

Why is this decision important? Because it sets a clear rule: if you are in dispute with a builder under a public contract, you must first go through the administrative court to establish liability, before you can bring an action against the insurer before the judicial court. A detour that can lengthen deadlines, but avoids unjust condemnations.

The Facts: A Story Like Many Others

In 2011, the commune of Fréjus entrusted the company Midi Travaux with roadworks. A public contract, therefore subject to administrative law. The works were accepted, but soon defects appeared: deteriorating asphalt, subsidence… The commune then sued directly Midi Travaux's insurers before the tribunal de grande instance (now the tribunal judiciaire). It claimed an interim payment of 100,000 euros for urgent repairs.

The insurers refused: in their view, their liability was not engaged until the liability of their insured (Midi Travaux) was established. However, for a public contract, only the administrative court is competent to assess this liability. The commune argued, on the contrary, that the judicial court could rule on the insurance without waiting, because the insurance contract is governed by private law.

The Aix-en-Provence Court of Appeal ruled in favour of the commune in 2018. The insurers appealed to the Court of Cassation. The Court of Cassation quashed the judgment: the Court of Appeal had violated the law of 16-24 August 1790 and the decree of 16 Fructidor Year III, which establish the principle of separation of administrative and judicial authorities. In clear terms, the judicial court cannot rule on a question that falls within the jurisdiction of the administrative court. Here, the liability of the contractor under a public contract is an administrative question. Until the administrative court has ruled, the judicial court must stay proceedings (suspend its decision).

The Reasoning of the Court — Analysed

The Court of Cassation relies on two fundamental texts: the law of 16-24 August 1790 and the decree of 16 Fructidor Year III. These texts, over two centuries old, prohibit the judicial court from hearing matters concerning acts of the administration. A public contract is an administrative contract. The liability of the contractor performing it is therefore an administrative question. The judicial court cannot assess it.

Next, the Court recalls Article L. 124-3 of the Insurance Code: the insurer must only indemnify if the liability of its insured is established. However, to establish this liability under a public contract, it is necessary to go through the administrative court. Therefore, the judicial court must stay proceedings pending the decision of the administrative court.

This is not a reversal, but a confirmation. The Court of Cassation had already ruled in the same way in 2012 (appeal no. 11-14.410). But the Fréjus case forcefully reminds that this principle is mandatory. The lower courts (Court of Appeal) had erred in thinking they could decide quickly. The Court of Cassation puts them back on the right track.

Why such strictness? Because the judicial court does not have jurisdiction to interpret an administrative contract. Imagine a rugby match refereed by a football referee: the rules are not the same. Similarly, the administrative court applies the Public Procurement Code, the judicial court applies the Civil Code. Mixing the two would be a source of errors and inconsistencies.

What This Changes for You — Concretely

If you are a commune, a condominium association, or even a private individual who has entered into a public contract with a contractor (for example, roadworks or public building works), this decision has a direct impact. You cannot directly sue the insurer before the judicial court. You must first bring an action before the administrative court to establish the contractor's liability. Only then can you claim compensation from the insurer.

Concretely, this means additional delays. A procedure before the administrative court can take 6 to 18 months. Then, a new judicial procedure against the insurer will be required. In total, expect 2 to 3 years to be compensated. But beware: if you skip the administrative step, the judicial court will reject your claim, as in the Fréjus case.

Take a concrete example: in La Garde, renovation works of the village hall for €200,000 show defects. The commune carries out urgent repairs for €30,000. It sues the contractor's insurer. If it has not first had the contractor's liability established by the administrative court, the insurer can refuse to pay. The commune will then have to restart the procedure, losing time and money.

If you are a private individual, the situation is rarer, because public contracts mainly concern local authorities. But if you own a building and have commissioned a company under a public contract (for example, a works concession), the same rule applies. The advice is therefore: check the nature of the contract before directly suing the insurer.

Four Tips to Avoid This Type of Dispute

• Check the legal nature of the contract: Before any action, ask a lawyer whether your contract is a public contract (subject to administrative law) or a private law contract. If it is a public contract, the contractor's liability falls within the jurisdiction of the administrative court.
• First bring an action before the administrative court: If you notice defects, do not rush to the insurer. Initiate an interim expert assessment procedure before the administrative court to have the defects recorded and the contractor's liability established.
• Send a formal notice to the contractor by registered letter: Before any action, formalise your request for repair. This will help document the dispute and prove that you attempted an amicable solution.
• Keep all contract documents: Specifications, quotes, invoices, correspondence. These documents will be essential for the administrative court and the insurer.

Further Reading: Related Case Law and Developments

This decision is part of a consistent line of case law. Already in 2012 (Civ. 2e, 12 July 2012, no. 11-14.410), the Court of Cassation ruled that the judicial court cannot condemn the insurer without awaiting the administrative decision. More recently, in 2021 (Civ. 2e, 4 February 2021, no. 19-21.376), it reaffirmed this principle in the context of a public works contract.

The trend is therefore clear: judges are increasingly strict on the division of powers. This may seem rigid, but it is a guarantee of legal certainty. Local authorities are the first affected, but private individuals contracting with the administration must also take it into account.

For the future, we can expect insurers to systematically invoke this argument to buy time. Local authorities will therefore have to anticipate this dual procedure. A legislative reform could simplify things, but for now, the rule remains the same.

Summary and Next Steps

FAQ:

Q: Can I directly sue the contractor's insurer in case of defects under a public contract?
A: No, you must first have the contractor's liability established by the administrative court. Without that, your action against the insurer will be inadmissible.

Q: What if the insurer refuses to pay pending the administrative court's decision?
A: You can apply to the administrative court for an interim expert assessment and, if urgency justifies it, an interim payment. But the insurer will only be obliged to pay after the administrative decision.

Q: What are the time limits for taking action?
A: For the claim against the contractor before the administrative court, you have 2 years from the acceptance of the works (decennial liability) or 5 years under general law. For the direct action against the insurer, the time limit is 2 years from the loss. However, these time limits are suspended during the administrative procedure.

Q: Does this decision apply to private law contracts?
A: No, only to public contracts. If you have a contract with a tradesman for work at your home, private law applies, and you can directly sue the insurer before the judicial court.

Q: Can I claim late payment interest if the insurer delays?
A: Yes, once liability is established, you can claim interest at the legal rate from the date of the formal notice. But beware: as long as the administrative court has not ruled, the insurer can legitimately refuse to pay.

In a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of procedure — and often much more. Book an appointment →