An employee who uses for personal purposes the vehicle or the fuel card that you had entrusted to them. A company director who pays into their own account funds that were deposited for a specific purpose. A former colleague who walks away with your customer files. In many cases, these behaviours have a name in french criminal law: breach of trust (abus de confiance). Whether you believe you are the victim of misappropriation within your business or you are the one implicated, here is what this offence covers and the penalties it carries.
Breach of trust: an offence defined by Article 314-1 of the French Criminal Code
What is the definition of breach of trust?
Article 314-1 of the French Criminal Code defines breach of trust as “the act, by a person, of misappropriating, to the detriment of others, funds, valuables or any property which were handed over to that person and which that person accepted on condition of returning them, handing them back or using them in a specified way”.
Keep the chronology in mind, because it is what characterises this offence (délit). The property is first handed over voluntarily, within a legitimate framework, most often a contract such as a deposit (dépôt), a mandate (mandat) or a management assignment. The wrongful conduct comes afterwards, when the person to whom the property was entrusted uses it contrary to what was agreed.
The constituent elements of breach of trust and the requirement of a handover on a precarious basis (remise à titre précaire)
First and foremost, one condition must be met: the handover on a precarious basis. The property must have been handed over lawfully, accepted, and above all entrusted on condition of returning it, handing it back or using it in a specified way. You keep ownership; you only transfer use (détention). Without this condition, there is no breach of trust.
This point is decisive. Where the handover transfers full ownership, the legal classification is in principle ruled out. The Court of Cassation (Cour de cassation) restated this on 5 April 2018 (no. 17-81.085): funds handed over in full ownership under a services contract cannot give rise to breach of trust, even if the service provider knew from the outset that it would not be able to perform the contract.
Once this condition is met, the offence requires three elements:
- misappropriation, that is, behaving as the owner of the thing or using it in breach of the intended use. The Court of Cassation sees in it the decision to assume over property received on a precarious basis more extensive powers than those of a mere holder;
- the harm suffered by the owner, the possessor or the lawful holder. In practice, it is largely inferred from the misappropriation itself;
- fraudulent intent, which I discuss further below because it is where most of the debate lies.
How can you tell breach of trust from theft and fraud (escroquerie)?
The distinction is not just a matter of vocabulary. It determines the classification adopted, and therefore your strategy, whether you are filing a complaint or having to defend yourself.
Breach of trust or theft: the question of the handover
Theft (Article 311-1 of the French Criminal Code) requires a taking, without voluntary handover, against the owner’s will or without their knowledge. In breach of trust, the thing was voluntarily handed over before being misappropriated.
Case law refines this boundary according to what was handed over. If only physical custody was entrusted, the appropriation that follows may amount to theft. If possession was handed over, but on a precarious basis, the misappropriation falls under breach of trust. For example, in a self-service sale, before payment the customer has only physical custody of the goods: if they leave without paying, they commit theft, not breach of trust.
Breach of trust or fraud: at what point does the fraud occur?
Fraud (Article 313-1 of the French Criminal Code) rests on a handover obtained through a false name, a false capacity, the abuse of a genuine capacity or fraudulent manoeuvres. The consent of the victim is vitiated from the outset.
The distinguishing criterion is the timing of the fraud. In fraud, the deception precedes and causes the handover. In breach of trust, the handover was lawful and freely made, and the fraud occurs only afterwards.
Which types of property can be the subject of a breach of trust within a company?
Article 314-1 refers to “funds, valuables or any property”. The wording is broad.
Breach of trust concerning the company’s tangible property
These are the most classic cases: cash, cheques, goods, vehicles, professional equipment. Think of the fuel card or the computer handed over for work purposes, then used for personal ends. The property had a specific purpose, and it was diverted from it.
Breach of trust concerning data and clientele
Case law also protects intangible property of economic value, provided it was handed over on a precarious basis. Information about a company’s clientele, entrusted to an employee for their work, may constitute breach of trust when it is subsequently exploited by unfair means to divert that clientele to another company (Cass. crim., 22 March 2017, no. 15-85.929). The same applies to confidential computer files copied for personal purposes.
Advance payments, loans and services: when breach of trust is ruled out
Not every handover of money falls under this offence. The Court of Cassation traditionally refuses the classification for funds handed over under a consumer credit agreement, a mortgage loan, a private loan agreed by mutual consent or an advance payment: these are handovers of full ownership, where the recipient must merely perform their contractual obligations.
The precarious nature of the handover may nevertheless follow from the nature of the agreement. In a participative current-account agreement (contrat de compte courant participatif), the Court of Cassation held that funds made available for a fixed period, comparable to a remunerated deposit and to be returned at maturity, had been handed over on a precarious basis: using them for other purposes then amounts to breach of trust. The dividing line therefore depends on whether or not there is an obligation to return the funds or to apply them to a specific purpose.
Fraudulent intent, an indispensable condition of breach of trust
What the intentional element of breach of trust involves
Breach of trust is an intentional offence (Article 121-3 of the French Criminal Code). Mere negligence is never enough. The perpetrator must have been aware of the precarious nature of the handover, of their obligation to return the property or to respect the agreed use, and of the harmful nature of their conduct. In addition, there must be the will to behave as the owner or to make a use of the property that is manifestly foreign to what had been agreed.
In practical terms: a merely improper use of the entrusted property, without any intention to appropriate it, may be held insufficient. Recent case law is demanding and rules out any automatic presumption of bad faith.
How is bad faith proven in a breach of trust?
Proof of intent does not require a confession. The Court of Cassation accepts that it is inferred from the circumstances found by the judges, bad faith being included in the finding of misappropriation (Cass. crim., 12 May 2009, no. 08-87.418; Cass. crim., 13 January 2010, no. 08-83.216). The judges assess a set of converging indicators: concealment, lies, personal use, unjustified transfers.
One important limit should nevertheless be noted: a mere failure to return the property, or the mere disappearance of the property, even after formal notice (mise en demeure), is not enough to establish fraudulent intent. It must be shown that the impossibility of returning it results from deliberate acts, and not from negligence, a fortuitous event or force majeure. This nuance is often at the heart of cases, in one direction or the other.
What criminal penalties does the perpetrator of a breach of trust face?
Penalties for breach of trust faced by natural persons
Basic breach of trust is punishable by 5 years’ imprisonment and a fine of €375,000. The prison sentence was increased from 3 to 5 years by Law no. 2020-1672 of 24 December 2020. Facts that predate it remain subject to the former 3-year penalty.
The penalties are increased in certain cases. Article 314-2 of the French Criminal Code raises them to 7 years’ imprisonment and a fine of €750,000, in particular where the offence is committed by a person who habitually carries out transactions concerning the property of third parties for whom they collect funds, such as property managers or estate agents. Article 314-3 provides for an even stricter regime, with penalties of up to 10 years’ imprisonment, for certain categories of offender such as public and ministerial officers (officiers publics ou ministériels) and court-appointed representatives (mandataires de justice).
To these principal penalties are added the additional penalties in Article 314-10 of the French Criminal Code:
- deprivation of civic, civil and family rights;
- a ban on holding public office or on carrying out the activity connected with the offence, or on practising a commercial or industrial profession, or on directing or managing a company;
- closure of the establishment used in committing the acts;
- exclusion from public contracts;
- a ban on issuing cheques;
- confiscation of the item used in, or constituting the proceeds of, the offence;
- display or publication of the decision;
- for a foreign offender, a ban from French territory.
Penalties for breach of trust faced by legal entities
A company or an association can also be held criminally liable for breach of trust. The fine faced is €1,875,000, that is five times the fine provided for natural persons (Article 131-38 of the French Criminal Code).
The legal entity also faces the additional penalties provided for in Article 131-39 of the French Criminal Code:
- dissolution, if it was created, or diverted from its purpose, in order to commit the offence;
- a ban on carrying out one or more activities;
- placement under judicial supervision (placement sous surveillance judiciaire);
- closure of the establishments used in committing the acts;
- a ban on raising funds from the public (appel public à l’épargne);
- confiscation.
Natural persons and legal entities may be prosecuted at the same time.
Responding to a breach of trust: the firm’s support
As you will have understood, breach of trust turns on details: the exact nature of the handover, the scope of the obligation to return, the demonstration of fraudulent intent. These are what tip a case from one classification to another, or separate a mere contractual dispute from a criminal offence.
Whether you are a company that is the victim of misappropriation of funds, equipment or customer files, or an implicated person who wishes to defend themselves, each situation is assessed in light of the actual documents in the file. I only give general pointers here, and nothing replaces the examination of your case. If you are concerned, I invite you to contact me for a first confidential, no-obligation discussion, so that we can assess together the points to watch and the strategies available.
Do you want to file a complaint for breach of trust? Find all the useful information in this article.
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