Trust and the right to make mistakes

By Jacques Chevallier

The Government Reform Act for a Trust-Based Society (ESSOC Act) of 10 August 2018, known informally as the “right to make mistakes” act, aims to transform the government-citizen relationship from one of mistrust to one in which users who make a mistake are presumed to have acted in good faith. Building and restoring trust – on tax affairs and in dealings between citizens, taxpayers, businesses and the public sector – is now high on the government’s agenda. In this article, Professor Jacques Chevallier examines the legal scope of this reform, and just how deep it goes.

Transforming the government-citizen relationship is one of the central planks of the government’s current reform agenda. Rather than wielding its power to impose its views on society, the government should be “considerate and open”[1], and support citizen-led initiatives. The “Government Reform Act for a Trust-Based Society” of 10 August 2018 seeks to forge a new relationship between government and society, built on “trust”, in order to shape a “new, collective way of working”. The idea is that, by trusting citizens, the government will in turn earn their trust, thereby helping to close the legitimacy gap in public institutions. Behind the Act lies a vision of a government that “advises and serves” and that is “supportive”, “responsive” and “engaged” in its dealings with citizens. Likewise, citizens should receive “more advice and support in managing their affairs” and the government should be “less quick to penalise citizens when they make obvious mistakes”. Citizens should have the “right to make mistakes” because they have to navigate a “growing, increasingly complex and sometimes contradictory set of standards and obligations that, all too often, they struggle to recognise and understand”.

How the “right to make mistakes” works

The term “right to make mistakes” is, in itself, somewhat misleading. The Act does not, in fact, enshrine the right to make mistakes, but rather to correct mistakes made in good faith in order to avoid penalties.

More specifically, the Act allows citizens to fix “correctable” mistakes in mandatory returns and filings, provided they do so before the relevant deadline (if any) – mistakes that, if not fixed, would attract penalties. The right covers material errors and mistakes stemming from ignorance of an applicable rule.

This right comes with certain conditions attached. First, citizens can only plead ignorance of a rule once – in other words, the right only applies the first time a mistake is made. And second, they must not have acted in bad faith or committed fraud. In this case, the burden of proof rests with the government. The Act therefore establishes a new principle, by which “the government, as a matter of course, trusts natural and legal persons acting in good faith”.

The Act sets out two ways in which citizens can correct mistakes: “proactively” (the citizen corrects the mistake without being prompted) and “reactively” (the government notifies the citizen of the mistake and asks them to correct it). As long as newly supplied information is correct, the citizen will not be penalised for the original mistake.

This new arrangement brings with it a series of obligations for the government. First, it must check whether the citizen has made the same mistake before, or whether there is any evidence of bad faith or fraud. If not, the government must ask the citizen to correct the mistake. If the mistake is fixed before the relevant deadline (if any), no penalty applies.

What the right means in practical terms

The Act represents a fundamental shift in how the government perceives citizens. They now have the right to make mistakes (a right that was largely unrecognised in public law), and any mistakes are presumed to have been made in good faith. In other words, the Act puts an end to the traditional relationship of mistrust and suspicion as standard.

Citizens are no longer seen as passive subjects dutifully accepting penalties when they get things wrong, but as active agents who have the right to correct their mistakes. In this new paradigm, the government has a duty to engage with citizens, as partners, before it penalises them. So in that sense, the Act fundamentally alters the traditional balance of power, in which the government sets and enforces the rules and citizens merely obey. Perhaps more important still, the Act refocuses the relationship on the citizen. According to the explanatory statement, the idea is to place “citizens at the heart of the law”.

The “right to make mistakes” is just one of several new rights introduced by the Act. It also recognises the “right to control” (which allows citizens to ask the authorities to check that their practices are compliant), as well as establishing the justiciability of circulars and making advance rulings binding on the government. Insofar as the Act grants citizens a series of rights in their dealings with the government – rights that are set to grow in number and scope – it is consistent with a broader movement towards the subjectivisation of what has traditionally been viewed as an objective body of law. And because the Act requires the government to consider the intent behind any breach of the rules before applying penalties, it once again introduces subjectivity into an area that has long been considered objective.

What the right means in legal terms

The new right was initially treated with scepticism. First of all, there were similar, pre-existing rights in relation to both tax and social security filings in French law and procedure. Art. L. 62 of the Book of Tax Procedures, for instance, sets out a procedure for correcting “errors, inaccuracies, omissions and other defects” in tax returns, while Art. R. 243-11 of the Social Security Code allows employers to correct mistakes in social security filings. Moreover, as established in the Conseil d’État opinion of 23 November 2017, the right only applies in areas where no specific arrangement exists. Consequently, several types of penalty fall outside its scope, including penalties for non-compliance with EU law, penalties for failure to follow rules relating to public health, the safety of people and property, and environmental protection, contractual penalties, and penalties imposed by regulatory authorities. And last but by no means least, the associated conditions (“the first time” and “good faith”) are vaguely worded, leaving them open to wide interpretation.

At a deeper level, while this new arrangement is much needed amid an increasingly complex legal landscape, it is but a mere sticking plaster. It recognises the problem but does not fix it. The real answer lies in making the law itself simpler, through a multifaceted policy that tackles the issue from several angles. First, the government needs to slim down the law by trimming the existing body of rules and restraining future legislative initiatives. One way to achieve this would be to subject proposed laws to a cost-benefit analysis (and, in the process, improve the way impact assessments are carried out to address quality inconsistencies and disincentivize sub-standard assessments). Second, the law needs to be made clearer – in other words, legislation needs to be better drafted, in plain and easy-to-understand language. These are absolute preconditions of any clarification exercise. And third, more flexibility should be built into the law to give those tasked with enforcing it greater leeway. But it is important to maintain a sense of perspective here: while nobody would argue against simplifying the law in principle, any efforts in this direction will, by their very nature, be piecemeal and unfinished.

Turning again to terminology, one might ask whether the new arrangement is actually a right or whether it is, in fact, an obligation. Remember: citizens do not have the right to make mistakes, but merely the right to correct mistakes made in good faith. So in that sense, they have an obligation to correct mistakes – or face penalties. By giving citizens the opportunity to remedy a temporary breach of the rules, the Act is designed to ensure that the law is properly enforced, and that due process is followed.

How the right is being implemented

In 2019, the French Ombudsman noted various shortcomings in implementation of the new arrangement in relation to social security filings. The report noted with regret that the Directorate for Social Security had issued no guidance on how to apply the right to make mistakes, recommended informing users about their rights and obligations, and called for the rules on mandatory returns and filings to be simplified and harmonized to reduce the risk of error. In its response, the Directorate for Social Security said it was working to address these issues. It highlighted the decree of 11 October 2019, which introduced a rule whereby no penalties would apply for delays, omissions or inaccuracies in social security filings and payments, and explained that the Central Mutual Insurance Fund for Farmers (CCMSA) and the National Family Allowance Office (CNAF) were running an information campaign to make sure the rules were widely understood.

The steps taken so far are unquestionably making a positive difference. On 4 June 2019, the government launched a new website(www.oups.gouv.fr) listing the most common mistakes, with a separate section for each agency or department. There is now a one-stop shop for reporting and correcting mistakes – especially relating to tax filings – across all areas of government. And agencies and departments now have a duty to be proactive in detecting mistakes and notifying users.

Will the right to make mistakes help to build trust in the government-citizen relationship?

It is still too early to answer this question with confidence, since it will take time to assess how government and citizens adjust to the new arrangement. Building trust in the government-citizen relationship, which is precisely what the Act sets out to achieve, is a complex and multifaceted process.

Enshrining the right to correct mistakes is just one (ultimately minor) manifestation of a broader movement to strengthen citizens’ rights. All the evidence suggests that this aim has now risen to the top of the government’s agenda. After all, the stated aim of the 2015 Code on Relations between the Public and the Administration (CRPA) is to “facilitate and strengthen dialogue between the government and citizens”. The days of citizens as mere subjects or users are gone. They now enjoy a series of rights in their dealings with the government, including the right to information, the right to good administration, the right to be involved in decision-making and in the functioning of government, and the right to access services (which is underpinned by the enforceability of certain rights). Introducing the right to make mistakes is yet another step in the same direction – a movement that is, slowly but surely, reshaping the traditional relationship between citizens and government.

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[1]Unless stated otherwise, this and other quotes in this article come from the explanatory statement and impact assessment for the Government Reform Act for a Trust-Based Society of 10 August 2018.