Privileges are securities conferred by law on certain creditors by reason of the particular quality of their claim – not by contract, not by court order. When an employee goes unpaid after the employer’s insolvency, when the State claims taxes from a company in liquidation, when a garage retains a repaired vehicle, when a landlord seeks to recover rent from furnishings: all mobilise the same mechanism. This legal security imposes itself by the sole will of the legislature, which determined that the particular quality of certain claims justifies their payment before others.
Discreet, often hidden, sometimes formidable, privileges are the concealed skeleton of creditor competition. Their architecture, profoundly reshaped by Ordonnance no. 2021-1192, today conditions every recovery strategy and credit risk analysis.
Definition
Article 2324 of the Code civil: “A privilege is a right that the quality of the claim gives a creditor to be preferred over other creditors, even mortgagees.” Three structural elements:
Foundation: The privilege arises from the quality, nature or social/economic character of the debt. No deed, no formality – merely the existence of the qualifying claim.
Exclusively legal source: No contract can create a privilege the law does not provide. This reserves the power to arbitrate between competing interests to the legislature.
Occult character: Most privileges involve no publicity. This makes them dangerous for third parties contracting with the debtor, and paralyses the right of pursuit (Article 2276: for movables, possession constitutes title – a good-faith purchaser is protected).
The 2021 reform: a simplified landscape
The reform’s principal contribution: all former special immovable privileges (unpaid vendor, lender, co-partitioner, co-ownership syndicate, architect/contractor) were converted into special legal mortgages. They now require registration and rank by registration date. Since 2022, the only remaining immovable privileges are general ones (judicial costs and salaries).
The current classification comprises three categories: special movable privileges (over identified movable property); general movable privileges (over all movables); general immovable privileges (over all property, exercisable on immovables only subsidiarily).
Special movable privileges
Landlord’s privilege (Article 2332, 1): Covers all movables furnishing the leased premises, guaranteeing rent payment. Based on a fiction of tacit pledge.
Carrier’s privilege: Over transported goods until payment of carriage.
Vendor of movables (Article 2332, 4): Allows the unpaid vendor preference on the sold property while it remains in the buyer’s possession in its original form.
Conservation expenses privilege (Article 2332, 3): Protects whoever incurred expenses preserving another’s movable property – the garage repairer being the classic case. Often doubled by a right of retention, creating one of the most powerful movable securities.
General privileges
Judicial costs: Guaranteeing costs incurred for preservation, liquidation and realisation of the debtor’s assets – costs that benefited all creditors. Ranked first among general privileges.
Salaries: Protecting the last six months of remuneration plus statutory indemnities. Applies to both movables and immovables (subsidiarily). In insolvency, doubled by the super-priority (see below).
Subsidiarity principle (Article 2378): General privileges extending to immovables may only be exercised there in default of sufficient movables. This protects mortgagees from unlimited subordination to general privileges.
Insolvency-specific priorities
Super-priority of salaries (Articles L. 3253-2 to L. 3253-4 Code du travail): Covers the last 60 days of wages (90 for sales representatives), capped at twice the monthly social security ceiling per employee. Prevails over all other claims except property rights (retention of title) and effective right of retention. In practice, advanced by the AGS (Association pour la gestion du regime de garantie des creances des salaries), which is then subrogated.
Conciliation privilege (Article L. 611-11 Code de commerce): Rewards those providing new money or services under a homologated conciliation agreement. Ranks just after super-priority and judicial costs – ahead of mortgagees, pledgees and ordinary privilege holders.
Proceeding privilege (Articles L. 622-17, L. 641-13 Code de commerce): Protects claims arising after the opening judgment for the needs of the proceedings or in consideration of services provided to the debtor. Payable at maturity; if unpaid, ranks preferentially in final distribution.
Ranking in insolvency (Article L. 643-8 Code de commerce)
- Exclusive rights holders (retention of title, fiducie, effective retention): outside competition
- Super-priority of salaries (last 60 days)
- Judicial costs
- Conciliation privilege (new money)
- Proceeding privilege (post-opening claims)
- General privileges (salaries beyond super-priority, taxes)
- Special legal mortgages and contractual mortgages (by registration date)
- Unsecured creditors (pari passu)
This hierarchy differs significantly from civil-law ranking outside insolvency, reflecting the legislature’s choice to incentivise rescue and protect employees over creditors with older conventional securities.
Solent Avocats assists creditors in establishing and enforcing priority claims and defends debtors challenging excessive privilege assertions. See our securities guide and insolvency guide.