Who should pay for an internal investigation: the employer, the works council, the insurer or the employee?

Updated 9 November 2026

Key contacts: Pascal-André Gérinier (Lawyer - Founder), William Mak (Lawyer - Founder)

The employer bears the cost of the investigation it decides on, under its duty of safety. Where the works council (CSE) appoints an accredited expert for a serious, identified and current risk, the expert's fees are borne in full by the employer (Articles L. 2315-94 and L. 2315-80 of the French Labour Code), which may only challenge the decision before the court within ten days. The employee never pays for the employer's investigation: making them bear the cost would be a prohibited financial penalty (Article L. 1331-2). They may fund their own counsel, sometimes through legal expenses insurance.

Key points

• The investigation the employer decides on is a cost for the company, never for the employee, even one at fault.
• The works council's expert assessment for serious risk is paid 100% by the employer; most other one-off expert assessments are paid 80% by the employer, with the works council funding 20% from its operating budget, except those that the law places entirely at the employer's expense.
• The employer has ten days to challenge the expert assessment; applying to the court suspends it, except where the challenge concerns only the final cost.

Who commissions, who pays: the table

• Legal expenses insurance covers mainly the defence once the dispute has arisen; directors' liability insurance may cover investigation costs.
• Part of the costs can be recovered before the court under Article 700 of the French Code of Civil Procedure, rarely all of them.

The cost of an investigation may weigh on the decision to launch it, especially where several people have to be interviewed or technical investigations are required. But waiting for budgetary reasons can also complicate the protection of employees and the preservation of evidence. Three funders may be involved: the employer, the works council and the insurer, depending on the measure undertaken and the cover under the policy. The principle is simple: each bears the cost of its own obligations. The employer pays for the investigations it commissions and cannot transfer the cost of its own obligations to the employee.

The investigation decided on by the employer: a cost for the company

When it opens an investigation, the employer is performing its duty of safety (Article L. 4121-1 of the French Labour Code): preventing risks, including psychosocial risks, and putting an end to what has been reported. The cost is a cost for the company, like other advisory fees. What makes it vary:

• the number of people to be interviewed and the number of investigators per interview;
• the languages and countries concerned, with or without an interpreter;
• the analysis of mailboxes or servers, which requires a frozen copy of the data and sometimes an IT service provider;
• court bailiff (commissaire de justice) reports and judicial measures;
• the drafting of a report that can be produced in court, with its anonymised versions.

MOSAIK draws up a fee quote on these criteria before opening the investigation, and revises it if the scope changes.

The employee does not fund the investigation commissioned by their employer. Deducting all or part of the costs from their salary would amount to imposing a financial penalty, prohibited by Article L. 1331-2 of the French Labour Code. This prohibition remains even if the investigation establishes misconduct, including serious misconduct. Under settled case law, an employee's financial liability towards their employer requires gross misconduct (faute lourde), characterised by an intention to cause harm. An employer that considers it has suffered loss may then seek compensation from the court, but cannot reimburse itself directly from the employee's pay. A distinction must therefore be drawn between investigation costs and any judicial claim for compensation.

The works council's expert assessment for serious risk: 100% at the employer's expense

The works council may call on an accredited expert where a serious, identified and current risk, whether or not revealed by an accident at work or an occupational disease, is found in the establishment (Article L. 2315-94). This is the former "approved expert": the Code has said "accredited" since the 2017 ordinances, but the old term is still used in companies. The costs of this expert assessment are borne in full by the employer (Article L. 2315-80). Most other one-off expert assessments are funded 80% by the employer and 20% by the works council from its operating budget, and 100% by the employer if that budget is insufficient and has not been transferred to social and cultural activities during the preceding three years; some remain entirely at the employer's expense, such as those concerning social policy or a proposed collective redundancy. Not to be confused with the investigation that the employer conducts with an elected member after an alert for an infringement of individual rights (Article L. 2312-59): that investigation does not, in itself, give rise to a right to an expert assessment funded by the employer.

First check whether the serious risk is identified and current: a vague malaise is not enough. Sick leave, alerts or the opinion of the occupational physician may support it. The choice of expert, the cost, the scope or the duration may also be challenged. Under Article R. 2315-49 of the French Labour Code, you have ten days to apply to the court, from the resolution, appointment or notification concerned. The members of the works council notify the employer, if need be, of a statement of requirements; the expert notifies the employer of the estimated cost, scope and duration of the assessment (Article L. 2315-81-1). The court rules within ten days on initial challenges; the application suspends the expert assessment, except where it concerns only the final cost (Article L. 2315-86). The expert assessment deals with working conditions, without replacing the investigation into individual facts. Coordinate the timetables to avoid repeated interviews.

Can the works council pay for its own lawyer?

Yes. The works council has an operating budget paid by the employer, equal to 0.20% of the gross payroll in companies with fifty to fewer than two thousand employees and 0.22% above that (Article L. 2315-61). It may use it for the fees of a lawyer who assists it in the joint investigation under Article L. 2312-59, reviews a report or supports it in challenging a measure; MOSAIK advises councils in this context, after checking that it is not already acting for the employer in the same matter. It may also use this budget to fund so-called free expert assessments, in preparation for its work (Article L. 2315-81), which fall under no statutory case of recourse and are not binding on the employer. These expenses are decided by resolution and recorded in its accounts.

The private investigator: what they can do and who pays them

A private investigator falls under Book VI of the French Internal Security Code and practises with a professional licence issued by the CNAPS, within an authorised agency (Article L. 622-19 of the French Internal Security Code). They are paid by whoever instructs them, generally the employer. Tailing and surveillance may infringe privacy. Evidence obtained unlawfully or unfairly may be admitted only if it is indispensable to the right to evidence and if the infringement of other rights is strictly proportionate (Ass. plén. 22 décembre 2023, n° 20-20.648). Such an investigator does not benefit from the lawyer's legal professional privilege (secret professionnel) and does not represent their principal before the court. A report excluded from the proceedings is money wasted. Their involvement may supplement a properly scoped investigation, not replace it.

Insurance: legal expenses and directors' liability

Company legal expenses policies most often cover defence costs once the dispute has arisen, and not the preventive investigation that precedes it. Directors' liability policies may, depending on their wording, cover investigation costs where a director is personally implicated. Under legal expenses insurance, the insured freely chooses their lawyer (Article L. 127-3 of the French Insurance Code), but the scales of cover are capped; under a directors' liability policy, free choice depends on the clause. Before committing:

• read the definitions of "insured event", "investigation costs" and "defence costs" in the policy;
• notify the insurer as soon as the report is received, as late notification exposes the insured to forfeiture of cover;
• assert the free choice of lawyer in writing;
• budget for the amount that remains payable.

An employee who wants separate counsel can check their legal expenses insurance. It is sometimes included in a home insurance policy or in the cover attached to a bank card. They should check the cover, its exclusions and the notification procedures. If the cover applies, the employee retains the free choice of their lawyer in accordance with Article L. 127-3 of the French Insurance Code. They may also seek the assistance of a trade union. Before the labour court (conseil de prud'hommes), a trade union defender may assist them free of charge. Subject to a means test, and in the absence of legal expenses insurance covering the costs, legal aid under the Act of 10 July 1991 may help to fund their defence. The investigation decided on by the employer is not billed to them.

Recovering part of the costs after litigation

If the matter ends before the court, the losing party may be ordered to pay the other a sum in respect of costs incurred and not included in the recoverable costs (Article 700 of the French Code of Civil Procedure). The court sets the amount freely, taking account of fairness or the economic situation of the party ordered to pay, and may even of its own motion decide that no such order is appropriate; it rarely covers all of the fees. The investigation costs themselves are not recoverable costs. Full compensation requires proof of a separate fault and loss, which remains exceptional between an employer and an employee.

What changes according to the facts

The size of the company changes the options. Below fifty employees, the works council has neither the statutory operating budget nor recourse to the expert assessment for serious risk. No internal whistleblowing channel is required on the basis of that threshold alone. Where a works council exists, its involvement and decisions influence the funding. Where criminal conduct is involved, an investigation by the authorities may be opened without investigation costs being billed to the employer, but it follows its own timetable. Internationally, translations and local rules may add to the burden of the operations. For the employee, legal expenses insurance, trade union support and legal aid widen the funding options. Finally, the actions that precede or follow the investigation, risk mapping, reporting channel, manager training, mediation, are the subject of fee quotes separate from that of the investigation: the company commits only to what it needs.

The guide Which HR risks require an internal investigation to be opened? helps to decide whether to open the investigation; the guide Why entrust the internal investigation to a lawyer? compares the practitioners and their real cost; the Employment law page presents the firm's employment practice, and the Internal investigations page the approach as a whole.