Choice of law for torts has had a long and interesting history in England, a history that illustrates many of the issues and problems in choice of law. We start by looking at some key cases.
A British ship had collided with a Norwegian ship in Belgian waters. At the time of the collision, the British ship was under the control of a pilot. Under Belgian law, the British ship was obliged to take the pilot on board and give him control of the ship. Nevertheless, under Belgian law, the owner of the British ship was responsible for the consequences of the pilot’s negligence. Under English law, on the other hand, a shipowner was not responsible for the negligence of a compulsory pilot. The owner of the Norwegian ship brought an action in rem against the British ship in England. The Court of Admiralty held that the action could be founded on Belgian law. The defendant (the British shipowner) appealed to the Privy Council.
[T]he liability of the Appellants, and the right of the Respondents to recover damages from them, as the owners of the Halley, if such liability or right exists in the present case, must be the creature of the Belgian law; and the question is, whether an English Court of Justice is bound to apply and enforce that law in a case, when, according to its own principles, no wrong has been committed by the Defendants, and no right of action against them exists.
The Counsel for the Respondents, when challenged to produce any instance in which such a course had been taken by any English Court of Justice, admitted his inability to do so, and the absence of any such precedent is the more important, since the right of all persons, whether British subjects or aliens, to sue in the English Courts for damages in respect of torts committed in Foreign countries has long since been established; and … there seems to be no reason why aliens should not sue in England for personal injuries done to them by other aliens abroad, when such injuries are actionable both by the law of England and also by that of the country where they are committed, and the impression which had prevailed to the contrary seems to be erroneous.
…
It is true that in many cases the Courts of England inquire into and act upon the law of Foreign countries, as in the case of a contract entered into in a Foreign country, where, by express reference, or by necessary implication, the Foreign law is incorporated with the contract, and proof and consideration of the Foreign law therefore become necessary to the construction of the contract itself. And as in the case of a collision on an ordinary road in a Foreign country, where the rule of the road in force at the place of collision may be a necessary ingredient in the determination of the question by whose fault or negligence the alleged tort was committed. But in these and similar cases the English Court admits the proof of the Foreign law as part of the circumstances attending the execution of the contract, or as one of the facts upon which the existence of the tort, or the right to damages, may depend, and it then applies and enforces its own law so far as it is applicable to the case thus established; but it is, in their Lordships’ opinion, alike contrary to principle and to authority to hold, that an English Court of Justice will enforce a Foreign Municipal law, and will give a remedy in the shape of damages in respect of an act which, according to its own principles, imposes no liability on the person from whom the damages are claimed …
Result: the British defendant was not liable.
In this case, the Privy Council seemed reluctant to pay any attention to foreign law except as providing some sort of background to the claim. It was certainly unwilling to allow it to serve as the foundation for a claim in tort when the defendant’s act was not a tort under English law.
Eyre had been the Governor of the British colony of Jamaica. He had suppressed a rebellion with great brutality. One of the victims sued him in tort in England. What he had done may have been a tort under English law, but it was not under Jamaican law. The reason was that Governor Eyre had taken the precaution of passing an Act of Indemnity in Jamaica,1 It was assented to by the Crown. legislation that retrospectively declared lawful everything that had been done to suppress the rebellion. Phillips nevertheless argued that, if the act was a tort under English law, he could recover damages.
The last objection to the plea of the colonial Act was of a more technical character;1 Editor’s note: the other objections concerned the legality or constitutionality of the Act of Indemnity. that assuming the colonial Act to be valid in Jamaica and a defence there, it could not have the extra-territorial effect of taking away the right of action in an English court. This objection is founded upon a misconception of the true character of a civil or legal obligation and the corresponding right of action. The obligation is the principle to which a right of action in whatever court is only an accessory, and such accessory, according to the maxim of law, follows the principle, and must stand or fall therewith … A right of action, whether it arise from contract governed by the law of the place or wrong, is equally the creature of the law of the place and subordinate thereto. The terms of the contract or the character of the subject-matter may shew that the parties intended their bargain to be governed by some other law; but, prima facie, it falls under the law of the place where it was made. And in like manner the civil liability arising out of a wrong derives its birth from the law of the place, and its character is determined by that law. Therefore, an act committed abroad, if valid and unquestionable by the law of the place, cannot, so far as civil liability is concerned, be drawn in question elsewhere unless by force of some distinct exceptional legislation, superadding a liability other than and besides that incident to the act itself. In this respect no sound distinction can be suggested between the civil liability in respect of a contract governed by the law of the place and a wrong.
… As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First, the wrong must be of such a character that it would have been actionable if committed in England; therefore, in The Halley, the Judicial Committee pronounced against a suit in the Admiralty founded upon a liability by the law of Belgium for collision caused by the act of a pilot whom the shipowner was compelled by that law to employ, and for whom, therefore, as not being his agent, he was not responsible by English law. Secondly, the act must not have been justifiable by the law of the place where it was done …
1 Editor’s note: the other objections concerned the legality or constitutionality of the Act of Indemnity.
It would clearly be wrong to hold a person liable in tort for something that was lawful under the law of the place where it was done; so, once it was established that the Act of Indemnity was constitutionally valid, the court had to hold for Governor Eyre. The result was the famous ‘double-actionability’ rule, a rule that was applied in English law for almost a century. It is usually expressed as follows, slightly adapting the words of Willes J:
As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled:
• First, the wrong must be of such a character that it would have been actionable if committed in England.
• Secondly, the act must not have been justifiable by the law of the place where it was done.
The following points should be noted:
The formulation of the rule is preceded by the words ‘as a general rule’, thus indicating that there may be exceptions (it was almost a hundred years before effect was given to this possibility).
The rule applies only when the tort is committed abroad: when it is committed in England, only English law applies.
While the first limb of the rule requires that the act must be ‘actionable’ under English law, the second limb requires only that it should not be ‘justifiable’ under the law of the place where it was committed. This difference of terminology has given rise to considerable debate. Although it is understandable in the context of the case – the Act of Indemnity had indeed ‘justified’ Governor Eyre’s otherwise-illegal acts – it could be argued that it constitutes a lesser requirement than that under the first limb. This point arose in our next case.
In this case, the alleged tort took place in Brazil. It took the form of a libel in a publication in the Portuguese language. The claimant sued in England. One of the defences was that, under Brazilian law, a libel, while a criminal offence, was not a tort.
[After referring to the defendant’s plea that libel was not a tort under the law of Brazil, said:]
Now the principle applicable in the present case appears to me to be this: where the words have been published outside the jurisdiction, then, in order to maintain an action here on the ground of a tort committed outside the jurisdiction, the act complained of must be wrongful – I use the word ‘wrongful’ deliberately – both by the law of this country, and also by the law of the country where it was committed; and the first thing we have to consider is whether those conditions are complied with.
[Lopes LJ referred to Phillips v. Eyre and another case, and continued:]
Both those cases seem to me to go this length: that, in order to constitute a good defence to an action brought in this country in respect of an act done in a foreign country, the act relied on must be one which is innocent in the country where it was committed. In the present case there can be no doubt that the action lies, for it complies with both of the requirements which are laid down by Willes J. The act was committed abroad, and was actionable here, and not justifiable by the law of the place where it was committed. Both those conditions are complied with; and, therefore, the publication in Brazil is actionable here.
It then follows, directly the right of action is established in this country, that the ordinary incidents of that action and the appropriate remedies ensue. Therefore, in this case, in my opinion, damages would flow from the wrong committed just as they would in any action brought in respect of a libel published in this country …
Willes J, in Phillips v. Eyre, was laying down a rule which he expressed without the slightest modification, and without the slightest doubt as to its correctness; and when you consider the care with which the learned judge prepared the propositions that he was about to enunciate, I cannot doubt that the change from ‘actionable’ in the first branch of the rule to ‘justifiable’ in the second branch of it was deliberate. The first requisite is that the wrong must be of such a character that it would be actionable in England. It was long ago settled that an action will lie by a plaintiff here against a defendant here, upon a transaction in a place outside this country. But though such action may be brought here, it does not follow that it will succeed here, for, when it is committed in a foreign country, it may turn out to be a perfectly innocent act according to the law of that country; and if the act is shewn by the law of that country to be an innocent act, we pay such respect to the law of other countries that we will not allow an action to be brought upon it here. The innocency of the act in the foreign country is an answer to the action. That is what is meant when it is said that the act must be ‘justifiable’ by the law of the place where it was done.
It is not really a matter of any importance what the nature of the remedy for a wrong in a foreign country may be. The remedy must be according to the law of the country which entertains the action …
This case establishes that ‘not justifiable’ requires only that the act should be in some sense unlawful: it is not necessary that it should give rise to civil liability; criminal liability would be sufficient. This has been subject to considerable criticism; nevertheless, it has a certain logic. If foreign law is applicable only to protect a defendant who acted in reliance on it, it should not matter what form the illegality takes.
The law laid down in these three cases continued to apply in England until 1969, when the House of Lords decided Chaplin v. Boys2 [1971] AC 356; [1969] 3 WLR 322; [1969] 2 All ER 1085. (set out in § 4, below). In this case, a majority in the House of Lords overruled Machado v. Fontes and held that the act must give rise to civil actionability under the foreign law: criminal liability is not sufficient. The House of Lords also held that the ‘double-actionability’ rule is subject to an exception: in certain circumstances, English law alone may be applied. In a subsequent decision, it was held by the Privy Council on appeal from Hong Kong that, in exceptional circumstances, the foreign law alone may be applied.3 Red Sea Insurance Co. Ltd v. Bouygues SA [1995] 1 AC 190. These two exceptions made the rule more flexible.
The ‘double-actionability’ rule was finally abolished by the Private International Law (Miscellaneous Provisions) Act 1995, which established the general rule that the applicable law is the law of the place where the tort was committed, though this too was subject to exceptions.4 On this, see Morse, ‘Torts in Private International Law: A New Statutory Framework’ (1996) 45 ICLQ 888. This was not quite the end of the ‘double-actionability’ rule, however, since the British press launched a successful campaign when the Bill was going through Parliament to retain the rule in defamation cases. Their concern was that, if the foreign law alone were applicable, a true, but defamatory, article about a foreign dictator might give rise to liability in England if, under the foreign law, the truth of the statement was no defence.
It is not necessary to consider the Act because it has now been replaced by the EU Rome II Regulation,5 However, the Act is still applicable to a narrow range of cases – for example, actions for invasion of privacy, which are excluded from the scope of the Rome II Regulation but not from the 1995 Act. which applies from 11 January 2009.6 According to Article 32, the Regulation ‘applies’ from 11 January 2009. It applies to events giving rise to damage which occurred after its entry into force: Article 31. In an EU measure, entry into force and application are not the same thing. Unless the contrary is specified in it, a general EU measure enters into force on the twentieth day following its publication in the Official Journal of the European Union. This rule is now contained in Article 297 TFEU (Treaty on the Functioning of the European Union). When the Rome II Regulation was adopted, the relevant provision was Article 254 EC (Treaty Establishing the European Community), which laid down the same rule. The Rome II Regulation was published in the Official Journal dated 31 July 2007. The twentieth day after publication was, therefore, 20 August 2007. This means that the Regulation applies from 11 January 2009 and entered into force on 20 August 2007. So the event giving rise to the damage must have occurred on or after 20 August 2007. It is not clear what the significance of the date of ‘application’ is: does it refer to the date on which proceedings are commenced or to the date on which judgment is given? The former seems more natural, though Dickinson argues in favour of the latter: see Dickinson (Andrew), The Rome II Regulation: A Commentary (Oxford University Press, Oxford, 2008) at pp. 285–90. This will be discussed below. However, when the Regulation was going through the European Parliament, European media interests, led by the British press, launched a campaign to have defamation excluded from it. This, too, was successful.7 The question is supposed to be reviewed by the Commission in a report which should have been submitted by the end of 2008: Article 30(2). It has not so far appeared. The result is that the ‘double-actionability’ rule still applies to defamation in England. It is considered further in § 7, below.
1. Unless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.
2. However, where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.
3. Where it is clear from all the circumstances of the case that the tort/ delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.
In this section, we will consider the rule applying to torts in general. (There are special rules for certain specific torts: see § 6, below.)
The general rule laid down by the Regulation in Article 4(1) is that the applicable law is that of the country in which the damage occurs (Panel 22.1). The rule refers to the place where the damage occurs, rather than the place where the tort occurs, to cover the situation where the wrongful act of the defendant takes place in one country and the damage occurs in another. As we saw in Chapter 4, § 1.2, above, this has caused problems with regard to jurisdiction. The words ‘irrespective of the country in which the event giving rise to the damage occurred’ are intended to ensure that the law of the country where the wrongful act of the defendant took place will not apply, while the words ‘irrespective of the country or countries in which the indirect consequences of that event occur’ are intended to ensure that the rule laid down, with regard to jurisdiction, in Dumez v. Hessische Landesbank and Marinari v. Lloyds Bank (Chapter 4, § 1.2, above) will also apply to choice of law. No attempt has been made to clarify the ambiguities in these cases.
In our next case, there was a suggestion that there should be a choice-of-law rule to determine what constitutes the ‘damage’ for the purpose of this rule.
A Romanian woman was killed in a traffic accident in Italy. Her father, who was domiciled in Romania, wanted to claim for the material and non-material damage he had suffered. Non-material damage would consist of the anguish he had suffered on hearing of his daughter’s death. He could have suffered material damage if his daughter was intending to help him financially.
It seems that, under Italian law, such a claim is regarded in some way as separate from the damage suffered by the deceased: it is regarded as an infringement of the personal rights of the father. Under other legal systems it would simply be regarded as the indirect consequence of the death of the victim. The Italian approach might suggest that the damage could be different in the two cases and that, in the case of the father’s claim, it was located in Romania.
Clearly, it would lead to immense complications to have a choice-of-law rule to determine how the choice-of-law rule applicable to a tort should be applied. So the CJEU rejected the idea. It said that provisions of EU law which contain no express reference to the law of a Member State must be given a uniform (EU) interpretation that is independent of national law. As regards the issue in question, the CJEU said that where personal injury is suffered, the personal injury constitutes the damage for the purpose of Article 4(1). Italian law was applicable to the father’s claim.
Article 4(1) is subject to an exception laid down in Article 4(2): if the tortfeasor and victim have their habitual residence in the same country, the law of that country will be the governing law. The most important situation in which this will apply is where there is a pre-existing relationship between the parties. An example is where two friends (or members of a family) living in England drive to Spain in a car owned by one of them. They have an accident in Spain in which the passenger is injured. In this situation, there are strong arguments for applying English law to a claim by the passenger against the driver.
Article 4(2) also applies where there is no pre-existing relationship – for example, if an Englishman drives to Spain, has an accident there, and discovers, to his surprise, that the driver of the other car is also English: here, too, the applicable law will be English law. This solution is less clearly right, but it is probably better on balance than applying the law of the place where the accident occurs.
In both these examples, English law cannot be applied with regard to the rules of the road. Here, Spanish law should apply, even if both parties are English. This is made clear by Article 17 (Panel 22.2), which provides that rules of safety and conduct in force at the time and place of the accident must be taken into account, in so far as appropriate, in order to assess the conduct of the defendant.
In assessing the conduct of the person claimed to be liable, account shall be taken, as a matter of fact and in so far as is appropriate, of the rules of safety and conduct which were in force at the place and time of the event giving rise to the liability.
In a multi-party case, different laws could be applied to different parties. Assume, for example, that an Englishman and his wife go to Spain on holiday and rent a car there. While the English husband is driving, they are involved in an accident with a car driven by a Spanish driver. Both the Spaniard and the English wife sue the English driver. Here, the claim by the Spaniard would be governed by Spanish law, while the claim by the wife would be governed by English law.
Where a State consists of two or more territorial units, each with its own law of tort, each is regarded as a separate country for the purpose of the Regulation. This is laid down in Article 25 (Panel 22.3), which also provides that Member States are not required to apply the Regulation to conflicts solely between such units.8 The United Kingdom has decided to apply the Regulation between its constituent countries – for example, between England and Scotland: SI 2008 No. 2986, reg. 6; and SI 2008 No. 404, reg. 4 (Scotland). This means that England and Scotland are separate countries for the purpose of the Regulation. Consequently, if an Englishman9 Having his habitual residence in England. takes his Scottish girlfriend10 Having her habitual residence in Scotland. in his car on a trip to Spain and an accident occurs there, the applicable law if she sues him will be Spanish law (unless the third paragraph of Article 4 is applied).11 This would not be affected by any decision (under the second paragraph of Article 25) as to whether or not the Regulation will apply as between England and Scotland.
1. Where a State comprises several territorial units, each of which has its own rules of law in respect of non-contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Regulation.
2. A Member State within which different territorial units have their own rules of law in respect of non-contractual obligations shall not be required to apply this Regulation to conflicts solely between the laws of such units.
The definition of ‘country’ in Article 25(1) gives rise to difficulty. A territorial unit is a separate country if it has ‘its own rules of law in respect of non-contractual obligations’. ‘Non-contractual obligations’ is wider than ‘tort’, since it includes unjust enrichment, negotiorum gestio and culpa in contrahendo.12 See Articles 10–13 of the Regulation. It is not clear what happens if the unit in question has its own rules on some of these matters but not others. The best solution would be to consider whether the particular question in issue is subject to different rules, but the wording of the Regulation provides no support for this view.
On almost any basis, Scotland and England are different countries for the purposes of the Regulation.13 England and Wales are not: they constitute one ‘country’ for the purposes of the Regulation, even though politically and culturally they are different countries. So are the different US states.14 The common law in each state is a separate legal system. The US Supreme Court has no jurisdiction to interpret it. Subject to minor exceptions, there is no federal common law: Erie Railroad Company v. Thompkins, 304 US 674; 58 S Ct 817; 82 L Ed 1188 (1938). On the other hand, German Länder and Swiss cantons are not: both Germany and Switzerland have civil codes which apply nationally and cover the law of non-contractual obligations. Australia, however, presents difficulties. Most aspects of the law of tort (and probably other non-contractual obligations) are governed by the common law. Although each state is a separate jurisdiction, with its own legislature, judiciary and executive, there is one system of common law for the whole of Australia.15 Lange v. Australian Broadcasting Corporation (1997) 189 CLR 520 at p. 563. The High Court of Australia, a court with jurisdiction over the whole of Australia, can resolve any differences in the common law that may develop in different states. On the other hand, certain peripheral matters, like limitation periods, are subject to state legislation and, therefore, potentially different in different states.16 The position appears to be the same in the common-law provinces of Canada, but Quebec is clearly a separate country.
The following example illustrates the problem. Two Australian friends, habitually resident in different states,17 They attended the same university. come to Europe on holiday. They rent a car in Spain. An accident occurs there and the passenger is injured. If Australian law were applied, all issues in the case would be governed by the common law. Spanish law, on the other hand, would lead to a different result. It would be absurd to apply Spanish law just because the two parties are habitually resident in different Australian states.18 The same problem of definition arises under the third paragraph of Article 4, though it might be possible to use it to apply the law of one particular state.
In view of this problem, it is unfortunate that the Regulation does not contain a provision stating that, if the parties are resident in different countries but the law of those countries is the same as regards the point in issue, they will be treated as if they were resident in the same country. The Louisiana Civil Code has such a provision.19 Article 3544(1).
Article 23 (Panel 22.4) provides a partial definition of habitual residence. Article 23(1) states that the habitual residence of a company is the place of its central administration. However, it goes on to say that, if the event giving rise to the damage, or the damage itself, takes place in the course of the operation of a branch, the company’s habitual residence is to be regarded as the place where the branch is located.
There is no definition of the habitual residence of an individual (natural person), but the second paragraph of Article 23 provides that, where an individual acts in the course of his business, his principal place of business is to be treated as his habitual residence.
1. For the purposes of this Regulation, the habitual residence of companies and other bodies, corporate or unincorporated, shall be the place of central administration.
Where the event giving rise to the damage occurs, or the damage arises, in the course of operation of a branch, agency or any other establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence.
The third paragraph of Article 4 provides much-needed flexibility by stating that, where it is clear from all the circumstances that the tort is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country applies. A defect, however, is that the tort as a whole must be more closely connected. It is not enough for a particular issue to be more closely connected – for example, whether a wife can sue her husband in tort, or whether the victim’s claim against the tortfeasor passes to the victim’s estate on his death. So, if paragraph 3 is applied, all aspects of the tort must be governed by some other system of law. As we shall see below, American law is more carefully crafted than this.
Paragraph 3 states that a manifestly closer connection might be based on a pre-existing relationship between the parties.20 The words ‘in particular’ are EU jargon indicating that this is not intended to exclude other possibilities. If such a relationship exists, the parties will often have their habitual residence in the same country, in which case paragraph 2 would apply. Where this is not the case, paragraph 3 would be applicable. An example of such a relationship is a contract between the parties.
In this section, we are going to take a particular situation and consider the legal problems that arise. The situation is that where a pre-existing relationship exists between the claimant and the defendant. The most common example is where two persons are travelling in the same car when an accident occurs. Their relationship is based in one country, but the accident takes place in another. They may set out from country X, where they both have their home, and cross into country Y, where the accident occurs. If the passenger would have had a right to sue the driver (and claim compensation from his insurer) under the law of their home country, he should not be deprived of that right because of the chance fact that the accident occurred after they had crossed into country Y. We have already considered how this would be dealt with under Rome II. We now consider the problem more generally.
In the past, this situation resulted in considerable litigation in North America because many jurisdictions had ‘guest statutes’. These were laws that applied to non-paying passengers in motor vehicles. They usually barred any action by the ‘guest’ against the driver for personal injury or wrongful death, unless gross negligence was proved. Ostensibly, they were to protect the driver from suit by an ‘ungrateful’ guest; in reality, they were passed at the behest of insurance companies in order to limit their liability to compensate the ‘guest’. The insurance companies argued that the ‘guest’ would often be a friend of the driver or a member of his family, so the driver might have an incentive to exaggerate his negligence to allow the ‘guest’ to recover. Their effect was usually to deprive the passenger of any compensation. For this reason, they were regarded as unjust by many people. They were prevalent in the 1950s and 1960s, but now seem to have been phased out.
Both the parties to this case lived in the province of Quebec, Canada. The plaintiff accepted the defendant’s offer of a lift to Ottawa. While they were going through the province of Ontario, the car crashed, seriously injuring the plaintiff. The defendant was driving at the time and, in the opinion of the court, the accident was due to his negligence. He was charged in Ontario with the offence of driving without due care and attention, but was acquitted. The plaintiff then sued him in Quebec. If the accident had occurred in Quebec, he would undoubtedly have been liable. However, a ‘guest statute’ was in force in Ontario and this would have barred the plaintiff’s claim under the law of that province.
The Supreme Court of Canada, affirming the judgments of the Quebec courts, held that the plaintiff could recover. It applied the rule in Machado v. Fontes, under which it was sufficient if the defendant’s conduct constituted a criminal offence under the law of the place where the accident occurred, even if it did not give rise to civil liability. The Supreme Court of Canada ruled that the Quebec courts were not bound by the acquittal in the Ontario criminal proceedings, and were entitled to make up their own minds as to whether or not the defendant was guilty of a criminal offence under Ontario law.
This decision has been subject to criticism for manipulating the law to obtain the desired result, and has now been overruled.21 Tolofson v. Jensen [1994] 3 SCR 1022; (1994) 120 DLR (4th) 289 (Supreme Court of Canada). However, it succeeded in producing a just result. Under Article 4(2) of the Rome II Regulation, the applicable law would have been that of Quebec. It would not have been necessary to consider the law of Ontario, except with regard to the rules of the road. Under present-day Canadian law, on the other hand, the applicable law would have been that of Ontario, and the action would have failed.22 Ibid Tolofson v. Jensen [1994] 3 SCR 1022; (1994) 120 DLR (4th) 289 (Supreme Court of Canada).. This case lays down the rule that the law of the place of the tort applies. In inter-provincial cases, there are no exceptions. This shows the superiority of the EU rule.
In this case, the pursuer (Scottish terminology for ‘claimant’) was Mrs Annie M’Elroy, widow of Mr Joseph M’Elroy. The couple lived in Glasgow, Scotland. Mr M’Elroy worked for a company in Glasgow. As part of his employment, he went in a truck driven by Mr M’Allister, who also lived in Glasgow. The truck crossed into England and was involved in a collision. Mr M’Elroy was severely injured and died shortly afterwards. His widow claimed that the accident was the fault of Mr M’Allister and brought legal proceedings against him in a Scottish court.
If the accident had taken place in Scotland, and if negligence had been proved, Mrs M’Elroy would have been able to claim a solatium (damages for emotional distress) and also compensation for financial loss. The result would have been a substantial sum of money.
If all the facts had taken place in England, and if the action had been brought there, she could – if she proved negligence – obtain damages under two heads. Under the Fatal Accidents Acts 1864 to 1908, she could have obtained compensation for the financial support she could have expected from her husband. However, there was a short limitation period under this statute – the action had to be brought within twelve months of the accident – and her action was outside this time limit. Under another statute, the Law Reform (Miscellaneous Provisions) Act 1934, the right of action which her husband had against Mr M’Allister would have passed to his estate and inured to the benefit of his widow.23 This rule was abolished in 1982 by the Administration of Justice Act, section 1.
The case came on appeal before a special seven-judge court. They held that Mrs M’Elroy could get nothing, except a small sum for funeral expenses. Their reasons were as follows. They interpreted the rule in Phillips v. Eyre as requiring civil liability under both systems, thus rejecting the English case of Machado v. Fontes. Moreover, they held that civil liability must exist under both systems of law as regards each head of liability. Because English law gave no right to a solatium, she could not claim that in Scotland. Because she brought the Scottish action more than twelve months after the accident, she had no right under English law to obtain compensation for financial loss. Therefore, she could not claim for financial loss under Scottish law.24 The court refused to characterize the English period of limitation as procedural: they said it was substantive, and therefore applicable in a Scottish court. Today, this characterization is expressly laid down by Article 15(h) of the Regulation. Finally, she could not claim as executrix of her deceased husband’s estate because, under Scottish law, such a claim does not pass to the estate. Consequently, the double-actionability rule was not satisfied with regard to any claim, except funeral expenses.
It is hard to fault the reasoning in each step of the argument. Yet the result was monstrous. Why should the widow be unable to claim just because the accident took place on the wrong side of the border, when she would have received substantial damages in either country if all the facts had taken place in that country?
Of the seven judges, only one dissented. Lord Keith25 Lord Keith went on to a distinguished legal career in the House of Lords. pointed out that the rule in Phillips v. Eyre merely required that the act of the defender (defendant) should not be justifiable under the law of the place where it was committed: even if the time limit under the Fatal Accidents Acts had expired, one could hardly say that causing a fatal accident was justifiable under English law.
It might be thought that the problem was the double-barrelled choice-of law rule applied by the court. This was partly the court’s own choice, since they could have interpreted ‘not justifiable’ as meaning something less than civil liability, as was done in the English case of Machado v. Fontes. The only alternative at the time would have been to apply (only) the law of the place where the tort occurred. This was the rule accepted in most countries. However, it would have raised a second characterization problem. How should one characterize the English rule that a right of action in negligence survives the death of the victim? Is this part of the law of tort or part of the law of succession?26 Article 15(e) of the Rome II Regulation specifies that this question is decided by the law governing the tort. If it was the latter, Mrs M’Elroy would still have lost the case, since succession to Mr M’Elroy’s estate was governed by the law of Scotland, his domicile at death.27 See the California decision of Grant v. McAuliffe, 41 Cal 2d 859; 264 P 2d 944 (Supreme Court of California, 1953), in which a California court applied California law to decide this question, even though the accident took place in Arizona. In that case, however, the right of action passed to the victim’s estate under California law but not under Arizona law; so the effect of characterizing it as falling under the law of succession was to allow recovery.
Under the Rome II Regulation,28 Assuming that it applied as between England and Scotland: see Article 25(2) of the Regulation (discussed above). Scottish law alone would have applied.29 This would have been true irrespective of where the proceedings were brought. An English court would also have applied Scottish law. Again this shows the merit of Article 4.
As this is our first case on choice of law in the United States, it should be said that choice of law is in practice a matter for state law. This means that it can be different in each state: the US Supreme Court has no jurisdiction to hear appeals on it (except in rare instances where it is claimed that a constitutional question arises). In this respect, the US is less unified than the EU, where choice of law in contracts and torts is a matter for EU law.
Babcock v. Jackson was another ‘guest statute’ case. The facts were similar to those in McLean v. Pettigrew, except that the parties lived in New York, not Quebec. Miss Babcock was a guest in a car driven by her friends, Mr and Mrs Jackson. They all lived in New York. They went on a trip to Ontario and the crash occurred in Ontario while Mr Jackson was driving. Miss Babcock was badly injured. She sued Mr Jackson in New York. Ontario had a guest statute; New York did not. The ‘double-actionability’ rule was not followed in the United States. American courts normally applied the law of the place where the tort occurred (referred to in the case as the ‘traditional rule’). The lower court applied this rule and found for the defendant. Miss Babcock appealed.
Realization of the unjust and anomalous results which may ensue from application of the traditional rule in tort cases has also prompted judicial search for a more satisfactory alternative in that area …
…
The ‘center of gravity’ or ‘grouping of contacts’ doctrine adopted by this court in conflicts cases involving contracts impresses us as likewise affording the appropriate approach for accommodating the competing interests in tort cases with multi-State contacts. Justice, fairness and ‘the best practical result’ may best be achieved by giving controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation. The merit of such a rule is that ‘it gives to the place “having the most interest in the problem” paramount control over the legal issues arising out of a particular factual context’ and thereby allows the forum to apply ‘the policy of the jurisdiction “most intimately concerned with the outcome of [the] particular litigation.”’
…
Comparison of the relative ‘contacts’ and ‘interests’ of New York and Ontario in this litigation, vis-à-vis the issue here presented, makes it clear that the concern of New York is unquestionably the greater and more direct and that the interest of Ontario is at best minimal. The present action involves injuries sustained by a New York guest as the result of the negligence of a New York host in the operation of an automobile, garaged, licensed and undoubtedly insured in New York, in the course of a week-end journey which began and was to end there. In sharp contrast, Ontario’s sole relationship with the occurrence is the purely adventitious circumstance that the accident occurred there.
New York’s policy of requiring a tort-feasor to compensate his guest for injuries caused by his negligence cannot be doubted – as attested by the fact that the Legislature of this State has repeatedly refused to enact a statute denying or limiting recovery in such cases … – and our courts have neither reason nor warrant for departing from that policy simply because the accident, solely affecting New York residents and arising out of the operation of a New York based automobile, happened beyond its borders. Per contra, Ontario has no conceivable interest in denying a remedy to a New York guest against his New York host for injuries suffered in Ontario by reason of conduct which was tortious under Ontario law. The object of Ontario’s guest statute, it has been said, is ‘to prevent the fraudulent assertion of claims by passengers, in collusion with the drivers, against insurance companies’ and, quite obviously, the fraudulent claims intended to be prevented by the statute are those asserted against Ontario defendants and their insurance carriers, not New York defendants and their insurance carriers. Whether New York defendants are imposed upon or their insurers defrauded by a New York plaintiff is scarcely a valid legislative concern of Ontario simply because the accident occurred there, any more so than if the accident had happened in some other jurisdiction.
It is hardly necessary to say that Ontario’s interest is quite different from what it would have been had the issue related to the manner in which the defendant had been driving his car at the time of the accident. Where the defendant’s exercise of due care in the operation of his automobile is in issue, the jurisdiction in which the allegedly wrongful conduct occurred will usually have a predominant, if not exclusive, concern. In such a case, it is appropriate to look to the law of the place of the tort so as to give effect to that jurisdiction’s interest in regulating conduct within its borders, and it would be almost unthinkable to seek the applicable rule in the law of some other place.1 Editor’s note: compare Article 17 of the Regulation (Panel 22.2), where the same solution is adopted.
The issue here, however, is not whether the defendant offended against a rule of the road prescribed by Ontario for motorists generally or whether he violated some standard of conduct imposed by that jurisdiction, but rather whether the plaintiff, because she was a guest in the defendant’s automobile, is barred from recovering damages for a wrong concededly committed. As to that issue, it is New York, the place where the parties resided, where their guest-host relationship arose and where the trip began and was to end, rather than Ontario, the place of the fortuitous occurrence of the accident, which has the dominant contacts and the superior claim for application of its law. Although the rightness or wrongness of defendant’s conduct may depend upon the law of the particular jurisdiction through which the automobile passes, the rights and liabilities of the parties which stem from their guest-host relationship should remain constant and not vary and shift as the automobile proceeds from place to place. Indeed, such a result, we note, accords with ‘the interests of the host in procuring liability insurance adequate under the applicable law, and the interests of his insurer in reasonable calculability of the premium.’ (Ehrenzweig, ‘Guest Statutes in the Conflict of Laws’ 69 Yale LJ 595, 603.)
…
In conclusion, then, there is no reason why all issues arising out of a tort claim must be resolved by reference to the law of the same jurisdiction. Where the issue involves standards of conduct, it is more than likely that it is the law of the place of the tort which will be controlling but the disposition of other issues must turn, as does the issue of the standard of conduct itself, on the law of the jurisdiction which has the strongest interest in the resolution of the particular issue presented.
1 Editor’s note: compare Article 17 of the Regulation (Panel 22.2), where the same solution is adopted.
Result: the appeal was allowed; the Ontario ‘guest statute’ was not applicable.
This case applied a mixture of two approaches – grouping of contacts (closest connection) and interest analysis – in order to reach a good result. The former approach is also applicable under the Regulation, though only in exceptional circumstances: see Article 4(3) (Panel 22.1, above). We will consider interest analysis further below.
The plaintiff in this case was Mrs Neilson, a resident of Western Australia. Her husband was sent by his Australian employer, OPC, to work temporarily in Wuhan, China, and Mrs Neilson went with him. OPC provided accommodation for the couple. Mrs Neilson fell down the stairs in the flat provided and injured herself. She subsequently sued OPC in a court in Western Australia. In a previous case, Regie Nationale des Usines Renault SA v. Zhang,31 (2002) 210 CLR 491. the High Court of Australia (the highest court in Australia) had ruled that claims in tort are governed by the law of the place where the tort occurs. There are no exceptions to this rule. As applied to the Neilson case, this seemed to require the application of the law of China. However, under Chinese law a claim of this kind had to be brought within one year of the accident, and Mrs Neilson’s claim was not within this time limit.
It would seem that she was bound to lose. However, the Chinese choice-of-law rule for torts was less inflexible than the Australian rule. Although it applied the law of the place of the tort as the primary rule, it contained an exception, worded in rather unclear terms, which could suggest that, where the parties had the same nationality or the same domicile, the court could apply that law instead.32 The Chinese law said ‘the court may also apply …’, thus suggesting that the court had a discretion. On this basis, the trial court held that applying Chinese law actually meant applying Australian law (both parties being Australian nationals), since this is what a Chinese court would (or might) do. The court was thus able to avoid the Chinese limitation period and find for Mrs Neilson. This was an application of the renvoi doctrine, discussed in Chapter 21, § 2.4.2, above. The judgment was reversed on appeal by the Full Court of the Supreme Court of Western Australia. Mrs Neilson appealed to the High Court of Australia.
The High Court allowed the appeal and restored the judgment of the trial court. Different judges gave different reasons, but the following points had majority support. First, the High Court affirmed its ruling in Zhang that there can be no exceptions to the strict application of the law of the place of the tort. Secondly, a majority held (on dubious grounds) that a Chinese court would have applied Australian law. Thirdly, a majority held that renvoi should be applied and that the particular brand of renvoi to be applied was the theory of ‘total renvoi’ (see Chapter 21, § 2.4.2, above).33 Of the judges hearing the case, six favoured some form of renvoi and five favoured ‘total’ renvoi. In other words, the Australian court had to apply both the Chinese choice-of-law rule and the Chinese theory of renvoi (if any). It had to decide the case by the same system of substantive law as would be applied by a Chinese court. This, it held, was Australian law, so Mrs Neilson won the case.
Though the result was right, the means used had little to recommend them. The cause of the problem was Australia’s inflexible choice-of-law rule. The High Court said that this was necessary in order to attain certainty. However, once it saw what this would lead to, it used the discredited theory of renvoi to provide an escape route. The result was to produce greater uncertainty than would have followed from a flexible choice-of-law rule like that in the Rome II Regulation. To understand the Chinese choice-of-law rule was hard enough – it is doubtful whether, on the extremely limited evidence available, the court got it right34 Some of the judges admitted this but decided the case on the ground that, in the absence of proof to the contrary, foreign law is presumed to be the same as Australian law. – but it is even more doubtful whether the court had any real ground for thinking it knew whether or not the Chinese court would apply renvoi. A further problem is that, if Chinese law had applied renvoi and if it too had applied ‘total’ renvoi, there would have been no solution: the Australian court would want to do whatever the Chinese courts would do, but the Chinese courts would want to do whatever the Australian courts would do.
The main ground on which the court sought to justify the application of renvoi was that it would lead to the same result as a Chinese court would have reached if it had decided the case.35 This is an example of the continuing influence of the once-prevalent theory that achieving uniformity of result is the most important objective of conflict of laws. It was criticized in Chapter 1, § 4, above. Since the case was not being, and would never be, decided in a Chinese court, it is hard to see the importance of this. The High Court tried to justify its position by saying that it would discourage ‘forum-shopping’, by which is meant a plaintiff’s bringing his action in the court likely to produce the most favourable result for him. However, the forum non conveniens doctrine, applicable in Australia, would ensure that the case would not go ahead in Australia if Australia was a clearly inappropriate forum. Given this, it is hard to see the objection to ‘forum-shopping’. In any event, on the facts of the case, Australia was clearly the natural forum. In fact, it was the only forum that one could ever imagine the case being brought in. The cultural, financial, linguistic and practical difficulties of suing in China would have been immense.
Moreover, it was naive in the extreme to suggest that renvoi would ensure that the result would be the same as that in a Chinese court. In a Chinese court, the lawyers would have been different and they would probably have been funded in a different way. The rules of procedure and evidence would have been different. If the evidence on Australian law available to the Chinese court had been as sketchy as the evidence on Chinese law available to the Australian court, they would almost certainly have applied a very different version of Australian ‘law’ from an Australian court. Moreover, concepts like negligence and reasonableness would have been interpreted in a completely different way. The chances of the same result ensuing would have been almost zero.
How would this case have been decided under the Rome II Regulation? Since renvoi is expressly excluded,36 Article 24. the solution adopted by the High Court of Australia would not have been followed. Under the first paragraph of Article 4 of the Regulation, the law of China would have been applied. This would have included the limitation period under Chinese law.37 Article 15(h) states that limitation periods are to be characterized as pertaining to tort law. Would the second paragraph have been applicable? The plaintiff, Mrs Neilson, was habitually resident in Western Australia. The defendant, OPC, had its central administration in another Australian state, Victoria. It is not clear whether it had a branch in Western Australia and, if it did, whether the event giving rise to the damage, or the damage itself, occurred in the course of operation of that branch.38 On this, see Article 23(1) of the Regulation, set out in Panel 22.4, above. If, as seems likely, the plaintiff and defendant were habitually resident in different Australian states, the next question is whether each state counts as a separate country for the purposes of Article 4.39 The question in issue in the case, limitation of actions, was governed by state statutes, but the action was brought within the time period laid down by the statutes in both Western Australia and Victoria. This was considered in § 2.2.3, above. It is not clear what the answer is. If they are separate countries, the Regulation would lead to the unsatisfactory result of applying Chinese law.40 This result cannot be avoided by characterizing limitation of actions as procedural: the Regulation expressly provides that it is part of the law of tort (Article 15(h)). The only possibility of avoiding this would be to apply the third paragraph of Article 4 and to find that the country with the closest connection was Western Australia.
We now consider the situation where the parties come from the same country but have no pre-existing relationship. Here, the right answer is less obvious.
Ms Dym and Mr Gordon were both New Yorkers. Although they had known each other in New York, they went independently to Colorado to attend summer school. The accident occurred when Ms Dym was a passenger in Mr Gordon’s car on a short trip within Colorado, and involved a car driven by a Kansas resident. Colorado had a ‘guest statute’; New York did not. Ms Dym sued Mr Gordon in New York for injuries received in the accident. The lower court, following Babcock v. Jackson, held New York law applicable. The Appellate Division reversed this judgment, and the case then came to the Court of Appeals.
Following our approach in Babcock, it is necessary first to isolate the issue, next to identify the policies embraced in the laws in conflict, and finally to examine the contacts of the respective jurisdictions to ascertain which has a superior connection with the occurrence and thus would have a superior interest in having its policy or law applied. The issue here is simply whether in an automobile host-guest relationship a negligent driver should be liable to his injured passenger. The New York law finds nothing in the host-guest relationship which warrants a digression from the usual negligence rule of ordinary care. In Colorado, however, this relationship is treated specially and, while ordinary negligence is usually enough for recovery in that state, injuries arising out of this relationship are compensable only if they result from ‘willful and wanton’ conduct. Contrary to the narrow view advanced by plaintiff, the policy underlying Colorado’s law is threefold: the protection of Colorado drivers and their insurance carriers against fraudulent claims, the prevention of suits by ‘ungrateful guests’, and the priority of injured parties in other cars in the assets of the negligent defendant. Examining Colorado’s interest in light of its public policy we find that over and above the usual interest which Colorado may bring to bear on all conduct occurring within its boundaries, Colorado has an interest in seeing that the negligent defendant’s assets are not dissipated in order that the persons in the car of the blameless driver will not have their right to recovery diminished by the present suit.
Finally we come to the question of which state has the more significant contacts with the case such that its interest should be upheld. In this regard, the factual distinctions between this case and Babcock do have considerable influence. Babcock did not involve a collision between two cars; thus only New Yorkers were involved and it was unnecessary for us to consider the interests of Ontario in the rights of those in a car of a non-negligent driver. In Babcock we pointed out that the host-guest relationship was seated in New York and that the place of the accident was ‘entirely fortuitous’. In this case the parties were dwelling in Colorado when the relationship was formed and the accident arose out of Colorado based activity; therefore, the fact that the accident occurred in Colorado could in no sense be termed fortuitous. Thus it is that in this case, where Colorado has such significant contacts with the relationship itself and the basis of its formation, the application of its law and underlying policy are clearly warranted.
Of compelling importance in this case is the fact that here the parties had come to rest in the State of Colorado and had thus chosen to live their daily lives under the protective arm of Colorado law. Having accepted the benefits of that law for such a prolonged period, it is spurious to maintain that Colorado has no interest in a relationship which was formed there. In Babcock the New Yorkers at all times were in transitu and we were impressed with the fundamental unfairness of subjecting them to a law which they in no sense had adopted.
[After stating that the rule laid down in Babcock was that the law to be applied to resolve a particular issue in a tort case with multi-jurisdictional contacts is ‘the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties, has the greatest concern’ with the matter in issue and ‘the strongest interest’ in its resolution, he continued:]
The rule thus announced is not, and does not profess to be, a talisman of legal certainty, nor does it of itself provide a formulary means for resolving conflicts problems. What it does provide is a method, a conceptual framework, for the disposition of tort cases having contacts with more than one jurisdiction. Although the majority in this case reaffirms Babcock’s abandonment of the prior inflexible rule of lex loci delicti, its decision, nevertheless, in essence, reflects the adoption of an equally mechanical and arbitrary rule that, in litigation involving a special relationship, controlling effect must be given to the law of the jurisdiction in which the relationship originated, notwithstanding that that jurisdiction may not have the slightest concern with the specific issue raised or that some other state’s relationship or contact with the occurrence or the parties may be such as to give it the predominant interest in the resolution of that issue.
…
Nothing turns on the circumstance that in this case the guest-host relationship was formed in the foreign jurisdiction. It seems indisputably clear that a jurisdiction may be said to be ‘concerned’ with a specific issue, if that term is to have any meaningful content, only when its governmental interests and policies enter into the making of a particular decision. Accordingly, the decisive consideration, in the present case, is that Colorado’s guest statute, paralleling Ontario’s, has as its prime objective the protection of Colorado driver-defendants and their insurance carriers against fraudulent claims and lawsuits … Manifestly, that policy of Colorado can in no way be served by applying its statute to an action, such as the present, which is brought in New York and involves not residents of Colorado or their insurance carriers but only New Yorkers and a New York based and insured vehicle. The mere fact that the guest-host relationship between the New York parties originated in Colorado has, in truth, as little relevance to the policy underlying that state’s guest statute and, by that token, as little bearing on that statute’s applicability as did the fact, in Babcock, of the occurrence of the accident in Ontario in relation to the similar policy embodied in its guest statute. Under the circumstances of the present case, then, Colorado, to paraphrase what we wrote in Babcock, ‘has no conceivable interest in denying a remedy to a New York guest against his New York host for injuries suffered in [Colorado] by reason of conduct which was tortious under [Colorado] law’.
Nor is the majority’s position advanced by its further suggestion … that the Colorado statute also reflects (1) an antipathy on the part of Colorado to suits by ‘ungrateful’ guests … and (2) a policy to assure ‘the priority of injured parties in other cars in the assets of the negligent defendant.’ Indeed, as regards the latter asserted policy, there does not appear to be any Colorado pronouncement even to intimate that the Colorado Legislature was motivated by any such objective. In any event, though, Colorado would be legitimately concerned with the application of these alleged policies only in relation to matters within its legislative competence, such as the burdens of the Colorado courts, the regulation of the affairs and relationships of Colorado citizens or the protection of Colorado claimants or insurers … Whether such considerations might be of significance in particular circumstances not here present, they certainly have no relevance in the context of this suit between New York domiciliaries in a New York court, in which no burden is being imposed on the Colorado courts and no citizen of Colorado appears to be in any way interested. The majority’s emphasis on the involvement of another vehicle in the accident … is thus misplaced since the other automobile was driven by a resident from Kansas and was apparently licensed in that state.
New York, on the other hand, just as in Babcock, as the permanent residence of the plaintiff and the defendant and the place to which they returned to live shortly after the accident, has a predominant interest in vindicating its own policy of requiring negligent driving hosts to compensate their injured guests. It is apparent that the consequences resulting from an uncompensated injury generally affect the community in which the injured party resides, in this case, New York. If a plaintiff who returns to live here after sustaining injuries in another state requires additional medical treatment, as is usually the case, or is unable to meet his normal economic commitments and becomes a public charge, it is the people of New York – whose services will go uncompensated and whose tax dollars will be charged in the form of welfare payments – who will feel the repercussions of such eventualities and not the distant and unconcerned residents of the state of injury, where a guest-host relationship between the New York parties may have been formed … There is thus no question but that Colorado’s ‘contacts’, though quantitatively greater than those of Ontario in Babcock, are still not ‘significant’ as respects the specific issue presented and that the ‘contacts’ of New York in relation to that issue are decidedly superior.
1 Editor’s note: it will be remembered that Fuld J gave the judgment of the court in Babcock v. Jackson.
Result: Colorado law (and its ‘guest statute’) was applicable.
The parties were both British subjects resident in England. They were both in the British Army and were temporarily stationed in Malta. There was no pre-existing relationship between them, unless being in the British Army could be regarded as a relationship. The parties were in separate vehicles when the accident occurred: the claimant was a passenger on a motor scooter which collided with a car negligently driven by the defendant. Liability existed under both English and Maltese law. However, there was a difference regarding the heads of damage: under English law damages could be claimed for pain and suffering; under Maltese law they could not. The result was that, under Maltese law, the claimant could recover only £53, while, under English law, he could recover £2,303.
The trial court awarded the claimant the higher sum, relying on Machado v. Fontes. This was affirmed by the Court of Appeal, though different judges gave different reasons. The case then came before the House of Lords. It again affirmed, though again different judges gave different reasons. There was, however, a majority in favour of overruling Machado v. Fontes: the rule was laid down that civil liability must exist both under the foreign law and under English law. This meant that some other ground had to be found to reach the desired result. The reasoning of Lord Wilberforce has probably been most influential in subsequent cases.
Given the general rule, as stated above, as one which will normally apply to foreign torts, I think that the necessary flexibility can be obtained from that principle which represents at least a common denominator of the United States decisions, namely, through segregation of the relevant issue and consideration whether, in relation to that issue, the relevant foreign rule ought, as a matter of policy … to be applied. For this purpose it is necessary to identify the policy of the rule, to inquire to what situations, with what contacts, it was intended to apply; whether not to apply it, in the circumstances of the instant case, would serve any interest which the rule was devised to meet. This technique appears well adapted to meet cases where the lex delicti either limits or excludes damages for personal injury: it appears even necessary and inevitable. No purely mechanical rule can properly do justice to the great variety of cases where persons come together in a foreign jurisdiction for different purposes with different pre-existing relationships, from the background of different legal systems. It will not be invoked in every case or even, probably, in many cases. The general rule must apply unless clear and satisfying grounds are shown why it should be departed from and what solution, derived from what other rule, should be preferred. If one lesson emerges from the United States decisions it is that case to case decisions do not add up to a system of justice. Even within these limits this procedure may in some instances require a more searching analysis than is needed under the general rule. But unless this is done, or at least possible, we must come back to a system which is purely and simply mechanical.
I find in this approach the solution to the present case. The tort here was committed in Malta; it is actionable in this country. But the law of Malta denies recovery of damages for pain and suffering. Prima facie English law should do the same: if the parties were both Maltese residents it ought surely to do so; if the defendant were a Maltese resident the same result might follow. But in a case such as the present, where neither party is a Maltese resident or citizen, further inquiry is needed rather than an automatic application of the rule. The issue, whether this head of damage should be allowed, requires to be segregated from the rest of the case, negligence or otherwise, related to the parties involved and their circumstances, and tested in relation to the policy of the local rule and of its application to these parties so circumstanced.
So segregated, the issue is whether one British subject, resident in the United Kingdom, should be prevented from recovering in accordance with English law, against another British subject, similarly situated, damages for pain and suffering which he cannot recover under the rule of the lex delicti. This issue must be stated, and examined, regardless of whether the injured person has or has not also a recoverable claim under a different heading (e.g., for expenses actually incurred) under that law. This Maltese law cannot simply be rejected on grounds of public policy or some general conception of justice. For it is one thing to say or presume that domestic rule is a just rule, but quite another, in a case where a foreign element is involved, to reject a foreign rule on any such general ground. The foreign rule must be evaluated in its application.
The rule limiting damages is the creation of the law of Malta, a place where both plaintiff and defendant were temporarily stationed. Nothing suggests that the Maltese state has any interest in applying this rule to persons resident outside it, or in denying the application of the English rule to these parties. No argument has been suggested why an English court, if free to do so, should renounce its own rule. That rule ought, in my opinion, to apply.
So far, we have been looking at cases in which the claimant was denied recovery by the law of the place where the tort occurred, but could obtain it under some other law. What happens in the reverse situation? Under a rule-based system, such as the Rome II Regulation, the result would be the same. The position is, however, different if we apply interest analysis or the ‘better law’ theory. This is the approach usually followed by American courts.
The plaintiff and both defendants were residents of Ontario. They drove to Duluth, Minnesota, to do some shopping and attend a play. The car belonged to the first defendant, Ms Saari. After they crossed the border, the second defendant, Ms Rudd, took over the driving. The car crashed in Minnesota about 40 miles south of the border, and the plaintiff was injured. The car was garaged, registered and insured in Ontario. Ontario had a ‘guest statute’; Minnesota did not. The action was brought in Minnesota.
[After discussing the authorities and stating that Minnesota courts had adopted the ‘better law’ approach, he said:]
The compelling factors in this case are the advancement of the forum’s governmental interests and the application of the better law. While there may be more deterrent effect in our common-law rule of liability as opposed to the guest statute requirement of gross negligence, the main governmental interest involved is that of any ‘justice-administering state.’ Leflar, ‘Conflicts Law: More on Choice-Influencing Considerations’ 54 Calif. L Rev. 1584, 1594. In that posture, we are concerned that our courts not be called upon to determine issues under rules which, however, accepted they may be in other states, are inconsistent with our own concept of fairness and equity. We might also note that persons injured in automobile accidents occurring within our borders can reasonably be expected to require treatment in our medical facilities, both public and private. In the instant case, plaintiff incurred medical bills in a Duluth hospital which have already been paid, but we are loath to place weight on the individual case for fear it might offer even minor incentives to ‘hospital shop’ or to create litigation-directed pressures on the payment of debts to medical facilities. Suffice it to say that we recognize that medical costs are likely to be incurred with a consequent governmental interest that injured persons not be denied recovery on the basis of doctrines foreign to Minnesota.
In our search for the better rule, we are firmly convinced of the superiority of the common-law rule of liability to that of the Ontario guest statute. We can find little reason for the strict limitation of a host’s liability to his guest beyond the fear of collusive suits and the vague disapproval of a guest ‘biting the hand that feeds him.’ Neither rationale is persuasive. We are convinced the judicial system can uncover collusive suits without such overinclusive rules, and we do not find any discomfort in the prospect of a guest suing his host for injuries suffered through the host’s simple negligence.
Accordingly, we hold that Minnesota law should be applied to this lawsuit.
If the ‘better law’ approach is adopted, two matters must be clarified. First, what are the criteria to decide which law is better? In Minnesota, it seems to be that, in personal-injury cases in which the defendant is insured, the ‘better law’ is the law most favourable to the plaintiff. The second question is: from among which legal systems can the court choose? Is the choice limited to the law of the place of the accident and the law of the common domicile or habitual residence of the parties? If these two issues can be satisfactorily resolved, the ‘better law’ approach has much to recommend it.
In the EU, it has been adopted in a modified form in several provisions. For example, under Article 7 of the Rome II Regulation (Panel 22.5), which deals with environmental damage, the claimant can choose either the law of the country where the damage occurred or the law of the country in which the event occurred which gave rise to the damage. Here ‘better law’ means the law more favourable to the claimant, and the choice is between the two laws mentioned above. Thus, if pollutants are put into the River Rhine in France and cause environmental damage in the Netherlands, the claimant can choose to have the case decided under either French law or Dutch law.
The law applicable to a non-contractual obligation arising out of environmental damage or damage sustained by persons or property as a result of such damage shall be the law determined pursuant to Article 4(1), unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred.
Another example is found in Article 18 of the Regulation, under which a direct action is possible against the tortfeasor’s insurer if this is permitted by either the law governing the tort or that governing the insurance policy.
In our last two cases, we change the focus and look at a different situation. Several American states have a rule that, if a bar, tavern or other such establishment serves alcoholic drinks to a customer who is already clearly drunk, the owner of the bar is liable in tort to anyone injured by the customer while he is in an inebriated condition. Our next two cases are concerned with the situation in which the bar is in one state and the injury occurs in another.
The plaintiff and his wife were seriously injured when they were hit by a car in Chevy Chase, Maryland. The car was driven by a man called Joray, who was drunk. He was returning from a restaurant in Washington, DC, owned by the defendant. In the restaurant, he had unlawfully been served with alcoholic liquor even though he was already obviously intoxicated. It was in this state that he left the restaurant, got into the car and drove away. The accident happened shortly afterwards. In these circumstances, the victim had a claim in tort against the restaurant owner under DC law. Under Maryland law, he did not. The action was brought against the restaurant owner in the District of Columbia.
[After saying that the District of Columbia followed the governmental-interests approach, he continued:]
In applying governmental interests analysis to the facts of this case, we consider the interests, respectively, of Maryland and the District of Columbia. From the ruling of Maryland’s highest court … we understand that state to adhere to a policy of protecting negligent bar owners from civil liability, although they remain subject to the criminal penalties that attach for serving a person who is ‘visibly under the influence’. By contrast, a District of Columbia rule that would make tavern keepers answerable in tort, as well as under the criminal sanctions of D C Code § 25–121(b) (1981), would signify interests of this jurisdiction in compensating victims for resulting injuries, as well as in deterring harmful conduct.
The apparent clash of policies between Maryland and the District of Columbia presents a ‘false conflict’ in the context of this case. A ‘false conflict’ occurs when the policy of one state would be advanced by application of its law, while that of the other state would not be advanced by application of its law. In such a situation, the law of the interested jurisdiction prevails … Here, Maryland’s interest in protecting tavern owners from tort liability is not implicated where the negligent restaurant is situated in the District of Columbia and the unlawful conduct occurred therein. Hence we apply the law of the interested jurisdiction, the District of Columbia.1 Footnote in the original text: The only interest of Maryland that is implicated in this litigation, an interest in protecting public safety which we infer from its statutory prohibition on serving persons under the influence, is consistent with rather than in conflict with applying a District of Columbia rule of civil liability.
1 Footnote in the original text: The only interest of Maryland that is implicated in this litigation, an interest in protecting public safety which we infer from its statutory prohibition on serving persons under the influence, is consistent with rather than in conflict with applying a District of Columbia rule of civil liability.
Result: DC law applies.
It is in situations like this that the EU rule is shown up as crude and unsophisticated. Under the general rule in Article 4(1), the law of the place where the damage occurs will be applied, irrespective of where the restaurant or tavern is located, unless it happens that the parties are all habitually resident in the same country. The third paragraph of Article 4 might provide a means of escape, but only if the tort as a whole – rather than the particular issue before the court – was more closely connected with the country in which the tavern was situated. However, interest analysis provides a much more satisfactory means of determining the applicable law than a simple weighing-up of contacts.
The Rong case suggests that the crucial fact in the United States is the location of the restaurant or tavern. Our next case shows that this is not necessarily so.
The defendant was a Nevada corporation. It operated a gambling establishment in Nevada that sold alcoholic liquor. It advertised extensively in California. The plaintiff was a California resident who was injured when a car coming in the opposite direction along a California highway crossed the central line and collided head-on with his motorcycle. The car was driven by a California resident called Fern Myers. He and his brother, Philip, were returning from a night out at an establishment in Nevada owned by the defendants. They had gone there as a result of the defendant’s advertisements. They had been served with alcoholic liquor when they were already obviously drunk. It was in this state that they left the establishment and drove away. After crossing into California, their car hit the plaintiff. They were still drunk at the time of the accident. Under California law, the defendant, Harrah’s Club, was liable to compensate the victim; under Nevada law, it was not. The plaintiff brought the action in California.
Although California and Nevada, the two ‘involved states’ have different laws governing the issue presented in the case at bench, we encounter a problem in selecting the applicable rule of law only if both states have an interest in having their respective laws applied …
Defendant contends that Nevada has a definite interest in having its rule of decision applied in this case in order to protect its resident tavern keepers like defendant from being subjected to a civil liability which Nevada has not imposed either by legislative enactment or decisional law … Accordingly defendant argues that the Nevada rule of decision is the appropriate one for the forum to apply.
Plaintiff on the other hand points out that California also has an interest in applying its own rule of decision to the case at bench. California imposes on tavern keepers civil liability to third parties injured by persons to whom the tavern keeper has sold alcoholic beverages when they are obviously intoxicated ‘for the purpose of protecting members of the general public from injuries to person and damage to property resulting from the excessive use of intoxicating liquor.’ California, it is urged, has a special interest in affording this protection to all California residents injured in California.
Thus, since the case at bench involves a California resident (plaintiff) injured in this state by intoxicated drivers and a Nevada resident tavern keeper (defendant) which served alcoholic beverages to them in Nevada, it is clear that each state has an interest in the application of its respective law of liability and nonliability. It goes without saying that these interests conflict. Therefore … in the instant case for the first time since applying a governmental interest analysis as a choice of law doctrine … we are confronted with a ‘true’ conflicts case. We must therefore determine the appropriate rule of decision in a controversy where each of the states involved has a legitimate but conflicting interest in applying its own law in respect to the civil liability of tavern keepers.
The search for the proper resolution of a true conflicts case, while proceeding within orthodox parameters of governmental interest analysis, has generated much scholarly examination and discussion. The father of the governmental interest approach, Professor Brainerd Currie, originally took the position that in a true conflicts situation the law of the forum should always be applied … However, upon further reflection, Currie suggested that when under the governmental interest approach a preliminary analysis reveals an apparent conflict of interest upon the forum’s assertion of its own rule of decision, the forum should re-examine its policy to determine if a more restrained interpretation of it is more appropriate. ‘[T]o assert a conflict between the interests of the forum and the foreign state is a serious matter; the mere fact that a suggested broad conception of a local interest will create conflict with that of a foreign state is a sound reason why the conception should be re-examined, with a view to a more moderate and restrained interpretation both of the policy and of the circumstances in which it must be applied to effectuate the forum’s legitimate purpose …’ (Currie, The Disinterested Third State (1963) 28 Law & Contemp. Prob., pp. 754, 757.) This process of re-examination requires identification of a ‘real interest as opposed to a hypothetical interest’ on the part of the forum (Sedler, Value of Principled Preferences, 49 Texas L Rev. 224) and can be approached under principles of ‘comparative impairment.’ (Baxter, Choice of Law and the Federal System … 16 Stan. L Rev. 1–22 …)
Once this preliminary analysis has identified a true conflict of the governmental interests involved as applied to the parties under the particular circumstances of the case, the ‘comparative impairment’ approach to the resolution of such conflict seeks to determine which state’s interest would be more impaired if its policy were subordinated to the policy of the other state. This analysis proceeds on the principle that true conflicts should be resolved by applying the law of the state whose interest would be the more impaired if its law were not applied. Exponents of this process of analysis emphasize that it is very different from a weighing process. The court does not ‘“weigh” the conflicting governmental interests in the sense of determining which conflicting law manifested the “better” or the “worthier” social policy on the specific issue. An attempted balancing of conflicting state policies in that sense … is difficult to justify in the context of a federal system in which, within constitutional limits, states are empowered to mold their policies as they wish … [The process] can accurately be described as … accommodation of conflicting state policies, as a problem of allocating domains of law-making power in multi-state contexts – limitations on the reach of state policies – as distinguished from evaluating the wisdom of those policies … [E]mphasis is placed on the appropriate scope of conflicting state policies rather than on the “quality” of those policies …’ (Horowitz, The Law of Choice of Law in California – A Restatement … 21 UCLA L Rev. 719, 753 …) However, the true function of this methodology can probably be appreciated only casuistically in its application to an endless variety of choice of law problems …
…
Mindful of the above principles governing our choice of law, we proceed to reexamine the California policy underlying the imposition of civil liability upon tavern keepers. At its broadest limits this policy would afford protection to all persons injured in California by intoxicated persons who have been sold or furnished alcoholic beverages while intoxicated regardless of where such beverages were sold or furnished. Such a broad policy would naturally embrace situations where the intoxicated actor had been provided with liquor by out-of-state tavern keepers. Although the State of Nevada does not impose such civil liability on its tavern keepers, nevertheless they are subject to criminal penalties under a statute making it unlawful to sell or give intoxicating liquor to any person who is drunk or known to be an habitual drunkard …
We need not, and accordingly do not here determine the outer limits to which California’s policy should be extended, for it appears clear to us that it must encompass defendant, who as alleged in the complaint, ‘advertis[es] for and otherwise solicit[s] in California the business of California residents at defendant Harrah’s Club Nevada drinking and gambling establishments, knowing and expecting said California residents, in response to said advertising and solicitation, to use the public highways of the State of California in going and coming from defendant Harrah’s Club Nevada drinking and gambling establishments.’ Defendant by the course of its chosen commercial practice has put itself at the heart of California’s regulatory interest, namely to prevent tavern keepers from selling alcoholic beverages to obviously intoxicated persons who are likely to act in California in the intoxicated state. It seems clear that California cannot reasonably effectuate its policy if it does not extend its regulation to include out-of-state tavern keepers such as defendant who regularly and purposely sell intoxicating beverages to California residents in places and under conditions in which it is reasonably certain these residents will return to California and act therein while still in an intoxicated state. California’s interest would be very significantly impaired if its policy were not applied to defendant.
Since the act of selling alcoholic beverages to obviously intoxicated persons is already proscribed in Nevada, the application of California’s rule of civil liability would not impose an entirely new duty requiring the ability to distinguish between California residents and other patrons. Rather the imposition of such liability involves an increased economic exposure, which, at least for businesses which actively solicit extensive California patronage, is a foreseeable and coverable business expense. Moreover, Nevada’s interest in protecting its tavern keepers from civil liability of a boundless and unrestricted nature will not be significantly impaired when as in the instant case liability is imposed only on those tavern keepers who actively solicit California business.
Therefore, upon re-examining the policy underlying California’s rule of decision and giving such policy a more restrained interpretation for the purpose of this case pursuant to the principles of the law of choice of law discussed above, we conclude that California has an important and abiding interest in applying its rule of decision to the case at bench, that the policy of this state would be more significantly impaired if such rule were not applied and that the trial court erred in not applying California law.
…
The judgment is reversed and the cause is remanded to the trial court with directions to overrule the demurrer and to allow defendant a reasonable time within which to answer.
The rule in Article 4 is subject to exceptions that apply in five special situations:
product liability (Article 5)
unfair competition and acts restricting free competition (Article 6)
environmental damage (Article 7)41 Set out in Panel 22.5, above.
infringement of intellectual property rights (Article 8)
industrial action (Article 9).
We shall consider only two of these.
Choice of law in product-liability cases is determined by Article 5 of the Regulation. This is set out in Panel 22.6.
1. Without prejudice to Article 4(2), the law applicable to a non-contractual obligation arising out of damage caused by a product shall be:
(a) the law of the country in which the person sustaining the damage had his or her habitual residence when the damage occurred, if the product was marketed in that country; or, failing that,
(b) the law of the country in which the product was acquired, if the product was marketed in that country; or, failing that,
(c) the law of the country in which the damage occurred, if the product was marketed in that country.
However, the law applicable shall be the law of the country in which the person claimed to be liable is habitually resident if he or she could not reasonably foresee the marketing of the product, or a product of the same type, in the country the law of which is applicable under (a), (b) or (c).
2. Where it is clear from all the circumstances of the case that the tort/ delict is manifestly more closely connected with a country other than that indicated in paragraph 1, the law of that other country shall apply. A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.
Article 5(1) is in the form of a ‘cascade’: it lays down a number of possibilities, but each possibility (other than the first) applies only if the preceding ones are inapplicable. The first possibility – the primary rule – appears to be Article 4(2), since the reference to this comes first. If that is inapplicable, the next possibility is sub-paragraph (a) of Article 5(1); if that is inapplicable, the next possibility is sub-paragraph (b), then sub-paragraph (c).
The last sentence of Article 5(1), which will henceforth be referred to as the ‘however’ clause, qualifies the rules in sub-paragraphs (a), (b) and (c), but not, it seems, Article 4(2).42 Since the ‘however’ clause refers to the law of the producer’s habitual residence, it would lead to the same result as Article 4(2); so it does not matter whether it qualifies Article 4(2) or not. Article 5(2) qualifies the rules in sub-paragraphs (a), (b) and (c); it also qualifies the rule in Article 4(2) either in its own right or because it is repeated in identical terms in Article 4(3).
The primary rule is contained in Article 4(2). This was discussed in § 2.2, above. It applies where both parties have their habitual residence in the same country at the time of the tort.
The second-ranking rule is that contained in sub-paragraph (a) of Article 5(1). Under this, the governing law is the law of the country of the victim’s habitual residence – provided that the product was marketed in that country. This proviso is repeated in sub-paragraphs (b) and (c). Its meaning will be discussed below.
The third-ranking rule is that contained in sub-paragraph (b). Under this, the governing law is the law of the country in which the product was acquired – provided that the product was marketed in that country. ‘Acquired’ presumably means purchased or otherwise obtained – for example, by gift.
The fourth-ranking rule is that contained in sub-paragraph (c). Under this, the governing law is the law of the country in which the damage occurred. This is the same as the general rule in Article 4(1). It is again subject to the condition that the product has been marketed in that country.
Sub-paragraphs (a), (b) and (c) are all subject to the ‘product marketed’ proviso. This raises two questions: the meaning of ‘product’ and the meaning of ‘marketed’.
The first question is whether ‘product’ refers to the particular item or good that actually caused the damage or whether it also covers other goods of the same type. For example, if the harm was caused by contamination in a can of beer, must it be proved that the particular can that was contaminated was marketed in the country in question, or is it enough that other cans of the same kind were marketed there? As a matter of plain English43 It is thought that the same is true of French. and common sense, the latter should be the answer. If the manufacturer sells the identical product in the country in question, it should not make any difference if the particular can was purchased by the claimant in another country while he was on holiday there. However, the fact that the ‘however’ clause refers to marketing of the product, ‘or a product of the same type’, suggests that the common-sense answer is not the correct one. If the proviso to sub-paragraphs (a), (b) and (c) was intended to cover products of the same type, those additional words would have been repeated there too.
The next question is the meaning of ‘marketed’. This cannot mean the same as ‘acquired’, since the latter is used in sub-paragraph (b) to mean something different. On the other hand, the product does not have to be marketed by the defendant, since the ‘however’ clause indicates that the product might be marketed without the knowledge of the defendant. It is suggested that marketing requires the organized, mass selling of a standardized product. This need not be by the defendant or with his consent.
What happens if none of the rules laid down in Article 5(1) is applicable? The ‘however’ clause does not establish an independent rule, since it is clearly geared to sub-paragraphs (a), (b) and (c): it cannot apply if none of those sub-paragraphs is applicable. The same applies to the rule in Article 5(2): this cannot apply unless one of the provisions of Article 5(1) applies.
In view of this, there are only three possibilities. The first is that no claim can be made. This would constitute a denial of justice and would be contrary to Article 6(1) of the European Convention on Human Rights, so it must be rejected. The second possibility is that national conflict of laws applies. However, it is unlikely that this was intended. The third possibility is that the general rule in Article 4 applies.44 Since we would not have reached the situation we are considering if the second paragraph of Article 4 had been applicable, we are really concerned only with the first and third paragraphs. This must be the correct solution.
Though correct, this has strange consequences. Assume that the first three rules are inapplicable and that one has to consider the rule in sub-paragraph (c). This requires the application of the law of the country in which the damage occurred, provided that the product was marketed in that country. If the product was not marketed in that country, you fall back on the general rule and apply the law of the country in which the damage occurred even if the product was not marketed there.45 This is subject to the escape clause in Article 4(3). In other words, the ‘marketed’ proviso is meaningless. However, if the product was marketed there, but this could not have been foreseen by the defendant, you then apply the ‘however’ clause, which leads to the law of the country of the defendant’s habitual residence. There is no logic in this.
These rules are extremely complicated, but in practice the answer will usually be fairly obvious. The following examples show how the rules will apply.
Assume that a beer manufacturer in Germany markets its product in England through a branch. The claimant, who lives in England, buys it in England and consumes it there. The beer is contaminated and he suffers illness as a result. Here, English law would apply under the rule in Article 4(2). The German company’s habitual residence would be regarded as being in England, since the beer would have been marketed through the English branch (Article 23). It would make no difference if the claimant had taken the beer to France on holiday and consumed it there.
A German beer manufacturer markets its product in England through an independent distributor. The claimant, who lives in England, buys it in England and consumes it there. The beer is contaminated and he suffers illness as a result. Article 4(2) would not apply here, because the defendant would not be habitually resident in England. However, English law would still apply under Article 5(1)(a), since the claimant would be habitually resident in England and the product would have been marketed there. The ‘however’ clause would not apply. Again, it would make no difference if the beer were consumed in another country.
A French resident comes to England to support his side in a rugby match. While in England, he buys beer manufactured by a German company. One can of the beer is not consumed in England. He takes it back to France and consumes it there. That can is contaminated and he suffers illness as a result. In this situation, Article 4(2) would not apply: the claimant would be habitually resident in France but not the defendant.46 The defendant would be habitually resident in either Germany (central administration) or England (if there is a branch there) but not in France. This would be true even if it had a branch in France: a company is not habitually resident where it has a branch unless the event giving rise to the damage, or the damage itself, arises in the course of operation of the branch (Article 23(1)). If the contaminated can was bought in England, the existence of a branch in France would be irrelevant. If ‘product’ in the proviso to sub-paragraph (a) means the particular can of beer that caused the problem, it would not have been marketed in France; so sub-paragraph (a) would not apply. However, since the product was acquired in England, sub-paragraph (b) would apply. The governing law would be English law (unless the defendant could not foresee that the product would be marketed in England).47 If this was the case, German law would apply. It is unlikely that Article 5(2) would apply: the tort is not manifestly more closely connected with France.
The defendant is a Korean car manufacturer. It markets its cars throughout the EU. One car is sold to X in France. X sells it in France to Y, who is habitually resident in Belgium. Y takes it to Belgium and is injured in an accident there. He sues the manufacturer in Belgium. Here, Article 4(2) will not apply because the defendant would not be habitually resident in Belgium for the purpose of the case.48 It would make no difference if it has a branch in Belgium, since the vehicle in question would not have been sold through that branch: see note 46, above. Sub-paragraph (a) will not apply because the product (the particular vehicle in question) was not marketed in Belgium. However, sub-paragraph (b) will apply. The car was acquired by Y in France and the car was marketed there. French law will govern.
The facts are as in the previous example, except that X took the car to Belgium and sold it there to Y. In this example, none of the provisions of Article 5(1) would apply. Article 4(2) would not apply because the company would not be habitually resident in Belgium for the purpose of the case and none of the sub-paragraphs would apply because the particular vehicle in question was not marketed in Belgium. If what was said above was correct, one would then fall back on the general rule in Article 4(1) and apply Belgian law because the damage occurred in Belgium. Article 4(3) would not apply because it could not be said that the tort is manifestly more closely connected with France or any other country.
As will be appreciated, Article 5 is complex. This complexity is due to the fact that consumers’ and producers’ lobbies are both powerful in the EU, and both fought hard for their respective interests. Whether a simpler, but more flexible, rule would have been better is a matter on which opinions may differ.
1. The law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country for which protection is claimed.
2. In the case of a non-contractual obligation arising from an infringement of a unitary Community intellectual property right, the law applicable shall, for any question that is not governed by the relevant Community instrument, be the law of the country in which the act of infringement was committed.
The law applicable to the infringement of an intellectual-property right is the law of the country for which protection is claimed. This will be the law of the country in which the right is registered or, if unregistered, the law under which the right was granted or arose. This is laid down in Article 8 of the Regulation (Panel 22.7), which also deals with the infringement of unitary intellectual-property rights arising under EU law.
Article 1(2)(g) excludes from the scope of the Regulation ‘non-contractual obligations arising out of violations of privacy and rights relating to personality, including defamation’. Since the British legislation – the Private International Law (Miscellaneous Provisions) Act 1995 – did not apply to defamation49 Sections 9(3), 10 and 13. Defamation is defined for this purpose in section 13(2). Since the area excluded from the Regulation is wider than that excluded from the Act, certain matters – for example, violations of privacy – will continue to be covered by the Act. (see § 1, above), the English common law still applies to defamation in England.
The common law was discussed in § 1, above. It will be remembered that Machado v. Fontes was overruled by the House of Lords in Chaplin v. Boys;50 [1971] AC 356; [1969] 3 WLR 322; [1969] 2 All ER 1085. so it must now be shown that the defendant’s act would be actionable as a tort under English law and that the defendant incurred civil liability under the law of the country where the tort was committed. This is subject to the exceptions laid down in Chaplin v. Boys and in Red Sea Insurance Co. Ltd v. Bouygues SA.51 [1995] 1 AC 190 (PC). The result is that, as regards publication in England (it must be remembered that, under English law, each sale is a separate ‘publication’), English law alone will apply; as regards publication abroad, the ‘double-actionability’ test must be satisfied. In either case, if there is a defence under English law – for example, that the statement is true – judgment will be given for the defendant.
Under Article 14, the parties are, in certain circumstances, permitted to choose the applicable law by agreement (Panel 22.8). Normally, this is possible only after the tort has been committed (paragraph 1), but, where all the parties are pursuing a commercial activity, it is possible beforehand, provided the agreement is freely negotiated. This is unlikely to apply very often – parties do not normally foresee that a tort will be committed – but one could imagine that if the parties have a continuing business relationship (e.g. a joint venture) they might conclude such an agreement.
1. The parties may agree to submit non-contractual obligations to the law of their choice:
(a) by an agreement entered into after the event giving rise to the damage occurred; or
(b) where all the parties are pursuing a commercial activity, also by an agreement freely negotiated before the event giving rise to the damage occurred.
The choice shall be expressed or demonstrated with reasonable certainty by the circumstances of the case and shall not prejudice the rights of third parties.
2. Where all the elements relevant to the situation at the time when the event giving rise to the damage occurs are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.
3. Where all the elements relevant to the situation at the time when the event giving rise to the damage occurs are located in one or more of the Member States, the parties’ choice of the law applicable other than that of a Member State shall not prejudice the application of provisions of Community law, where appropriate as implemented in the Member State of the forum, which cannot be derogated from by agreement.
The requirement at the end of paragraph 1 (that the choice must be ‘expressed or demonstrated with reasonable certainty by the circumstances of the case’) was based on Article 3(1) of the Rome Convention, now replaced by the Rome I Regulation, discussed in the chapters that follow.52 The equivalent provision in the Rome I Regulation is also Article 3(1). Paragraphs 2 and 3 of Article 14 are similar to paragraphs 3 and 4 of Article 3 of the Rome I Regulation (discussed in Chapter 24, § 3.1, below).
Article 16 of Rome II provides:
Nothing in this Regulation shall restrict the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.
This provision, which mirrors Article 9(2) of Rome I (discussed below in Chapter 24, § 3.5), is intended to give the forum the right to apply its own law where it is especially important for it to do so. It was considered by the CJEU in our next case.
This case arose out of a car crash in Spain between two cars, one of which was registered in Portugal and the other in Spain. The owner of the Portuguese car brought proceedings in Portugal against the relevant insurer. The action was brought within the time limit laid down by Portuguese law (three years) but outside the time limit laid down by Spanish law (one year). Since, under the general rule in Rome II, Article 4(1), the applicable law for the tort claim would seem to be Spanish law, and since Rome II, Article 15(h) says that this covers rules of prescription and limitation, it might seem that the applicable time limit should be that laid down by Spanish law. The lower Portuguese court so held; on appeal, a reference was made to the CJEU. The main issue was whether the Portuguese time limit might nevertheless be applicable as an overriding mandatory provision of the law of the forum under Rome II, Article 16. We consider only this issue.
23 By its first question, the referring court is asking, in essence, whether Article 16 of the Rome II Regulation must be interpreted as meaning that a national provision, such as that at issue in the main proceedings, which provides that the limitation period for actions seeking compensation for damage resulting from an accident is three years, may be considered to be an overriding mandatory provision, within the meaning of that article.
24 In that connection, it should be observed, first, that it is clear from Article 4(1) of the Rome II Regulation that the law applicable to a non-contractual obligation arising out of a tort/delict is to be the law of the country in which the damage occurs, irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.
25 Second, Article 15(h) of the Rome II Regulation provides that the law applicable to a non-contractual obligation under that regulation is to govern, in particular, the rules of prescription and limitation.
26 However, Article 16 of the Rome II Regulation authorises the application of the provisions of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable to the non-contractual obligation.
27 Although the concept of ‘overriding mandatory provisions’ used in that provision is not defined in the Rome II Regulation, it must be observed that Article 9(1) of the Rome I Regulation defines mandatory provisions as provisions the respect for which is regarded as crucial by a State for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under that regulation.
28 The requirement for consistency in the application of the Rome I and Rome II Regulations (judgment of 21 January 2016, ERGO Insurance and Gjensidige Baltic, C 359/14 and C 475/14, EU:C:2016:40, paragraph 43) supports the harmonisation wherever possible of the interpretation of the concepts used by those two regulations which are, in functional terms, identical. It must therefore be held that, irrespective of the fact that certain language versions of the Rome II Regulation use different terminology compared to the Rome I Regulation, ‘dispositions impératives dérogatoires’ (‘overriding mandatory provisions’), within the meaning of Article 16 of the Rome II Regulation, fall within the definition of ‘lois de police’ (‘overriding mandatory provisions’), within the meaning of Article 9 of the Rome I Regulation, so that the Court’s interpretation of the latter concept also applies to ‘dispositions impératives dérogatoires’ (‘overriding mandatory provisions’) within the meaning of Article 16 of the Rome II Regulation.
29 In that connection, it must be borne in mind that the Court has already pointed out, in the context of the Rome Convention, that the plea relating to the existence of a ‘mandatory rule’ within the meaning of the legislation of the Member State concerned must be interpreted strictly (judgment of 17 October 2013, Unamar, C 184/12, EU:C:2013:663, paragraph 49).
30 It is settled case-law of the Court that it is, in that context, for the national court, in the course of its assessment of whether the national law which it proposes to substitute for that expressly chosen by the parties to the contract is a ‘mandatory rule’, to take account not only of the exact terms of that law, but also of its general structure and of all the circumstances in which that law was adopted in order to determine whether it is mandatory in nature in so far as it appears that the legislature adopted it in order to protect an interest judged to be essential by the Member State concerned (judgment of 17 October 2013, Unamar, C 184/12, EU:C:2013:663, paragraph 50).
31 By analogy, it must be held that, with regard to the possible identification of an ‘overriding mandatory provision’, within the meaning of Article 16 of the Rome II Regulation, the referring court must find, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which that provision was adopted, that it is of such importance in the national legal order that it justifies a departure from the applicable law, designated pursuant to Article 4 of that regulation.
32 The order of reference indicates that Article 11(1)(b) of Decree-Law No 291/2006 provides that, so far as concerns accidents occurring in the territory of States that are Contracting Parties to the Agreement on the European Economic Area, the obligation to pay compensation laid down in the law applicable to the accident is replaced by Portuguese law where it provides better cover. Pursuant to Article 498(1) of the Civil Code, the limitation period for actions seeking compensation for damages resulting from accidents is three years, whereas the period laid down in Spanish law – which the referring court deems applicable in the present case, pursuant to Article 4 of the Rome II Regulation – is one year.
33 Although it is not for the Court of Justice to assess the provisions referred to in the preceding paragraph in the light of the criteria set out in paragraph 31 of the present judgment, it must be pointed out that, in spite of the variety of national rules of prescription and limitation, Article 15(h) of the Rome II Regulation expressly makes such rules subject to the general rule on determining the law applicable, and that no other provision of EU law establishes specific requirements with regard to the limitation period for actions such as that at issue in the main proceedings.
34 In those circumstances, as the European Commission points out, the application to an action seeking compensation for damage resulting from an accident of a limitation period other than that laid down in the law designated as applicable would require the identification of particularly important reasons, such as a manifest infringement of the right to an effective remedy and to effective judicial protection arising from the application of the law designated as applicable pursuant to Article 4 of the Rome II Regulation.
35 It follows from the foregoing that the answer to the first question is that Article 16 of the Rome II Regulation must be interpreted as meaning that a national provision, such as that at issue in the main proceedings, which provides that the limitation period for actions seeking compensation for damage resulting from an accident is three years, cannot be considered to be an overriding mandatory provision, within the meaning of that article, unless the court hearing the case finds, on the basis of a detailed analysis of the wording, general scheme, objectives and the context in which that provision was adopted, that it is of such importance in the national legal order that it justifies a departure from the law applicable, designated pursuant to Article 4 of that regulation.
This is another example of the CJEU’s policy of trying to attain consistency among the different EU instruments in the field of private international law. It also shows that the CJEU wants to restrict the application of the rule regarding overriding mandatory provisions. If this rule were applied too extensively, the whole system of Rome II would be jeopardized; nevertheless, the final decision rests with the Member State court.
In some cases, especially where insurance is involved, tort claims can give rise to questions of subrogation. Our next case is an example.
In these two cases, which were joined before the CJEU, a set of complicated legal questions arose out of a seemingly simple traffic accident. A tractor towing a trailer overturned on a road in Germany. The driver of the tractor appeared to have been at fault, so the insurer of the tractor (ERGO) paid compensation to the victim of the accident. However, the trailer was insured by a different insurer and ERGO wanted to obtain a contribution from the latter, so it brought proceedings against the trailer insurer in Lithuania. The facts in the second case were similar, but involved a different insurance company, Gjensidige Baltic. It also brought proceedings in Lithuania for a contribution. Both cases came before the CJEU on a reference from courts in Lithuania. The question before the CJEU was whether Rome I or Rome II should be applied to determine the governing law to decide whether a contribution should be made.
47 In the present case, it is clear from the orders for reference that contractual obligations, within the meaning of the Rome I Regulation, exist between the insurers and the owners or drivers of the tractor and the owners of the trailer respectively. However, there is no contractual undertaking between the two insurers.
48 In addition, the existence and extent of the obligation to compensate the victims at issue in the main proceedings depend, above all, on assessments relating to the road traffic accidents which gave rise to the damage concerned. Those assessments, concerning tort or delict, are foreign to the contractual relationship between the insurers and their respective insured.
49 As to whether the insurer of a tractor unit, which compensated a victim for all the harm sustained as a result of the accident involving both the tractor vehicle and the trailer coupled to it, may bring an action for indemnity against the insurer of the trailer, the following observations should be made.
50 First, the very existence of the right of the insurer of a tractor unit, the driver of which caused an accident, to bring an action for indemnity against the insurer of a trailer, once the victim has been compensated, cannot be inferred from the insurance contract, but is based on the premiss that the owner of the trailer will concomitantly incur liability in tort, delict or quasi-delict in relation to the same victim.
51 In that connection, it must be observed that such an obligation to pay compensation by the owner of the trailer must, therefore, be regarded as a ‘non-contractual’ obligation, within the meaning of Article 1 of the Rome II Regulation. Therefore, it is in the light of the provisions of that regulation that the law applicable to the obligation must be determined.
52 In accordance with Article 4 of that regulation, save as otherwise provided, the law applicable to such a non-contractual obligation is that of the country in which the harm was sustained, that is, in the cases in the main proceedings, the country in which the damage directly resulting from the accident is suffered (see, to that effect, judgment in Lazar, C-350/14, EU:C:2015:802, paragraph 24). According to Article 15(a) and (b) of the Rome II Regulation, that law will determine the basis and extent of liability and the grounds for any division of that responsibility.
53 Therefore, it is in the light of the law of the place of the direct harm, in the present case German law, that the debtors of the obligation to compensate the victim and, if appropriate, the respective contributions of the owner of the trailer and of the owner or driver of the tractor unit to the damage caused to the victim must be determined.
54 Second, it must be recalled that the obligation for an insurer to compensate the damage caused to a victim arises not from the damage caused to the latter but from the contract between it and the insured party who is liable. Such compensation is therefore based on a contractual obligation, since the law applicable to such an obligation must be determined in accordance with the provisions of the Rome I Regulation.
55 Therefore, it must be examined, in the light of the law applicable to the contract of insurance of the tractor units, such as those at issue in the main proceedings, and to that of the trailers coupled to them, respectively, whether the insurers of those two kinds of vehicle were in fact bound, in accordance with those contracts, to compensate the victims of an accident caused by those vehicles.
56 Third, regarding the issue whether the insurer of a tractor unit who has compensated a victim has, in some circumstances, a right to bring an action in subrogation against the insurer of the trailer, it must be observed that Article 19 of the Rome II Regulation distinguishes between matters subject to the tort/delict regime and those subject to the contractual regime. That provision applies in particular to the situation in which a third party, namely an insurer, has compensated the victim of an accident, the creditor of an obligation in tort/delict of damages owed by the driver or owner of a motor vehicle, in order to discharge the duty to satisfy that obligation.
57 More particularly, Article 19 of the Rome II Regulation provides that, in that case, the issue of any subrogation of the victim’s rights is governed by the law applicable to the obligation of the third party, namely the civil liability insurer, to compensate that victim.
58 Thus, the insurer’s obligation to cover the civil liability of the insured party with respect to the victim resulting from the contract of insurance concluded with the insured party and the conditions under which the insurer may exercise the rights the victim of the accident has against the persons responsible for the accident depend upon the national law governing that insurance contract, which are determined in accordance with Article 7 of the Rome I Regulation.
59 However, the law applicable to the determination of the persons who may be held liable and the allocation of responsibility between them and their respective insurers remains subject, in accordance with Article 19, to Article 4 et seq. of the Rome II Regulation.
60 In particular, it must be held that, if, according to the law applicable by virtue of those provisions of the Rome II Regulation, the victim of a road traffic accident caused by a tractor unit coupled with a trailer has rights against both the owner of the trailer and its insurer, the insurer of the tractor unit, after compensating the victim, has a right of action against the insurer of the trailer since the law applicable, in accordance with Article 7 of the Rome I Regulation, to the insurance contract provides for subrogation of the insurer to the victim’s rights.
61 Therefore, it is for the referring courts to establish, first of all, how the damages to be paid to the victim are to be divided between the driver and the owner of the tractor unit, on the one hand, and the owner of the trailer, on the other, in accordance with the rules of national law applicable by virtue of the Rome II Regulation.
62 Second, in accordance with Article 7 of the Rome I Regulation, the law applicable to the insurance contract concluded between the insurers which are the applicants in the main proceedings and the respective insured parties must be determined, in order to ascertain whether and, if so, to what extent those insurers may, by subrogation, exercise the victim’s rights against the insurer of the trailer.
…
64 The Rome I and Rome II Regulations must be interpreted to the effect that the law applicable to an action for indemnity between the insurer of a tractor unit, which has compensated the victims of an accident caused by the driver of that vehicle, against the insurer of the trailer coupled to it at the time of that accident, is to be determined in accordance with Article 7 of the Rome I Regulation if the rules of liability in tort, delict and quasi-delict applicable to that accident by virtue of Article 4 et seq. of the Rome II Regulation provide for apportionment of the obligation to compensate for the damage.
The case was complicated by the different obligations that existed at different levels. On the first level, there were the obligations of the owner/driver of the tractor and the owner of the trailer to compensate the victim. These obligations were clearly obligations in tort, governed by Rome II. On the facts of the case, German law was applicable. If both were liable, German law also decided on the allocation of responsibility (division of liability) between them.53 Paragraphs 51–53 and 59–61 of the judgment. See Rome II, Article 15(a) and (b). Unless the owner of the trailer was liable under German law to compensate the victim and German law provided for apportionment of the obligation to compensate for the damage, no question of a contribution or indemnity could arise.54 If the owner of the trailer was liable, German law would also decide whether, if the owner/driver of the tractor compensated the victim, he could claim a contribution from the owner of the trailer: see Rome II, Article 15(b), which says that the law applicable under the Regulation will govern ‘any division of liability’. This question is related to, but different from, the question whether the insurer of the tractor had such a claim against the insurer of the trailer if it compensated the victim.
Assuming that the first-level obligations existed, the question would then arise whether the two insurers were obliged to compensate the victim. Such an obligation would depend on the insurance contract. Rome I would apply. On the facts, the insurance contracts were probably both governed by Lithuanian law. These can be regarded as second-level obligations.
Assuming that the first-level and second-level obligations existed and that the insurer of the tractor paid the victim, the question would arise whether it could claim a contribution from the insurer of the trailer. This can be regarded as a third-level obligation: it comes into existence only if the first-level and second-level obligations both exist. Moreover, no question of a contribution could exist unless the law governing the tort (German law) provided for apportionment of the obligation to compensate the victim between the owner/driver of the tractor and the owner of the trailer.
Assuming that German law did provide for an apportionment, ERGO’s right to claim a contribution from the insurer of the trailer depended, in the opinion of the CJEU, on Rome II, Article 19. This reads as follows:
Where a person (the creditor) has a non-contractual claim upon another (the debtor), and a third person has a duty to satisfy the creditor, or has in fact satisfied the creditor in discharge of that duty, the law which governs the third person’s duty to satisfy the creditor shall determine whether, and the extent to which, the third person is entitled to exercise against the debtor the rights which the creditor had against the debtor under the law governing their relationship.
Under the terminology adopted in Article 19, the victim would constitute the creditor, since he was owed an obligation to compensate him for the damage he had suffered. If we assume that both the owner/driver of the tractor and the owner of the trailer were liable under German law to compensate him, they would both constitute debtors in terms of Article 19. Since ERGO had satisfied the creditor (the victim) by paying him compensation, ERGO would constitute the third party who had satisfied the creditor.
ERGO’s duty to satisfy the creditor (victim) derived from the insurance contract; so, according to Article 19, as interpreted by the CJEU, the law governing the insurance contract between ERGO and the owner/driver of the tractor decided whether, and the extent to which, the victim’s rights against the owner of the trailer passed to ERGO by way of subrogation. This is a fairly wide interpretation of Article 19, since it might be understood as applying only to the victim’s rights against the owner/driver of the tractor. ERGO was under no obligation to satisfy the victim’s claim against the owner of the trailer. Nevertheless, when ERGO paid the victim, this did in fact also satisfy the victim’s claim against the owner of the trailer.
The result of all this was that if under German law the owner of the trailer was liable to the victim and if under German law the obligation to compensate the victim was to be apportioned between him and the owner/driver of the tractor, ERGO could claim a contribution from the insurer of the trailer if it could do so under the law governing the insurance contract between it and the owner/driver of the tractor.
The subject-matter scope of the Regulation is laid down in Article 1, set out in Panel 22.9.
1. This Regulation shall apply, in situations involving a conflict of laws, to non-contractual obligations in civil and commercial matters. It shall not apply, in particular, to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority (acta iure imperii).
2. The following shall be excluded from the scope of this Regulation:
(a) non-contractual obligations arising out of family relationships and relationships deemed by the law applicable to such relationships to have comparable effects including maintenance obligations;
(b) non-contractual obligations arising out of matrimonial property regimes, property regimes of relationships deemed by the law applicable to such relationships to have comparable effects to marriage, and wills and succession;
(c) non-contractual obligations arising under bills of exchange, cheques and promissory notes and other negotiable instruments to the extent that the obligations under such other negotiable instruments arise out of their negotiable character;
(d) non-contractual obligations arising out of the law of companies and other bodies corporate or unincorporated regarding matters such as the creation, by registration or otherwise, legal capacity, internal organisation or winding-up of companies and other bodies corporate or unincorporated, the personal liability of officers and members as such for the obligations of the company or body and the personal liability of auditors to a company or to its members in the statutory audits of accounting documents;
(e) non-contractual obligations arising out of the relations between the settlors, trustees and beneficiaries of a trust created voluntarily;
(f) non-contractual obligations arising out of nuclear damage;
(g) non-contractual obligations arising out of violations of privacy and rights relating to personality, including defamation.
3. This Regulation shall not apply to evidence and procedure, without prejudice to Articles 21 and 22.
1 It was assented to by the Crown.
2 [1971] AC 356; [1969] 3 WLR 322; [1969] 2 All ER 1085.
3 Red Sea Insurance Co. Ltd v. Bouygues SA [1995] 1 AC 190.
4 On this, see Morse, ‘Torts in Private International Law: A New Statutory Framework’ (1996) 45 ICLQ 888.
5 However, the Act is still applicable to a narrow range of cases – for example, actions for invasion of privacy, which are excluded from the scope of the Rome II Regulation but not from the 1995 Act.
6 According to Article 32, the Regulation ‘applies’ from 11 January 2009. It applies to events giving rise to damage which occurred after its entry into force: Article 31. In an EU measure, entry into force and application are not the same thing. Unless the contrary is specified in it, a general EU measure enters into force on the twentieth day following its publication in the Official Journal of the European Union. This rule is now contained in Article 297 TFEU (Treaty on the Functioning of the European Union). When the Rome II Regulation was adopted, the relevant provision was Article 254 EC (Treaty Establishing the European Community), which laid down the same rule. The Rome II Regulation was published in the Official Journal dated 31 July 2007. The twentieth day after publication was, therefore, 20 August 2007. This means that the Regulation applies from 11 January 2009 and entered into force on 20 August 2007. So the event giving rise to the damage must have occurred on or after 20 August 2007. It is not clear what the significance of the date of ‘application’ is: does it refer to the date on which proceedings are commenced or to the date on which judgment is given? The former seems more natural, though Dickinson argues in favour of the latter: see Dickinson (Andrew), The Rome II Regulation: A Commentary (Oxford University Press, Oxford, 2008) at pp. 285–90.
7 The question is supposed to be reviewed by the Commission in a report which should have been submitted by the end of 2008: Article 30(2). It has not so far appeared.
8 The United Kingdom has decided to apply the Regulation between its constituent countries – for example, between England and Scotland: SI 2008 No. 2986, reg. 6; and SI 2008 No. 404, reg. 4 (Scotland).
9 Having his habitual residence in England.
10 Having her habitual residence in Scotland.
11 This would not be affected by any decision (under the second paragraph of Article 25) as to whether or not the Regulation will apply as between England and Scotland.
12 See Articles 10–13 of the Regulation.
13 England and Wales are not: they constitute one ‘country’ for the purposes of the Regulation, even though politically and culturally they are different countries.
14 The common law in each state is a separate legal system. The US Supreme Court has no jurisdiction to interpret it. Subject to minor exceptions, there is no federal common law: Erie Railroad Company v. Thompkins, 304 US 674; 58 S Ct 817; 82 L Ed 1188 (1938).
15 Lange v. Australian Broadcasting Corporation (1997) 189 CLR 520 at p. 563.
16 The position appears to be the same in the common-law provinces of Canada, but Quebec is clearly a separate country.
17 They attended the same university.
18 The same problem of definition arises under the third paragraph of Article 4, though it might be possible to use it to apply the law of one particular state.
19 Article 3544(1).
20 The words ‘in particular’ are EU jargon indicating that this is not intended to exclude other possibilities.
21 Tolofson v. Jensen [1994] 3 SCR 1022; (1994) 120 DLR (4th) 289 (Supreme Court of Canada).
22 Ibid Tolofson v. Jensen [1994] 3 SCR 1022; (1994) 120 DLR (4th) 289 (Supreme Court of Canada).. This case lays down the rule that the law of the place of the tort applies. In inter-provincial cases, there are no exceptions.
23 This rule was abolished in 1982 by the Administration of Justice Act, section 1.
24 The court refused to characterize the English period of limitation as procedural: they said it was substantive, and therefore applicable in a Scottish court. Today, this characterization is expressly laid down by Article 15(h) of the Regulation.
25 Lord Keith went on to a distinguished legal career in the House of Lords.
26 Article 15(e) of the Rome II Regulation specifies that this question is decided by the law governing the tort.
27 See the California decision of Grant v. McAuliffe, 41 Cal 2d 859; 264 P 2d 944 (Supreme Court of California, 1953), in which a California court applied California law to decide this question, even though the accident took place in Arizona. In that case, however, the right of action passed to the victim’s estate under California law but not under Arizona law; so the effect of characterizing it as falling under the law of succession was to allow recovery.
28 Assuming that it applied as between England and Scotland: see Article 25(2) of the Regulation (discussed above).
29 This would have been true irrespective of where the proceedings were brought. An English court would also have applied Scottish law.
30 For comments, see Mortensen, ‘“Troublesome and Obscure”: The Renewal of Renvoi in Australia’ (2006) 2 JPIL 1; Mills, ‘Renvoi and the Proof of Foreign Law in Australia’ [2006] CLJ 37.
31 (2002) 210 CLR 491.
32 The Chinese law said ‘the court may also apply …’, thus suggesting that the court had a discretion.
33 Of the judges hearing the case, six favoured some form of renvoi and five favoured ‘total’ renvoi.
34 Some of the judges admitted this but decided the case on the ground that, in the absence of proof to the contrary, foreign law is presumed to be the same as Australian law.
35 This is an example of the continuing influence of the once-prevalent theory that achieving uniformity of result is the most important objective of conflict of laws. It was criticized in Chapter 1, § 4, above.
36 Article 24.
37 Article 15(h) states that limitation periods are to be characterized as pertaining to tort law.
38 On this, see Article 23(1) of the Regulation, set out in Panel 22.4, above.
39 The question in issue in the case, limitation of actions, was governed by state statutes, but the action was brought within the time period laid down by the statutes in both Western Australia and Victoria.
40 This result cannot be avoided by characterizing limitation of actions as procedural: the Regulation expressly provides that it is part of the law of tort (Article 15(h)).
41 Set out in Panel 22.5, above.
42 Since the ‘however’ clause refers to the law of the producer’s habitual residence, it would lead to the same result as Article 4(2); so it does not matter whether it qualifies Article 4(2) or not.
43 It is thought that the same is true of French.
44 Since we would not have reached the situation we are considering if the second paragraph of Article 4 had been applicable, we are really concerned only with the first and third paragraphs.
45 This is subject to the escape clause in Article 4(3).
46 The defendant would be habitually resident in either Germany (central administration) or England (if there is a branch there) but not in France. This would be true even if it had a branch in France: a company is not habitually resident where it has a branch unless the event giving rise to the damage, or the damage itself, arises in the course of operation of the branch (Article 23(1)). If the contaminated can was bought in England, the existence of a branch in France would be irrelevant.
47 If this was the case, German law would apply.
48 It would make no difference if it has a branch in Belgium, since the vehicle in question would not have been sold through that branch: see note 46, above.
49 Sections 9(3), 10 and 13. Defamation is defined for this purpose in section 13(2). Since the area excluded from the Regulation is wider than that excluded from the Act, certain matters – for example, violations of privacy – will continue to be covered by the Act.
50 [1971] AC 356; [1969] 3 WLR 322; [1969] 2 All ER 1085.
51 [1995] 1 AC 190 (PC).
52 The equivalent provision in the Rome I Regulation is also Article 3(1).
53 Paragraphs 51–53 and 59–61 of the judgment. See Rome II, Article 15(a) and (b).
54 If the owner of the trailer was liable, German law would also decide whether, if the owner/driver of the tractor compensated the victim, he could claim a contribution from the owner of the trailer: see Rome II, Article 15(b), which says that the law applicable under the Regulation will govern ‘any division of liability’. This question is related to, but different from, the question whether the insurer of the tractor had such a claim against the insurer of the trailer if it compensated the victim.