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Applicable law - England and Wales

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TABLE OF CONTENTS

I. Sources of the rules in force I.
I.1. National rules I.1.
I.2. Multilateral international conventions in force I.2.
I.3. Principal bilateral conventions in force I.3.
II. Implementation of conflict of laws' rules II.
II.1. Obligation of the judge to apply conflict of laws' rules on his/her own initiative? II.1.
II.2. Renvoi II.2.
II.3. Change of connecting factor II.3.
II.4. Exceptions to the normal application of the conflict rules II.4.
II.5. Proof of foreign law II.5.
III. Conflict of laws' rules III.
III.1. Contractual obligations and legal acts III.1.
III.2. Non-contractual obligations (torts and delicts, unjust enrichment, negotiorum gestio, etc.) III.2.
III.3. The personal status, its aspects relating to the civil status (name, domicile, capacity) III.3.
III.4. Establishment of parent-child relationship, including adoption III.4.
III.5. Marriage, unmarried couples, partnerships, divorce, judicial separation, maintenance obligations III.5.
III.6. Matrimonial property regimes III.6.
III.7. Wills and successions III.7.
III.8. Real property III.8.
III.9. Insolvency III.9.

 

I. Sources of the rules in force

I.1. National rules

The conflict of laws rules in England and Wales have both statutory and common law (case law) sources, and the balance of each varies in each field of law. For example, choice of law in tort and contract is now dominated by statute: the Private International Law (Miscellaneous Provisions) Act 1995 and Contracts (Applicable Law) Act 1990 respectively. In turn, it may be noted that some of these statutes give effect to international agreements (such agreements, other than EU legislation with direct effect, require a statute to take effect in England and Wales). For example, the Contracts (Applicable Law) Act 1990 gives effect to the Rome Convention 1980 on the Law Applicable to Contractual Obligations.

I.2. Multilateral international conventions in force

Hague Convention on the Conflicts of Laws Relating to the Form of Testamentary Dispositions 1961

Rome Convention 1980 on the Law Applicable to Contractual Obligations

Hague Convention of 1 July 1985 on the Law Applicable to Trusts and on their Recognition

I.3. Principal bilateral conventions in force

We are unaware of any bilateral conventions containing choice of law provisions to which the UK is a party.

However, it should be noted that, although the Rome Convention 1980 and Hague Conventions permit a State to apply some other choice of law regime to “internal” conflicts – such as conflicts between the laws of England and Wales and Scotland – the UK has chosen not to make use of this facility. Hence, the Rome Convention and Hague Convention rules apply to conflicts between the different jurisdictions of the UK as well as in international conflicts.

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II. Implementation of conflict of laws' rules

II.1. Obligation of the judge to apply conflict of laws' rules on his/her own initiative?

The general position is that the conflict of laws rules are only applied if at least one of the parties has argued that they be applied. If this has not been argued, or if there is no satisfactory evidence of the content of foreign law, the judge will normally apply English law to the issue. This rule is one relating to evidence and procedure, and hence is unaffected by the Rome Convention 1980 etc.

II.2. Renvoi

The application of renvoi has been the subject of intense academic debate in England and Wales. The view that has prevailed in statutes concerning conflicts of law (Private International Law (Miscellaneous Provisions) Act 1995, Contracts Applicable Law Act 1990, Foreign Limitations Period Act 1984) is to reject renvoi. Hence, if the English choice of law rule for a tort of negligence points to French law, French domestic law will be applied, even if a French court would have applied some other country’s law. One justification put forward for the rejection of renvoi in these spheres seems to be that the complex rules established by the statutes would be upset if renvoi were applied.

However, renvoi does seem to apply in the case of succession to movable and immovable property, and possible transfers of such property generally, where the English choice of law rules has referred to the law of the domicile or the law of the place where the immovable was situated, and in family law cases (which refers to the law of the domicile). In such cases, there is a pragmatic desire to apply the same law of the court in whose jurisdiction the property is located, to increase the chance that any English decision concerning the property will be effective. It should be noted, however, that in many cases the proof of the content of foreign choice of law rules is expensive and parties frequently choose not to argue for their application (see 2.2 above).

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II.3. Change of connecting factor

This problem is dealt with by specifying in each choice of law rule the relevant time at which the connecting factor is identified. For example, in the case of transfers of movables, the relevant applicable law is that applicable at the location of movable in question at the time when the act in question is alleged to have affected title to that movable.

II.4. Exceptions to the normal application of the conflict rules

English courts can refuse to apply a foreign law that is contrary to English public policy. However, the threshold is very high: for example, where it would lead to a result “ wholly alien to fundamental requirements of justice as administered by an English court”. The content of English public policy is influenced by the UK’s international obligations, in particular the European Convention on Human Rights; breaches of human rights is one well-known example of the public policy exception, another is where the law is a “ flagrant violation of rules of international law of fundamental importance” (e.g. the invasion of Kuwait by Iraq in 1990).

In addition, Article 7(2) of the Rome Convention 1980 provides that mandatory rules of the forum that are mandatory irrespective of the law otherwise applicable to the contract may be applied. However, there are few such rules in English law. Those rules that exist are generally to be found in the consumer and employment spheres or in legislation supplementing an international convention.

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It should be noted that the UK has entered a reservation in respect of Article 7(1) of the Rome Convention, and so will not apply foreign mandatory rules that are applicable irrespective of the law applicable to the contract (i.e. a foreign lois de police) merely on the basis of a close connection with the contract.

II.5. Proof of foreign law

Thecontent of foreign law is proved as if it were a fact. As such, it is for the parties to prove the content of foreign law; judges are not permitted to investigate the content of foreign law themselves. In the event of conflict between the evidence submitted by the parties, the judge may assess the credibility of the experts and is permitted to consider the primary evidence (e.g. foreign statutes and cases), especially where they are written in English and apply concepts that are familiar to an English judge.

The content of foreign law is normally proved by expert evidence. It is not enough to put the text of a foreign statute, case or text of authority before the court. Expert evidence as to foreign law may be given by anyone “suitably qualified to do so on account of his knowledge or experience,” irrespective of whether he is entitled to act as a legal practitioner in the relevant jurisdiction. Nonetheless, it is usual for experts to be either academics or practitioners in the jurisdiction in question. If the content of foreign law has been determined in an earlier English case, this case may be cited as evidence of the content of foreign law, and the content of foreign law will be presumed to be the same as determined in that case unless proved otherwise.

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The burden of proof is on the party relying on the foreign law. If foreign law is not proved satisfactorily, the general rule is that English law will be applied. However, in cases where there is no reason to think that the foreign law in any way resembles English law (e.g. a tax statute from another European jurisdiction), the suit may be dismissed.

III. Conflict of laws' rules

III.1. Contractual obligations and legal acts

In all cases concerning contractual obligations and involving a choice of law, the Rome Convention 1980 applies, as a result of the Contracts (Applicable Law) Act 1990. The choice of law rules in the Rome Convention 1980 will apply to cases that English domestic law would not recognise as being contractual (e.g. where the agreement is not supported with consideration e.g. contracts of gift). It also seems likely that certain situations that English law would deal with through tort – such as the assumption of responsibility of a bank towards a third party when offering negligent advice concerning the creditworthiness of its client – are likely to be governed by the Convention. In respect of the boundary between contract and unjust enrichment, the UK has entered a reservation in respect of Article 10(1)(e) of the Convention. However, English law is probably consistent with the substance of Article 10(1)(e): the law that would have governed the void contract if it had been valid probably governs the unjust enrichment claim.

It should be noted that, as in the case of all choice of law rules, matters of procedure are determined by the lex fori. Hence, the assessment of the level of damages (but not the heads of damage) and means of proof are regulated by the law of the forum. Limitation periods are substantive, and hence in the case of contractual obligations are determined by the law applicable under the Convention. The primary substantive rules are as follows.

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In cases where the parties have made an express choice of law, or one that is demonstrable by reasonable certainty, this law applies. A choice is likely to be demonstrated with reasonable certainty where the contract is in a standard form that is known to be governed by a particular law (e.g. a Lloyd’s marine insurance policy), or in light of previous dealings between the parties. Where there is a choice of court agreement, this is often enough to infer that the law of that court was intended to be chosen, but this is not always the case. In the case of an arbitration agreement, if the selection criteria for the arbitrators is specified, this will more readily permit an inference of a choice of law, but if arbitrators are identified by reference to some international body, then it is much less likely that the choice has been demonstrated with reasonable certainty.

Freedom of choice is circumscribed in several respects. First, in consumer and employment contracts, the choice of law cannot deprive the consumer or employee of the protection of mandatory rules that exist under the law that would, if there had not been an express choice of law, have applied to the case. Secondly, where all the elements of the situation are connected with one country, a choice of a different law cannot deprive the mandatory rules of that country of effect. It should be noted that the UK has entered a reservation in respect of Article 7(1): the English courts will not give effect to the mandatory rules of a foreign country merely because the contract is closely connected with the foreign country. However, the English court will apply English mandatory rules (that is, rules that seek to apply irrespective of the law governing the contract). An example of this rule is s.27(2)(a) of the Unfair Contract Terms Act 1977, which requires that certain obligations of the seller (e.g. implied terms as to the quality of the goods) cannot be excluded; s.27(2)(a) provides that these rules still apply where a choice of foreign law has been made that was designed to evade these protections. Thirdly, in cases where the law chosen conflicts with English public policy, the conflicting provision will not be applied. It might also be noted that where there is disagreement in respect of the effectiveness of choice – for example, an allegation of duress – the question as to whether such a choice was effective is determined by the putative applicable law (i.e. the law that would govern the contract if the choice were valid), unless this would be “unreasonable” (in which case, the law of the habitual residence of the party claiming not to have consented may be applied).

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In cases where there is no express choice of law, or one that is demonstrable with reasonable certainty, a two-part test applies in most contracts. At the first stage, there is a presumption that the law will be the law of the habitual residence of the characteristic performer. The characteristic performer is not always easy to identify, but is usually the party who is not providing payment for the good or service (e.g. the characteristic performer is the vendor of a product, the lender in a banking transaction, the guarantor in a contract of guarantee). This presumption may be rebutted in favour of a country with which the contract is more closely connected only “in circumstances which clearly demonstrate the existence of connecting factors justifying the disregarding [of the presumption]”. In cases involving consumer and employment contracts, the law of the habitual residence of the consumer, and usual place of work of the employee, respectively will apply.

III.2. Non-contractual obligations (torts and delicts, unjust enrichment, negotiorum gestio, etc.)

In respect of “issues relating to tort”, the provisions of Part III of the Private International Law (Miscellaneous Provisions) Act 1995 apply to most torts (defamation and related torts are excluded, and remain governed by the common law: see below). It seems that choice of law in respect of equitable “wrongs”, such as breach of confidence and perhaps dishonest assistance in another’s breach of trust, are subject to the choice of law rules set out in the 1995 Act. Examples of “issues relating to tort” include: capacity to commit a tort, the heads of damage available (including whether restitutionary damages for wrongs are available) and defences. Limitation periods are also determined by the applicable law.

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The substantive rule is set out in two stages. The first stage sets out a general rule: the applicable law is the law of the country in which the events constituting the tort or delict in question occur. Where all the events constituting the tort or delict occur in one place, the solution is simple. Where elements of those events occur in different countries, the applicable law under the general rule is to be taken as being:-

  1. in personal injury (which includes disease and impairment of one’s mental condition) or wrongful death cases, the law of the country where the individual was when he sustained the injury;
  2. in cases of damage to property, the law of the country where the property was when it was damaged;
  3. in any other case, the law of the country in which the most significant element or elements of those events occurred. (This exercise involves considering the various elements that constitute the alleged tort e.g. the act/omission, damage suffered; in most cases it will be the place where the direct harmful effect occurs).

At the second stage, there is an opportunity to reject the law identified at the first stage. At this second stage, the court must identify the factors connecting the tort or delict with the country whose law was identified at the first stage and must also identify the factors connecting the tort or delict with another country. These factors may include: factors relating to the parties (e.g. that their presence in the jurisdiction in question was temporary or fortuitous; any contract between the parties; the fact that they share a common domicile), to any of the events which constitute the tort or delict in question or to any of the circumstances or consequences of those events (e.g. where the victim resides). The court must then assess the significance of each of these sets of factors. Finally, the court can only reject the law selected at the first stage if it is “substantially more appropriate” to apply that law; a clear preponderance of factors is required. It is thought that this exception will be used less often where part (c) – discussed above – is relied on at the first stage.

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As noted above, the 1995 Act does not apply to cases of defamation (which includes slander of title, slander of goods, malicious falsehood and any foreign law claim “corresponding to or otherwise in the nature of [such] a claim”). In such cases, the “double actionability rule” applies: a tort is only actionable in England and Wales if it is civilly actionable under the foreign law of the jurisdiction in which the act occurred (usually publication) and, if the act had occurred in England and Wales, it would be civilly actionable under English law. This rule was retained after pressure from media organisations fearful of the application of oppressive foreign laws. However, this rule is subject to an exception: where another country has a more significant relationship with the occurrence and the parties, the law of that jurisdiction will apply instead. It should be noted that this area is particularly uncertain.

In respect of unjust enrichment (which includes claims of knowing receipt), the position of English law is unclear. It is thought that the law of the place of the unjust enrichment is the prima facie rule, but that this may be rebutted, especially in cases where there is a pre-existing relationship between the parties (e.g. a void contract).

Although the English common law does not have a general cause of action equivalent to negotiorum gestio, it seems that the choice of law rules applicable to unjust enrichment claims will also apply in respect of negotiorum gestio claims. It should be noted that cases involving agency, to the extent that they raise contractual issues, are governed by the Rome Convention 1980.

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In respect of the administration of trusts, the applicable law is that chosen by the settlor, or, in the absence of such choice, by the law with which the trust is most closely connected. This law determines the validity of the trust, its construction, effects and the administration of the trust. Constructive trusts are, insofar as they are restitutionary, governed by the law applicable to unjust enrichment (see previous paragraph).

As in the case of other choice of law obligations, a foreign law that conflicts with English public policy will not be given effect.

It should be noted that the UK has agreed to participate in the negotiations for a Council Regulation on the Law Applicable to Non-Contractual Obligations (known as “Rome II”), so that these substantive rules are likely to change when that Regulation is effective.

III.3. The personal status, its aspects relating to the civil status (name, domicile, capacity)

At birth, a person’s domicile (the domicile of origin) is the same as that of the child’s father at the time of the child’s birth, if the child is legitimate. If the child is illegitimate, or the father is dead at the time of birth, the child’s domicile is the same as that of the child’s mother. This rule continues to apply until the child is 16 (i.e. the child’s domicile changes with that of the father or mother respectively).

For persons over 16 years of age, the domicile of origin continues to apply unless they adopt a domicile of choice. To adopt a domicile of choice, they must actually reside in the relevant jurisdiction and intend to reside there indefinitely or permanently. If either of these elements ceases to exist, the domicile of choice no longer applies and the domicile of origin applies.

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The domicile of a wife is no longer determined by reference to that of her husband: it is assessed independently.

Capacity to undertake particular obligations (e.g. to contract, to make a will, to marry) is determined by rules specific to that area, and are discussed in the relevant sections.

III.4. Establishment of parent-child relationship, including adoption

The responsibilities of a parent to a minor (under 18 years of age) are determined by English law in cases where the English courts have jurisdiction, even if the child is residing abroad and is a foreign national. However, the English court will only have jurisdiction – pursuant to EU Regulation 1347/2000 on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility for children of both spouses – when the child is resident in England and Wales or if the child is in another Member State and if at least one spouse has parental responsibility and jurisdiction has been accepted by the spouse.

A child will be legitimate if born in lawful wedlock wherever the child was born, or if the child was legitimate by the law of the domicile of each of the parents at the time of the child’s birth.

A court will apply English law to establish an individual as a guardian of a child, wherever the English court has jurisdiction (which it will have whenever the applicant is a UK national, or is ordinarily resident or present in England and Wales).

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An English court will apply English law in adoption cases wherever it has jurisdiction (which it will have whenever the applicant is domiciled in England and Wales at the time of the application, but the court will also consider the likelihood of any English order being recognised abroad where this is relevant to the exercise of its jurisdiction). The effect of such an order is to transfer all responsiblities away from the existing parents and to the adopted parents.

III.5. Marriage, unmarried couples, partnerships, divorce, judicial separation, maintenance obligations

The formal validity of a marriage is governed by the law of the place of celebration of the marriage. This law governs the validity of the ceremony and its components e.g. whether any particular words must be used, whether a particular building must be used, whether parental consent is required and whether a marriage can be conducted by proxy. There are some limited exceptions to this rule: in particular, if it is impossible to use the local form of marriage, or if at least one party is a member of the armed forces and is serving in a foreign, non-Commonwealth country, then it will be sufficient to comply with the English common law requirements.

The capacity of persons to marry is determined by the domicile of the relevant person at the time immediately before the marriage. This law governs issues such as whether the parties consented, age requirements and which persons within one’s extended family one may not marry. In the special case of age, no marriage will be valid if either of the participants was under 16 at the time, if they are domiciled in England and Wales.

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In the case of same sex marriages, where the place of celebration defines the union as marriage, and the parties have personal capacity to marry, this is likely to be accepted. Where it is not recognised as a marriage, it is likely to take effect by giving rise to contractual rights.

In respect of a divorce, an English court will only have jurisdiction to entertain divorce proceedings pursuant to Council Regulation 1347/2000 on jurisdiction and the recognition and enforcement of judgments in matrimonial matters and in matters of parental responsibility for children of both spouses if one of the following requirments is satisfied: the spouses are habitually resident or domiciled in England and Wales, the spouses were habitually resident in England and Wales and one of them is still resident there now, the respondent is habitually resident in England and Wales, the applicant was resident in England and Wales for at least one year before the date of the application (or six months if the applicant is a national of a Member State). If none of these is satisfied and no other Member State has jurisdiction, domestic law confers jurisdiction on the English courts if at least one of the parties was domiciled in England and Wales at the time of the commmencement of the divorce proceedings. An English court with jurisdiction will apply English law to the divorce proceedings. In proceedings for a decree of nullity, the laws referred to above (law of place of celebration or law of party’s domicile) will apply depending on the ground of nullity. A foreign divorce will be recognised if one of the parties was habitually resident, domiciled, or a national of that country at the time of the foreign proceedings.

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In respect of maintenance obligations, the UK is bound by Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters. An English court will have jurisdiction pursuant if it has jurisdiction over the divorce or, if the divorce was obtained in foreign proceedings, where one of the parties is domiciled in England and Wales at the time of the foreign divorce or had been habitually resident in England and Wales for a year up to that date, or if one party has a beneficial interest in a former matrimonial home located in England and Wales. English law applies to such cases.

As noted above, in respect of all of these matters, renvoi applies.

III.6. Matrimonial property regimes

In the absence of a contract or marriage settlement, the rights of the husband and wife in each other’s movable property (whether acquired before or during the marriage) is determined by the law of the matrimonial domicile at the time of marriage. Where the domiciles of husband and wife coincide, this will be the matrimonial domicile. Where it does not do so, it will be the law with which the parties and the marriage have their closest connection. The intentions of the parties at the time of marriage are only relevant if they indicate an implied choice of law. The same rule probably applies in respect of immovable property, but at least one case seems to prefer the law of the location of the immovable property.

If there is a marriage contract or settlement, the law of the contract will apply: this is the law of the matrimonial domicile if there are no other indications as to the applicable law.

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III.7. Wills and successions

In cases of intestate succession (i.e. where there is no will), the law of the domicile of the testator at the time of death applies to the succession to movable property; the law of the jurisdiction in which the property is located applies to succession to immovable property.

In cases involving wills, the capacity of the testator to make a will is determined by the law of the testators’ domicile on the date of the will. A legatee will have capacity to receive movables if he has capacity under either the law of his own domicile or under the law of the domicile of the testator.

Pursuant to the Wills Act 1963, a will is formally valid (e.g. correct number of witnesses) if it complies with any of the following laws: the law of the place where the will was executed (i.e. usually where it is signed and witnessed) at the time it was executed; the law of the domicile, habitual residence or nationality of the testator at the time the will was executed; the law of the domicile, habitual residence or nationality of the testator at the time of death. A will will also be formally valid to pass immovable property if it complies with the law of the jurisdiction in which the property is sitauted.

A will of movable property is materially valid (e.g. limitations on the amount one can leave under a will) if it complies with the law of the domicile of the testator at the time of death; a will of immovable property is materially valid if it complies with the law of the jurisdiction in which the property is located.

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A will is interpreted by the law intended by the testator, which is presumed to be the law of his domicile at the date of the will.

The validity of an alleged revocation of a will is determined by the law of the domicile of the testator at the time of the alleged revocation. However, where the revocation is alleged to have been achieved by a later will (as opposed to, for example, tearing up the will), whether this second will revokes the earlier one is determined by the laws applicable to the capacity and formal validity of the second will. If it is unclear whether a second will revokes an earlier will, the question of construction will be determined by the law intended by the testator, which is presumed to be the law of his domicile at the date of the second will.

III.8. Real property

Property cases are divided into movable and immovable property; whether property is movable or immovable is for the law of the place in which the property is situated.

In the case of immovable property, the applicable law is the law of the place in which the property is situated, and renvoi applies.

In the case of tangible movable property, the applicable law is the law of the place in which the property was situated at the time of the event that was alleged to have affected title to it, and renvoi applies.

In the case of intangible movable property, where the right is contractual (as in the case of most debts), the Rome Convention 1980 applies. Therefore, the law of the contract of assignment determines whether an assignment has been effective, and the law of the contract creating the debt will determine whether it can be assigned. The common law might reflect this position in cases where the intangible property was not created voluntarily.

III.9. Insolvency

The UK is a party to Council Regulation 1346/2000 on insolvency proceedings, which sets out the relevant rules in proceedings involving the complete or partial divestment of the debtor and appointment of a liquidator where the debtor’s main interests are in an EU Member State (other than Denmark). If the English courts have jurisdiction (which will be the case if the debtor’s main interests were centred in England and Wales, presumed to be the place of the registered office), English law will be applied.

In cases falling outside of Regulation 1346/2000, English law will be applied where the English courts have jurisdiction (which will be the case if the company is registered in England and Wales, or if there are persons in England and Wales who would benefit from the winding up and there are no good reasons to decline jurisdiction). An English discharge of debts is valid, irrespective of the law governing the debt.

Further information

« Applicable law - General information | United Kingdom - General information »

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Last update: 06-10-2006

 
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