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Public consultations

Summary and contributions of the consultation "Rome II"

Follow-up of the consultation on a preliminary draft proposal for a Council Regulation on the law applicable to non-contractual obligations ("Rome II")

Following the consultation on a preliminary draft proposal for a Council Regulation on the law applicable to non-contractual obligations, about 80 contributions have so far (31 October, 2002) been made by academics, governments, business and practitioners' representations. Despite some criticism about the lack of an explanatory note, this initiative was highly welcomed for the Commission thus respecting its engagements with respect of "Better Law Making".

The consultation was aimed at getting a feedback from the various European stakeholders on the project of providing for a uniform set of rules on the conflict of laws regarding non-contractual obligations.

The reaction ranged from blunt refusal of the draft Regulation as a whole to approval with some points of criticism. It is worth noting that business was more critical of the draft than representatives of legal professions, academics and Member States, who in general welcomed the draft.

This synthesis aims to present the Commission services' understanding of the contributions received during the consultation. It may not reflect everything that has been said in these contributions. This, however, does not mean that the Commission ignores any points which are not reproduced here.

In the interest of transparency, the replies will be made available to the public on the Internet site of DG JHA, except where the contributors have specifically requested confidentiality.

The contributions focused on 12 major topics:
  • Interest of a Rome-II-Regulation for the EU
  • Scope of Application, in particular IPRights (Art. 1)
  • Universal scope of application (Art. 2)
  • The general conflict of laws' rule (Art. 3)
  • Product liability (Art. 5)
  • Unfair competition and unfair practices (Art. 6)
  • Defamation (Art. 7)
  • Non-contractual obligations other than tort (Art. 10)
  • Freedom of choice (Art. 11)
  • Rules of conduct and safety (Art. 13)
  • "Ordre Public" (Art. 20)
  • Relationship with other community instruments (Art. 23)

    1. Interest of a Rome-II-Regulation for the EU

    This issue provoked a wide range of different reactions. Contributors generally agree on the fact the substantial tort law differs considerably from one Member State to another. However, whereas many contributors conclude from this that harmonised rules on conflict of laws are crucial, many expressed doubts whether an EU-wide set of lawconflict rules is indeed necessary. It was argued that in practice business does not have problems with diverging rules on conflict of laws in the Member States.

    Some commentators argued that it would be preferable to harmonise rules on substantial laws and that a European Civil code on the law of tort and delict was required in order to really improve the internal market. However, it was recognised that, since harmonisation of substantial private law is unlikely to happen in the near future, the Rome-II-Regulation would make solutions more predictable and be a step towards increasing legal certainty.

    Furthermore, academics in particular drew attention to the huge differences in rules on the conflict of laws in the area of tort and delict between the Member States and to the fact that these differences have even increased in the 90s due to a trend towards national codification of private international law.

    Some contributors stressed that the question of which law is applicable becomes less important in the context of development of Alternative Dispute Resolution procedures.

    2. Scope of application, in particular IPRights (Art. 1)

    The issue of the future instrument's scope of application was treated in depth by academic contributors and by the national ministries of justice. It was emphasised that the scope of § 2 was too extensive: many proposed excluding issues such as obligations arising out of family relationship and laws of succession, which are mainly governed by the law of contractual obligations. Even if there are also non-contractual obligations arising out of these relationships, they are always accessory and therefore governed by the conflict rules that govern contractual obligations anyway, according to Art. 3 § 3 sub-§ 2.

    Contributors from the business world concentrated on the question of how the present IP-Rights régime interacts with the Rome-II-draft. There was near unanimity that IP-issues should be excluded from the scope of a future Rome-II-Regulation. The interaction between Rome-II and existing international agreements on IP-Rights was described as uncertain, and it was emphasised that the principle of territoriality in IP-law should not be touched upon through such a general instrument as the present draft Regulation.

    Some academic contributors proposed to include IP-Rights in the scope of application, however, under a specific article that would confirm the principle of territoriality as an exception to the general rule of Art. 3.

    3. Universal scope of application (Art. 2)

    Art. 2 defines the universal scope of application of the draft Regulation, which means that its conflict rules may also lead to the application of the law of a non-Member-State. This basic principle provoked both approval and refusal. In particular the European press and the publishing businesses criticized a possible interplay of Art. 2 with Art. 7 (defamation). On the other hand, academics and practitioners pointed out that the coexistence of two parallel systems (one within the EC and the other for third countries) would lead to a further complication of this already highly complex discipline and therefore highly welcomed Art. 2.

    In order to soften the impact of the rule of universal application (e.g. when leading to the application of a law providing for excessive or punitive damages), it was proposed to compensate the dangers of such a clause by elaborating a more precise ordre-public clause, which could contain a list of ordre-public qualifications.

    4. The General Rule of Art. 3.

    Art. 3 § 1 of the draft Regulation states as a general rule for "double locality cases" (i.e. cases where the act complained of happened and the place of damage are located in different countries) that the applicable law is that of the country where the loss is sustained. The paragraphs 2 and 3 give exceptions to that rule, leading to the application of the law of the parties' common habitual residence (§ 2) or of the law of the country with which the situation presents a "substantially closer connection"(§3).

    In particular the basic rule of the draft Regulation (Art. 3 § 1), which in many cases leads to the application of the laws of the country of the victim's residence, provoked much reaction. Business pointed out the unpredictability and the necessity to comply with various different tort laws - depending on where the damage occurs. It was also argued that the rule is difficult to apply in case of financial loss. Nearly all contributions from business stressed that article 3 is not in line with the country-of-origin-principle of the internal market, thus having a negative impact on internet-based businesses, in particular on small-and medium sized enterprises.

    On the other hand, many contributions welcomed the approach of the draft, pointing out that it is in line with modern substantive liability law - focusing on indemnification of the damage rather than punishment - and also with the situation in many Member states. It was stressed that some Member States' willingness to better protect the victim goes even further by providing for a choice for the plaintiff between the law of the place where something happened and the place of its effect. While some contributions defended this latter solution, others considered the approach of the draft Regulation to be more predictable and therefore the better rule.

    Finally, there were attempts to find a compromise between the rule based on the place that something happened and the place-of-effect-rule. Thus it was proposed to introduce the concept of "consumer" into tort law and to apply the principle rule set down in article 3 only if the plaintiff is a moral person or a legal person that acts outside his trade or profession. For business to business relations, the laws of the place something happened should apply, thus complying with the "country-of origin" principle of the Internal Market.

    Furthermore, various comments were made on Art. 3 § 3 of the draft Regulation, which provides for some flexibility by introducing a test of "substantial connection", thus increasing the power of the judge to decide on the applicable law. There was criticism about the uncertain wording as well as approval of the flexibility that is introduced by this rule. Some contributions were in favour of giving more details in order to give some guidelines for the application of the "closer-connection-test".

    5. Product liability (Art. 5)

    The vast majority of the contributors emphasised the necessity to strike a balance between consumer protection and predictability of the applicable law for business. Therefore, a special rule for product liability was required. It was also stressed that due to the intervention of insurers, most product liability disputes are settled out of court, thus reducing the number of court decisions on that matter.

    As to the actual content of the rule, many representatives of European businesses expressed their fear of the interplay of Art. 5 with Art. 2 - in particular with regard to a commercialisation via the Internet. Criticism was also made of the rigidity of the rule, and some were in favor of an additional rule similar to Art. 3 § 3 (test of substantial closer connection).

    A more general question is whether the Community should adopt the same rules as those of the 1973 Hague Convention on the law applicable to product liability (which entered into force in only two Member States) or whether there are good reasons to adopt different rules. Contributions from business and also some academics asked for the inclusion of a foreseeability-clause such as in Art.7 of the Hague Convention, aiming at protecting the producer against the application of the law of the place where the damage occurred if he was not able to foresee this solution. Some argued that a definition of "product" (unmovable goods, disks) was required and that the Hague Convention of 1973 could be helpful in this regard.

    Contributions from the legal professions emphasised that disputes arising from products are often governed by both contractual and non-contractual obligations. One should therefore envisage a parallelism of both claims with regard to the applicable law.

    6. Unfair competition and unfair practices (Art. 6)

    Despite some criticism from businesses, there is much approval for the rule that is in line with most laws of the Member States. Not only consumer interest groups but also lawyers' associations welcomed the approach in the draft Regulation - particularly with regard to current practice in the internet-business. Some contributions pointed to the fact that the practical effect of this rule is similar to Art. 3 and therefore doubted the necessity of the former.

    Some criticism was raised concerning the second alternative of Art. 6 (collective interests of consumers). It was argued that the rule was too vague and that the criterion was atypical in private international law. Others criticised that the relationship of Art. 6 with other provisions, namely Art. 3 §1, Art. 7 (advertising that violates personal integrity) and Art. 23 needed clarification.

    7. Defamation (Art. 7)

    Newspaper and broadcasting industries stated that Art. 7 does not strike a fair balance between the freedom of the press and the personal integrity of the victim of defamation. The fear was expressed that publishers would have to comply with foreign press laws in order to avoid civil liability. This, it was argued, had a negative impact, particularly on small newspapers. Furthermore, the difficulty to assess the habitual residence of, for example, a prominent person that moved for tax reasons was emphasised.

    Again, academic contributors drew a more varied picture. They pointed out that already now very few legal systems applied the law of the place of publication, but rather the law of the place of sale. The solution found for the draft Rome-II Regulation is thus a compromise that prevents different national laws from applying to the same publication, and that gives some predictability for press and newspaper businesses. It was also pointed out that the rule places a fair restriction on the victim/plaintiff who chose his place of residence and therefore knows about the protection that is being granted against defamation.

    Many contributors wished to improve the compatibility between the future Rome-II-instrument and the "Brussels-I" Regulation. According to the Fiona Shevill decision (ECJ, C-68/93, 7.3.1995), the victim may choose the law which seems more favourable to him between the laws of the place-of-action and the place of damage.

    Others stressed that that the damage done in a defamation case is likely to be where the defamatory product is sold or distributed, rather than where the victim lives. Should such a rule be adopted, a better protection of the editor's interests could be sought by introducing a supplementary condition, providing that only places where he willingly distributed the media product be taken into account.

    As a different means to increase legal certainty for the publisher, others advocated a foreseeability-clause (see point 5).

    8. Non-contractual obligations other than tort (Art. 10)

    This issue was in treated in depth by academic contributors and associations of legal practitioners. They pointed out that the interplay of Rome-II with Rome-I needs to be carefully considered.

    In particular contributions originating from the German legal system (where the substantive law , and consequently the private international law of unjust enrichment, is very sophisticated) argued that the various forms of unjust enrichment should be treated specifically with regard to their qualification as a (non-) contractual obligation.

    9. Freedom of choice (Art.11)

    The adoption of the freedom of choice principle as well as its restrictions were mostly welcomed, and it was emphasised that the present draft was an improvement to the existing situation in the legal system of many Member States.

    Some commentators emphasised that the law should only be determinable after the event that gives rise to the claim has occurred whereas others pointed out that this was - in practical terms - the case anyway. Finally, some contributors asked for the possibility to choose the law applicable tacitly whereas others welcomed that the choice need to be made expressly.

    Many contributions from business complained that, in practice, it is likely to prove difficult to determine which rules are mandatory. Suggestions were made to provide for a definition of this term to increase legal certainty.

    10. Rules of conduct and safety (Art. 13)

    Some contributions stressed that this rule contributes to find a balance between the diverging interests of the parties: Even if the judge, e.g. following Art. 3, must apply the law of the victim's place of residence, he must also take into account the rules of safety and conduct in force at the place of acting, thus taking into account that liability was not reasonably foreseeable for the author of the tort.

    Other contributions feared that such rule could cause confusion.

    11. "Ordre Public" (Art. 20)

    Some contributors asked for a clearer explanation of what was meant. It was emphasised that the wide territorial scope of Art. 2 (universal application) requires as a counterpart a more precise ordre-public reservation - in particular with regard to punitive damages and excessive compensation sums.

    12. Relationship with other provisions of Community law (Art. 23)

    The provision and its underlying idea were highly welcomed by contributions from business. However, it was stated that further clarification is needed in order to avoid misinterpretation. Business insisted that there is an urgent need for the Commission to clarify the relationship between the country of origin principle set down in Internal Market instruments and rules on the conflict of laws.
  • List of contributors