Roma 2 Simionidis PDF

Rome II and Tort Conflicts: A Missed Opportunity
By SYMEON C. SYMEONIDES* [To be published in 56 AMERICAN JOURNAL OF COMPARATIVE LAW (2008) All rights reserved]
Abstract
This article reviews the European Unions new Regulation on tort conflicts (Rome II), which unifies and federalizes the member states laws on this subject. The review accepts the drafters pragmatic premise that a rule-system built around the lex loci delicti as the basic rule, rather than American-style approaches, was the only politically viable vehicle for unification. Within this framework, the review examines whether Rome II provides sufficient and flexible enough exceptions as to make the lex loci rule less arbitrary and the whole system more workable. The authors answer is negative. For example, the common-domicile exception is too broad in some respects and too narrow in other respects. Likewise, the manifestly closer connection escape is phrased in exclusively geographical terms unrelated to any overarching principle and is worded in an all-or-nothing way that precludes issue-by-issue deployment and prevents it from being useful in all but the easiest of cases. The review concludes that, although attaining a proper equilibrium between legal certainty and flexibility is always difficult, Rome II errs too much on the side of certainty, which ultimately may prove elusive. On the whole, Rome II is a missed opportunity to take advantage of the rich codification experience and sophistication of modern European conflicts law. Nevertheless, Rome II represents a major political accomplishment in unifying and equalizing the member states laws on this difficult subject. If this first step is followed by subsequent improvements, Europe would have achieved in a relatively short time much more than American conflicts law could ever hope for.
Contents
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 II. HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 A. Before Rome II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 B. Rome II .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 III. GENERAL FEATURES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 A. Scope.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
*.
Dean and Professor of Law, W illamette University College of Law; LL.B. (Private Law); LL.B. (Public Law) University of Thessaloniki; LL.M., S.J.D. Harvard Law School.
SYM EON C. SYM EONIDES
ROM E II AND TORT CONFLICTS
B. Structure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 C. Certainty vs. Flexibility.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 D. Jurisdiction-Selection or Content-Oriented Law-Selection. . . . . . . . . . 9 E. State or National Interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 F. Issue-by-Issue Analysis and Dpeage. . . . . . . . . . . . . . . . . . . . . . . . . 13 IV. THE GENERAL RULE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 V. THE EXCEPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 A. The List. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 B. The Common Habitual-Residence Rule. . . . . . . . . . . . . . . . . . . . . . . . 21 C. The General Escape.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 1. The Closer-Connection Escape. . . . . . . . . . . . . . . . . . . . . . . . . 25 2. The Pre-existing Relationship Exception.. . . . . . . . . . . . . . . . . 31 D. Compensation for Traffic Accidents.. . . . . . . . . . . . . . . . . . . . . . . . . . 32 VI. PRODUCT LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 VII. ENVIRONMENTAL TORTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 VIII. RULES OF SAFETY AND CONDUCT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 IX. PARTY AUTONOMY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 X. CONCLUDING THOUGHTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 I. INTRODUCTION On July 11, 2007, the European Parliament and the Council of the European Union adopted Regulation (EC) No 864/2007 on the Law Applicable to Non-Contractual Obligations known as Rome II.1 In European Union parlance, a regulation is binding . . . and directly applicable2 in all member countries without the need for implementing national legislation in each individual country. The Regulation is scheduled to go into effect on January 11, 2009.3 It will preempt the national choice-of-law rules of the European Unions member states4 on noncontractual obligations arising from torts or delicts and from other acts or facts.5 Unlike some other regulations which apply only within the European Union, Rome II will have universal application, in the sense that it will cover torts occurring both within and outside the Union, and it may lead to the application of the law of a nonmember state. Rome II is a dramatic step in the federalization or Europeanization
1.
The English text of the Regulation can be found in the Official Journal of the European Union, 2007 O.J. (L 199) 40. Excerpts discussed in this essay are reproduced in an Appendix at ???, infra . R O M E II, closing sentence. See also Treaty establishing the European Community, art. 249(2). R O M E II, art. 32. Rome II will not apply to Denmark. See R O M E II, recital (40), art. 1(4). Among the non-contractual obligations arising from acts other than torts are those arising from unjust enrichment, negotiorum gestio, and culpa in contrahendo . Rome II covers these obligations in arts. 10-12. This essay does not discuss these articles.
2. 3. 4. 5.
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of private international law (PIL) in the EU member states, a step that has been aptly characterized as the European conflicts revolution.6 This essay discusses the main provisions of Rome II on tort conflicts.7 The fact that the essays author has spent the last three decades laboring in the American conflicts vineyard, inevitably influences his views on the subject. Nevertheless, to the extent this essay criticizes Rome II, it is notat least not consciouslyfor failing to emulate any American models, but rather for failing to take full advantage of the richness, sophistication, and progress of modern European PIL. Indeed, while American conflicts law was stumbling through a loud revolution and then engaging in endless navel-gazing about how to end it,8 European PIL was going through a quiet evolution, gradually repairing the old system and producing several noteworthy PIL codifications, among them the Belgian,9 Dutch,10 English,11 German,12 and Swiss,13 to mention just a few. Unfortunately, Rome II does not compare favorably with these
6. 7.
Johan Meeusen, Instrumentalisation of Private International Law in the European Union: Toward a European Conflicts Revolution? 9 E U R . J. M IGR .& L. 287 (2007). For other discussions of Rome II, including earlier versions, see, e.g., Janeen M. Carruthers & Elizabeth B. Crawford, Variations on a Theme of Rome II: Reflections on Proposed Choice of Law Rules for Non-contractual Obligations , 9 E D IN BU RGH L. R EV . 65, 238 (2005;) Peter Hay, Contemporary Approaches to Non-Contractual Obligations in Private International Law (Conflict of Laws) and the European Communitys Rome II Regulation , E U RO PEAN L EGAL F O RU M I-137 (4-2007); Cyril Nourissat & Edouard Treppoz, Quelques observations sur leavened-projet de proposition de reglement du Conseil sur la loi applicable aux obligations non contractuelles Rome II , 45 J. D R . I N T L 130 (2003); W illibald Posch, The Draft Regulation Rome II in 2004: Its Past and Future Perspectives, 6 Y BK P RIV . I N T L L. 129 (2004); Ansgar Staudinger, Rome II and Traffic Accidents , E U RO PEAN L EGAL F O RU M 61 (42005); Peter Stone, The Rome II Proposal on the Law Applicable to Non-contractual Obligations, E U R OPEAN L EGAL F O RU M 213 (4-2004); von Gerhard W agner, Internationales Deliktsrecht, die Arbeiten an der Rom II Verordnung und der Europische Deliktsgerichtsstand , IPR AX 372 (2006); Russell J. W eintraub, Rome II and the Tension Between Predictability and Flexibility , 19 R IV . D IR . IN T LE PRIV . E PROC ESS 561 (2005). See S Y M EO N C. S Y M EON ID ES , T H E A M ERICAN C HO ICE -O F -L AW R EVO LU TIO N : P AST , P RESEN T AN D F UTURE (2006) [hereinafter T H E C HO ICE - O F -L AW R EVO LU TIO N ]. See C O D E DE D RO IT IN TERN ATIO N AL PRIV (Loi du 16 juillet 2004, Moniteur B elge 27 Juillet 2004 (1), hereafter B ELGIAN PIL C O D E . See A CT O F 11 A PRIL 2001R EGARDING C O N FLICT O F L AW S O N T O RTS , Staatsblad 2001, 190, effective 1 June 2001 (hereafter D U TCH PIL A CT ). For English translation with an Introductory Note by P. Vlas, see N ETH ERLAN D S I N T L L. R EV . 221 (2003-2). See P RIVATE I N TERN ATIO N AL L AW (M ISC ELLAN EOU S P RO VISIO N S ) A CT November 1995, hereafter cited as E N GLISH PIL A CT .
OF
8. 9. 10.
11. 12.
1995 (c 42), 8
See F ED ERAL A CTS O F 1986 AN D 1999 FO R TH E R EVISIO N O F P RIVATE I N TERN ATIO N AL L AW ( AM END IN G THE I N TRO D U C TO R Y L AW TO TH E C IVIL C O D E (EGBGB)) (Transl. by W egen, 27 I.L.M. 1, 18 (1988), and Hay, 47 A M . J. C O M P . L. 650 (1999)), hereafter referred to as EGBGB. See F ED ERAL L AW O F 18 D ECEM BER , 1987 ON P RIVATE I N TERN ATIO N AL L AW (Transl. by Cornu, Hankins & Symeonides, 37 A M . J. C O M P . L. 193 (1989), hereafter cited as S W ISS PIL A CT .
13.
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codifications, thus underscoring the fact that law reform is far more difficult at the multinational than the national level.
II. HISTORY A. Before Rome II In recent European history, the first effort to codify choice of law for torts at a multinational level was the Benelux Uniform Law on Private International Law of 1969, which was based on work that began as early as 1951.14 Although it never entered into force, the Uniform Law was surprisingly modern for its day. Its basic rule for tort conflicts was to apply the law of the place of tortious conduct, but subject to a wisely drafted escape clause. The escape provided that, if the consequences of a wrongful act belong to the legal sphere of a country other than the one where the act took place, the obligations which result therefrom shall be determined by the law of that other country.15 This escape was phrased broadly enough to cover not only cross-border torts in which the consequences of conduct in one country are felt in another country, the country of injury, but also cases such as the one in the famous New York case Babcock v. Jackson,16 namely intra-state torts in which both parties are domiciled in another country (common-domicile cases). We shall return to this point later. The next major effort took place in 1967, in the context of the then European Economic Community. By 1972, this effort produced the E.E.C. Draft Convention on Contractual and Noncontractual Obligations.17 Its main provision on tort conflicts also adopted the place of conduct rule, but was accompanied by a more elaborate, two-prong escape: [I]f, on the one hand, no significant link exists between the situation resulting from the event which caused the damage and the State in which the event occurred and if, on the other hand, such situation has a predominant connection (connexion prpondrante) with another
14. See Kurt H. Nadelmann, The Benelux Uniform Law on Private International Law , 18 A M .J.C O M P .L. 406 (1970). An English translation of the Uniform Law is reproduced id . at 420425. B ENELUX U N IFO RM L AW , Art. 14 (emphasis added). 191 N.E.2d 279 (N.Y. 1963). Babcock applied New York law to a suit by a New York guestpassenger against her New York host-driver and his insurer for injury sustained in a traffic accident in Ontario, during a short trip there. Ontarios guest-statute prohibited the suit, while New York law allowed it. For an English translation of the Draft Convention, see 21A M . J. C O M P . L. 587 (1973). For discussion, see Kurt H. Nadelmann, Impressionism and Unification of Law: The EEC Draft Convention on the Law Applicable to Contractual and Non-Contractual Obligations , 24 A M . J. C O M P . L. 1 (1976).
15. 16.
17.
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State, the law of that State shall apply.18 The escape continued with an explicit common-domicile presumption for Babcock type cases,19 and with the sensible notion which Rome II does not repeat20 that, in cases of multiple victims, the applicable law shall be determined separately for each of them.21 Finally, the draft convention included a special provision, also contained in two Hague conventions of the same period,22 which called for taking into account certain rules of safety and public order in force in the conduct state.23 This provision survived in slightly different verbiage in Rome II as discussed below.24 With the expansion of the Community to nine members states in 1973, following the accession of the United Kingdom, Ireland, and Denmark, the effort slowed down. It slowed to the point that the decision was made to abandon the tort provisions of the draft convention and instead to concentrate on contract conflicts. In 1980, the Convention on the Law Applicable to Contractual Obligations,25 now known as the Rome Convention, was opened for signature, and it entered into force on April 1, 1991. B. Rome II The idea of addressing tort conflicts received new impetus with the Treaty of Amsterdam of October 2, 1997, when the European Commission began soliciting feedback on measures to implement the provisions of the Treaty regarding judicial cooperation in civil matters with cross-border impact. By 1998, the idea of a convention on tort conflicts was adopted in principle and, later that year, the first draft proposal was put forward by the Groupe europen de droit international priv
18. 19. 20. 21.
EEC D RAFT C O N VEN TIO N ON C O N TRACTU AL AN D N O N CO N TRACTU AL O BLIGATIO N S , art. 10(2). See id . at art. 10(3) (Such a connection must normally be based on a connecting factor common to the victim and the author of the damage.). See infra at text accompanying note 130. Id. at art. 10(4). The placement of this statement suggested that it was intended to be used not only in applying (or not applying) the common-domicile presumption, but also in applying the general, closer connection escape. See art. 7 of the H AGU E C O N VEN TIO N O F 4 M A Y 1971 O N THE L AW A PPLICABLE TO T RAFFIC A CCID ENTS & art. 9 of the H AGU E C O N VEN TIO N O F 2 O CTOBER 1973 O N THE L AW A PPLICABLE TO P RO D U CTS L IABILITY . See EEC D RAFT C O N VEN TIO N art. 12. (Irrespective of which law is applicable under Article 10, in determining liability account shall be taken of rules of safety and public order in force at the place and time of the event which caused the damage.). See R O M E II, art. 17, discussed infra VIII. The consolidated text of the Convention as amended by the various Conventions of Accession, and the declarations and protocols annexed to it, is published in 1998 O.J. (C 27, 26,1) 34.
22.
23.
24. 25.
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(GEDIP).26 This proposal was an elegant, sophisticated, and flexible document which has influenced the general content and coverage of Rome II, although not where it matters most. In May 2002, the European Commission published a preliminary draft proposal27 and invited comments from the public. In addition to holding public hearings, the Commission received, and posted on the internet, more than eighty written commentaries from interested parties, including trade and industry groups, professional organizations, governments, practitioners, and academics.28 Although the majority of the commentaries came from industry groups and tended to support the most regressive elements of the preliminary draft, the whole process is a good example of European democracy at work. The Commission finalized its proposal on July 22, 2003.29 The proposal was accompanied by a detailed Explanatory Report (hereafter Report) and an article-byarticle commentary. This Report is the only complete explanation of the thinking underlying Rome II and it remains authoritative as to all of the remaining unamended provisions. The process then shifted to the European Parliament where the rapporteur, British MEP Diana Wallis,30 continued to solicit feedback, especially from academics.31 The rapporteur tried valiantly to inject some flexibility into the Commissions proposal and, on July 6, 2005, she succeeded in having Parliament
26.
See Proposal for a European Convention on the Law Applicable to Non-contractual Obligations adopted at the Luxembourg meeting of Sept. 25-28, 1998, available at http://www.drt.ucl.ac.be/gedip/gedip-documents-8pe.html. See Preliminary Draft Proposal for a European Council Regulation on the Law Applicable to Non-Contractual Obligations , available at http://europa.eu.int/com m .justice_hom e/ unit/civil/consultation/I ndex_en.htm l [hereinafter Commission, Preliminary Draft Proposal]. For a comprehensive academic proposal put forward during this period by the Hamburg Group of Private International Law, see Comments on the European Commissions Draft Proposal for a European Council Regulation on the Law Applicable to Non-Contractual Obligations (Oct. 10, 2002), 67 R ABELS Z 1 (2003). See Commission of the European Communities, Proposal for a Regulation of the European Parliament and the Council on the Law Applicable to Non-Contractual Obligations , (COM 427) (2003) final, 2003/0168(C)D), Brussels, (July 22, 2003) [hereinafter Commission Proposal]. For a critique of this proposal, see Symeon C. Symeonides, Tort Conflicts and Rome II; A View from Across, in F ESTSCHRIFT FR E RIK J AY M E 935 (H-P. M ansel, et al., eds. 2004). Ms. W allis is currently the Vice President of the European Parliament and is the former leader of the Liberal Democrat European Parliamentary Party (LDEPP). She is an English solicitor who also studied law in Belgium, Germany, and Switzerland and is fluent in French and German. For more information on her background and work in the European Parliament, see http://www.dianawallismep.org.uk/. In the interest of full disclosure, it should be noted that the undersigned author is one of the academics consulted by the rapporteur.
27.
28.
29.
30.
31.
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adopt, on first reading, several amendments to that effect.32 However, the Council, representing the member states, and the Commission rejected most of the amendments. On second reading, Parliament moved closer to the Commissions positions,33 however, the Council and Commission remained unsatisfied.34 The process then shifted to a Conciliation Committee, consisting of representatives of the Council, Commission, and Parliament. The ensuing trialogue bridged the differences with a compromise text that was adopted by Parliament on third reading, on July 11, 2007.35 This is the final text and is referred to hereafter as Rome II.
III. GENERAL FEATURES A. Scope Article 1 of Rome II defines the scope of the Regulation. It applies to non-contractual obligations in civil and commercial matters, in situations involving a conflict of laws, namely, situations having multistate contacts of the kind and pertinence that implicate the laws of more than one state.36 The Regulation does not apply to revenue, customs or administrative matters or to the liability of the State for acts and omissions in the exercise of State authority (acta jure imperii), or to obligations arising out of: marriage, family or similar relationships; matrimonial property regimes; wills and succession; bills of exchange, cheques, promissory notes and other negotiable instruments; the law of companies; relations between the settlors, trustees and beneficiaries of voluntary trusts; nuclear damage; violations of privacy and rights relating to personality, including defamation.37 The last topic was initially included in the scope of Rome II, but the proposed article proved most controversial attracting more commentary, especially from the publishing industry, than any other provision. Eventually, the article was dropped, but a Commission Statement accompanying Rome II pledges to study the subject again and report to Parliament by December 2008.38
32. 33. 34. 35. 36. 37.
See E U R . P ARL., P6_TA(2005)0284. (Codecision procedure: first reading.. See E U R . P ARL., P6_TA(2007)0006. (Codecision procedure: second reading.. See Common Position (EC) No 22/2006 adopted by the Council on Sept. 25, 2006, Oy C 289E/68 (Nov. 28, 2006). See supra note 1. Hereafter, the word state is used interchangeably with the word country. The Regulation also does not apply to evidence and procedure, except as provided in Articles 21 and 22, which deal with the proof of juridical acts and presumptions regarding the burden of proof in torts. For recent academic commentary on the subject, see Christopher J. Kunke, Rome II and Defamation: Will the Tail Wag the Dog? 19 E M O RY I N T L L. R EV . 1733 (2005); Aaron W arshaw, Uncertainty from Abroad: Rome II and the Choice of Law for Defamation Claims , (continued...)
38.
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B. Structure Rome II begins with forty statements or recitals explaining the drafters thinking and goals, and continues with thirty-two articles divided into seven chapters. The most important of these chapters, and the focus of this essay, is chapter II, which contains the general rule for all torts (Art. 4), followed by special rules on product liability (Art. 5), unfair competition (Art. 6), environmental damage (Art. 7), infringement of intellectual rights (Art. 8), and industrial action (Art. 9). Chapter III deals with unjust enrichment, negotiorum gestio, and culpa in contrahendo, chapter IV deals with party autonomy (Art. 14), and the remaining chapters contain common, general and transitional rules. The general rule of Article 4 is the lex loci delicti, which is defined as the law of the place of the injury (lex loci damni). The rule is followed by an exception in favor of the parties common habitual residence, and by a general escape clause based on the closer connection principle. Articles 5 to 9 are phrased as either particular applications or clarifications of the general rule for certain torts, or as exceptions to the general rule. Before discussing these articles, it is helpful to identify some of the general methodological features of Rome II, beginning with the balance it strikes between certainty and flexibility.
C. Certainty vs. Flexibility Every PIL system encounters the perennial tension between the need for certainty and predictability on the one hand, and the need for flexibility and equity on the other. Each system responds differently, striking a different equilibrium between the two needs.39 For example, the GEDIP proposal, which consisted of a series of cascading presumptions rather than rules, was a deliberate and brave choice of flexibility over certainty. Although the GEDIP scheme was nearly perfect, the potential for uncertainty must have alarmed the Commission, because it moved sharply in the opposite direction of adopting a system of tightly written black-letter rules with relatively few escapes and little room for judicial discretion. The rapporteur and Parliament tried to re-inject flexibility into the draft,40 but, as the final text reflects, the Commission and especially the Council remained unyielding. The only provision that remains from the Parliaments efforts is a recital in the Preamble referring to the need to do justice in the individual case, juxtaposing it with the
38. 39. (...continued) 32 B RO O KLY N J. I N T L L. 269 (2006). For a comparative discussion of the various choices, see S Y M E O N C. S Y M EON ID ES , P RIVATE I N TERN ATION AL L AW AT THE E N D O F THE 20 TH C EN TURY : P ROGRESS OR R EGRESS ?, 21-35 (1999) [hereinafter Symeonides, P ROGRESS OR R EGRESS ]. See, e.g., the rapporteurs Report to the European Parliament, in Final A6-0211/2005, (June 27, 2005).
40.
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requirement of legal certainty.41 However, as explained later in discussing the escape clauses of Rome II,42 the final balance is excessively skewed against flexibility. The reasons for the Councils and Commissions political preference for certainty over flexibility are obvious. The primary motive behind the movement to draft Rome II, as well as the choice of the particular instrument for its implementationa regulation as opposed to a directivewas the need to ensure uniformity of choice-of-law decisions within the European Union.43 These two bodies must have concluded that uniformity would be in jeopardy if Rome II were to have too many flexible rules or escape clauses. This was a plausible, though not necessarily the best, conclusion. The argument that a codification intended for application by the courts of different countries cannot afford to be flexible, is highly overrated. For example, whatever its other faults, the Rome Convention did not fail for being too flexible. Moreover, while no one would question the desirability of uniformity and certainty, one can question the extent to which these values should displace all other values of the choice-of-law process, such as the need for sensible, rational, and fair decisions in individual cases. If the American experience has something to offer, it is a reminder that a system that is too rigidas the traditional American system was ultimately fails to deliver the promised predictability because, in a democratic society no system can mechanize judgment44 and, to the extent it attempts to do so, judges will ignore it.45 To be sure, it would be unfair to characterize Rome II as a mechanical system. Its drafters were conscious of the need for flexibility and they attempted to provide for some degree of it. The question is whether the drafters provided enough flexibility, a question on which reasonable minds can differ. Only time will show whether the final text of Rome II has found the golden mean between the competing values of certainty and flexibility. For what it is worth, and for reasons that will become obvious from the following discussion, this authors opinion is that a scheme that is closer to the GEDIP proposal or the rapporteurs ultimately defeated proposals would have been preferable.
D. Jurisdiction-Selection or Content-Oriented Law-Selection
41. 42. 43.
See R O M E II Preamble, recital (14). See infra V.2-3. See R O M E II, recital (6) (The proper functioning of the internal market creates a need, in order to improve the predictability of the outcome of litigation, certainty as to the law applicable and the free movement of judgments, for the conflict-of-law rules in the Member States to designate the same national law irrespective of the country of the court in which an action is brought.). David F. Cavers, Restatement of the Law of Conflict of Laws , 44 Y ALE L. J. 1478, 1482 (1935). In Professor Weintraubs words, [i]ronically Rome II is more likely to succeed in providing reasonable foreseeability if its rules provide sufficient flexibility. W eintraub, supra note 7, at id.
44. 45.
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One difference between traditional and modern PIL is the extent to which each considers the content of the substantive laws of the involved states before choosing the law that would govern the case at hand. In traditional PIL, the choice was based exclusively on the physical contacts of the involved states (jurisdiction-selection), without regard to the content of their substantive laws.46 In contrast, in modern PIL, the choice is based not only on physical contacts but also on the content and underlying policies of the laws of the contact states (content-oriented law selection).47 Content-oriented law selection is easier when the court is not bound by statutory choice-of-law rules. When such rules exist, however, a content-oriented law selection is possible only to the extent these rules allow it. The question here is to what extent the rules of Rome II require jurisdiction-selection and to what extent they permit content-oriented law selection? Under Rome II, jurisdiction-selection is the norm and content-oriented law selection is a limited, often unintended, exception. The majority of the dispositive articles of Rome II designate the state whose law governs because of that states physical contacts rather than because of the content of its law. This alone is not a reason to criticize Rome II. After all, in most codified PIL systems, jurisdictionselecting rules are bound to outnumber content-oriented rules. Secondly, as documented elsewhere,48 carefully crafted, narrowly tailored jurisdiction-selecting rules can achieve functionally sound results. For this to happen, however, the drafters must identify the various typical law-fact patterns and consider whether the application of a given states law produces an equally good result regardless of the content of that law. If the answer to this question is affirmative, a jurisdictionselecting rule would be acceptable.49 If the answer is negative, then one or more content-oriented rules should be drafted to accommodate the various patterns. One question explored later in this essay is whether the jurisdiction-selecting rules of Rome II meet this test. Before addressing this question, it is worth noting that Rome II contains several provisions that, directly or indirectly, permit consideration of the content of the substantive laws of the involved countries. These provisions can be divided into three categories: (1) traditional provisions that allow the court to refuse to apply the normally
46. 47. 48. 49.
The term jurisdiction-selection was first coined by Professor Cavers. See David F. Cavers, A Critique of the Choice-of-Law Problem , 47 H ARV . L. R EV . 173 (1933). For a full discussion of these concepts, see Symeon C. Symeonides, American Conflicts Law at the Dawn of the 21st Century, 37 W ILLAM ETTE L. R EV . 1, 46-60 (2000). See Symeonides, T H E C HO ICE -O F -L AW R EVO LU TIO N 399-404. One example of such a rule is the common-domicile rule for loss distribution conflicts. As explained infra at text accompanying note 112, this rule produces good results not only when the law of the common domicile favors the victim, but also when it favors the tortfeasor.
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applicable law to the extent it violates the forums mandatory rules (Article 16) or its ordre public (Article 26); (2) provisions that require the court to choose a law that produces a particular result, such as Article 18, which authorizes a direct action against the insurer if such action is allowed by either the law applicable to the tort or the law applicable to the insurance contract; and Article 14(2) and (3) which provide that the contractually chosen law shall be disregarded to the extent it violates certain mandatory rules; and (3) provisions that directly allow one litigant to choose between two laws, such as: Article 7, which allows the victim of an environmental tort to choose between the law of the place of conduct and the law of the place of injury; and Article 6(3)(b), which allows the plaintiff to choose the law of the forum in certain cases involving anti-competitive restrictions. Although some of these content-oriented provisions have long been accepted by traditional PIL, the presence of the remaining ones suggests a selective receptiveness to the idea of content-oriented selection on the part of the drafters of Rome II. Moreover, as in other codifications, certain choice-of-law rules that purport to choose a state because of its contacts rather than its law, in fact are based on certain assumptions about the likely content of that law and to that extent they disguise specific substantive choices. One possible example from Rome II is Article 5 on products liability, which, as explained below, will lead to the application of the law of the victims habitual residence in the great majority of cases.50 When the plaintiff is a resident of an EU country with a generous pro-consumer law and the manufacturer is based in a state with a pro-manufacturer law, Article 5 will ensure that the EU plaintiff will be protected under EU standards. However, in the converse situation, the same article will ensure that the EU defendant will be held accountable under the lower standards of the plaintiffs foreign residence. Similar thinking seems to underlie recital 33 regarding damages for victims of traffic accidents. The recital states that, when quantifying damages for personal injury in cases in which the accident takes place in a State other than that of the habitual residence of the victim, the court should take into account all the relevant actual circumstances of the specific victim, including in particular the actual losses and costs of after-care and medical attention.51 The history and meaning of this recital are discussed later.52 Suffice it to say that, despite its precarious placement and equivocal wording, this recital does more than recognize the relevance of foreign facts (i.e., the costs of after-care and medical attention); it also recognizes the relevance of
50. 51. 52.
See infra text following note 154. R O M E II, recital (33). See infra at text accompanying note 44.
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foreign law as Parliaments unsuccessful amendment expressly provided. Indeed, it is the law of the foreign state that makes these facts relevant, not the other way around. Stated another way, the fact that medical costs are high in the victims residence is not significant unless the victim would be entitled to recover medical costs under that states law. To this extent, recital 33 can be seen as an example of a content-oriented law selection.
E. State or National Interests A casual look at Rome II confirms the impression that, like most traditional PIL systems in Europe, Rome II does not subscribe to the notion that ordinary conflicts disputes at the private-law level implicate the interests of the involved countries. Indeed, none of Rome IIs articles refer to state policies, much less interests, and both the Preamble and the Explanatory Report contain several statements describing Rome IIs goal as one of ensur[ing] a reasonable balance between the interests of [the parties, i.e.,] the person claimed to be liable and the person who has sustained damage.53 Yet, one who looks below the surface would discover that Rome II is not oblivious to state interests. In several instances, the Preamble refers to broader societal interests that reach beyond the interests of private litigants. For example, with regard to products liability, recital 20 of the Preamble speaks of the policies of fairly spreading the risks, . . . protecting consumers health, stimulating innovation, securing undistorted competition and facilitating trade.54 With regard to unfair competition, recital 21 speaks of the need to protect competitors, consumers and the general public and ensure that the market economy functions properly.55 Recital 25, with regard to environmental torts, states that the need for a high level of [environmental] protection and the principle that the polluter pays justify a choice-of-rule of discriminating in favour of the person sustaining the damage.56 Finally, recital 31 recognizes the need to impose certain restrictions on the parties power to choose the governing law so as to protect the weaker parties.57 More importantly, some of Rome IIs dispositive articles can only be explained in terms of public (and thus state) interests, rather than in terms of private interests. Besides Article 26 which codifies the traditional ordre public exception, and Article 16 which allows the forum to interpose its own mandatory rules, many other provisions of Rome II are designed to be sensitive to certain preferred substantive
53. 54. 55. 56. 57. R O M E II, recital (16). Id . at recital (20). Id. at recital (21). Id. at recital (25). Id. at recital (31).
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polices. The clearest example is Article 7 pertaining to environmental torts, which is discussed in some detail later.58 Other less obvious examples are: Article 14(2)-(3), prohibiting choice-of-law clauses to the extent they violate certain mandatory rules of a non-chosen state or of the Community; Article 14(1)(b), allowing pre-tort choice-oflaw clauses only in contracts between commercial parties and subjecting them to certain limitations; and Article 6(4), prohibiting choice-of-law agreements in cases of unfair competition and restrictions to competition.
F. Issue-by-Issue Analysis and Dpeage Modern choice-of-law doctrine and practice have come to recognize that in many cases the conflict is confined to only some aspects or issues of the case, and that in other cases the involved states may be interested in different aspects of the case. Consequently, rather than seeking to choose a law as if all aspects of the case were in dispute, the modern decisionmaker focuses on the narrow issues with regard to which a conflict exists and proceeds accordingly. Such issue-by-issue analysis is easier and more likely when the decisionmaker is not bound by statutory choice-oflaw rules. When such rules exist, however, such an analysis is possible only to the extent the rules permit it. In turn, this depends on whether these rules are phrased in broad terms designating the law that would govern the case as a whole, or whether they are phrased in narrower terms. On the whole, Rome II takes a negative stance towards issue-by-issue analysis, apparently because of the drafters desire to avoid as much as possible one of its byproductsthe phenomenon of dpeage, namely the application of the laws of different states to different issues in the same case. Indeed, the Council and the Commission specifically rebuffed the rapporteurs and Parliaments efforts to introduce issue-by issue analysis. One of Parliaments amendments on first reading had attached the following concluding sentence to what became the general rule of Article 4: In resolving the question of the applicable law, the court seised shall, where necessary, subject each specific issue of the dispute to separate analysis.59 The Council and Commission rejected this amendment. In the end, most of Rome IIs articles were phrased in broad terms designating the law that would govern the case as a whole, the tort/delict. Article 15 reaffirms this holistic approach by providing a long list of issues that comprise the scope of the law applicable under these articles.60
58. 59. 60.
See infra VIII. E U R . P ARL. F IN AL A6-0211/2005, (June 27, 2005) p. 19/46. Art. 15 provides that the scope of the applicable law encompasses virtually all issues likely to arise in tort litigation, including the basis and extent of liability, the grounds for exemption from liability, any limitation of liability and any division of liability, the existence, the nature and the (continued...)
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Nevertheless, a closer look at some of the other articles reveals that Rome II does notbecause it cannotentirely avoid an issue-by-issue analysis and thus the possibility of dpeage. First, some of Rome IIs articles speak of the law applicable to the obligation arising out of a tort or delict, rather than to the tort or delict as a whole. This is a wise choice of terms, which will enable courts to engage in a more individualized evaluation of the multiple obligations that may arise from the same events. Moreover, if Rome II uses the term obligation in its original sense of the legal bond between the obligor and the obligee that encompasses both the obligors duties and the obligees rights, the court will be able to further differentiate among the rights of the individual victims and proceed accordingly. Rome II consciously stops short of the next logical step of encouraging or even permitting an issue-by-issue analysis of the various aspects of the obligation. Even so, some of Rome IIs other articles contain the possibility for further splitting the issues. Among the latter articles are: (a) Article 8(2) on intellectual property rights;61 (b) Article 14 on choice-of-law agreements;62 (c) Articles 16 on mandatory rules and 26 on ordre public;63 (d) Article 17 on rules of safety and conduct;64 (e) Article 18 on direct actions against insurers;65 (f) Articles 19 and 20 regarding subrogation, indemnification, or
60.
(...continued) assessment of damage or the remedy claimed; injunctive relief, the proper beneficiaries of the right to claim damages, and its transferability or heritability, respondeat superior, and the extinction or prescription of the obligation (statutes of limitation). This provision can lead to the application of community law to some issues and national law to other issues. Art, 27 can also lead to the same phenomenon by recognizing that a case may be governed partly by the law designated by Rome II and partly by the law designated by other choice-of-law rules contained in other community instruments. Art. 14 can lead to dpeage through several different routes. For example, the parties may choose different laws for different aspects of the case, or they may choose one law for some issues and none for others. Even when they choose one law for all issues, that law will not be applied to the extent it violates the mandatory rules described in art. 14(2) or the community rules described in art. 14(3). Arts. 16 and 26 allow courts to displace the applicable law to the extent necessary to satisfy the mandatory rules of the forum state, or to the extent that law is incompatible with the forums ordre public. Art. 17 (discussed infra VIII) allows the court to take account of the conduct rules of the conduct state when the rest of the case is governed by the law of another state. Under art. 18, the victims right to directly sue the tortfeasors insurer may be governed by the law governing the insurance contract, although the tort may be governed by another law.
61.
62.
63.
64. 65.
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contribution;66 and (g) Recital 33, which, as noted earlier,67 purports to authorize the application of the law of the habitual residence of the victim of a traffic accident in quantifying the recoverable damage, even when all the other issues resulting from the accident are governed by the law of the accident state.68 The above is a much longer list than the opponents of dpeage would ordinarily tolerate, but one provision that is missing is the general rule of Article 4, especially the general escape of paragraph 3 in which issue-by-issue analysis (with the possibility of dpeage) would have been most useful. The resulting problems are discussed later.69
IV. THE GENERAL RULE Rome IIs central provision is Article 4, which contains the general and residual rules. Paragraph 1 of Article 4 provides that the applicable law shall be the law of the country in which the damage occurs70 (lex loci damni). This law governs 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.71 The operation of this rule can be illustrated by the following hypothetical scenario, which is used throughout this essay: Blasting operations by a Swiss mining company in the Swiss Alps cause a snow avalanche in the French Alps injuring a group of English tourists. Although there is some room for contrary argument, it seems that Article 4(1) views Switzerland as the country of the event giving rise to the damage, France as the country in which the damage occurs, and England as the country in which the indirect consequences of that event occur. Translated into simpler English, Article 4(1) provides that the applicable law is the law of the country in which the injury occurs, and more precisely the harmful physical impact (France),
66.
Under arts. 19 and 20, the rights of subrogation, indemnification, and contribution between the parties mentioned in the articles may be governed by a law other than the law governing the victims claims against these parties. See supra text accompanying note 51. In fact, the possibility of dpeage is the main reason cited by the Council and Commission for rejecting Parliaments express rule to that effect. Although the recital does not enjoy the same status as an express rule in the Regulations main body, the recital either means what it says, in which case the possibility of dpeage remains, or it does not mean what it says, in which case Parliament did not get anything from the purported compromise. See infra at text accompanying notes 129-34. R O M E II, art. 4(1). Id.
67. 68.
69. 70. 71.
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irrespective of the country in which the injurious conduct occurred (Switzerland), and irrespective of the country in which the indirect consequences of the injury are felt (England). Thus, the general rule of Rome II is nothing but a restatement of the traditional lex loci delicti rule, with its last event sub-rule. It purports to be as categorical as the corresponding rule of the American First Restatement. In its penchant to avoid any ambiguity, the Restatement provided numerous minute localization sub-rules which, for example, defined the place of injury as the place where the harmful force takes effect upon the body in personal injury cases, and the place where the deleterious substance takes effect in cases of poisoning.72 The fact that the Restatement never attained certainty, despite having attained clarity, is a lesson that subsequent codifiers ignore at their peril. The Rome II codifiers note that [t]he principle of the lex loci delicti commissi is the basic solution for non-contractual obligations in virtually all the Member States,73 which of course is true, except for the fact that in many countries this solution is subject to several exceptions. The drafters also correctly note that many countries disagree in defining the locus delicti.74 Indeed, some countries opt for the place of conduct,75 others opt for the place of injury,76 others apply the law of the place of conduct in some specified cases and the law of the place of injury in other cases,77 others leave the question unanswered,78 while others allow the victim or the court to choose between the two laws.79 The Rome II drafters decided to resolve these differences by unequivocally choosing the law of the place of injury, because such a solution strikes a fair balance between the interests of the person claimed to be liable and the person sustaining the damage, and also reflects the modern approach to civil liability and the development of systems of strict liability.80 Neither of these two reasons are self-explanatory, and the second reason regarding strict liability is certainly debatable. As for the first reason, the only balance the lex loci damni rule strikes between the parties is that it can be equally unfair to the plaintiff in some cases as to the defendant in others.
72. 73. 74. 75. 76. 77. 78. 79. 80.
A M ERICAN L AW I N STITUTE , R ESTATEM EN T O F C O N FLICT O F L AW S 377 Note (1933). R O M E II, recital (15). See R O M E II, recital (15). See, e.g. , A U STRIAN PIL A CT of 15 June 1978 48(1); P O LISH PIL A CT of 1965 art. 33(1). See D U TCH PIL A CT , art. 3(2); E N GLISH PIL A CT of 1995 11 (subject to exceptions). See P O RTU GU ESE C IV . C O D E , art. 45(1) and (2); S W ISS PIL A CT , art. 133(2). See S PAN ISH C IV . C O D E art. 9; G REEK C IV . C O D E , art.26; C ZECH O SLO VAKIAN PIL A CT of 1963, art 15. See EGBGB art 40(1); H U N GARIAN PIL D ECREE of 1979 32(1)(2); I TALIAN PIL A CT of May 31, 1995, art 62(1). R O M E II, recital (16).
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This is not to say that, just because the lex loci damni is an old rule, or just because it produces unfair results in some cases, the rule is bad in all cases. Despite the recent tendency, especially among American academics, to summarily reject this rule as an outmoded remnant of the past, a dispassionate examination of actual cases indicates that this rule produces good or defensible results in several fact-law patterns, although by no means all. To properly evaluate this rule one should first evaluate the exceptions to which it is subject,81 and, second, examine the results the rule produces in several typical patterns formed by the aggregation or disbursement of the pertinent contacts (conduct, injury, and parties domiciles82) and the content of the laws of each contact state. Specifically, it is helpful to distinguish between cases depending on: (1) whether the injurious conduct and the resulting injury occurred in the same state (intrastate torts), or in different states (cross-border torts); (2) whether the tortfeasor and the victim were domiciled in the same state (common-domicile cases), or in different states (split-domicile cases); and (3) whether the conflict is between laws that primarily regulate conduct (conduct-regulating rules) or primarily allocate the economic loss resulting from the injury (loss-allocation or loss-distribution rules). The above quoted terms are neither self-explanatory nor universally accepted. Generally speaking, the distinction between conduct-regulating and loss-distributing rules corresponds to the two grand objectives of tort lawdeterrence and reparation. Although these two objectives are often interconnected, conduct-regulating rules serve primarily the first objective, while loss-distributing rules serve primarily the second objective. Rome II does not adopt this distinction, except in a oblique and limited way through Article 17, which authorizes taking account of the safety and conduct rules of the conduct state.83 In the United States, this distinction, which was first articulated by the New York Court of Appeals in the 1963 landmark case Babcock v. Jackson,84 has been adopted by many courts, albeit without always using this terminology and without a consensus on its precise contours.85 In the words of the New York court, conduct-regulating rules are those that have the prophylactic effect of governing conduct to prevent injuries from occurring.86 This category includes not only rules of the road like speed limits and traffic-light rules, but also rules that prescribe the civil sanctions for violating traffic rules, including presumptions and
81. 82. 83. 84. 85. 86.
See infra IV. Hereafter, the term domicile is used interchangeably with the term habitual residence as used in Rome II. Art. 17 is discussed infra VIII. 191 N.E.2d 279 (N.Y. 1963). See S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N 123-29 and authorities cited therein. Padula v. Lilarn Props. Corp., 644 N.E.2d 1001, 1002 (N.Y. 1994).
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inferences attached to the violation;87 rules that prescribe safety standards for work sites, buildings, and other premises; rules that impose punitive damages; and rules defining as tortious conduct such as alienation of affections, interference with marriage, or interference with contract, and granting an action against the actor. In contrast, loss-distributing rules are those that prohibit, assign, or limit liability after the tort occurs.88 They include not only guest statutes, which now are virtually extinct, but also rules that define the amount of compensatory damages, and rules of interspousal immunity, parent-child immunity, workers compensation immunity, and loss of consortium. Admittedly, the line between the two categories is not always as bright as one would like. While some tort rules are clearly conduct-regulating and others are clearly loss-distributing, there are many tort rules that do not easily fit in either category, and some rules that appear to fit in both, namely they both regulate conduct and effect or affect loss distribution. Nevertheless, despite the difficulties in its application, this distinction provides a useful starting point for resolving or analyzing many tort conflicts, although in many such conflicts the distinction will not make a difference. The starting point is a presumption that conduct-regulating rules are territorially oriented and loss-distribution rules are not necessarily territorially oriented. Consequently, territorial contacts (namely the places of conduct and injury) remain relevant in conduct-regulation conflicts, while both territorial and personal contacts (i.e., the parties domiciles) are relevant in loss-distribution conflicts. For reasons explained in detail elsewhere,89 as well as later in discussing the exceptions to the lex loci damni rule, the view of this author is that this rule produces functionally defensible results in the following patterns of cases: (1) intrastate torts involving conflicting conduct-regulation rules, regardless of where the parties are domiciled; (2) intrastate torts in which the issue is one of loss distribution and either the tortfeasor or the victim is domiciled in the state of conduct and injury; and (3) cross-border torts involving either conduct-regulation or loss distribution conflicts, in which: (a) the state of injury prescribes a higher standard of conduct for the tortfeasor or of financial protection for the victim than the state of conduct; and (b) in which the occurrence of the injury in the former state was objectively foreseeable. In the first two patterns, the application of the law of the state of conduct and
87.
Examples include rules providing that a person involved in a collision while driving in excess of the speed limit, or while being intoxicated, is presumed to be negligent, and rules providing that, in a rear-end vehicular collision, the driver of the rear car is presumed to be at fault. Padula , supra note 86, at id . See S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N 141-263.
88. 89.
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injury passes the scrutiny of a functional choice-of-law analysis, regardless of whether that law favors the tortfeasor or the victim. Consequently, a jurisdiction-selecting rule like that of Article 4(1) which is indifferent on its surface to the content of the involved substantive laws is acceptable, besides being relatively easy to apply in the majority of cases. In the first pattern, the state of both the conduct and injury clearly has the strongest claim to apply its law to conduct within its borders, even if the parties are both domiciled in the same foreign state.90 The lex loci rule honors this claim.91 The second pattern consists of four different sub-patterns, two of which present the direct or true conflict paradigm and two the inverse or no interest paradigm. On balance, the application of the law of the state that has the two territorial contacts (conduct and injury) and one personal contact (the domicile of one party) is justified in all four sub-patterns, whether that law favors the tortfeasor or the victim.92 The third pattern presents the true conflict paradigm: the state of injury has an interest in protecting its domiciliary victim injured there, while the state of conduct has an interest in protecting a tortfeasor acting (and often domiciled) there. In these cases, the application of the law of the state of injury is justified if the occurrence of the injury in that state was objectively foreseeable.93 The lex loci damni rule of Rome II produces this result, but its failure to include a foreseeability defense may make it unfair to the defendant, depending on the other circumstances of the case.94 The lex loci damni rule does not produce good results in cases of the converse pattern, namely cross-border torts in which the state of conduct prescribes higher standards of conduct for the tortfeasor than the state of injury.95 Suppose for example that, in the above snow avalanche hypothetical, Switzerland imposes a negligence per se rule on mining operators who engage in blasting activities in certain areas or time periods, while France, in order to protect its mining industry, follows an ordinary negligence standard. In such a case, Article 4(1) calls for the application of French law and specifically excludes Swiss law.96 In contrast, if this were an environmental tort,
90. 91.
For documentation and defense of this thesis, see id. at 213-20. However, by adopting a common-domicile rule that is phrased so broadly as to trump the lex loci rule in these cases, Rome II commits a serious error, which can only be corrected through the back door of art. 17. See infra text accompanying notes 113 & 172. For documentation and defense of this thesis, see S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N 162-91. For documentation and defense of this thesis, see id. at 192-200, 228-36. See infra text accompanying note 164. For documentation and defense of this thesis, see S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N 200-02, 223-28. Art. 17 allows the court to take account, but not necessarily to apply, the Swiss negligence per se rule on the assumption that it qualifies as a rule of safety and conduct. See infra VIII.
92. 93. 94. 95. 96.
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Article 7 would allow the victim to opt for Swiss law.97 The drafters decided not to extend this option (which the Report characterizes as the principle of favouring the victim)98 to other torts , because this solution would go beyond the victims legitimate expectations.99 This, however, is the wrong dilemma. The dilemma is not whether one should favor victims over defendants, but rather whetherin a subject called conflict of lawsone should seek to first determine whether the involved laws actually conflict. As in the case of environmental torts, the reason for giving victims a choice is not to benefit victims as such, but rather out of deference to the policies of the state of conduct, which is the only state that has something to lose from the non-application of its law. In this case, Switzerlands negligence per se rule is intended to deter people from engaging in inherently dangerous operations like blasting. Because the defendant acted within Swiss territory, Switzerland has every reason to insist in determining the legal consequences of that activity, even if in this case, the injury occurred across the border. The effectiveness of this policy of deterrence would be seriously impaired if exceptions to it were made for out-of-state injuries. Moreover, in terms of fairness and party expectations, there is nothing unfair in subjecting a tortfeasor to the law of the state in which he acted. Having violated the standards of that state, the tortfeasor should bear the consequences of such violation and not be allowed to invoke the lower standards of another state. Conversely, there is little reason to apply French law. Its ordinary negligence rule was intended to protect mining defendants who operate within French territory, not foreign operators operating elsewhere.100 In conclusion, there is a good deal of wisdom in the rules that allow the victim or the court to choose between the laws of the state of conduct and the laws of the state of injury in cases of cross-border torts.101 It is regrettable that the drafters of Rome II have chosen not to adopt a similar rule as they did with regard to environmental torts.102 V. THE EXCEPTIONS A. The List As noted earlier, one cannot properly evaluate Rome II without also analyzing the exceptions to its basic rule of lex loci damni. A careful perusal of the whole
97. 98. 99. Art. 7 is discussed infra VII. Report, art. 3, 11. Id . at 11-12.
100. Similar arguments could be made if France, but not Switzerland, limited the amount of damages that could be recovered from mining operators. Again, art. 4(1) would mandate the application of French law, albeit subject to the closer-connection escape of art. 4(3). However, for reasons explained later, this escape will not necessarily lead to Swiss law. 101. See, e.g., EGBGB arts. 40.1, 41; S W ISS PIL A CT A rts. 133(2), 136-39; I TALIAN PIL A CT art. 62; V EN EZU ELAN PIL A CT art. 32(2); H U N GARIAN PIL A CT art. 32(2). 102. For contrary views, see Hay, supra note 7, at I-145; W agner, supra note 7, at 379.
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document reveals that this rule is subject to many more exceptions than are readily apparent. They can be divided into general exceptions, namely those that apply to all cases, and specific exceptions that apply to particular torts. The general exceptions include the following: (1) The application of the law of the parties common habitual residence, under Article 4(2); (2) The application of the law of a state that has a manifestly closer connection, under the escape clause of Article 4(3); (3) The application of the mandatory rules of the forum state, under Article 16; (4) The taking into account (and possible application) of the safety and conduct rules of the state of conduct, under Article 17; (5) The application of the law chosen by the parties before or after the occurrence of the tort, under Article 14; (6) The non-application of the lex loci (or any other law) when it is manifestly incompatible with the ordre public of the forum, under Article 26. The specific exceptions include the following: (7) In product liability cases, the application of the law of the common domicile of the tortfeasor and the victim, the domicile of the victim, the state of the products acquisition, or the state of the manifestly closer connection, under Article 5; (8) The application of the law of the forum in certain cases involving restrictions to competition under Article 6(3)(b); (9) The application of the law of the state of conduct at the victims behest in environmental torts, under Article 7; and (10) The possible application of the law of the victims habitual residence for quantifying recoverable damages in traffic accident cases, under recital 33. Because of space limitations, this essay discuses only some of the exceptions.103 B. The Common Habitual-Residence Rule The first official exception to the lex loci rule is found in paragraph 2 of Article 4, which provides that, if at the time of the injury, the tortfeasor and the victim have their habitual residence in the same country (hereafter common domicile), then
103. Additional exceptions can be found in arts. 10-12 in cases of unjust enrichment, negotiorum gestio , and culpa in contrahendo , which are not discussed here.
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the law of that country applies to the exclusion of the lex loci.104 This exception is repeated in Article 5 on product liability, Article 6 on unfair competition cases in which the competition affects exclusively the interests of a specific competitor,105 and Article 9 on industrial action.106 In contrast, this exception does not apply to other unfair competition cases, cases falling within Article 7 on environmental torts, or Article 8 on infringement of intellectual property rights. One can infer that the reason for this exclusion is an implicit recognition that cases involving the latter categories of cases implicate broader societal interests that go beyond the interests of the litigants. In adopting the common-domicile exception, Rome II joins the majority of recent PIL codifications and international conventions in accepting the premise that when both the tortfeasor and the victim are affiliated with the same state or state (through nationality, domicile, or habitual residence) that state has the best claim to determine their respective rights and obligations, even if the tort occurred entirely in another state. This notion is implemented either through a common-domicile rule (as in the codifications of Louisiana, Puerto Rico, Switzerland, Quebec, Belgium, and the Hague Convention on Products Liability),107 or through an exception from the lex loci rule. The exception is phrased either in common-domicile or common-habitual residence language (as in the Dutch, German, and Hungarian codifications),108 or in common-nationality language (as in the Italian, Polish, and Portuguese codifications).109 Article 4(2) also mirrors parallel developments in the United States. As documented elsewhere,110 32 of the 42 cases decided since the 1960s in which an
104. Art. 13 provides that the habitual residence of companies and other corporate or unincorporated bodies is the place of their central administration and, for injuries caused or sustained in the course of operation of a branch, the place where the branch is located. Art. 13 also provides that the habitual residence of a natural person acting in the course of his or her business activity is his or her principal place of business. 105. R O M E II, art. 6(2). 106. This escape is also repeated in the art. 10-12, dealing with unjust enrichment, negotiorum gestio , and culpa in contrahendo , which are not discussed here. However, the escape becomes operable only if the primarily applicable law cannot be determined. 107. See L A . C IV . C O D E A N N . art. 3544(1); P U ERTO R ICO D RAFT C O D E art. 47(a); S W ISS PIL A CT , art. 133; Q UEBEC C IV . C O D E , art. 3126; B ELGIAN PIL C O D E , art. 99 (1); H AGU E P RO D U CTS L IABILITY C O N VEN TIO N , art. 5. 108. See D U TCH PIL A CT , art. 3(3); EGBGB art. 40(2); H U N GARIAN PIL D ECREE 32(3). 109. See I TALIAN PIL A CT , art. 62; P O LISH PIL A CT , art. 31(2); P O RTU GU ESE C IV . C O D E , art. 45. For an exception that displaces the lex loci when the parties have either a common nationality or a common habitual residence, see C H IN A S M O D EL D RAFT L AW O F PIL, art. 114 (6th Draft 2002). 110. For citations and discussion, see S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N 145-59; E U GENE S CO LES , P ETER H AY , P ATR IC K B O R C H ERS & S Y M EO N C. S Y M EON IDES , C O N FLICT O F (continued...)
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American court of last resort abandoned the lex loci rule involved the commondomicile pattern. Subsequently, an additional 18 common-domicile cases have reached the highest courts of the states that had previously abandoned the lex loci rule, thus raising to 50 the total number of common-domicile cases that have reached state supreme courts in the post-lex loci era. Of these 50 cases, 44 cases (or 88%) have applied the law of the common domicile, regardless of the particular choice-of-law methodology the court followed.111 The majority of these cases (35 out of 50) involved the Babcock v. Jackson pattern in which the law of the common domicile favors recovery more than the law of the state of conduct and injury. These cases present the classic false conflict paradigm in which only the state of the common domicile has an interest in applying its law. The remaining cases involved the converse-Babcock pattern in which the law of the common-domicile prohibits or limits recovery more than the law of the state of conduct and injury. These cases are not as clear false conflicts as Babcock was because the accident state arguably has an interest in applying its law to compensate those injured in its territory and to facilitate recovery of local medical costs.112 On balance, however, the application of the law of the common domicile in both the Babcock pattern and its converse is entirely justified. In this sense, a common-domicile rule that does not depend on the content of the law of the common domicile (i.e., a jurisdiction-selecting rule) is generally preferable to any other iteration. It is important to stress, however, that all of the above American cases involved conflicts between loss-allocation or loss-distribution rules, as opposed to conduct-regulation rules. In contrast, the common-domicile rule of Rome II is much broader in that it encompasses not only loss-distribution issues, but also conduct-regulation ones. This is a serious defect. As a general proposition, a state has an interest in enforcing its conduct-regulating rules even if neither the violator nor the victim is domiciled in that state, and even if both parties are domiciled in the same foreign state. For example, an Austrian motorist involved in a French accident may not claim exemption from French traffic rules, and if injured by conduct that violates these rules, France may not deny her the benefit of their protection. Even if both parties are domiciled in Austria, France has the exclusive claim to apply its law to the conduct-regulating aspects of the case. These aspects are not limited to rules of public law or pure traffic rules such as speed limits and red lights; they also extend to rules that impose civil liability to violations of traffic rules or attach presumptions and inferences of fault that arise from certain violations, such as not maintaining sufficient distance from the preceding car. Because the common-domicile rule of Rome II is
110. (...continued) L AW S , 799-806 (4th ed. 2004). 111. The six cases that applied another law are distinguishable, overruled, or discredited. See S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N , 149 n.17, 152-54. 112. See id. at 154.
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phrased in global terms, it would mandate the application of Austrian law to all aspects of the case. This problem is made worse when, as in the Italian, Quebec, and Polish codifications, the rule is not subject to any escapes.113 Rome IIs rule is subject to two escapes: the closer connection clause of Article 4(3), and the possibility that the court may take account of the safety and conduct rules of the conduct state under Article 17. Unfortunately, as explained below, these escapes are not easily deployable. From a different perspective, the common-domicile rule of Rome II is too narrow in that it applies only when the parties are domiciled in the same state but not when they are domiciled in different countries that have the same laws. The better view is that the latter cases are functionally analogous to common-residence cases and should be treated accordingly.114 Suppose, for example, that while hunting in Kenya, a French hunter injures a Belgian hunter with whom he has no pre-existing relationship. Suppose that French and Belgian law provide the same amount of compensation, which is much higher than that provided by Kenya. This is the classic false conflict in which Kenya has no interest in applying its low recovery law. In such a case, there is no reason to apply Kenyan law and every good reason to apply either Belgian or French law. Yet, Article 4(1) of Rome II mandates the application of Kenyan law, and, unfortunately, none of Rome IIs exceptions to the lex loci rule would be operable in this case.
C. The General Escape Paragraph 3 of Article 4 provides an escape from both the lex loci rule of paragraph 1 and the common-residence rule of paragraph 2. Echoing similar escapes
113. See I TALIAN PIL A CT , art. 62(2); Q UEBEC C IV . C O D E , art. 3126(2); P O LISH PIL A CT , art. 31(2). 114. The Louisiana codification provides that [p]ersons domiciled in states whose law on the particular issue is substantially identical shall be treated as if domiciled in the same state. L A . C IV . C O D E A N N . Art. 3544(1). This legal fiction, which is particularly useful in cases with multiple victims or defendants, enables a court to resolve these false conflicts by applying the law of the domicile of either party, unless the general escape clause of the codification dictates a different result. For pertinent discussion, see Symeon C. Symeonides, Louisianas New Law of Choice of Law for Tort Conflicts: An Exegesis , 66 T U L. L. R EV . 677, 759-63 (1992). The American Law Institute has recommended a similar rule for mass tort cases. See A M ERICAN L AW I NSTITUTE , C OM PLEX L ITIGATIO N : S TATU TO RY R ECO M M EN D ATIO N S AN D A N ALY SIS 6.01(c)(2) & (3) (1994). In addition, in certain cases involving corporate tortfeasors, the Louisiana common-domicile rule is subject to further expansion, or contraction, through art. 3548, which provides that a juridical person that is domiciled outside the forum state but transacts business in that state and incurs a delictual obligation arising from such activity may be treated as a domiciliary of that state, if such treatment is appropriate under the principles of art. 3542.
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found in recent European codifications and international conventions,115 the escape authorizes the court to apply the law of another country if it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with [that other] country.116 Paragraph 3 provides an example by stating that a manifestly closer connection might be based on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.117 In contrast to the preliminary draft, which limited the scope of the escape to cases covered by the general rule, the final text repeats the escape in the articles dealing with products liability (Art. 5(2)), unfair competition cases in which the competition affects exclusively the interests of a specific competitor (Art. 6(2)), and choice-of-law agreements (Art 14(2)).118 Despite serious reservations about the scope and wording of this particular escape, this author applauds the drafters for including an escape in the final version of Rome II. Indeed, escapes clause are necessary in any less than perfect statutory scheme. Because perfection is not for this world and more and more modern legislatures have begun to recognize their fallibility, escapes have become a common feature of almost all recent codifications.119 As Aristotle recognized many centuries ago, any pre-formulated rule, no matter how carefully or wisely drafted, may, due to its generality,120 or because of its specificity, produce results that are contrary to the purpose for which it was designed. This is a natural consequence of the difference between law making and law application.121 The question here is to what extent this escape will help cure the deficiencies of the general rules of Rome II. 1. The Closer Connection Exception The final phrasing of the escape clause is a significant improvement over that of the Commissions preliminary draft proposal, which was based on the failed EEC
115. For a comparative discussion, see S Y M EON ID ES , P ROGRESS OR R EGRESS , 31-35. 116. R O M E II, art. 3(2). 117. Id. 118. This escape is also repeated in the Articles 10-12, dealing with unjust enrichment, negotiorum gestio, and culpa in contrahendo , which are not discussed here. 119. For comprehensive discussions of this subject, see D. K O KKIN I-I A TRID O U , L ES C LAU SES D E XCEPTIO N EN M ATIRE DE C O N FLITS D E L O IS ET D E C O N FLITS DE J U RID ICTIO N S O U LE PRIN CIPE DE PRO XIM IT (1994). 120. Aristotle, N ICO M A CH EAN E THICS , V. x 7. 121. Peter Hay, Flexibility Versus Predictability and Uniformity in Choice of Law , 226 R ECU EIL D ES COU RS 281, 291 (1991-I).
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draft convention of 1972122 and later emulated by several national codifications.123 That escape was very problematic because it consisted of two independent prongs, both of which had to be satisfied for the escape to apply. One had to show (a) that there was no significant connection to the country whose law governed under the drafts rules; and (b) that there was a substantially closer connection with another country. The problem with this scheme was that, if taken literally, the first prong would rarely be satisfied, thus making the second prong nothing more than cosmetic. The problem was confounded by the fact that the escape did not contemplate a comparison of the two connections, but rather an independent determination that the first connection was not significant. Only when that determination confirmed the insignificance of the first connection did the escape allow examination of the closeness of the other connection. The final text resolved much of the problem by eliminating the first prong and by encouraging a comparison between the two connections. Under the final text, a party that invokes the escape need not show that the connection of the country whose law governs under the rule is insignificant. All one needs to show is that the connection with another country is manifestly closer and this of course can only be determined after comparing the two connections. This is a significant improvement for which the drafters deserve praise. Even with these changes, however, the escape remains problematic because, like its European counterparts:124 (a) it is phrased in exclusively geographical or quantitative terms that are not correlated to an overarching principle; and (b) it does not permit an issue-by-issue evaluation. In one sense, it is logical that a system of geographically-based rules also relies on geography when formulating escapes from those rules. Rome II is such a system because most of its dispositive rules depend on the place in which a single critical event occurred, or in which one or both parties reside. Very few non-geographical factors affect the choice, and the content of the conflicting laws is a factor that appears only in some narrow exceptions.125 Having relied on geography in erecting this system, the drafters may have felt bound to also rely on geography to handle the exceptional cases and overcome the inevitable impasses. Thus, if the geographically chosen place of injury or of the parties common residence turn out to have a nonsignificant connection, one must search for a place that has a closer connection. This logic, however, will rarely overcome the impasses. Escapes are designed to cure the rules deficiencies, not to reproduce them. To intelligently employ the escape, one must know the reasons for which the drafter made the choices embodied in the rule
122. See supra II.1. 123. See, e.g., B ELGIAN PIL A CT , art. 19(1); S W ISS PIL A CT , art.15(1); Q UEBEC C IV . C O D E art. 3082. For a softer phrasing, see E N GLISH PIL A CT . 12. 124. See supra note 115; A U STRIAN PIL A CT , 48(1); EGBGB art. 41(1). 125. See supra III.4.
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and the values and goals the rule seeks to promote. To simply say that one should look for a closer connection gives courts little meaningful guidance and entails the risk of degenerating into a mechanical counting of physical contacts. This risk is reduced when the escape is correlated to the overarching principles that permeate the rules, and/or when the escape allows an issue-by-issue evaluation. For purposes of illustration, not emulation, one can consider the schemes of the Restatement (Second) and the Louisiana codification. The Restatement provides in Section 6 that the goal of the choice-of-law process is to identify the state that has the most significant relationship. Although literally the quoted phrase appears to contemplate a determination based on geography, the content of Section 6 negates any such inference because it lists a series of substantive policies intended to guide this determination. The subsequent sections of the Restatement provide specific rules, most of which contain an escape authorizing the judge to apply the law of another state if with respect to the particular issue that state has a more significant relationship under the principles stated in 6.126 Similarly, Article 3542 of the Louisiana codification enunciates the general goal of the choice-of-law process for tort conflicts as one of identifying the state whose policies would be most seriously impaired if its law were not applied. After establishing specific rules based on that goal, the codification also provides an escape clause in Article 3547 which authorizes the judge to apply the law of another state if, under the principles of Article 3542, the policies of that other state would be more seriously impaired if its law were not applied to the particular issue.127 The italicized phrases signify what is missing from the escape of Article 4(3) of Rome IIissue-by-issue evaluation and correlation to non-geographical overarching principles. The only hope comes from a statement in recital 14, which appears to articulate the philosophy of Rome II as a whole: The requirement of legal certainty and the need to do justice in individual cases are essential elements of an area of justice. This Regulation provides for the connecting factors which are the most appropriate to achieve these objectives. Therefore, this Regulation provides for a general rule but also for specific rules and, in certain provisions, for an escape clause which allows a departure from these rules where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with another country. This set of rules thus creates a flexible framework of conflict-of-law rules. Equally, it enables the court seised to treat individual cases in
126. A M ERICAN L AW I N STITUTE , R ESTATEM ENT (S ECO N D ) O F C O N FLICT O F L AW S , 146 (emphasis added). 127. L A . C IV . C O D E A N N . Art. 3547 (emphasis added).
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an appropriate manner.128 This recital is what survives from the rapporteurs and Parliaments efforts to inject more flexibility into the text of the general rule of Rome II. As noted earlier, the Council and Commission rebuffed these efforts and recital 14 is the resulting compromise. While much of this recital is self-congratulatory and merely describes the scheme of Rome II, the italicized phrases can be viewed as providing instruction to courts on when and how to use the escape: to treat individual cases in an appropriate manner and to do justice in individual cases. Thus, a court should resort to the escape when the law designated as applicable by the general rule leads to a result that is incompatible with the need to do justice in individual cases. To be sure, one can objectand many willto such a loose reading of the escape as giving a licence for loose, ad hoc, subjective judging. While this danger is real, it is worth the price. The alternative is a quantitative employment of the escape, which will resolve only the easiest of conflicts. For example, a quantitative employment of the escape will not resolve the aforementioned Kenyan hunting accident case involving a French and a Belgian hunter, whereas an employment of the escape with a view toward doing justice in the individual case would. The second major problem with the escape is its failure to allow an issue-byissue deployment and evaluation. As it is, the escape contemplates situations in which the entire tort/delict is manifestly more closely connected with another country. Paragraph 3 of Article 4 not only avoids using the dirty word issue but also avoids (perhaps unintentionally) the phrase used in paragraph 1, which speaks of the law applicable to a non-contractual obligation arising out of a tort/delict.129 Thus, the escape does not even permit the court to look separately to the possibly multiple obligations that may arise from the same facts, such as when (but not only) the case involves multiple tortfeasors or victims.130 Instead, the phrasing of the escape forces the court to only look at the tort as a whole. If the court finds that the tort as a whole has a closer connection with another country, then the court is authorized to displace the otherwise applicable law in its entirety and replace it with the law of that other country. Thus, the escape is an all or nothing proposition; and therein lies its most serious flaw. This flaw will make the escape unavailable in all but the obvious cases. For example, in the above snow avalanche hypothetical, it would be difficult to convince a court that the tort/delict (as opposed to the specific issues of negligence per se or damages limitations) is manifestly more closely connected with Switzerland. Even if the victims domicile, England, also allowed unlimited damages, the court could not
128. R O M E II, recital 14 (emphasis added). 129. R O M E II, art. 4(1) (emphasis added). 130. See the EEC Draft Convention, supra at 20.
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avoid the application of French law because the connection with England (which Article 4(1) a priori condemns to a state of insignificance) will probably not qualify as manifestly closer than the connection with France. The same would be true with other issues affecting the victims recovery. Suppose, for example, that the avalanche caused the death of one of the English tourists, and one of the issues in the case is who is entitled to compensation for his wrongful death. Suppose that French law provides that compensation is due to the victims surviving spouse and children together, whereas English law provides that compensation is due to the surviving spouse to the exclusion of the children. Under Article 4(1), the applicable law shall be the law of the country in which the damage occurs (France) irrespective of the country or countries in which the indirect consequences of that event occur (England). Article 15 reiterates that in such a case, French law will apply to virtually all issues likely to arise in tort litigation, including [which] persons [are] entitled to compensation and whether a right to claim damages or a remedy may be transferred, including by inheritance.131 Yet England is the country most intimately involved and has the best claim to apply its law to this issue. Rules designating the beneficiaries of a wrongful death action reflect a societys assumptions regarding how a persons death impacts his survivors and which of his survivors are likely to have the highest need for compensation. These assumptions and value judgments belong to the society in which the victim lived, not to the society in whose territory the injury occurred. In Rome IIs terminology, England is manifestly more closely connected with regard to the issue of wrongful death beneficiaries, even if its connections with regard to other issues may not be the closest. Yet, the phrasing of the escape clause does not permit this focus on the specific issue, and therefore does not allow a court to cure the rules deficiency. Similar problems are encountered in employing the manifestly closer connection escape to cases falling within the scope of the common-domicile rule, especially those in which, as noted earlier, that rule is either too broad or too narrow. In the case of the French traffic accident involving two Austrians, one could argue that, with regard to issues of conduct and safety, France has a manifestly closer connection than Austria, and thus French law should govern. The problem with this otherwise sound argument is that it runs against the restrictive and holistic wording of the escape, which does not allow an issue-by-issue analysis and instead speaks of the whole tort/delict, as opposed to certain aspects of it, as being more closely connected with another country. This wording makes it difficult to argue that the entire tort is more closely connected with France, while also being governed by the law of Austria. The same problem exists in the case of the Kenyan hunting accident involving the French and Belgian hunters. Because the escape is worded in geographical terms, and the hunters are not domiciled in the same country, geography would work in favor of, not against, the lex loci. One provision that can help in the French, but not the Kenyan, accident case is Article 17, which allows a court to take
131. R O M E II, art. 15 (f) & (e).
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account of the safety and conduct rules of the state of conduct. However, as discussed later, this provision offers only limited relief. A more nuanced escape clause would soften the common-domicile rule and produce more rational results, not only in the above cases, but also in other exceptional cases,132 or in cases in which that rule adversely affects the rights of third parties. The latter problem is illustrated by two hypotheticals. The first involves a single-car accident in Portugal caused in part by faulty road conditions and resulting in injury to the cars Spanish passenger. The passenger sues the local Portuguese authority responsible for maintaining the road, and the authority then impleads the cars Spanish driver for contribution and indemnification for his fault in the accident. The driver and passenger are married to each other and Spanish, but not Portuguese, law prohibits interspousal suits. In such a case, one could argue that the local authoritys claim for contribution falls outside the scope of the common-domicile rule,133 but if the argument fails, the only way to avoid Spanish law would be by stretching the wording of the closer connection escape. In the second hypothetical the local authority is not involved, the car was rented in Portugal, and the laws are reversed so that Portuguese, but not Spanish, law prohibits interspousal lawsuits. The injured passenger sues the driver and the cars insurer invoking Spanish law, while the insurer denies coverage invoking Portuguese law. Again, if the insurers obligation for coverage falls within the scope of the common-domicile rule,134 then the only way to avoid Spanish law would be through the difficult road of employing the closer connection escape. In conclusion, while both the adoption of the common-domicile rule and the inclusion of an escape clause in Article 4 are significant steps in the right direction, both the rule and the escape would have benefitted from more nuanced drafting. In the
132. A case like Schultz v. Boy Scouts of America, 480 N.E.2d 679 (N.Y. 1985), is arguably such an exceptional case. Schultz involved a suit by New Jersey parents against a New Jersey charitable corporation for injury resulting from a sexual molestation of the plaintiffs child by one of defendants employees in New York. Invoking the common-domicile rule, the New York Court of Appeals applied New Jersey charitable immunity law, denying recovery. 133. The argument would be based in part on art. 20 of Rome II, which provides that, if a creditor has a claim against several debtors who are liable for the same claim, the question of that debtors right to demand compensation from the other debtors shall be governed by the law applicable to that debtors non-contractual obligation towards the creditor. 134. The pertinent Rome II articles for answering this question are art. 18 & 19. Art. 18 is not particularly helpful, except perhaps indirectly, because it only applies to the victims right to directly sue the tortfeasors insurer (i.e ., without joining the tortfeasor) and not to the merits of the suit. The article allows the victim to chose between the law governing the insurance contract and the law governing the tort. Art. 19 provides that, when a creditor has a noncontractual claim against a debtor, and a third person has a duty to satisfy the creditor, the law which governs the third persons duty to satisfy the creditor shall determine whether . . . 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.
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final analysis, a good escape clause can bring substantive improvements to even a bad rule system, in addition to helping attain the proper equilibrium between the two perpetually competing goals of certainty and flexibility. However, to perform this role the escape must possess some degree of built-in flexibility. The drafters preference for a tight escape that does not swallow the rules is understandable. However, an escape that is so tight as to be rarely utilized, or one that is phrased in broad all-ornothing terms, is only slightly better than no escape at all. 2. The Pre-existing Relationship Exception As noted earlier, the second sentence of Paragraph 3 of Article 4, attempts to provide an example of a manifestly closer connection by stating that such a connection might be based on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.135 As with the general escape, this exception is also conceived of in all-or-nothing terms rather than in terms of specific issues. Once again, the drafters excessive concern with avoiding the possibility of dpeage renders this exception far less useful than it might have been. In fact, rather than allowing a splitting of the various tort issues, this exception contemplates grouping them together with the issues arising from the pre-existing relationship. However, this is only one of the problems with this provision. The major problem is determining which of two equally plausible objectives the drafters intended, namely: (a) to apply the same law as that which governs the pre-existing relationship, or (b) to apply the law of the same state in which the pre-existing relationship is primarily centered. The Explanatory Report suggests that the drafters intended the first objective.136 However, unlike some European codifications which expressly provide to that effect,137 Article 4(3) of Rome II does not do so. This makes viable the other possibility, namely, applying the law of the state in which the preexisting relationship is centered.138
135. R O M E II, art. 4(3). 136. See Explanatory Report, p. 13 ("By having the same law apply to all their relationships, this solution respects the parties' legitimate expectations and meets the need for sound administration of justice. On a more technical level, it means that the consequences of the fact that one and the same relationship may be covered by the law of contract in one Member State and the law of tort/delict in another can be mitigated.). 137. See, e.g., S W ISS PIL A CT , art. 133(3) (. . . when the tortious act constitutes a violation of a pre-existing legal relationship between the tortfeasor and the injured party, claims founded on this act are governed by the law applicable to that legal relationship. B ELGIAN PIL C O D E , art. 100 (an obligation resulting from an injurious event having a close connection with a preexisting legal relationship between the parties is governed by the law applicable to that relationship.). 138. This possibility is consistent not only with the previous sentence of paragraph 3 of Article 4, but also with the whole geographical orientation of Rome II.
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To be sure, in some cases, the two objectives will lead to the same law. For example, if the pre-existing relationship is a family relationship centered in state X, then the law of that state will govern that relationship and, under the above quoted provision, the court may apply the same law to a related delictual obligation.139 If, however, the relationship is contractual,140 then there is no guarantee that the state in which the relationship is centered will also be the state whose law will govern the contract. For example, the contract may contain a choice-of-law clause stipulating for the law of state Z, even if that state has a relatively tenuous but otherwise sufficient connection with the relationship.141 In such a case, the question is which, if any, of the two states, X or Z, will be the candidate for the closer connection exception? Z cannot be because, in this scenario, it does not have a close enough factual connection. On the other hand, X has the factual connection, but the application of its law will defeat the apparent purpose of this exception, which is to apply the same law to both the tort and contract aspects of the case.142 Finally, the main advantages of applying the same law to both the tort and contract aspects of a dispute are practicality and simplicity. Obviously, these advantages are not present when the particular dispute involves only tort issues. In such a case, the rationale for this exception must be sought elsewhere, such as in the ostensible expectations of the parties. 4. Compensation for Traffic Accident Victims
139. The same result can be obtained more directly through the common-residence rule of Paragraph 2. This illustrates that the above quoted sentence of Paragraph 3 is superfluous in most cases in which the parties to the relationship are residents of the same state. 140. If the relationship is merely social rather than legal, as in Babcock v. Jackson in which the parties where neighbors who drove together from New York to Ontario, it makes little sense to say that the tort will be governed by the same law that governs the relationship because the social relationship may not, as such, be governed by any law. However, it does make sense to say that the tort will be governed by the law of the state in which the relationship was centered. 141. Under the Rome Convention, the choice of state Z law will be upheld unless all the other elements relevant to the situation at the time of the choice are connected with [another] country. Even then, the choice will be disregarded only to the extent it prejudices the application of rules of the law of that [other] country which cannot be derogated from by contract. R O M E C O N VEN TIO N , art. 3(3) (emphasis added). 142. Another variation of this problem is when the contract contains a choice-of-law clause that is partially ineffective under the Rome Convention. For example, under art. 6, a choice-of-law clause in an employment contract will be disregarded to the extent it would deprive the employee of the protection afforded by the mandatory rules of the state in which the employee habitually carries out his work. However, the rest of the contract will be governed by the chosen law. Thus, if a German company hires in Germany a German employee for work in Belgium and the clause stipulates for German law, the clause will be ineffective to the extent it violates Belgian mandatory rules but effective with regard to the rest of the contract. One of the questions in such a case is which of the two countries (and for what issues) would qualify as the contract state for purposes of applying the exception of art. 4(3) of Rome II.
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During Parliaments first reading of Rome II, the rapporteur proposed, and Parliament approved, the insertion of the following exception to the general lex loci rule of what later became Article 4: In the case of personal injuries arising out of traffic accidents, . . . the court seised . . . should, for the purposes of determining the type of claim for damages and calculating the quantum of the claim, apply the rules of the individual victims place of habitual residence unless it would be inequitable to the victim to do so.143 The Council and Commission rejected this amendment, and the resulting compromise was the insertion of the following statement in recital 33 of the final text of the Preamble: According to the current national rules on compensation awarded to victims of road traffic accidents, when quantifying damages for personal injury in cases in which the accident takes place in a State other than that of the habitual residence of the victim, the court seised should take into account all the relevant actual circumstances of the specific victim, including in particular the actual losses and costs of after-care and medical attention.144 Obviously, this recital narrows down considerably the scope and import of Parliaments amendment. Besides the fact that a recital does not have the same status and cogency as a rule in the main body of the Regulation, the recital does not authorize the application of the law of the victims habitual residence. It merely authorizes taking into account that law in quantifying damages, rather than in also determining the type of claim for damages, as Parliament intended. Thus, the recital appears to be no more than an invitation ( la Article 17) for the court to take account of facts,145 such as the cost of medical care in the victims residence, in fixing the final amount of recoverable compensation. Nevertheless, unless one assumes that the Parliament got nothing in return for this compromise, the recital must mean
143. E U R . P ARL. F IN AL A6-0211/2005 (June 27, 2005). The accompanying justification stated that in traffic accident cases, applying the law of the state of the victim's place of habitual residence is more equitable (for the victim, e.g., where he or she needs lifelong care) and more practicable for insurers and the courts, and that not only the level of compensation is important, i.e., the question of how much; rather, what FORM of compensation to be received by an injured party is also important (in particular whether there is an entitlement to damages for pain and suffering, a nursing and attendance allowance or certain pensions). Accordingly, the type of compensation should be governed by the law applicable at the injured party's place of habitual residence. Id. 20/46. 144. R O M E II, recital 33. In addition, the Commission issued a Statement, reproduced as an appendix to the final text of Rome II, promising to study the matter and report to Parliament before the end of 2008. 145. But see supra text accompanying notes 51-52.
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something. What it may mean is thatconsistently with the admonition to do justice in individual cases in recital 14a court should keep in mind (for example, in applying the closer connection escape) the need to adequately compensate victims of traffic accidents. Unfortunately, even if this argument is accepted, it cannot help the Belgian hunting accident victim or the injured tourist in the snow avalanche hypothetical because they were not victims of a traffic accident, although they were equally deserving of protection.
VI. PRODUCTS LIABILITY Article 5 provides a special rule for non-contractual obligations arising from an injury caused by a product. Paragraph 1 of the article designates, in successive order, three countries whose law may govern: (a) the country of the victims habitual residence; (b) the country in which the product was acquired;146 and (c) the country in which the injury occurred.147 The application of each countrys law depends on whether the product was marketed in that country.148 For example, if a German plaintiff is injured in India by a product acquired in Egypt, the applicable law will be that of Germany, if the product was marketed there; or, if not, Egypt, if the product was marketed there; or, if not, India, if the product was marketed there. It appears that the burden of proving that the product was marketed in the particular country would rest with the plaintiff, although the defendant may also have an incentive, and should be allowed, to either disprove or prove that fact. Moreover, the last sentence of paragraph 1 expressly gives defendants a defensethey can avoid the application of the law of each of the above three countries by demonstrating that they could not reasonably foresee the marketing of the product, or a product of the same type in that country.149 If taken literally, this could mean that, even if the plaintiff proves (and the defendant does not disprove) that the product was actually marketed in the particular country, the defendant can still get a second line of defense by showing that, despite the actual marketing, he or she could not reasonably foresee the marketing. This provision is unduly generous to the defendant. Fortunately, as noted below, contemporary marketing patterns suggest that in most cases this defense
146. Art. 5 makes no distinction between situations in which the product was acquired by the victim and situations in which the product was acquired by a third party, such as a previous purchaser or a transportation carrier. For the significance of this distinction, see S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N 268-70, 351-52. 147. Art. 5, and Rome II in general, offer little guidance for cases involving peripatetic injuries, such as cases involving pharmaceutical products used by their eventual victims over long periods of time while residing in different countries. For the American experience on this matter, see S Y M EON ID ES , T H E C HO ICE -O F -L AW R EVO LU TIO N 268-69. 148. R O M E II, art. 5(1). 149. Id.
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is unlikely to succeed.150 In any event, if the defense does succeed, the applicable law will not be that of the country next in line under paragraph 1 (e.g., Egypt after Germany, or India after Egypt), but rather the law of the defendants habitual residence.151 Thus, if the product was manufactured by a Japanese defendant, Japanese law will govern the case, unless of course Japanese law is more favorable to the plaintiff than say Egyptian or Indian law, in which case the defendant will not invoke this defense to begin with. Paragraph 1 of Article 5 applies [w]ithout prejudice to Article 4(2), which contains the common-residence rule. This means that, if the parties have their habitual residence in the same country, its law applies to the exclusion of all others, even if the product was not marketed in that country. Thus, if in the above scenario the product was manufactured by a German defendant, German law would govern, even if the product was not marketed in Germany. Finally, all of paragraph 1 (including the cross-reference to the commonresidence rule) is subject to the manifestly closer connection escape contained in paragraph 2 of Article 5.152 This escape authorizes a court to either: (a) deviate from the order established in paragraph 1 and apply the law of one of the countries listed there; or (b) apply the law of a country not listed in paragraph 1, such as the country of the products manufacture,153 upon showing that the country has a manifestly closer connection than the country whose law would normally govern under paragraph 1. Although Article 5 appears complex in its wording, its actual operation in practice may be much simpler, depending on how easy it will be to satisfy the basic condition of a products marketing in a particular country. One could surmise that, in todays global market, this condition will be more and more easily satisfied in the great majority of cases without much further inquiry or counter-proof. At least this is what the American experience suggests. A recent study of products liability cases decided in the United States between 1990 and 2005 shows that, in none of these cases
150. See infra at text accompanying note 154. 151. If the defendant is a juridical person, the place of its central administration is deemed to be its habitual residence. See R O M E II, art. 23(1). Even so, the defendants residence (at least when the defendant is the manufacturer rather than the local importer or distributor ) would seem to be the least relevant contact in todays world of corporate mobility. In most cases, the manufacturer is likely to be a corporate entity whose residence or cental administration may be located in a country that has little relationship with the case, the product, or its manufacture. 152. R O M E II, art. 5(2). The escape also repeats the pre-existing relationship exception with all the problems described earlier. In addition, in all cases in which the victim was also the acquirer of the product, either side can claim a pre-existing relationship between the victim and the defendant manufacturer, distributor, or retail seller. 153. It is somewhat surprising that art. 5 does not consider the place of manufacture as a pertinent connecting factor. For the role of this factor in American product liability conflicts, see S Y M EON ID ES , THE C HO ICE -O F -L AW R EVO LU TIO N 270, 327, 351.
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did the foreign defendant invoke a similar defense.154 Although most of these cases involved American manufacturers, several cases involved foreign manufacturers. Thus, unless marketing patterns are much different in Europe, the marketing defense will probably be unsuccessful in all but the rarest instances. In turn, this suggests that Article 5 will lead to the application of the law of: (a) the parties common habitual residence, in the few cases when such common residence exists; and (b) the victims habitual residence in most of the remaining instances. Few cases would trickle down to the law of the country of acquisition, and even fewer, if any, to the law of the country of injury. If these assumptions are correct, the next question is whether these results are acceptable. In answering that question, it helps to remember that actual cases are often far less complex than classroom hypotheticals. For example, although in the abstract there may be good reasons to criticize the application of the law of the country of the victims residence as such, it is helpful to know that, in the majority of cases that country is likely to have at least one or more additional pertinent contacts. This was so in seventy-two percent of the disputes in the aforementioned American study.155 Nevertheless, although the presence of these additional contacts make the application of the law of the victims domicile more defensible in practice, Article 5 itself must also be defensible in those cases in which these other contacts are lacking. Moreover, the fact that Article 5 does not differentiate between cases in which the law of the victims domicile favors and those in which it disfavors the victim raises additional questions. One such question is whether Article 5 favors residents of developed countries and disfavors residents of lesser developed countries.156 In the above hypothetical, the German plaintiff who was injured in India by a Japanese product acquired in Egypt will get the benefit of German law. However, an Indian plaintiff who is injured in Austria by a German product acquired in Germany will be confined to the remedies provided by Indian law. Was this deliberate? If yes, it is one more example of a territorialist choice-of-law rule which, though seemingly value-neutral, disguises specific policy choices. If the only objective of products liability law is to ensure the right amount of compensation for victims, then the application of German law to the German plaintiff and Indian law to the Indian plaintiff may be defensible. However, to the
154. See id . at 337. 155. See id. at 320-22. American courts applied the law of the victims domicile in sixty-five percent of all cases, but in all but twelve percent of those cases that state had one or two additional contacts and in more than half of them, that state had a pro-defendant law. See id . at 325. 156. For purposes of illustration, it is worth noting that American courts, which are often accused of favoring plaintiffs, applied a plaintiff-favoring law in only fifty-two percent of the cases. See id. at 332-33.
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extent that product liability law is also designed to serve other objectives,157 such as deterring the manufacture and proliferation of unsafe products, there are good reasons to disagree with the application of Indian law in the Indian plaintiffs case. One can only hope that a court would avoid such a result by invoking the closer connection escape of Article 5. In fairness to the Rome II drafters, it should be noted that product liability conflicts are inherently complex and thus far no one has the perfect formula for resolving them.158 This includes the present author who has drafted two statutory rules for such conflicts159 and has proposed two other rules for the same purpose.160 The fact that each of those rules differs from the others is this authors admission that the search for the perfect formula must continue. Article 5 of Rome II is far from the perfect formula, but the real question is whether it is good enough.
VII. ENVIRONMENTAL TORTS Article 7 of Rome II deals with environmental torts. Through a cross reference to the general rule of Article 4(1), Article 7 provides that the applicable law is the law of the place of injury, unless the victim of the tort opts for the law of the place of conduct. As noted earlier, Article 7 is not subject to either the common-domicile or the closer connection exceptions. Because this victims choice is meaningful only in cases of cross-border torts in which the country of conduct and the country of injury prescribe different standards of conduct for the tortfeasor or financial protection for the victim, the discussion below is limited to these cases. It is worth noting that, although at some point the Explanatory Report speaks of a victim in a low-protection country . . . enjoy[ing] the higher level of protection available in neighbouring countries,161 the reason for which Article 7 gives the victim a choice is not to benefit the victim as such. Rather, the reason is to promote the interests of the respective countries and of the Union as a whole in deterring pollution. Applying whichever of the two laws subjects the polluter to a higher standard
157. R O M E II, recital (2), states that [t]he conflict-of-law rule in matters of product liability should meet the objectives of fairly spreading the risks inherent in a modern high-technology society, protecting consumers health, stimulating innovation, securing undistorted competition and facilitating trade. 158. For a comparative discussion of enacted and proposed rules for product liability conflicts, see E. Scoles et al., C O N FLICT O F L AW S , 934-41 (4th ed. 2004). 159. See L A . C IV . C O D E A N N . Art. 3545, discussed in Symeonides, Exegesis, supra note 114, at 74959; P U ERTO R ICO D RAFT C O D E , art. 48. 160. See Symeon C. Symeonides, The Need for a Third Conflicts Restatement (And a Proposal for Tort Conflicts), 75 I ND IANA L. J. 437, 450-51, 472-74 (2000); Symeonides, T H E C HO ICE -O F L AW R EVO LU TIO N , 346-64. 161. Explanatory Report, art. 7, at 19.
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promotes this interest. Giving the victim a choice is simply the vehicle for ensuring this result. When the law of the state of conduct has a higher standard of conduct for the tortfeasor or of financial protection for the victim than the state of injury, the victim will opt for the law of the conduct state, thus producing the deterring effect the drafters intended. As the Report notes, if the victim did not have this choice, the operator would have an incentive to establish his facilities at the border so as to discharge toxic substances into a river and enjoy the benefit of the neighbouring countrys laxer rules. This solution would be contrary to the underlying philosophy of the European substantive law of the environment and the polluter pays principle.162 Indeed, the application of the higher standards of the conduct state in this scenario is fully justified, whether one thinks in terms of party reliance or expectations or, more aptly, state interests. After all, the operator should not complain for being subjected to the standards of the state in which he acted. Having violated those standards, he should bear the consequences of the violation and not be allowed to invoke the lower standards of another state. In terms of state interests, the application of the higher standards of the conduct state promotes that states policy in policing conduct within its borders, without subordinating the policies of the state of injury because the latter state does not have an interest in applying its lower-standards to protect conduct occurring, or tortfeasors acting, beyond its borders. In other words, this is a case that is described in the American conflicts lexicon as a classic false conflict. As noted earlier, Rome II would have been a better system if the drafters had adopted the same logic when drafting the general rule of Article 4(1). When the law of the state of injury prescribes a higher standard than the state of conduct, the victim will not opt for the law of the conduct state, thus again producing the deterrent effect the drafters intended. As the Report points out, this application is [C]onducive to a policy of prevention, obliging operators established in countries with a low level of protection to abide by the higher levels of protection in neighbouring countries, which removes the incentive for an operator to opt for low-protection countries. The rule thus contributes to raising the general level of environmental protection.163 Significantly, because Article 7 is not subject to any exceptions, the polluter cannot avoid the application of the law of the state of injury by arguing, for example, that the occurrence of the injury in that state was not foreseeable. Apparently the article assumes that, regardless of distance, foreseeability is always present, or alternatively, that it should make no difference. One avenue for providing some protection for the polluter in this case is Article 17, and the Report alludes to this
162. Id. 19-20. 163. Explanatory Report, art. 7, at19.
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possibility.164 This authors view is that an objective foreseeability proviso is a better vehicle for ensuring fairness. If the polluter should have foreseen that his conduct in one state would cause injury in another state with higher standards, the polluter should not be able to seek refuge behind the lower standards of the state of conduct. Conversely, when foreseeability is lacking, the court should be allowed to take account of this factor, without necessarily exonerating the actor. For, although the application of the law of the state of injury would be unfair to the polluter, this result would be defensible because the non-application of that law would be equally unfair to the victim who has no control over the situation.
VIII. RULES OF SAFETY AND CONDUCT Buried towards the end of the Rome II regulation is the familiar yet somewhat enigmatic provision of Article 17. It provides that, regardless of which law governs the non-contractual obligation under the other articles of Rome II, 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.165 As noted earlier, provisions similar to Article 17, albeit with slightly different wording, are found in the 1972 EEC draft convention on contractual and non-contractual obligations,166 the Hague conventions on traffic accidents and products liability,167 as well as the Belgian,168 Dutch,169 and Swiss170 codifications enacted in the interim. The Preamble of Rome II states that the term rules of safety and conduct should be interpreted as referring to all regulations having any relation to safety and conduct, including, for
164. See id. at20. 165. R O M E II, art. 17. 166. See supra note 24. 167. See art. 7 of the Hague Convention of 4 May 1971 on the Law Applicable to Traffic Accidents (rules relating to the control and safety of the traffic), and art. 9 of the Hague Convention of 2 October 1973 on the Law Applicable to Products Liability (rules of conduct and safety). 168. See B ELGIAN PIL C O D E , art. 102 (consideration must be given to the safety and conduct rules of the conduct state). 169. See D U TCH PIL A CT , art. 8 (authorizing the taking into account of the traffic and safety regulations and other comparable regulations for the protection of persons or property in force at the place of the tort.). 170. See S W ISS PIL A CT , art. 142(2) (Rules of safety and conduct in force at the place of the act are taken into consideration). Cf. also P O RTU GU ESE C IV . C O D E , art. 45(3) (without prejudice to provisions of local state laws which must be applied to all persons without differentiation); Hungarian PIL Decree, 33.1 (The law of the place of the tortious conduct shall determine whether the tortious conduct was realized by the violation of traffic or other security regulations.).
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example, road safety rules in the case of an accident.171 The very fact that Rome II contains a separate article dealing with these rules, is an oblique and grudging recognition of the distinction noted earlier between conduct-regulating rules and loss distributing tort rules. However, it is unclear whether this article is a true rule of choice-of-law rather than a mere evidentiary instruction about which facts are relevant in determining the degree of the defendants culpability.172 Although the articles wording clearly suggests the latter possibility, it is worth exploring whether the article is capable of being used as a choice-of-law rule, which can lead to applying, rather than merely taking account of the law of the conduct state in appropriate cases. If the answer is affirmative, then Article 17 can provide a flexible exception to all of Rome IIs articles that lead to a law other than that of the state of conduct, particularly: (a) the lex loci damni rule of Article 4(1) in conflicts arising from cross-border torts; and (b) the common-domicile rule of Article 4(2), in conflicts arising from intrastate torts. Unfortunately, there are several obstacles to transforming Article 17 into a true rule of choice-of-law. The first obstacle, which is not insurmountable, is that, despite using the imperative shall, the article is entirely discretionary,173 as it should be. The second obstacle is that, under the article, the court need not apply the rules of safety and conduct, but may simply take them into account. Although the article itself does not preclude the application of these rules, the Explanatory Report suggests that this is precisely what was intended. It states that [t]aking account of foreign law is not the same thing as applying it: the court will apply only the law that is applicable under the conflict rule, but it must take account of another law as a point of fact, for example when assessing the seriousness of the fault or the authors good or bad faith for the purposes of the measure of damages.174 This statement, especially the italicized word only, seems to preclude the application of the safety and conduct rules of the conduct state.175 The third obstacle is that these rules are to be taken into account as a matter of fact in assessing the conduct of the tortfeasor, a notion that echoes
171. R O M E II, recital (34) (emphasis added). 172. For the concept of foreign law as datum, see Erik Jayme, Auslndische Rechtsregeln und Tatbestand inlndischer SachnormenBetrachtungen zu Ehrenzweigs Datum-Theorie , in G ED CHTNISSCHRIFT FR E H REN ZW EIG 35 (1976); Herma H. Kay, Conflict of Laws: Foreign Law as Datum , 53 C ALIF . L. R EV . 47 (1965). 173. This is clear from both the legislative history and the phrase in so far as appropriate in art. 17, although that phrase also has a quantitative component. 174. Explanatory Report, art. 13, p. 25 (emphasis added). 175. The Report acknowledges the origin of Article 17 in, among others, Article 9 of the Hague Products Liability Convention, which does not preclude consideration being given to the rules of conduct and safety of the state of the products marketing. Despite this equivocal wording, however, the Explanatory Report of the Hague Convention states that a court could well apply the conduct rules of that state. See W illis Reese, Explanatory Report to the Hague Products Liability Convention, A CTS AN D D O CU M ENTS O F THE T W ELFTH S ESSIO N , v. III, 251, 268 (1972).
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Ehrenzweigs concept of foreign law as a datum.176 This phraseology is considerably narrower than the Commissions proposal, which provided that these rules were to be taken into account in determining liability.177 This restrictive formulation reduces Article 17 to a mere evidentiary instruction of how to assess the tortfeasors culpability. Unfortunately, this minimalist conception prevents Article 17 from becoming the useful corrective tool that Rome II sorely needs. Moreover, the Rome II drafters seem to envision an even narrower, one-sided role for Article 17. They describe it as tool for helping the tortfeasor, but not necessarily the victim. Rome IIs preamble states that Article 17 is necessary [i]n order to strike a reasonable balance between the parties,178 while the Report seems to be preoccupied with the plight of the perpetrator [who] must abide by the rules of safety and conduct in force in the country in which he operates.179 In rejecting Parliaments attempt at first reading to make Article 17 inapplicable to cases of defamation and unfair competition, the Commission saw no reason for depriving the perpetrators of these two categories of liability of the protection which this rule gives them.180 Elsewhere, the Report describes a situation falling within Article 7 in which the perpetrator complied with the lower environmental standards of the state of conduct but not with the higher standards of the state of injury. The Report concludes that, in such a situation, [u]nder Article 17, the court must then be able to have regard to the fact that the perpetrator has complied with the rules in force in the country in which he is in business.181 The view of this author is that, in cases such as the one described above, the concern for the perpetrator is excessive, if not misplaced. The key question in such cases should be whether, under these facts, a reasonable person should have foreseen that his conduct in the one state would produce injury in the other state. For example, one who operates a chemical factory in close proximity to the border in state A should have foreseen that the wind will likely carry the factorys emissions across the border into state B. Under these circumstances, the operator should not be allowed to seek refuge in the lower standards of state A. Using Article 17 as such a refuge would be contrary to the spirit of Article 7 and the polluter pays principle that article
176. See supra note 172. 177. Commission Proposal, art. 13 (2003). Also, the phrase as a matter of fact and in so far as is appropriate was not part of the Commissions proposal. 178. R O M E II, recital (34) (In order to strike a reasonable balance between the parties, account must be taken of the rules of safety and conduct in operation in the country in which the harmful act was committed, even where the non-contractual obligations is governed by the law of another country.). 179. Explanatory Report, art. 13, at 25. 180. COD/2003/0168 (Feb. 21, 2006) Commission modified legislative proposal (emphasis added). 181. Explanatory Report under art. 7.
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embodies.182 Likewise, returning to the snow avalanche hypothetical, the Swiss operator who engaged in blasting operations near the Swiss-French border in the Alps should have anticipated that his operations may cause avalanches, some of which would occur across the border in France. If French law imposes higher standards of conduct than Swiss law, why should the operator be allowed to seek refuge in Swiss law? In any event, if one is to use Article 17 to protect the tortfeasor in this scenario, there is little justification for not using the same article in the converse scenario in which Swiss law imposes higher standards of conduct for blasting operations than French law. Whether one thinks in terms of state interest or simply in terms of evenhandedness toward litigants, there is good reason to take account and indeed to apply Swiss law in this case. The fact that the operator violated the standards of Swiss law implicates Switzerlands policies in policing conduct within its borders, even though the consequences of that conduct in this case materialized in France. Conversely, this case does not implicate the policies underlying the French lowerstandard rule because that rule is designed to protect or encourage conduct within and not beyond French borders. In other words, this is what is known in the American conflicts lexicon as a classic false conflict in which only Switzerland has an interest in applying its law, or at least to have it taken into account. To be sure, the quoted term may be anathema to Rome II given its limited recognition of the role of state interests, despite, for example, embracing the concept of mandatory rules (Art. 16). Instead, Rome II places a premium on the need to ensure a reasonable balance between the interests of the person claimed to be liable and the person who has sustained damage,183 and the Explanatory Report purports to explain most of Rome IIs rules in terms of the parties expectations. As noted earlier, the reason for the drafterss decision to reject a general rule of allowing the victim to choose between the laws of the places of conduct and injury in cross-border torts other than environmental torts is because such a solution would go beyond the victims legitimate expectations.184 However, one can also turn that question around. Does the application of the law of the state of conduct violate the legitimate expectations of the tortfeasor who violated the conduct standards of that state, just because the injury occurs across the border? The only Rome II provision that can provide a negative and, in this authors view, justified answer to this question is Article 17. If the drafters intent was to use this article only when it helps the tortfeasor but not when it helps the victim, then it would have been preferable to suppress the article from the final text.
182. See supra note 163. 183. R O M E II, recital (16), et passim . 184. Explanatory Report, art. 3, at 11-12.
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IX. PARTY AUTONOMY Under the heading freedom of choice, Article 14 of Rome II introduces the notion that the parties to a tort may agree on which law will govern their rights and obligations resulting from the tort.185 The article properly distinguishes between choice-of-law agreements made before and after the tort. It allows post-tort agreements between all parties and allows pre-tort agreements only if all the parties are pursuing a commercial activity.186 In the latter case, the agreement must be freely negotiated.187 For the remainder, Article 14 treats both pre-tort and post-tort agreements alike: (1) both must be expressed or demonstrated with reasonable certainty by the circumstances of the case;188 and (2) neither may prejudice the rights of third parties,189 or derogate from the mandatory rules of a state in which all the elements relevant to the situation . . . are located,190 or, in certain cases, from the mandatory rules of Community law.191 Obviously, post-tort agreements are far less problematical because, after the occurrence of the tort, the parties are in a position to know of their rights and obligations and have the opportunity to weigh the pros and cons of a choice-of-law agreement. For this reason, these agreements need little policing by the legal system. In fact, the system benefits from these agreements insofar as they promote judicial economy. Precisely the opposite is true of pre-tort agreements. The parties do not (and should not) contemplate a future tort, they do not know who will injure whom, or what will be the nature or severity of the injury. Moreover, a weak or unsophisticated party may uncritically sign such an agreement, even when the odds of him being the victim are much higher than the odds of him being the tortfeasor. For these and other
185. In cases of unfair competition, restriction to competition, and infringement of intellectual property rights, Rome II does not allow choice-of-law agreements, either before or after the tort. See R O M E II, arts. 6(4), 8(3). 186. R O M E II, art. 14(1)(b). 187. Id. The fact that Article 14 does not expressly impose the same requirement in the case of posttort agreements may give rise to an a contrario argument that free negotiation is not necessary in such cases. Of course, the argument should be rejected. Apparently, the drafters intended to ensure higher scrutiny of pre-tort agreements and not to free post-tort agreements from any scrutiny. 188. Id. art. 14(1). 189. Id. 190. R O M E II, art. 14(2) (W here all the elements relevant to the situation . . . 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.). 191. See R O M E II, art.(3) (W here all the elements relevant to the situation . . . are located in one or more of the M ember 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 . . . which cannot be derogated from by agreement.).
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reasons, pre-tort agreements should either be prohibited192 or, if permitted, they should be closely policed. Regrettably, Article 14 requires only minimal scrutiny. The only restrictions it imposes on pre-tort agreements (that it does not impose on post-tort agreements) is that it must be freely negotiated and that the parties must be pursuing a commercial activity. This is neither sufficient nor free of problems. Even if the term commercial activity was clearly defined or uniformly understood throughout the EU, it would still include within its scope, relationships that are one-sided, such as those arising from franchise, licensing, or insurance contracts. For example, a franchise contract is clearly commercial, yet the franchisee is usually in a very weak bargaining position (which is why so many states have enacted consumer-protection type statutes to protect franchisees).193 By allowing pre-tort choice-of-law agreements in these contracts, Article 14 does not live up to the statement in recital 32 that [p]rotection should be given to weaker parties by imposing certain conditions on the choice.194 As with some other freedom-laden ideas, Article 14 may well become the vehicle for taking advantage of weak parties, many of whom are parties to commercial relationships. The argument that the mandatory rules of paragraphs 2 and 3 of Article 14, or the ordre public exception of Article 26 will protect the weak parties is overly optimistic because of the high threshold these provisions require before they become operable.
X. CONCLUDING THOUGHTS Considering its starting pointthe Commissions preliminary draft Rome II could have been much worse. Considering the rapporteurs valiant efforts and Parliaments amendments, Rome II could also have been much better. The amendments injected more flexibility, introduced issue-by-issue analysis, and differentiated between issues of conduct regulation and loss distribution. Had any of these amendments survived, they would have considerably improved Rome II. Unfortunately, the Council and Commission rejected these and other amendments. In the end, Rome II is what it is. In this authors view, it is a missed opportunity to do much better. This view is reinforced by the fact that the European continent, the birthplace of PIL, has never had a shortage of talent, sophistication, and experience in drafting PIL legislation. Recent national codifications are a solemn testimony of that
192. See, e.g. , EGBGB, art. 42 After the event giving rise to a non-contractual obligation has occurred, the parties may choose the law that shall apply to the obligation.) (emphasis added); B ELGIAN PIL CO D E , accord . But see D U TCH PIL A CT , art. 6 (W here the parties have chosen the law applicable to any matter relating to tort, . . . that law shall apply between them . . .). For the position of American cases law on this issue, see S Y M EO N C. S Y M EON ID ES , A M ERICAN P RIVATE I N TERN ATIO N AL L AW _???__ (forthcoming 2008). 193. See S Y M EON ID ES , A M ERICAN P RIVATE I N TERN ATIO N AL L AW , supra note 192 at _???_. 194. R O M E II, recital (31).
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experience and wisdom, as is the GEDIP proposal which was drafted specifically for the pan-European level. Be that as it may, the final text of Rome II illustrates the difficulties of the process of lawmaking in a multinational democratic society. More often than not, the need to obtain a consensus, which is so important and healthy, necessitates compromises that disturb the coherence and consistency of the final scheme. This author can empathize with the drafters unenviable position, having found himself in a similar situation in drafting two PIL codifications and being currently involved in a third.195 During the six-year process of drafting the Louisiana codification, he had to make compromises which, at the time, he strongly resisted.196 In retrospect, however, besides recognizing that with regard to some of them the critics may have had the better argument,197 he views the rest of the compromises as the political price that had to be paid in return for getting the bill passed. It was either that, or nothing at all. The bill became law and, for the last fifteen years, it has worked well.198 Based on this experience, the author assumes that, as an outside observer, he sees no more than half of the picture and acknowledges the objective political difficulties the Rome II drafters faced in obtaining consensus. These difficulties at least partially explain the differences between Rome II and, for example, the GEDIP proposal. The reason the GEDIP proposal was so close to perfection had more to do with the homogeneity of that academic group than with the fact that it encompasses la creme de la creme of European conflicts thought. The proposal was a sophisticated document drafted for sophisticated judges capable of, and entrusted with the discretion necessary for making the fine balancing the proposal envisioned. In contrast, Rome II is a pragmatic document that aims for simplicity and uniformity and primarily seeks to preserve the status quo rather than to dramatically alter it. Whether this was the right choice in the long run is a matter of opinion, and this authors opinion deserves no more deference than that of the erudite men and women who drafted Rome II or
195. See Symeon C. Symeonides, Private International Law Codification in a Mixed Jurisdiction: The Louisiana Experience , 57 R ABELS Z 460 (1993); Symeonides, Exegesis, supra note 193; Symeon C. Symeonides, Revising Puerto Ricos Conflicts Law: A Preview , 28 C O LU M . J. T RANSNAT L L., 601 (1990); Symeon C. Symeonides, Codifying Choice of Law for Contracts: The Puerto Rico Project, in L AW A ND J USTICE IN A M U LTISTATE W O RLD : E SSAY S IN H O N OR O F A RTHU R T. VO N M EHR EN , 419-37 (John Nafziger & Symeon Symeonides eds., 2002); Symeon C. Symeonides, Oregons Choice-of-Law Codification for Contract Conflicts: An Exegesis , 44 W ILLAM ETTE L. R EV . (forthcoming Dec. 2007); Symeon C. Symeonides, Codifying Choice of Law for Contracts: The Oregon Experience , 67 R ABELS Z 726 (2003). 196. See Symeonides, Exegesis , supra note 193, at 712-14, 742-48, 758-59. 197. See Symeonides, T H E C HO ICE -O F -L AW R EVO LU TIO N 263; Symeon C. Symeonides, In Search of New Choice-of-Law Solutions to Some Marital Property Problems of Migrant Spouses: A Response to the Critics , 13 (3) C O M M . P RO P . J. 11 (1986). 198. See Patrick J. Borchers, Louisianas Conflicts Codification: Som e Empirical Observations Regarding Decisional Predictability , 60 L A . L. R EV . 1061 (2000).
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the many commentators who applaud it. In any event, although European PIL would have been better off with a better Rome II, the more realistic question is whether it would have been better off without Rome II at all. On balance, this authors answer is in the negative. If nothing else, and despite its flaws, Rome II will unify and thus equalize, the private international law of the member-states of the European Union. Although for some of these states this equalization will amount to regress, for many more states it will be clear progress. From a transatlantic perspective, whatever its flaws, this unification or Europeanization cannot be worse than the complete lack common direction, much less unity, that characterizes modern American conflicts law. Moreover, one hopes that the present text of Rome II is not the last step in the arduous process of modernizing and unifying European private international law in tort conflicts. Indeed a review clause in Rome II leaves the door open for future changes and adaptations.199
199. See Rome II, art. 30 (Not later than 20 August 2011, the Commission shall submit to the European Parliament, the Council and the European Economic and Social Committee a report on the application of this Regulation. If necessary, the report shall be accompanied by proposals to adapt this Regulation.).
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Rome II and Tort Conflicts: A Missed Opportunity

SYM EON C. SYM EONIDES

ROM E II AND TORT CONFLICTS

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18. 19. 20. 21.

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D. Jurisdiction-Selection or Content-Oriented Law-Selection

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