Commission adopts Rome II Regulation on cross-border disputes

Rome II applies only to non-contractual disputes, such as cases of defamation, invasion of privacy, liability for defective products and unfair competition, including advertising and marketing.

The goal is to ensure that courts in all the Member States apply the same law to cross-border disputes where there is otherwise a choice of whose law to apply, thereby facilitating mutual recognition of court rulings in the European Union.

The Commission said today that its rules "strike a reasonable balance between the interests of the parties involved in a cross-border dispute" and "aim at applying a law that reflects the centre of gravity of the situation."

However, the proposal has already drawn criticism. The UK's Advertising Association has been campaigning against the form of the Rome II Regulation. Today, Phil Murphy, the Association's European Public Affairs Manager, told OUT-LAW.COM: "Today's publication draws a line in the sand - industry will continue fighting this tooth and nail over the coming years."

Murphy continued, "There's no justification for this legislation - the text doesn't appear to be based on any evidence that either industry or consumers require uniform rules for determining the law applicable to non-contractual relations."

The initiative focuses on the question of civil liability for damage caused to others, particularly in the case of accidents such as traffic accidents or accidents caused by a defective product, or in case of invasion of privacy. With increased trade and movement within the Union, this kind of litigation will become more widespread.

Current problem, according to the Commission

Member States do not at present have common rules for deciding which law should apply in cases concerning non-contractual obligations, so each court applies its own national rules.

Consequently, the outcome of cases can vary widely from one Member State to another, prompting plaintiffs to bring their actions before the courts which will apply the most favourable legislation – a practice known as 'forum shopping'.

Solution

The rules proposed by the Commission aim to strike a reasonable balance between the interests of the person claimed to be liable and the person sustaining the damage.

Since the basic rule leads, in general, to the application of the law of the place where the damage is sustained, the proposal reflects the legitimate expectations of the victim, who - in particular in the case of an accident - never intended to enter into relation with the author of the damage.

International jurisdiction and the recognition and enforcement of judgements in another Member State is already dealt with in a separate Council Regulation of December 2000, which applies to both contractual and non-contractual obligations.

As regards applicable law, the rules on contracts were harmonised by the Rome Convention of 1980 on the law applicable to contractual obligations. This initiative will complete the harmonisation at Community level of the rules of private international law on civil and commercial obligations.

At the time of writing, the final Commission proposal had not been published on-line.