Proposal for a Regulation of the European Parliament and the Council on the law applicable to non-contractual obligations ("ROME II")
Date: 2003-07-22
Institutions: European Commission
Subjects: EU Member State, EU national, application of the law, area of freedom, security and justice, civil law, commercial law, judicial cooperation in criminal matters in the EU, jurisdiction, law of obligations, mutual recognition principle

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 22.7.2003
COM(2003) 427 final

2003/0168 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL

ON THE LAW APPLICABLE TO NON-CONTRACTUAL OBLIGATIONS
(“ROME II”)

(presented by the Commission)

EXPLANATORY MEMORANDUM

1.

INTRODUCTION

1.1.

Context

By  Article  2  of  the  Treaty  on  European  Union,  the  Member  States  set  themselves  the
objective of maintaining and developing the Union as an area of freedom, security and justice,
in which the free movement  of  persons is  assured  and  litigants  can assert  their rights in the
courts  and  before  the  authorities  of  all  the  Member  States,  enjoying  facilities  equivalent  to
those they enjoy in their own country.

To establish a genuine European law-enforcement area, the Community, under Articles 61(c)
and 65 of the Treaty establishing the European Community, is to adopt measures in the field
of judicial cooperation in civil matters in so far as necessary for the proper functioning of the
internal market. The Tampere European Council on 15 and 16 October 19991 acknowledged
the  mutual  recognition  principle  as  the  cornerstone  of  judicial  cooperation  in  the  Union.  It
asked  the  Council  and  the  Commission  to  adopt,  by  December  2000,  a  programme  of
measures to implement the mutual recognition principle.

The  joint  Commission  and  Council  programme  of  measures  to  implement  the  principle  of
mutual recognition of decisions in civil and commercial matters, adopted by the Council  on
30  November  2000,2  states  that  measures  relating  to  harmonisation  of  conflict-of-law  rules,
which may sometimes be incorporated in the same instruments as those relating to jurisdiction
and  the  recognition  and  enforcement  of  judgments,  actually  do  help  facilitate  the  mutual
recognition  of  judgments.  The  fact  that  the  courts  of  the  Member  States  apply  the  same
conflict  rules  to  determine  the  law  applicable  to  a  practical  situation  reinforces  the  mutual
trust in judicial decisions given in other Member States and is a vital element in attaining the
longer-term  objective  of  the  free  movement  of  judgments  without  intermediate  review
measures.

1.2.

Complementarity with instruments of private international law already in force
in the Community

This  initiative  relates  to  the  Community  harmonisation  of  private  international  law  in  civil
and commercial matters that began late in the 1960s. On 27 September 1968 the six Member
States of the European Economic Community concluded a Convention on jurisdiction and the
recognition  and  enforcement  of  judgments  in  civil  and  commercial  matters  (the  “Brussels
Convention”) on the basis of the fourth indent of Article 293 (formerly 220) of the EC Treaty.
This was drawn up on the idea, already described in the EC Treaty, that the establishment of a
common  market  implied  the  possibility  of  having  a  judgment  given  in  any  Member  State
recognised  and  enforced  as  easily  as  possible.  To  facilitate  the  attainment  of  that  objective,
the  Brussels  Convention  begins  by  setting  out  rules  identifying  the  Member  State  whose
courts have jurisdiction to hear and determine a cross-border dispute.

1

2

Presidency conclusions of 16 October 1999, points 28 to 39.
OJ C 12, 15.1.2001, p. 1.

2

                                                
The mere  fact  that there  are rules  governing  the  jurisdiction  of the  courts  does not  generate
reasonable foreseeability as to the outcome of a case being heard on the merits. The Brussels
Convention  and  the  “Brussels  I”  Regulation  that  superseded  it  on  1  March  20013  contain  a
number of options enabling claimants to prefer this or that court. The risk is that parties will
opt for the courts of one Member State rather than another simply because the law applicable
in the courts of this state would be more favourable to them.

That  is  why  work  began  on  codifying  the  rules  on  conflicts  of  laws  in  the  Community  in
1967. The Commission convened two meetings of experts in 1969, at which it was agreed to
focus initially on questions having the greatest impact on the operation of the common market
the  law  applicable  to  tangible  and  intangible  property,  contractual  and  non-contractual
obligations and the form of legal documents. On 23 June 1972, the experts presented a first
preliminary  draft  convention  on  the  law  applicable  to  contractual  and  non-contractual
obligations. Following the accession of the United Kingdom, Ireland and Denmark, the group
was expanded in 1973, and that slowed progress.  In March  1978, the  decision was taken to
confine attention to contractual obligations so that negotiations could be completed within a
reasonable  time  and  to  commence  negotiations  later  for  a  second  convention  on  non-
contractual obligations.

In  June  1980  the  Convention  on  the  law  applicable  to  contractual  obligations  (the  “Rome
Convention”) was opened for signature, and it entered into force on 1 April 1991.4 As there
was no proper legal basis in the EC Treaty at the time of its signing, the convention takes the
traditional form of an international treaty. But as it was seen as the indispensable adjunct to
the Brussels Convention, the complementarity being referred to expressly in the Preamble, it
is treated in the same way as the instruments adopted on the basis of Article 293 (ex-220) and
is an integral part of the Community acquis.

Given  the  substantial  difference  in  scope  between  the  Brussels  and  Rome  Conventions  the
former covers both contractual and non-contractual obligations whereas the latter covers only
contractual obligations the proposed Regulation, commonly known as “Rome II”, will be the
natural  extension  of  the  unification  of  the  rules  of  private  international  law  relating  to
contractual and non-contractual obligations in civil or commercial matters in the Community.

1.3.

Resumption  of  work  in  the  1990s  under  the  Maastricht  and  Amsterdam
Treaties

Article K.1(6) of the Union Treaty in the Maastricht version classified judicial cooperation in
civil matters in the areas of common interest to the Member States of the European Union. In
its Resolution of  14 October  1996  laying  down  the  priorities  for  cooperation  in  the  field  of
justice and home affairs for the period from 1 July 1996 to 30 June 1998,5 the Council stated
that, in pursuing the objectives set by the European Council, it intended to concentrate during
the  above  period  on  certain  priority  areas,  which  included  the  “launching  of  discussions  on
the  necessity  and  possibility  of  drawing  up  ...  a  convention  on  the  law  applicable  to  extra-
contractual obligations”.

3

4

5

Council  Regulation  (EC)  No  44/2001  of  22  December  2000,  OJ  L  12,  16.1.2001,  p.  1,  replacing  the
Brussels  Convention  of  1968,  of  which  a  consolidated  version  was  published  in  OJ  C  27,  26.1.1998,
p. 1.  But  the  Brussels  Convention  remains  in  force  for  relations  between  Denmark  and  the  other
Member States.
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 OJ C 27, 26.1.1998, p. 34.
OJ C 319, 26 October 1996, p. 1.

3

                                                
In  February  1998  the  Commission  sent  the  Member  States  a  questionnaire  on  a  draft
convention  on  the  law  applicable  to  non-contractual  obligations.  The  Austrian  Presidency
held four working meetings to examine the replies to the questionnaire. It was established that
all the Member States supported the principle of an instrument on the law applicable to non-
contractual  obligations.  At  the  same  time  the  Commission  financed  a  GROTIUS  project6
presented by the European Private International Law Group (GEDIP) to examine the feasibility
of  a  European  Convention  on  the  law  applicable  to  non-contractual  obligations,  which
culminated in a draft text.7 The Council' s ad hoc “Rome II” Working Party continued to meet
throughout  1999  under  the  German  and  Finnish  Presidencies,  examining  the  draft  texts
presented  by  the  Austrian  Presidency  and  by  Gedip.  An  initial  consensus  emerged  on  a
number of conflict rules, which this proposal for a Regulation duly reflects.

The Amsterdam Treaty, which entered into force on 1 May 1999, having moved cooperation
in  civil  matters  into  the  Community  context,  the  Justice  and  Home  Affairs  Council  on
3 December 1998 adopted the Action Plan of the Council and the Commission on how best to
implement  the  provisions  of  the  Treaty  of  Amsterdam  on  an  area  of  freedom,  security  and
justice.8  It  recalls  that  principles  such  as  certainty  in  the  law  and  equal  access  to  justice
require among other things “clear designation of the applicable law” and states in paragraph
40 that “The following measures should be taken within two years after the entry into force of
the  Treaty:  …  b)  drawing  up  a  legal  instrument  on  the  law  applicable  to  non-contractual
obligations (Rome II)”.

On 3 May 2002, the Commission launched consultations with interested circles on an initial
preliminary  draft  proposal  for  a  “Rome  II”  Regulation  prepared  by  the  Directorate-General
for  Justice  and  Home  Affairs.  The  consultations  prompted  a  very  wide  response,  and  the
Commission  received  80  or  so  written  contributions  from  the  Member  States,  academics,
representatives of industry and consumers’ associations.9 The written consultation procedure
was followed by a public hearing in Brussels on 7 January 2003. This proposal duly reflects
the comments received.

2.

2.1.

PROPOSAL  FOR  A  EUROPEAN  PARLIAMENT  AND  COUNCIL
REGULATION

General  purpose  -  to  improve  the  foreseeability  of  solutions  regarding  the
applicable law

The  purpose  of  this  proposal  for  a  regulation  is  to  standardise  the  Member  States'  rules  of
conflict  of  laws  regarding  non-contractual  obligations  and  thus  extend  the  harmonisation  of
private international law in relation to civil and commercial obligations which is already well
advanced  in  the  Community  with  the  “Brussels  I”  Regulation  and  the  Rome  Convention  of
1980.

6

7

8

9

Project No GR/97/051.
Accessible at http://www.drt.ucl.ac.be/gedip/gedip_documents.html.
OJ C 19, 23.1.1999, p. 1.
The contributions received by the Commission can be consulted at: 
http://europa.eu.int/comm/justice_home/news/consulting_public/rome_ii/news_summary_rome2_en.ht
m.

4

                                                
The harmonisation of conflict rules, which must be distinguished from the harmonisation of
substantive law, seeks to harmonise the rules whereby the law applicable to an obligation is
determined.  This  technique  is  particularly  suitable  for  settling  cross-border  disputes,  as,  by
stating with reasonable certainty the law applicable to the obligation in question irrespective
of  the  forum,  it  can  help  to  develop  a  European  area  of  justice.  Instead  of  having  to  study
often  widely  differing  conflict  rules  of  all  the  Member  States'  courts  that  might  have
jurisdiction  in  a  case,  this  proposal  allows  the  parties  to  confine  themselves  to  studying  a
single set of conflict rules, thus reducing the cost of litigation and boosting the foreseeability
of solutions and certainty as to the law.

These general observations are particularly apt in the case of non-contractual obligations, the
importance of which for the internal market is clear from sectoral instruments, in force or in
preparation, governing this or that specific aspect (product liability or environmental liability,
for  example).  The  approximation  of  the  substantive  law  of  obligations  is  no  more  than
embryonic.  Despite  common  principles,  there  are  still  major  divergences  between  Member
States, in particular as regards the following questions: the  boundary between strict liability
and  fault-based  liability;  compensation  for  indirect  damage  and  third-party  damage;
compensation  for  non-material  damage,  including  third-party  damage;  compensation  in
excess of actual damage sustained (punitive and exemplary damages); the liability of minors;
and  limitation  periods.  During  the  consultations  undertaken  by  the  Commission,  several
representatives  of  industry  stated  that  these  divergences  made  it  difficult  to  exercise
fundamental  freedoms  in  the  internal  market.  They  realised  that  harmonisation  of  the
substantive  law  was  not  a  short-term  prospect  and  stressed  the  importance  of  the  rules  of
conflict of laws to improve the foreseeability of solutions.

A comparative law analysis of the rules of conflict of laws  reveals that the present situation
does  not  meet  economic  operators'  need  for  foreseeability  and  that  the  differences  are
markedly  wider  than  was  the  case  for  contracts  before  the  harmonisation  achieved  by  the
Rome Convention. Admittedly, the Member States virtually all give pride of place to the lex
loci delicti commissi, whereby torts/delicts are governed by the law of the place where the act
was committed. The application of this rule is problematic, however, in the case of what are
known  as  “complex”  torts/delicts,  where  the  harmful  event  and  the  place  where  the  loss  is
sustained  are  spread  over  several  countries.10  There  are  variations  between  national  laws  as
regards  the  practical  impact  of  the  lex  loci  delicti  commissi  rule  in  the  case  of  cross-border
non-contractual obligations. While certain Member States still take the traditional solution of
applying  the  law  of  the  country  where  the  event  giving  rise  to  the  damage  occurred,  recent
developments  more  commonly  tend  to  support  the  law  of  the  country  where  the  damage  is
sustained. But to understand the law in force in a Member State, it is not enough to ascertain
whether  the  harmful  event  or  the  damage  sustained  is  the  dominant  factor.  The  basic  rule
needs  to  be  combined  with  other  criteria.  A  growing  number  of  Member  States  allow  a
claimant  to  opt  for  the  law  that  is  most  favourable  to  him.  Others  leave  it  to  the  courts  to
determine  the  country  with  which  the  situation  is  most  closely  connected,  either  as  a  basic
rule or exceptionally where the basic rule turns out to be inappropriate in the individual case.
Generally  speaking  most  Member  States  use  a  sometimes  complex  combination  of  the
different  solutions. Apart  from the  diversity  of  solutions,  their  legibility  is  not  improved  by
the fact that only some of the Member States have codified their conflict-of-laws rules; in the
others,  solutions  emerge  gradually  from  the  decisions  of  the  courts  and  often  remain
uncertain, particularly as regards special torts/delicts.

10

See the decision of the Court of Justice in the following notes as regards the account to be taken of this
spreading of factors for the international jurisdiction of the courts.

5

                                                
There  is  no  doubt  that  replacing  more  than  fifteen  national  systems  of  conflict  rules11  by  a
single set of uniform rules would represent considerable progress for economic operators and
the general public in terms of certainty as to the law.

The  next  need  is  to  analyse  the  conflict  rules  in  the  context  of  the  rules  governing  the
international jurisdiction of the courts. Apart from the basic jurisdiction of the courts for the
place  of  the  defendant'  s  habitual  residence,  provided  for  by  Article  2  of  the  “Brussels  I”
Regulation, Article 5(3) provides for a special head of jurisdiction in relation to torts/delicts
and quasi-delict in the form of “the courts for the place where the harmful event occurred...”.
The Court of Justice has always held that where the place where the harmful act occurred and
the  place  where  the  loss  is  sustained  are  not  the  same,  the  defendant  can  be  sued,  at  the
claimant’s choice, in the courts either of the place where the harmful  act occurred or of the
place where the loss is sustained.12 Admittedly, the Court acknowledged that each of the two
places  could  constitute  a  meaningful  connecting  factor  for  jurisdiction  purposes,  since  each
could  be  of  significance  in  terms  of  evidence  and  organisation  of  the  proceedings,  but  it  is
also  true  that  the  number  of  forums  available  to  the  claimant  generates  a  risk  of  forum-
shopping.

This proposal for a Regulation would allow parties to determine the rule applicable to a given
legal  relationship  in  advance,  and  with  reasonable  certainty,  especially  as  the  proposed
uniform rules  will receive  a  uniform interpretation from the Court  of  Justice. This initiative
would accordingly help to boost certainty in  the law  and promote the proper  functioning  of
the  internal  market.  It  is  also  in  the  Commission's  programme  of  measures  to  facilitate  the
extra-judicial settlement of disputes, since the fact that the parties have a clear vision of their
situation makes it all the easier to come to an amicable agreement.

2.2.

Legal basis

Since  the  Amsterdam  Treaty  came  into  force,  conflict  rules  have  been  governed  by  Article
61(c) of the EC Treaty. Under Article 67 of the EC Treaty, as  amended by the Nice Treaty
that entered into force on 1 February 2003, the Regulation will be adopted by the codecision
procedure laid down by Article 251 of the EC Treaty.

Article 65(b) provides: “Measures in the field of judicial cooperation in civil matters having
cross-border implications, to be taken ... in so far as necessary for the proper functioning of
the internal market, shall include: promoting the compatibility of the rules applicable in the
Member States concerning the conflict of laws ...”

The  Community  legislature  has  the  power  to  put  flesh  on  the  bones  of  this  Article  and  the
discretion  to  determine  whether  a  measure  is  necessary  for  the  proper  functioning  of  the
internal market. The Council exercised this power when adopting  the  Vienna action plan of
3 December 199813 on how best to implement the provisions of the Treaty of Amsterdam on
an area of freedom, security and justice, point 40(c) of which calls expressly for a “Rome II”
instrument.

11

12

13

There  are  more  than  fifteen  national  systems  because  the  United  Kingdom  does  not  have  a  unitary
system.
Case 21/76 Mines de Potasse d' Alsace [1976] ECR 1735 (judgment given on 30.11.1976).
OJ C 19, 23.1.1999, p. 1.

6

                                                
Harmonisation  of  the  conflict  rules  helps  to  promote  equal  treatment  between  economic
operators  and  individuals  involved  in  cross-border  litigation  in  the  internal  market.  It  is  the
necessary  adjunct  to  the  harmonisation  already  achieved  by  the  “Brussels  I”  Regulation  as
regards  the  rules  governing  the  international  jurisdiction  of  the  courts  and  the  mutual
recognition of judgments. Given that there are more than fifteen different systems of conflict
rules, two firms in distinct Member States, A and B, bringing the same dispute between them
and a third firm in country C before their respective courts would have different conflict rules
applied to them, which could provoke a distortion of competition. Such a distortion could also
incite operators to go forum-shopping.

But the harmonisation of the conflict rules also facilitates the implementation of the principle
of  the  mutual  recognition  of  judgments  in  civil  and  commercial  matters.  The  mutual
recognition programme14 calls  for the reduction  and ultimately  the  abolition of  intermediate
measures for recognition of a judgment given in another Member State. But the removal of all
intermediate measures calls for a degree of mutual trust between Member States which is not
conceivable if their courts do not all apply the same conflict rule in the same situation.

Title IV of the EC Treaty, which covers the matters to which this proposal for a Regulation
applies, does not apply to Denmark by virtue of the Protocol concerning it. Nor does it apply
to the United Kingdom or Ireland, unless those countries exercise their option of joining the
initiative (opt-in clause) on the conditions set out in the Protocol annexed to the Treaty. At the
Council  meeting  (Justice  and  Home  Affairs)  on  12  March  1999,  these  two  Member  States
announced their  intention of being  fully  associated  with Community  activities  in  relation  to
judicial cooperation in civil matters. They were also fully associated with the work of the ad
hoc Council working party before the Amsterdam Treaty entered into force.

2.3.

Justification for proposal in terms of proportionality and subsidiarity principles

The  technique  of  harmonising  conflict-of-laws  rules  fully  respects  the  subsidiarity  and
proportionality  principles  since  it  enhances  certainty  in  the  law  without  demanding
harmonisation of the substantive rules of domestic law.

As for the choice of instrument, point 6 of the Protocol on the application of the principles of
subsidiarity and proportionality provides that “Other things being equal, directives should be
preferred to regulations and framework directives to detailed measures.” But for the purposes
of this proposal a Regulation is the most appropriate instrument.  It lays down uniform rules
for  the  applicable  law.  These  rules  are  detailed,  precise  and  unconditional  and  require  no
measures by the Member States for their transposal into national law. They are therefore self-
executing. The nature of these rules is the direct result of the objective set for them, which is
to enhance certainty in the law and the foreseeability of the solutions adopted as regards the
law applicable to a given legal relationship. If the Member States had room for manoeuvre in
transposing these rules, uncertainty would be reintroduced into the law, and that is precisely
what the harmonisation is supposed to abolish. The Regulation is therefore the instrument that
must be chosen to guarantee uniform application in the Member States.

14

OJ C 12, 15.1.2001, p. 8.

7

                                                
3.

INDIVIDUAL PROVISIONS

Article 1 - Material scope

Like  the  Brussels  Convention  and  the  “Brussels  I”  Regulation,  the  proposed  Regulation
covers civil and commercial obligations. This is an autonomous concept of Community  law
that has been interpreted by the Court of Justice. The reference to this makes it clear that the
“Brussels I” Regulation, the Rome Convention and the Regulation proposed here constitute a
coherent set of instruments covering the general field of private international law in matters of
civil and commercial obligations.

The  scope  of  the  Regulation  covers  all  non-contractual  obligations  except  those  in  matters
listed in paragraph 2. Non-contractual obligations are in two major categories, those that arise
out of a tort or delict and those that do not. The first category comprises obligations relating to
tort or delict, and the second comprises obligations  relating to what in some jurisdictions is
termed  “quasi-delict“  or  “quasi-contract“,  including  in  particular  unjust  enrichment  and
agency without authority or negotiorum gestio. The latter category is governed by section 2.
But  the  demarcation  line  between  contractual  obligations  and  obligations  based  on  tort  or
delict  is  not  identical  in  all  the  Member  States,  and  there  may  be  doubts  as  to  which
instrument  the  Rome  Convention  or  the  proposed  Regulation  should  be  applied  in  a  given
dispute,  for  example  in  the  event  of  pre-contractual  liability,  of  culpa  in  contrahendo  or  of
actions by creditors to have certain transactions by their debtors declared void as prejudicial
to their interests. The Court of Justice, in actions under Articles 5(1) and (3) of the Brussels
Convention, has already had occasion to rule that tort/delict cases are  residual in relation to
contract  cases,  which  must  be  defined  in  strict  terms.15  It  will  no  doubt  refine  its  analysis
when interpreting the proposed Regulation.

The  proposed  Regulation  would  apply  to  all  situations  involving  a  conflict  of  laws,  i.e.
situations in which there are one or more elements that are alien to the domestic social life of
a country  that  entail  applying  several  systems  of  law.  Under  Article  1(2),  the  following  are
excluded from the scope of the proposed Regulation:

a)

b)

15

non-contractual  obligations  arising  out  of  family  or  similar  relationships:  family
obligations  do  not  in  general  arise  from  a  tort  or  delict.  But  such  obligations  can
occasionally  appear  in  the  family  context,  as  is  the  case  of  an  action  for
compensation for damage caused by late payment of a maintenance obligation. Some
commentators  have  suggested  including  these  obligations  within  the  scope  of  the
Regulation on the grounds that they are governed by the exception clause in Article
3(3),  which  expressly  refers  to  the  mechanism  of  the  “secondary  connection”  that
places them under the same law as the underlying family relationship. Since there are
so far no harmonised conflict-of-laws rules in the Community as regards family law,
it  has  been  found  preferable  to  exclude  non-contractual  obligations  arising  out  of
such relationships from the scope of the proposed Regulation.

Non-contractual obligations arising in connection with matrimonial property regimes
and successions: these are excluded for similar reasons to those given at point a).

Case 34/82 Martin Peters [1983] ECR I-987 (judgment given on 22 March 1983); Case C-26/91 Jacob
Handte  [1992]  ECR  I-3697  (judgment  given  on  17  June  1992);  Case  C-334/00  Fonderie  Officine
Meccaniche Tacconi [202] ECR I-7357 (judgment given on 17.9.2002).

8

                                                
c)

d)

e)

f)

Non-contractual obligations arising out of bills of exchange, cheques and promissory
notes and other negotiable instruments to the extent that the obligations under such
other negotiable instruments arise out of their negotiable character; this point is taken
over  from  Article  1(2)(c)  of  the  Rome  Convention.  It  is  incorporated  here  for  the
same  reasons  as  are  given  in  the  Giuliano-Lagarde  Report,16  namely  that  the
Regulation  is  not  the  proper  instrument  for  such  obligations,  that  the  Geneva
Conventions of 7 June 1930 and 19 March 1931 regulate much of this matter and that
these obligations are not dealt with uniformly in the Member States.

The  personal  legal  liability  of  officers  and  members  as  such  for  the  debts  of  a
company  or  firm  or  other  body  corporate  or  unincorporate,  and  the  personal  legal
liability  of  persons  responsible  for  carrying  out  the  statutory  audits  of  accounting
documents: this question cannot be separated from the law governing  companies or
firms or other bodies corporate or unincorporate that is applicable to the company or
firm or other body corporate or unincorporate in connection with whose management
the question of liability arises.

Non-contractual obligations among the settlers, trustees and beneficiaries of a trust:
trusts  are  a  sui  generis  institution  and  should  be  excluded  from  the  scope  of  this
Regulation as previously from the Rome Convention.

non-contractual obligations arising out of nuclear damage: this exclusion is explained
by  the  importance  of  the  economic  and  State  interests  at  stake  and  the  Member
States'  contribution  to  measures  to  compensate  for  nuclear  damage  in  the
international  scheme  of  nuclear  liability  established  by  the  Paris  Convention  of
29 July  1960  and  the  Additional  Convention  of  Brussels  of  31  January  1963,  the
Vienna  Convention  of  21  May  1963, 
the  Convention  on  Supplementary
Compensation of 12 September 1997 and the Protocol of 21 September 1988.

These being exceptions, the exclusions will have to be interpreted strictly.

The  proposed  Regulation  does  not  take  over  the  exclusion  in  Article  1(2)(h)  of  the  Rome
Convention, which concerns rules of evidence and procedure. It is clear from Article 11 that,
subject to the exceptions mentioned, these rules are matters for the lex fori. They would be out
of place in a list of non-contractual obligations excluded from the scope of this Regulation.

Article 2 – Universal application

Under  Article  2,  this  is  a  universal  Regulation,  meaning  that  the  uniform  conflict  rules  can
designate the law of a Member State of the European Union or of a third country.

This is a firmly-rooted principle of the law concerning conflict of laws and already exists in
the Rome Convention, the conventions concluded in the Hague Conference and the domestic
law of the Member States.

Given the complementarily between “Brussels I” and the proposed Regulation, the universal
nature of the latter is necessary for the proper functioning of the internal market as avoiding
distortions  of  competition  between  Community  litigants.  If  the  “Brussels  I”  Regulation
distinguishes a priori between situations in which the defendant is habitually resident in the

16

Report on the Convention on the law applicable to contractual obligations, OJ C 282, 31.10.1980, p. 1.

9

                                                
territory of a Member State and those in which he is habitually resident in a third country,17 it
still  governs  both  purely  “intra-Community”  situations  and  situations  involving  a  “foreign”
element. For the rules of recognition and  enforcement,  first  of  all, all  judgments  given by  a
court in a Member State that are within the scope of the “Brussels I” Regulation qualify for
the simplified  recognition  and  enforcement  scheme;  the  law  under  which  the  judgment  was
given the law of a Member State or of a third country therefore has very little impact. As for
the  rules  of  jurisdiction,  the  “Brussels  I”  Regulation  also  applies  where  the  defendant  is
habitually resident outside Community territory: this is the case where the dispute is within an
exclusive jurisdiction rule,18 where the jurisdiction  of the  court  proceeds  from  a jurisdiction
clause,19 where the defendant enters an appearance20 and where the lis pendens rule applies;21
in  general,  Article  4(2)  specifies  that  where  the  defendant  is  habitually  resident  in  a  third
country, the claimant, if habitually resident in a Member States, may rely on exorbitant rules
of  the  law  of  the  country  where  he  is  habitually  resident,  irrespective  of  his  nationality.  It
follows  from  all  these  provisions  that  the  “Brussels  I”  Regulation  applies  both  to  “intra-
Community” situations and to situations involving an “extra-Community” element.

What must be sought, therefore, is equal treatment for Community litigants, even in situations
that  are  not  purely  “intra-Community”.  If  there  continue  to  be  more  than  fifteen  different
systems  of  conflict  rules,  two  firms  in  distinct  Member  States,  A  and  B,  bringing  the  same
dispute between them and a third firm in country C before their respective courts, would have
different conflict rules applied to them, which could provoke a distortion of competition as in
purely intra-Community situations.

Moreover, the separation between “intra-Community” and “extra-Community” disputes is by
now  artificial.  How,  for instance, are we  to  describe  a  dispute  that  initially  concerns  only  a
national of a Member State and a national of a third country but subsequently develops into a
dispute concerning several Member States, for instance where the Community party joins an
insurer established in another Member State or the debt in issue is assigned. Given the extent
to  which  economic  relations  in  the  internal  market  are  now  intertwined,  all  disputes
potentially have an intra-Community nature.

And  on  purely  practical  grounds,  evidence  presented  to  the  Commission  by  the  legal
professions – both bench and bar – in the course of the written consultation emphasised that
private international law in general and the conflict rules in particular are perceived as highly
complex. This complexity would be even greater if this measure had the effect of doubling the
sources  of  conflict  rules  and  if  practitioners  now  had  to  deal  not  only  with  Community
uniform rules but also with distinct national rules in situations not connected as required with
Community territory. The universal nature of the proposed Regulation accordingly meets the
concern  for  certainty  in  the  law  and  the  Union'  s  commitment  in  favour  of  transparent
legislation.

17

18

19

20

21

Article 2(1).
Article 22.
Article 23.
Article 24.
Article 27.

10

                                                
Article 3 – General rules

Article  3  lays  down  general  rules  for  determining  the  law  applicable  to  non-contractual
obligations  arising  out  of  a  tort  or  delict.  It  covers  all  obligations  for  which  the  following
Articles lay down no special rule.

The Commission' s objectives in confirming the lex loci delicti commissi rule are to guarantee
certainty in the law and to seek to strike a reasonable balance between the person claimed to
be liable and the person sustaining the damage. The solutions adopted here also reflect recent
developments in the Member States' conflict rules.

Paragraph 1 - General rule

Article 3(1) takes as the basic rule the law of the place where the direct damage arises or is
likely  to  arise.  In  most  cases  this  corresponds  to  the  law  of  the  injured  party's  country  of
residence. The expression “is likely to arise” shows that the proposed Regulation, like Article
5(3)  of  the  “Brussels  I”  Regulation,  also  covers  preventive  actions  such  as  actions  for  a
prohibitive injunction.

The  place  or  places  where  indirect  damage,  if  any,  was  sustained  are  not  relevant  for
determining the applicable law. In the event of a traffic accident, for example, the place of the
direct damage is the place where the collision occurs, irrespective of financial or non-material
damage sustained in another country. In a Brussels Convention case the Court of Justice held
that the "place where the harmful event occurred" does not include the place where the victim
suffered  financial  damage  following  upon  initial  damage  arising  and  suffered  by  him  in
another Contracting State.22

The  rule  entails,  where  damage  is  sustained  in  several  countries,  that  the  laws  of  all  the
countries concerned will have to be applied on a distributive basis, applying what is known as
“Mosaikbetrachtung” in German law.

The  proposed  Regulation  also  reflects  recent  developments  in  the  Member  States'  conflict
rules. While the absence of codification in several Member States makes it impossible to give
a clear answer for the more than fifteen systems, the connection to the law of the place where
the  damage  was  sustained  has  been  adopted  by  those  Member  States  where  the  rules  have
recently  been  codified.  The  solution  applies  to  the  Netherlands,  the  United  Kingdom  and
France, but also in Switzerland. In Germany, Italy and Poland, the victim may opt for this law
among others.

The solution in Article 3(1) meets the  concern  for certainty in  the  law.  It  diverges  from  the
solution  in  the  draft  Convention  of  1972,  which  takes  as  its  basic  rule  the  place  where  the
“harmful event” occurred. But the Court of Justice has held that the “harmful event” covers
both the act itself  and  the  resultant  damage.  This  solution  reflects  the  specific  objectives  of
international  jurisdiction  but  it  does  not  enable  the  parties  to  foresee  the  law  that  will  be
applicable to their situation with reasonable certainty.

The rule also reflects the need to strike a reasonable balance between the various interests at
stake. The Commission has not adopted the principle of favouring the victim as a basic rule,
which  would  give  the  victim  the  option  of  choosing  the  law  most  favourable  to  him.  It
considers that this solution would go beyond the victim' s legitimate expectations and would

22

Case C-364/93 Marinari v Lloyds Bank [1995] ECR I –2719 (judgment given on 19.9.1995).

11

                                                
reintroduce  uncertainty  in  the  law,  contrary  to  the  general  objective  of  the  proposed
Regulation.  The  solution  in  Article  3  is  therefore  a  compromise  between  the  two  extreme
solutions of applying the law of the place where the event  giving rise to  the damage  occurs
and giving the victim the option.

Article 3(1), which establishes an objective link between the damage and the applicable law,
further reflects the modern concept of the law of civil liability which is no longer, as it was in
the  first  half  of  the  last  century,  oriented  towards  punishing  for  fault-based  conduct:
nowadays,  it  is  the  compensation  function  that  dominates,  as  can  be  seen  from  the
proliferation of no-fault strict liability schemes.

But the application of the basic rule might well be inappropriate where the situation has only a
tenuous  connection  with  the  country  where  the  damage  occurs.  The  following  paragraphs
therefore exclude it in specified circumstances.

Paragraph 2 – Law of the common place of residence

Paragraph  2  introduces  a  special  rule  where  the  person  claimed  to  be  liable  and  the  person
who has allegedly sustained damage  are  habitually  resident  in  the  same  country,  the  law  of
that country being applicable. This is the solution adopted by virtually all the Member States,
either by means of a special rule or by the rule concerning connecting factors applied in the
courts. It reflects the legitimate expectations of the two parties.

Paragraph 3 – General exception and secondary connection

Like Article 4(5) of the Rome Convention, paragraph 3 is  a  general exception clause  which
aims to bring a degree of flexibility, enabling the court to adapt the rigid rule to an individual
case so as to apply the law that reflects the centre of gravity of the situation.

Since this clause generates a degree of unforeseeability as to the law that will be applicable, it
must remain exceptional. Experience with the Rome Convention, which begins by setting out
presumptions, has shown that the courts in some Member States tend to begin in fact with the
exception clause and seek the law that best meets the proximity criterion, rather than starting
from  these  presumptions.23  That  is  why  the  rules  in  Article  3(1)  and  (2)  of  the  proposed
Regulation are drafted in the form of rules and not of mere presumptions. To make clear that
the  exception  clause  really  must  be  exceptional,  paragraph  3  requires  the  obligation  to  be
“manifestly more closely connected” with another country.

Paragraph 3 then allows the court to be guided, for  example, by the  fact that  the parties are
already bound by a pre-existing relationship. This is a factor that can be taken into account to
determine whether there is a manifestly closer connection with a country other than the one
designated by the strict rules. But the law applicable to the pre-existing relationship does not
apply automatically, and the court enjoys a degree of discretion to decide whether there is a
significant connection between the non-contractual obligations and the law applicable to the
pre-existing relationship.

The  text  states  that  the  pre-existing  relationship  may  consist  of  a  contract  that  is  closely
connected  with  the  non-contractual  obligations  in  question.  This  solution  is  particularly
interesting for Member States whose legal system allows both contractual and non-contractual

23

Cf. point 3.2.5 of the Green Paper on converting the Convention of Rome of 1980 on the law applicable
to contractual obligations into a Community instrument and its modernisation.

12

                                                
obligations between the same parties. But the text is flexible enough to allow the court to take
account  of  a  contractual  relationship  that  is  still  only  contemplated,  as  in  the  case  of  the
breakdown  of  negotiations  or  of  annulment  of  a  contract,  or  of  a  family  relationship.  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,  until  such  time  as  the  Court  of  Justice  comes  up  with  its  own
autonomous response to the situation. The same reasoning applies to the consequences of the
nullity  of  a  contract,  already  covered  by  a  special  rule  in  Article  10(1)(e)  of  the  Rome
Convention. Certain Member States having expressed a reservation as to this Article, the use
of the secondary connection mechanism will overcome the difficulties that might flow from
the application of two separate instruments.

But  where  the  pre-existing  relationship  consists  of  a  consumer  or  employment  contract  and
the  contract  contains  a  choice-of-law  clause  in  favour  of  a  law  other  than  the  law  of  the
consumer' s habitual place of residence, the place where the employment contract is habitually
performed  or,  exceptionally,  the  place  where  the  employee  was  hired,  the  secondary
connection mechanism cannot have the effect of depriving the weaker party of the protection
of the law otherwise applicable. The proposed Regulation does not contain an express rule to
this  effect  since  the  Commission  considers  that  the  solution  is  already  implicit  in  the
protective  rules  of  the  Rome  Convention:  Articles  5  and  6  would  be  deflected  from  their
objective  if  the  secondary  connection  validated  the  choice  of  the  parties  as  regards  non-
contractual obligations but their choice was at least partly invalid as regards their contract.

Article 4 – Product liability

Article  4  introduces  a  specific  rule  for  non-contractual  obligations  in  the  event  of  damage
caused  by  a  defective  product.  For  the  definition  of  product  and  defective  product  for  the
purposes of Article 4, Articles 2 and 6 of Directive 85/374 will apply. 24

Directive 85/374 approximated the Member States' substantive  law regarding strict  liability,
i.e. no-fault liability. But there is no full harmonisation, as the Member States are authorised
to exercise certain options. The Directive does not affect national law concerning fault-based
liability, which the victim can always rely on, and covers only certain types of damage. The
scope  of  the  special  rule  in  Article  4  is  consequently  broader  than  the  scope  of  Directive
85/374,  as  it  also  applies  to  actions  based  on  purely  national  provisions  governing  product
liability that do not emanate from the Directive.

Apart from respecting the parties' legitimate expectations, the conflict rule regarding product
liability  must  reflect  also  the  wide  scatter  of  possible  connecting  factors  (producer's
headquarters,  place  of  manufacture,  place  of  first  marketing,  place  of  acquisition  by  the
victim,  victim'  s  habitual  residence),  accentuated  by  the  development  of  international  trade,
tourism and the mobility of persons and goods in the Union. Connection solely to the place of

24

Council  Directive  85/374/EEC  of  25.7.1985  on  the  approximation  of  the  laws,  regulations  and
administrative provisions of the Member States concerning liability for defective products (OJ L 210,
7.8.1985, p. 29), as amended by Directive 1999/34/EC of 10 May 1999 (OJ L 141, 4.6.1999, p. 20).

13

                                                
the direct damage is not suitable here as the law thus designated could be unrelated to the real
situation, unforeseeable for the producer and no source of adequate protection for the victim.25

Countries  in  which  there  are  special  rules  thus  tend  to  provide  for  a  rule  requiring  several
elements to be present in the same country for that country' s law to be applicable. This is also
the approach taken in the Hague Convention 1973 on the law applicable to products liability,
in  force  in  five  Member  States.26  Under  Article  25  of  the  proposed  Regulation,  the
Convention  will  remain  in  force  in  the  Member  States  that  have  ratified  it  when  the
Regulation  comes  into  force.  The  1973  Convention  determines  the  law  applicable  to  the
liability  of  manufacturers,  producers,  suppliers  and  repairers  on  the  basis  of  the  following
factors,  whether distributed  or  combined on a  complex  basis: the place  of  damage,  place  of
the  habitual  residence  of  the  victim,  principal  place  of  business  of  the  manufacturer  or
producer, place where the product was acquired.

The proposed Regulation acknowledges the specific constraints inherent in the subject-matter
in  issue  but  nevertheless  proceeds  from  the  need  for  a  rule  to  avoid  being  unnecessarily
complex.

Under  Article  4,  the  applicable  law  is  basically  the  law  of  the  place  of  where  the  person
sustaining damage has his habitual residence. But this solution is conditional on the product
having been marketed in that country with the consent of the person claimed to be liable. In
the  absence  of  consent,  the  applicable  law  is  the  law  of  the  country  in  which  the  person
claimed to be liable has his habitual residence. Article 3(2) (common habitual residence) and
(3) (general exception clause) also apply.

The fact that this is a simple and predictable rule means that it  is  particularly  suitable in  an
area where the number of out-of-court settlements is very high, partly because insurers are so
often involved. Article 4 strikes a reasonable balance between the interests in issue. Given the
requirement that the product be marketed in the country of the victim's habitual residence for
his law to be applicable, the solution is foreseeable for the producer, who has control over his
sales  network.  It  also  reflects  the  legitimate  interests  of  the  person  sustaining  damage,  who
will generally have acquired a product that is lawfully marketed in his country of residence.

Where the victim acquires the product in a country other than that of his habitual residence,
perhaps  while  travelling,  two  hypotheses  need  to  be  distinguished:  the  first  is  where  the
victim acquired abroad a product also marketed in their country of residence, for instance in
order to enjoy a special offer. In this case the producer had already foreseen that his activity
might  be  evaluated  by  the  yardstick  of  the  rules  in  force  in  that  country,  and  Article  4
designates the law of that country, since both parties could foresee that it would be applicable.

In the second hypothesis, by contrast, where the victim acquired abroad a product that is not
lawfully  marketed  in  their  country  of  habitual  residence,  none  of  the  parties  would  have
expected that law to be applied. A subsidiary rule is consequently needed. The two connecting
factors discussed during the Commission' s consultations were the place where the damage is
sustained and the habitual residence of the person claimed to be liable. Since the large-scale
mobility  of  consumer  goods  means  that  the  connection  to  the  place  where  the  damage  is

25

26

Such a case might be a German tourist buying French-made goods in Rome airport to take to an African
country, where they explode and cause him to sustain damage.
Finland, France,  Luxembourg the Netherlands and Spain. The  convention  is  also  in  force  in  Norway,
Croatia, Macedonia, Slovenia and Yugoslavia.

14

                                                
sustained no longer meets the need for certainty in the law or for protection of the victim, the
Commission has opted for the second solution.

The rule in Article 4 corresponds not only to the parties' expectations but also to the European
Union's  more  general  objectives  of  a  high  level  of  protection  of  consumers'  health  and  the
preservation  of  fair  competition  on  a  given  market.  By  ensuring  that  all  competitors  on  a
given  market  are  subject  to  the  same  safety  standards,  producers  established  in  a  low-
protection country could no longer export their low standards to other countries, which will be
a general incentive to innovation and scientific and technical development.

The expression “person claimed to be liable” does not necessarily mean the manufacturer of a
finished  product;  it  might  also  be  the  producer  of  a  component  or  commodity,  or  even  an
intermediary or a retailer. Anybody who imports a product into the Community is considered
in certain conditions to be responsible for the safety  of the products in the same way  as the
producer.27

Article 5 – Unfair competition

Article 5 provides for an autonomous connection for actions for damage arising out of an act
of unfair competition.

The purpose of the rules against unfair competition is to protect fair competition by obliging
all  participants  to  play  the  game  by  the  same  rules.  Among  other  things  they  outlaw  acts
calculated to influence  demand  (misleading  advertising,  forced  sales,  etc.),  acts  that  impede
competing  supplies  (disruption  of  deliveries  by  competitors,  enticing  away  a  competitor's
staff,  boycotts),  and  acts  that  exploit  a  competitor's  value  (passing  off  and  the  like).  The
modern competition law seeks to protect not only competitors (horizontal dimension) but also
consumers  and  the  public  in  general  (vertical  relations).  This  three-dimensional  function  of
competition law must be reflected in a modern conflict-of-laws instrument.

Article 5 reflects this triple objective since it refers to the effect on the market in general, the
effect  on  competitors'  interests  and  the  effect  on  the  broad  and  rather  vague  interests  of
consumers (as opposed to the individual interests of a specific consumer). This last concept is
taken  over  from  a  number  of  Community  consumer-protection  directives,  in  particular
Directive 98/27 of 19 May 1998.28 This is not to say that the concept relates solely to actions
brought by a consumers' association; given  the triple objective  of  competition  law,  virtually
any  act  of  unfair  competition  also  affects  the  collective  interests  of  consumers,  and  it  is
neither  here  nor  there  whether  the  action  is  brought  by  a  competitor  or  an  association.  But
Article  5  applies  also  to  actions  for  injunctions  brought  by  consumer  associations.  The
proposed  Regulation  thus  sits  well  with  recent  decisions  of  the  Court  of  Justice  on  the
Brussels Convention holding, for instance, that “a preventive  action  brought  by  a consumer
protection organisation for the purpose of preventing a trader from using terms considered to
be  unfair  in  contracts  with  private  individuals  is  a  matter  relating  to  tort,  delict  or  quasi-
delict within the meaning of Article 5(3) of that convention”.29

27

28

29

Directive 85/374, Article 3(2).
Parliament  and  Council  Directive  98/27/EC  of  19  May  1998  on  injunctions  for  the  protection  of
consumers' interests: OJ L 166, 11.6.1998, p. 51.
Case C-167/2000 Henkel (judgment given on 1.10.2002).

15

                                                
Comparative  analysis  of  the  Member  States'  private  international  law  shows  that  there  is  a
broad consensus in favour of applying the law of the country in which the market is distorted
by competitive acts. This result is obtained either through the general principle of the lex loci
delicti  or  by  a  specific  connection  (Austria,  Netherlands,  Spain  and  also  Switzerland)  and
corresponds  to  recommendations  extensively  made  by  academic  writers  and  by  the  Ligue
internationale  du  droit  de  la  concurrence  en  matière  de  publicité.30The  current  situation,
however,  is  one  of  uncertainty,  particularly  in  countries  where  the  courts  have  not  had  an
opportunity  to  rule  on  how  the  lex  loci  delicti  rule  should  operate  in  practice.  The
establishment of a uniform conflict rule here would thus  enhance  the  foreseeability  of  court
decisions.

Article  5  provides  for  connection  to  the  law  of  the  State  in  whose  territory  “competitive
relations or the collective interests of consumers are affected or are likely to be affected” by
“an act of unfair competition”. This is the market where competitors are seeking to gain the
customer's  favour.  This  solution  corresponds  to  the  victims'  expectations  since  the  rule
generally designates the law governing their economic environment. But it also secures equal
treatment for all operators on the same market. The purpose of competition law is to protect a
market;  it  pursues  a  macro-economic  objective.  Actions  for  compensation  are  purely
secondary and must be dependent on the overall judgement of how the market functions.

Regarding  the  assessment  of  the  impact  on  the  market,  academic  writers  generally
acknowledge that only the direct substantial effects of an act of unfair competition should be
taken  into  account.  This  is  particularly  important  in  international  situations  since  anti-
competitive  conduct  commonly  has  an  impact  on  several  markets  and  gives  rise  to  the
distributive application of the laws involved.

The need for a special rule here is sometimes disputed on the ground that it would lead to the
same solution as the general rule in Article 3, the damage for which compensation is sought
being assimilated to the anti-competitive effect on which the application of competition law
depends. While the two very often coincide in territorial terms, they will not automatically do
so: for instance, the question of the place where the damage is sustained is tricky where two
firms from State A both operate on market B. Moreover, the rules of secondary connection, of
the common residence and the exception clause are not adapted to this matter in general.

Paragraph  2  deals  with  situations  where  an  act  of  unfair  competition  targets  a  specific
competitor,  as  in  the  case  of  enticing  away  a  competitor's  staff,  corruption,  industrial
espionage,  disclosure  of  business  secrets  or  inducing  breach  of  contract.  It  is  not  entirely
excluded that such conduct may also have a negative impact on a given market, but these are
situations  that  have  to  be  regarded  as  bilateral.  There  is  consequently  no  reason  why  the
victim  should  not  enjoy  the  benefit  of  Article  3  relating  to  the  common  residence  or  the
general exception clause. This solution is in conformity with recent developments in private
international  law:  there  is  a  similar  provision  in  section  4(2)  of  the  Dutch  Act  of  2001  and
section 136(2) of the Swiss Act. The German courts take the same approach.

30

Resolution passed at the Amsterdam congress in October 1992, published in the Revue internationale
de la concurrence 1992 (No 168), p. 51, this Resolution having also called for an effort to harmonise
the substantive rules here.

16

                                                
Article 6 - Violations of privacy and rights relating to the personality

The  Regulation  follows  the  approach  generally  taken  by  the  law  of  the  Member  States
nowadays  and  classifies  violations  of  privacy  and  rights  relating  to  the  personality,
particularly in the event of defamation by the mass media, in the category of non-contractual
obligations  rather  than  matters  of  personal  status,  except  as  regards  rights  to  the  use  of  a
name.

There  are  specific  provisions  on  respect  for  privacy  and  freedom  of  expression  and
information,  also  covering  respect  for  media  freedom  and  pluralism,  in  the  Charter  of
Fundamental Rights of the European Union and in the Council of Europe Convention on the
Protection of Human Rights and Fundamental Freedoms. The Community institutions and the
Member  States  are  required  to  respect  these  fundamental  values.  The  European  Court  of
Human Rights has already given valuable pointers to how to reconcile the two principles in
the  event  of  defamation  proceedings.  International  conventions  have  helped  to  approximate
the  rules  governing  freedom  of  the  press  in  the  Member  States,  but  differences  remain  as
regards  the  practical  application  of  that  freedom.  Operators  regard  the  foreseeability  of  the
law applicable to their business as of the greatest importance.

A  study  of  the  conflict  rules  in  the  Member  States  shows  that  there  is  not  only  a  degree  of
diversity  in  the  solutions  adopted  but  also  considerable  uncertainty  as  to  the  law.  In  the
absence  of  codification,  court  decisions  laying  down  general  rules  are  still  lacking  in  many
Member  States.31  The  connecting  factors  in  the  other  Member  States  vary  widely:  the
publisher' s headquarters or the place where the product was published (Germany and Italy, at
the  victim'  s  option);  the  place  where  the  product  was  distributed  and  brought  to  the
knowledge of third parties (Belgium, France, Luxembourg); the place where the victim enjoys
a reputation, presumed to be his habitual residence (Austria). Other Member States follow the
principle  of  favouring  the  victim,  by  giving  the  victim  the  option  (Germany,  Italy),  or
applying the law of the place where the damage is sustained where the lex loci delicti does not
provide  for  compensation  (Portugal).  The  UK  solution  is  very  different  from  the  solutions
applied  in  other  Member  States,  for  it  differentiates  depending  whether  the  publication  is
distributed in the UK or elsewhere: in the former case the only law applicable is the law of the
place  of  distribution;  in  the  latter  case  the  court  applies  both  the  law  of  the  place  of
distribution and the lex fori (“double actionability rule”). This rule protects the national press,
as  the  English  courts  cannot  give  judgment  against  it  if  there  is  no  provision  for  this  in
English law.32

Given the diversity and the uncertainties of the current situation, harmonising the conflict rule
in the Community will increase certainty in the law.

The  content  of  the  uniform  rule  must  reflect  the  rules  of  international  jurisdiction  in  the
“Brussels  I”  Regulation.  The  effect  of  the  Mines  de  Potasse  d’Alsace  and  Fiona  Shevill
judgments33 is that the victim may sue for damages either in the courts of the State where the
publisher of the defamatory material is established, which have full jurisdiction to compensate
for  all  damage  sustained,  or  in  the  courts  of  each  State  in  which  the  publication  was

31

32

33

Denmark,  Finland,  Greece,  Ireland  (doctrine  of  the  “proper  law  of  the  tort”),  Netherlands,  Spain  and
Sweden.
Some academic writers in England doubt, however,  whether invasions of privacy are also covered by
this rule.
Case  C  68/93  Fiona  Shevill  and  others  v  Press  Alliance  SA  [1995]  ECR  I  -  415  (judgment  given  on
7 March 1995).

17

                                                
distributed  and  the  victim  claims  to  have  suffered  a  loss  of  reputation,  with  jurisdiction  to
award  damages  only  for  damage  sustained  in  their  own  State.  Consequently,  if  the  victim
decides to bring the action in a court in a State where the publication is distributed, that court
will apply its own law to the damage sustained in that State. But if the victim brings the action
in  the  court  for  the  place  where  the  publisher  is  headquartered,  that  court  will  have
jurisdiction to rule on the entire claim for damages: the lex fori will then govern the damage
sustained in that country and the court will apply the laws involved on a distributive basis if
the victim also claims compensation for damage sustained in other States.

In view of the practical difficulties  in  the  distributive  application  of  several laws to a  given
situation,  the  Commission  proposed,  in  its  draft  proposal  for  a  Council  Regulation  of  May
2002,  that  the  law  of  the  victim'  s  habitual  residence  be  applied.  But  there  was  extensive
criticism of this during the consultations, one of the grounds being that it is not always easy to
ascertain the habitual residence of a celebrity and another being that the combination of rules
of jurisdiction and conflict rules could produce a situation in which the courts of the State of
the  publisher'  s  establishment  would  have  to  give  judgment  against  the  publisher  under  the
law of the victim' s  habitual residence  even  though  the  product was  perfectly  in  conformity
with the rules of the publisher's State of establishment and no single copy of the product was
distributed in the victim' s State of residence. The Commission has taken these criticisms on
board and reviewed its proposal.

Article 6(1) of the proposed Regulation now provides for the law applicable to violations of
privacy and rights relating to the personality to be determined in accordance with the rules in
Article 3, which posit the  law of the place  where the direct damage  is  sustained,  unless  the
parties reside in the same State or the dispute is more closely connected with another country.

In Fiona Shevill the Court of Justice ruled on the actual determination of the place where the
damage was sustained in the event of defamation by the press, opting for the “State in which
the  publication  was  distributed  and  where  the  victim  claims  to  have  suffered  injury  to  his
reputation”.  The  place  where  a  publication  is  distributed  is  the  place  where  it  comes  to  the
knowledge of third parties and a person' s reputation is liable to be harmed. This solution is in
conformity with the victim's legitimate expectations without neglecting those of media firms.
A publication can be regarded as distributed in a country only if is actually distributed there
on a commercial basis.

But the Commission has been sensitive to concerns expressed both in the press and by certain
Member States regarding situations in which a court in Member State A might be obliged to
give judgment against a publisher with its own nationality A under the laws of Member State
B, or even a third country, even though the publication in dispute was perfectly in conformity
with the rules applicable in Member State A. It has been  pointed out  that the  application of
law B could be unconstitutional in country A as violating the freedom of the press. Given that
this  is  a  sensitive  issue,  where  the  Member  States'  constitutional  rules  diverge  quite
considerably, the Commission has felt that Article 6(1) should make it explicitly clear that the
law designated by Article 3 must be disapplied in favour of the lex fori if it is incompatible
with the public policy of the forum in relation to freedom of the press.

The law designated by Article 6(1) does  not  seem  to  provide  a  proper  basis  for  settling  the
question  whether  and  in  what  conditions  the  victim  can  oblige  the  publisher  to  issue  a
corrected version and exercise a right of reply. Paragraph 2 accordingly provides that the right
of  reply  and  equivalent  measures  will  be  governed  by  the  law  of  the  country  in  which  the
broadcaster or publisher is established.

18

Article 7 - Violation of the environment

Article  7  lays  down  a  special  rule  for  civil  liability  in  relation  to  violations  of  the
environment.  Reflecting  recent  developments  in  the  substantive  law,  the  rule  covers  both
damage to property and persons and damage to the ecology itself, provided it is the result of
human activity.

European  or  even  international  harmonisation  is  particularly  important  here  as  so  many
environmental disasters have an international dimension. But the instruments adopted so  far
deal primarily with questions of substantive law or international jurisdiction rather than with
harmonisation  of  the  conflict  rules.  And  they  address  only  selected  types  of  cross-border
pollution.  In  spite  of  this  gradual  approximation  of  the  substantive  law,  not  only  in  the
Community, major differences subsist – for example in determining the damage giving rise to
compensation, limitation periods, indemnity  and  insurance rules, the  right of  associations to
bring actions and the amounts of compensation. The question of the applicable law has thus
lost none of its importance.

Analysis of the current conflict rules  shows that  the  solutions  vary  widely.  The lex fori and
the law of the place where the dangerous activity is exercised play a certain role, particularly
in  the  international  Conventions,  but  the  most  commonly  applied  solution  is  the  law  of  the
place  where  the  loss  is  sustained  (France,  United  Kingdom,  Netherlands,  Spain,  Japan,
Switzerland, Romania, Turkey, Quebec) or one of the variants of the principle of the law that
is  most  favourable  to  the  victim  (Germany,  Austria,  Italy,  Czech  Republic,  Yugoslavia,
Estonia,  Turkey,  Nordic  Convention  of  1974  on  the  protection  of  the  environment,
Convention  between  Germany  and  Austria  of  19  December  1967  concerning  nuisances
generated by the operation of Salzburg airport in Germany). The Hague Conference has also
put  an  international  convention  on  cross-border  environmental  damage  on  its  work
programme,  and  preparatory  work  seems  to  be  moving  towards  a  major  role  for  the  place
where the damage is sustained, though the merits of the principle of favouring the victim are
acknowledged.

The  uniform  rule  proposed  in  Article  7  takes  as  its  primary  solution  the  application  of  the
general rule in Article 3(1), applying the law of the place where the damage is sustained but
giving the victim the option of selecting the law of the place where the event giving rise to the
damage occurred.

The basic connection to the law of the place where the damage was sustained is in conformity
with  recent  objectives  of  environmental  protection  policy,  which  tends  to  support  strict
liability.  The  solution  is  also  conducive  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.

But the exclusive connection to the place where the damage is sustained would also mean that
a victim in a low-protection country would not enjoy the higher level of protection available
in neighbouring countries. Considering the Union' s more general objectives in environmental
matters, the point is not only to respect the victim's legitimate interests but also to establish a
legislative  policy  that  contributes  to  raising  the  general  level  of  environmental  protection,
especially as the author of the environmental damage, unlike other torts or delicts, generally
derives  an  economic  benefit  from  his  harmful  activity.  Applying  exclusively  the  law  of  the
place  where  the  damage  is  sustained  could  give  an  operator  an  incentive  to  establish  his

19

facilities at the border so as to discharge toxic substances into a river and enjoy the benefit of
the  neighbouring  country'  s  laxer  rules.  This  solution  would  be  contrary  to  the  underlying
philosophy  of  the  European  substantive  law  of  the  environment  and  the  “polluter  pays”
principle.

Article  7  accordingly  allows  the  victim  to  make  his  claim  on  the  basis  of  the  law  of  the
country  in  which  the  event  giving  rise  to  the  damage  occurred.  It  will  therefore  be  for  the
victim rather than the court to determine the law that is most favourable to him. The question
of the stage in proceedings at which the victim must exercise his option is a question for the
procedural  law  of  the  forum,  each  Member  State  having  its  own  rules  to  determine  the
moment from which it is no longer possible to file new claims.

A further difficulty regarding civil liability for violations of the environment lies in the close
link  with  the  public-law  rules  governing  the  operator's  conduct  and  the  safety  rules  with
which  he  is  required  to  comply.  One  of  the  most  frequently  asked  questions  concerns  the
consequences of an activity that is authorised and legitimate in State A (where, for example, a
certain  level  of  toxic  emissions  is  tolerated)  but  causes  damage  to  be  sustained  in  State  B,
where it is not authorised (and where the emissions exceed the tolerated level). Under Article
13, 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.

Article 8 – Infringement of intellectual property rights

Article  8  lays  down  special  rules  for  non-contractual  obligations  flowing  from  an
infringement  of  intellectual  property  rights.  According  to  Recital  14  the  term  intellectual
property  rights  means  copyright,  related  rights,  sui  generis  right  for  protection  of  databases
and industrial property rights.

The treatment of intellectual property was one of the questions that came in for intense debate
during  the  Commission'  s  consultations.  Many  contributions  recalled  the  existence  of  the
universally recognised principle of the lex loci protectionis, meaning the law of the country in
which protection is claimed on which e.g. the Bern Convention for the Protection of Literary
and Artistic Works of 1886 and the Paris Convention for the Protection of Industrial Property
of 1883 are built. This rule, also known as the “territorial principle”, enables each country to
apply its own law to an infringement of an intellectual property right which is in force in its
territory: counterfeiting an industrial property right is governed by the law of the country in
which the patent was issued or the trade mark or model was registered; in copyright cases the
courts  apply  the  law  of  the  country  where  the  violation  was  committed.  This  solution
confirms that the rights held in each country are independent.

The general rule contained in Article 3(1) does not appear to be compatible with the specific
requirements  in  the  field  of  intellectual  property.  To  reflect  this  incompatibility,  two
approaches  were  discussed  in  the  course  of  preparatory  work.  The  first  is  to  exclude  the
subject from the scope of the proposed Regulation, either by means of an express exclusion in
Article 1 or by means  of Article 25,  which  preserves  current international  conventions. The
second  is  to  lay  down  a  special  rule,  and  this  is  the  approach  finally  adopted  by  the
Commission with Article 8.

Article  8(1)  enshrines  the  lex  loci  protectionis  principle  for  infringements  of  intellectual
property rights conferred under national legislation or international conventions.

20

Paragraph  2  concerns  infringements  of  unitary  Community  rights  such  as  the  Community
trade mark, Community designs  and models and other  rights that might be created in future
such  as  the  Community  patent  for  which  the  Commission  has  adopted  a  proposal  for  a
Council regulation34 on 1 August 2000. The locus protectionis referring to the Community as
a  whole,  the  non  contractual  obligations  that  are  covered  by  the  present  proposal  for  a
regulation are directly governed by the unitary Community law. In case of infringements and
where  for  a  specific  question  the  Community  instrument  neither  contains  a  provision  of
substantive  law  nor  a  special  conflict  of  laws'  rule,  Article  8(2)  of  the  proposed  regulation
contains  a  subsidiary  rule  according  to  which  the  applicable  law  is  the  law  of  the  Member
State in which an act of infringement of the Community right has been committed.

Article 9 – Law applicable to non-contractual obligations
arising out of an act other than a tort or delict

In all the Member States' legal systems there are obligations that arise neither out of a contract
nor  out  of  a  tort  or  delict.  The  situations  that  are  familiar  to  all  the  Member  States  are
payments made by mistake and services rendered by  a person that  enable  another person to
avoid sustaining personal injury or loss of assets.

Since these obligations are clearly distinguished by their own features from torts and delicts,
it has been decided that there should be a special section for them.

To  reflect  the  wide  divergences  between  national  systems  here,  technical  terms  need  to  be
avoided. This Regulation refers therefore to “non-contractual obligations arising out of an act
other than a tort or delict”. In most Member States there are sub-categories for repayment of
amounts wrongly received or unjust enrichment on the one hand and agency without authority
(negotiorum  gestion)  on  the  other.  Both  the  substantive  law  and  the  conflict  rules  are  still
evolving rapidly in most of the Member States, which means that the law is far from certain.
The uniform conflict rule must reflect the divergences in the substantive rules. The difficulty
is in laying  down  rules  that  are  neither  so  precise  that  they  cannot  be  applied  in  a  Member
State whose substantive law makes no distinction between the various relevant hypotheses nor
so general that they might be open to challenge as serving no obvious purpose. Article 9 seeks
to  overcome  the  problem  by  laying  down  specific  rules  for  the  two  sub-categories,  unjust
enrichment and agency without authority, while leaving the courts with sufficient flexibility
to adapt the rule their national systems.

The  secondary  connection  technique,  confirmed  by  paragraph  1,  is  particularly  important
here, for example where an agent exceeds his authority or where a third-party debt is settled.
The  rule  is  accordingly  a  strict  one.  The  obligation  is  so  closely  connected  with  the  pre-
existing relationship between the parties that it is preferable for the entire legal situation to be
governed by the same law. As in the case of the general exception clause in Article 3(3), the
expression “pre-existing relationship” applies particularly to pre-contractual relationships and
to void contracts.

Paragraph  2  reflects  the  legitimate  expectations  of  the  parties  where  they  are  habitually
resident in the same country.

34

OJ C 337 E, 28.11.2000, p. 78.

21

                                                
Paragraph 3 concerns unjust enrichment in the absence of a pre-existing relationship between
the parties, in which case the non-contractual obligation is governed by the law of the country
in which  the enrichment occurs.  The proposed  rule is a conventional  one,  found  also  in  the
GEDIP draft and the Swiss legislation.

Paragraph 4, concerning negotiorum gestio (agency without authority), distinguishes between
measures to be described as assistance and measures that might be described as interference.
Measures of assistance mean one-off initiatives taken on an exceptional basis by the “agent”,
who  deserves  special  protection  since  he  acted  in  order  to  preserve  the  interests  of  the
“principal”, which justifies a local connection to the law of the property or person assisted. In
the case of measures of interference in the assets of another person, as in the case of payment
of  a  third-party  debt,  it  is  the  “principal”  who  deserves  protection.  The  applicable  law  is
therefore generally the law of the latter' s place of habitual residence.

Paragraph 5, like the first sentence of Article 3, provides an exception clause.

To ensure that several different laws are not applicable to one and the same dispute, paragraph
6  excludes  from  this  Article  non-contractual  obligations  relating  to  intellectual  property,  to
which Article 8 alone applies. E.g. an obligation based on unjust enrichment arising from an
infringement of an intellectual property right is accordingly governed by the same law as the
infringement itself.

Article 10 - Freedom of choice

Paragraph 1 allows the parties to choose the law applicable to the non-contractual obligation
after  the  dispute  has  arisen.  The  proposed  Regulation  thus  follows  recent  developments  in
national private international law, which likewise tend to encourage greater freedom of will,35
even if the situation is less frequent that in contract cases. For this reason, the rule is based on
objective connecting factors, unlike the Rome Convention.

Freedom  of  will  is  not  accepted,  however,  for  intellectual  property,  where  it  would  not  be
appropriate.

As in Article 3 of the Rome Convention, it is stated that the choice must either be explicit or
emerge  clearly  from  the  circumstances  of  the  case.  Since  the  proposed  Regulation  does  not
allow an ex ante choice, there is no need for special provisions to protect a weaker party.

Paragraph 1 further specifies that the parties' choice may not affect the rights of third parties.
The typical example is the insurer's obligation to reimburse damages payable by the insured.

Paragraph  2  puts  a  restriction  on  freedom  of  will,  which  is  inspired  by  Article  3(3)  of  the
Rome  Convention  and  applies  where  all  the  elements  of  the  situation  (except  the  choice  of
law) are located in a country other than the one whose law is chosen. In reality this is a purely
internal  situation  regarding  a  Member  State  and  is  within  the  scope  of  the  Regulation  only
because  the  parties  have  agreed  on  a  choice  of  law.  The  choice  by  the  parties  is  not
deactivated, but it may not operate to the detriment of such mandatory provisions of the law
which might otherwise be applicable.

35

Examples include section 6 of the Dutch Act of 11 April 2001 and section 42 of the German EGBGB.

22

                                                
In  this  Article  the  concept  of  “mandatory  rules”,  unlike  the  overriding  mandatory  rules
referred to in Article 12, refers to a country' s rules of internal public policy. These are rules
from  which  the  parties  cannot  derogate  by  contract,  particularly  those  designed  to  protect
weaker  parties.  But  internal  public  policy  rules  are  not  necessarily  mandatory  in  an
international context. They must be distinguished from the rules of international public policy
of the forum referred to in Article 22 and from the overriding mandatory rules referred to in
Article 12.

Paragraph 3 represents an extension by analogy of the limit provided for by paragraph 2 and
applies where all the elements of the case apart from the choice of law are located in two or
more  Member  States.  It  has  the  same  objective,  i.e.  to  prevent  the  parties  frustrating  the
application  of  mandatory  rules  of  Community  law  through  the  choice  of  the  law  of  a  third
country.

Article 11 – Scope of the law applicable to non-contractual obligations

Article  11  defines  the  scope  of  the  law  determined  under  Articles  3  to  10  of  the  proposed
Regulation. It lists the questions to be settled by that law. The approach taken in the Member
States is not entirely uniform: while certain questions, such as the conditions for liability, are
generally  governed  by  the  applicable  law,  others,  such  as  limitation  periods,  the  burden  of
proof, the measure of damages etc., may fall to be treated by the lex fori. Like Article 10 of
the Rome Convention, Article 11 accordingly lists the questions to be settled by the law that
is actually designated.

In  line  with  the  general  concern  for  certainty  in  the  law,  Article  11  confers  a  very  wide
function on the law designated. It broadly takes over Article 10 of the Rome Convention, with
a few changes of detail:

a)

b)

c)

“The conditions and extent  of liability,  including the  determination  of  persons  who
are  liable  for  acts  performed  by  them”;  the  expression  “conditions  ...  of  liability”
refers  to  intrinsic  factors  of  liability.  The  following  questions  are  particularly
concerned: nature of liability (strict or fault-based); the definition of fault, including
the question whether an omission can constitute a fault; the causal link between the
event giving rise to the damage and the damage; the  persons  potentially  liable;  etc.
“Extent of liability" refers to the limitations laid down by law on liability, including
the maximum extent of that liability and the contribution to be made by each of the
persons liable for  the  damage  which  is  to be compensated for.  The  expression  also
includes division of liability between joint perpetrators.

“The  grounds  for  exemption  from  liability,  any  limitation  of  liability  and  any
division of liability”: these are extrinsic factors of liability. The grounds for release
from  liability  include  force  majeure;  necessity;  third-party  fault  and  fault  by  the
victim. The concept also includes the inadmissibility of actions between spouses and
the exclusion of the perpetrator' s liability in relation to certain categories of persons.

“The existence and kinds of damage for which compensation may be due”: this is to
determine the damage for which compensation may be due, such as personal injury,
damage to property, moral damage and environmental damage, and financial loss or
loss of an opportunity.

23

d)

e)

f)

g)

h)

i)

“the measures which a court has power to take under its procedural law to prevent or
terminate damage or to ensure the provision of compensation”: this refers to forms of
compensation, such as the question whether the damage can be repaired by payment
of damages, and ways of preventing or halting the damage, such as an interlocutory
injunction,  though  without  actually  obliging  the  court  to  order  measures  that  are
unknown in the procedural law of the forum.

“the  measure  of  damages  in  so  far  as  prescribed  by  law”:  if  the  applicable  law
provides for rules on the measure of damages, the court must apply them.

“the question whether a right to compensation may be assigned or inherited”: this is
self-explanatory.  In  succession  cases,  the  designated  law  governs  the  question
whether  an  action  can  be  brought  by  a  victim’s  heir  to  obtain  compensation  for
damage  sustained by  the  victim.36  In  assignment  cases,  the  designated  law  governs
the  question  whether  a  claim  is  assignable37  and  the  relationship  between  assignor
and debtor.

The law that is designated will also determine the “persons entitled to compensation
for  damage  sustained  personally”:  this  concept  particularly  refers  to  the  question
whether a person other than the “direct victim” can obtain compensation for damage
sustained  on  a  “knock-on”  basis,  following  damage  sustained  by  the  victim.  Such
damage might be non-material, as in the pain and suffering caused by a bereavement,
or financial, as in the loss sustained by the children or spouse of a deceased person.

“liability for the acts of another person”: this concept concerns provisions in the law
designated for vicarious liability.  It covers the liability of  parents  for  their  children
and of principals for their agents.

“the manners in which  an obligation may be extinguished  and  rules of prescription
and  limitation,  including  rules  relating  to  the  commencement  of  a  period  of
prescription or limitation and the interruption and suspension of the period”; the law
designated  governs  the  loss  of  a  right  following  failure  to  exercise  it,  on  the
conditions set by the law.

Article 12 - Overriding mandatory rules

This Article closely follows the corresponding Article of the Rome Convention.

In Arblade, the Court of Justice gave an initial definition of overriding mandatory rules (also
called  public-order  legislation)  as  “national  provisions  compliance  with  which  has  been
deemed  to  be  so  crucial  for  the  protection  of  the  political,  social  or  economic  order  in  the
Member  State  concerned  as  to  require  compliance  therewith  by  all  persons  present  on  the
national territory of that Member State and all legal relationships within that State”.38 What
is  specific  about  them  is  that  the  courts  do  not  even  apply  their  own  conflict  rules  to
determine the law applicable to a given situation and to evaluate in practical terms whether its

36

37

38

It goes without saying that the law governing the injured party's succession applies to the determination
of the heirs, this being a preliminary to the main action.
Article 12(2) of the Rome Convention.
Cases C-369/96 and C-376/96 [1999] ECR I-8453 (judgment given on 23.11.1999).

24

                                                
content  would  be  repugnant  to  the  values  of  the  forum,  but  they  apply  their  own  rules  as  a
matter of course.39

Paragraph 2  allows the courts to apply  the  overriding  mandatory  rules  of  the  forum.  As  the
Court  also  held  in  Arblade,  in  intra-Community  relations  the  application  of  the  mandatory
rules  of  the  forum  must  be  compatible  with  the  fundamental  freedoms  of  the  internal
market.40

Paragraph 1 refers to foreign mandatory rules, where the court enjoys considerable discretion
if there is a close connection with the situation, depending on its nature, its purposes and the
consequences  of  applying  it.  Under  the  Rome  Convention,  Germany,  Luxembourg  and  the
United Kingdom have exercised their right to  refrain from  applying Article  7(1),  relating to
foreign mandatory rules. But the Commission like most of the contributors during the written
consultations sees no reason to exclude this possibility since references to foreign mandatory
rules have been perfectly exceptional hitherto.

Article 13 – Rules of safety and conduct

Where the law that is designated is not the law of the country in which the event giving rise to
the damage occurred, Article 13 of the proposed Regulation requires the court to take account
of the rules of safety and conduct which were in force at the place  and time  of the relevant
event.

This  article  is  based  on  the  corresponding  articles  of  the  Hague  Conventions  on  traffic
accidents (Article  7)  and  product  liability  (Article  9).  There  are  equivalent  principles  in  the
conflict systems of virtually all the Member States, either in express statutory provisions or in
the decided cases.

The rule in Article 13 is based on the fact that the perpetrator must abide by the rules of safety
and conduct in force in the country in which he operates, irrespective of the law applicable to
the civil consequences of his action, and that these rules must also be taken into consideration
when ascertaining liability. Taking 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 author' s good or bad faith for the purposes of the measure of damages.

Article 14 – Direct action

Article  14  determines  the  law  applicable  to  the  question  whether  the  person  sustaining
damage may bring a direct action against the insurer of the person liable. The proposed rule
strikes a reasonable balance between the interests at stake as it protects the person sustaining
damage by giving him the option, while limiting the choice to the two laws which the insurer

39

40

This is the international public policy exception, to which Article 22 is devoted.
Paragraph 31 of the judgment states that “The fact that national rules are categorised as public-order
legislation does not mean that they are exempt from compliance with the provisions of the Treaty” and
that “The considerations underlying such national legislation can be taken into account by Community
law only in terms of the exceptions to Community freedoms expressly provided for by the Treaty and,
where  appropriate,  on  the  ground  that  they  constitute  overriding  reasons  relating  to  the  public
interest”.

25

                                                
can legitimately expect to be applied the law applicable to the non-contractual obligation and
the law applicable to the insurance contract.

At  all  events,  the  scope  of  the  insurer's  obligations  is  determined  by  the  law  governing  the
insurance contract.

As in Article 7, relating to the environment, the form of words used here will avert the risk of
doubts where the victim does not exercise his right of option.

Article 15 – Subrogation and multiple liability

This Article is identical to Article 13 of the Rome Convention.

It  applies  in  particular  to  the  relationship  between  insurer  and  perpetrator  to  determine
whether the form has a right of action by way of subrogation against the latter.

Where there are several perpetrators, it also applies where one of the joint and several debtors
makes a payment.

Article 16 is inspired by Article 9 of the Rome Convention.

Article 16 – Formal validity

Although the concept of formal validity plays a minor role in the creation of non-contractual
obligations, an obligation can well arise as a result of a unilateral act by  one or other of the
parties.

To promote the validity of such acts, Article 16 provides for an alternative rule along the lines
of  Article  9  of  the  Rome  Convention,  whereby  the  act  is  formally  valid  if  it  satisfies  the
formal requirements  of the law which  governs the  non-contractual  obligation  in  question  or
the law of the country in which this act is done.

Article 17 is identical to Article 14 of the Rome Convention.

Article 17 - Burden of proof

It  provides  that  the  law  governing  non-contractual  obligations  applies  to  the  extent  that  it
contains, in matters of non-contractual obligations, rules which raise presumptions of law or
determine the burden of proof. This is a useful provision as questions relating to evidence are
basically matters for the procedural law of the lex fori.

Paragraph 2 concerns the admissibility of modes of proving acts intended to have legal effect
referred to in Article 16. It does not cover evidence of legal facts, which is also covered by the
lex  fori.  The  very  liberal  system  of  Article  14(2)  of  the  Rome  Convention  is  used  here,
providing for the alternative application of the lex fori and the law governing the form of the
relevant act.

26

Article 18 – Assimilation to the territory of a State

Article 18 applies to situations in which one or more of the connecting factors in the conflict
rules of the proposed Regulation relate to an area that is not subject to territorial sovereignty.

The  text  proposed  by  the  Commission  in  the  written  consultation  procedure  in  May  2002
contained a special conflict rule. One of the difficulties with this rule lay in the diversity of
the situations concerned. It is by no means certain that a single rule will adequately cover the
position of a collision between ships on the high seas, the explosion of an electronic device or
the breakdown of negotiations in an aircraft in flight, pollution caused by a ship at sea etc.

The  contributions  received  by  the  Commission  have  made  it  aware  that  the  proposed  rule
made it all too easy to designate the law of a flag of convenience, which would be contrary to
the  more  general  objectives  of  Community  policy.  Many  contributors  had  doubts  about  the
value added by a rule which, where two or more laws are potentially involved, as in collision
cases, merely refers to the principle of the closest connection.

Rather than introducing a special rule here, Article 18 offers a definition of the “territory of a
State”. This solution is founded on the need to strike a reasonable balance between divergent
interests  by  means  of  the  different  conflict  rules  in  the  proposed  Regulation  where  one  or
more connecting factors are located in an area subject to no sovereignty. The general rule in
Article 3 and the special conflict rules accordingly apply.

The definitions in the proposed text are inspired by section 1 of the Dutch Act on conflicts of
laws in relation to obligations arising out of unlawful acts (11 April 2001).

Article 19 – Assimilation to habitual residence

This article  deals  with  the  concept  of  habitual  residence  for  companies  and  firms  and  other
bodies  corporate  or  unincorporate  and  for  natural  persons  exercising  a  liberal  profession  or
business activity in a self-employed capacity.

In general terms the proposed Regulation is distinguished from the “Brussels I” Regulation by
the  fact  that,  in  accordance  with  the  generally  accepted  solution  in  conflict  matters,  the
criterion used here is not domicile but the more flexible criterion of habitual residence.

With  regard  to  companies  and  firms  and  other  bodies  corporate  or  unincorporate,  simply
taking  over  the  alternative  rule  in  Article  60  of  the  “Brussels  I”  Regulation,  whereby  the
domicile of a body corporate is either its registered office, or its central administration, or its
principal establishment, would not make the applicable law adequately foreseeable.

Article 19(1) accordingly provides that the principal establishment of a company or firms or
other body corporate or unincorporate is considered to be its habitual residence. However, the
second sentence of paragraph 1 states that where the event giving rise to the damage occurs or
the  damage  is  sustained  in  the  course  of  operation  of  a  subsidiary,  a  branch  or  any  other
establishment, the establishment takes the place of the habitual residence. Like Article 5(5) of
the "Brussels I" Regulation, the purpose of this is to respect the legitimate expectations of the
parties.

Paragraph  2  determines  the  habitual  residence  of  a  natural  person  exercising  a  liberal
profession  or  business  activity  in  a  self-employed  capacity,  for  whom  the  professional
establishment operates as habitual residence.

27

Article 20 – Exclusion of renvoi

This Article is identical to Article 15 of the Rome Convention.

To avoid jeopardising the objective of certainty in the law that is the main inspiration for the
conflict  rules  in  the  proposed  Regulation,  Article  20  excludes  renvoi.  Consequently,
designating a law under uniform conflict rules means designating the substantive rules of that
law but not its rules of private international law, even where the law thus designated is that of
a third country.

Article 21 – States with more than one legal system

This Article is identical to Article 19 of the Rome Convention.

The uniform rules also apply where several legal systems coexist in a single State. Where a
State  has  several  territorial  units  each  with  its  own  rules  of  law,  each  of  those  units  is
considered a country for the purposes of private international law. Examples of those States
are the United Kingdom, Canada, the United States and Australia. For example, if damage is
sustained in Scotland, the law designated by Article 3(1) is Scots law.

Article 22 – Public policy of the forum

This Article corresponds to Article 16 of the Rome Convention relating to the mechanism of
the public policy exception. Like the Rome Convention, this concerns a State’s public policy
in  the  private  international  law  sense,  a  more  restrictive  concept  than  public  policy  in  the
domestic  law  sense.  The  words  “of  the  forum”  have  been  added  to  distinguish  the  rules  of
public  policy  in  the  private  international  law  sense,  which  proceed  solely  from  the  national
law of a State, from those flowing from Community law, to which the specific rule of Article
23 applies.

The mechanism of the public policy exception allows the court to disapply rules of the foreign
law designated by the conflict rule and to replace it by the lex fori where the application of the
foreign  law  in  a  given  case  would  be  contrary  to  the  public  policy  of  the  forum.  This  is
distinguished from overriding mandatory rules: in the latter case, the courts apply the law of
the  forum  automatically,  without  first  looking  at  the  content  of  the  foreign  law.  The  word
“manifestly” incompatible with the public policy of the forum means that the use of the public
policy exception must be exceptional.

In  a  Brussels  Convention  case  the  Court  of  Justice  held  that  the  concept  of  public  policy
remains  a  national  concept  and  that  “…it  is  not  for  the  Court  to  define  the  content  of  the
public  policy  of  a  Contracting  State…”,  but  it  must  none  the  less  “review  the  limits  within
which the courts of a Contracting State may have recourse to that concept for the purpose of
refusing recognition of a judgment emanating from another Contracting State”.41

41

Case C-38/98 Renault v Maxicar [2000] ECR I-2973 (judgment given on 11.5.2000).

28

                                                
Article 23 – Relationship with other provisions of Community law

Paragraph 1 refers to the traditional mechanisms of private international law that can be found
in  the  treaties  and  the  secondary  legislation  and  entail  special  conflict  rules  in  specific
matters, mandatory rules of Community and the Community public policy exception.

Paragraph 2 refers more particularly to the specific principles of the internal market relating to
the free movement of goods and services, commonly known as the “mutual recognition” and
“home-country control” principles.

Article 24 – Non-compensatory damages

Article 24 is the practical application of the Community public policy exception provided for
by the third indent of Article 23(1) in the form of a special rule.

In the written consultation, many contributors expressed  concern at the idea of  applying the
law  of  a  third  country  providing  for  damages  not  calculated  to  compensate  for  damage
sustained. It was suggested that it would be preferable to adopt a specific rule rather than to
apply the public policy exception of the forum, as is the case of section 40-III of the German
EGBGB.

The effect of Article 24 is accordingly that application of a provision of the law designated by
this  Regulation  which  has  the  effect  of  causing  non-compensatory  damages,  such  as
exemplary or punitive damages, to be awarded will be contrary to Community public policy.

The words used are descriptive rather than technical legal terms, too loosely tied to a specific
legal system. Compensatory damages serve to compensate for damage sustained by the victim
or liable to be sustained by him at a future date. Non-compensatory damages serve a punitive
or deterrent function.

Article 25 – Relationship with existing international conventions

Article  25  allows  Member  States  to  go  on  applying  choice  of  law  rules  laid  down  in
international conventions to which they are party when this Regulation is adopted.

These  conventions  include  the  Hague  Conventions  on  traffic  accidents  (4  May  1971)  and
product liability (2 October 1973).

Article 26 – List of conventions referred to in Article 25

To make it easier to identify the conventions to which Article 25 applies, Article 26 provides
that  the  Member  States  are  to  notify  the  Commission  of  the  list,  which  the  Commission  is
then to publish in the Official Journal of the European Union. The Member States are also to
notify the Commission of denunciations of these conventions so that it can update the list.

29

2003/0168 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND THE COUNCIL

ON THE LAW APPLICABLE TO NON-CONTRACTUAL OBLIGATIONS
(“ROME II”)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  Article  61(c)
thereof,

Having regard to the proposal from the Commission,42

Having regard to the opinion of the European Economic and Social Committee,43

Acting in accordance with the procedure laid down in Article 251 of the Treaty,44

Whereas:

(1)

(2)

(3)

42

43

44

45

46

47

The Union has set itself the objective of establishing an area of freedom, security and
justice.  To  that  end  the  Community  must  adopt  measures  relating  to  judicial
cooperation in civil matters with a cross-border impact to the extent necessary for the
proper  functioning  of  the  internal  market,  including  measures  promoting  the
compatibility of the rules applicable in the Member States concerning the  conflict of
laws and of jurisdiction.

For  the  purposes  of  effectively  implementing  the  relevant  provisions  of  the
Amsterdam  Treaty,  the  Council  (Justice  and  Home  Affairs)  on  3  December  1998
adopted  a  plan  of  action  specifying  that  the  preparation  of  a  legal  instrument  on  the
law applicable to non-contractual obligations is among the measures to be taken within
two years following the entry into force of the Amsterdam Treaty.45

The Tampere European Council on 15 and 16 October 199946 approved the principle
of  mutual  recognition  of  judgments  as  a  priority  matter  in  the  establishment  of  a
European  law-enforcement  area.  The  Mutual  Recognition  Programme47  states  that
measures relating to harmonisation of conflict-of-law rules are measures that “actually
do help facilitate the implementation of the principle”.

OJ C [... ], [... ] , p. [... ] .
OJ C [... ], [... ] , p. [... ] .
Opinion of the European Parliament of [...] (OJ C [... ], [... ] , p. [... ] .
Action Plan of the Council and the Commission on how best to implement the provisions of the Treaty
of Amsterdam on an area of freedom, security and justice: OJ C 19, 23.1.1999.
Presidency conclusions of 16 October 1999, points 28 to 39.
OJ C 12, 15.1.2001, p. 1.

30

                                                
(4)

(5)

(6)

(7)

(8)

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  and  the  free
movement  of  judgments,  for  the  rules  of  conflict  of  laws  in  the  Member  States  to
designate  the  same  national  law  irrespective  of  the  country  of  the  court  in  which  an
action is brought.

The scope of the Regulation must be determined in such a way as to be consistent with
Regulation (EC) No 44/200148 and the Rome Convention of 1980.49

Only uniform rules applied irrespective of the law they designate can avert the risk of
distortions of competition between Community litigants.

The principle of the lex loci delicti commissi is the basic solution for non-contractual
obligations  in  virtually  all  the  Member  States,  but  the  practical  application  of  the
principle where the component factors of the case are spread over several countries is
handled differently. This situation engenders uncertainty in the law.

The  uniform  rule  must  serve  to  improve  the  foreseeability  of  court  decisions  and
ensure  a  reasonable  balance  between  the  interests  of  the  person  claimed  to  be  liable
and the person who has  sustained damage. A  connection with  the country  where the
direct  damage  occurred  (lex  loci delicti commissi)  strikes  a fair  balance  between  the
interests of the person causing the damage and the person sustaining the damage, and
also reflects the modern approach to civil liability and the development of systems of
strict liability.

(9)

Specific rules should be laid down for special torts/delicts where the general rule does
not allow a reasonable balance to be struck between the interests at stake.

(10) Regarding  product  liability,  the  conflict  rule  must  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. Connection to the law of the place where the person sustaining the
damage has his habitual residence, together with a foreseeability clause, is a balanced
solution in regard to these objectives.

(11)

(12)

In matters of unfair competition, the conflict rule must protect competitors, consumers
and  the  general  public  and  ensure  that  the  market  economy  functions  properly.  The
connection  to  the  law  of  the  relevant  market  generally  satisfies  these  objectives,
though in specific circumstances other rules might be appropriate.

In view of the Charter of Fundamental Rights of the European Union and the Council
of  Europe  Convention  for  the  Protection  of  Human  Rights  and  Fundamental
Freedoms,  the  conflict  must  strike  a  reasonable  balance  as  regards  violations  of
privacy and rights in the personality. Respect for the fundamental principles that apply
in the  Member  States as  regards  freedom  of  the  press  must  be  secured  by  a  specific
safeguard clause.

48

49

OJ L 12, 16.1.2001, p. 1.
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 OJ C 27, 26.1.1998, p. 34.

31

                                                
(13) Regarding  violations  of  the  environment,  Article  174  of  the  Treaty,  which  provides
that there must a high level of protection based on the precautionary principle and the
principle that preventive action must be taken, the principle of priority  for corrective
action at  source and  the  principle that  the  polluter pays, fully  justifies the  use  of  the
principle of discriminating in favour of the person sustaining the damage.

(14) Regarding  violations  of  intellectual  property  rights,  the  universally  acknowledged
principle  of  the  lex  loci  protectionis  should  be  preserved.  For  the  purposes  of  the
present Regulatio, the term intellectual property rights means copyright, related rights,
sui generis right for the protection of databases and industrial property rights.

(15)

(16)

Similar  rules  should be provided  for  where  damage  is  caused  by  an  act  other  than  a
tort or delict, such as unjust enrichment and agency without authority.

To preserve their freedom of will, the parties should be allowed to determine the law
applicable  to  a  non-contractual  obligation.  Protection  should  be  given  to  weaker
parties by imposing certain conditions on the choice.

(17) Considerations of the public interest  warrant  giving  the  courts  of  the  Member  States
the possibility, in exceptional  circumstances, of  applying  exceptions  based  on  public
policy and overriding mandatory rules.

(18)

(19)

The  concern  to  strike  a  reasonable  balance  between  the  parties  means  that  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 another law.

The  concern  for  consistency  in  Community  law  requires  that  this  Regulation  be
without prejudice to provisions relating to or having an  effect on the applicable law,
contained  in  the  treaties  or  instruments  of  secondary  legislation  other  than  this
Regulation, such as the conflict rules in specific matters, overriding mandatory rules of
Community origin, the Community public policy exception and the specific principles
of the internal market. Furthermore, this regulation is not intended to create, nor shall
its  application  lead  to  obstacles  to  the  proper  functioning  of  the  internal  market,  in
particular free movement of goods and services.

(20) Respect for international commitments entered into by the Member States means that
this Regulation should not affect conventions relating to specific matters to which the
Member  States  are  parties.  To  make  the  rules  easier  to  read,  the  Commission  will
publish  the  list  of  the  relevant  conventions  in  the  Official  Journal  of  the  European
Union on the basis of information supplied by the Member States.

(21)

Since  the  objective  of  the  proposed  action,  namely  better  foreseeability  of  court
judgments requiring genuinely uniform rules determined by a mandatory and directly
applicable Community legal instrument, cannot be adequately attained by the Member
States, who cannot lay down uniform Community rules, and can therefore, by reason
of its effects throughout the Community, be better achieved at Community level, the
Community can take measures, in accordance with the subsidiarity principle set out in
Article 5 of the Treaty. In accordance with the proportionality principle set out in that
Article,  a  Regulation,  which  increases  certainty  in  the  law  without  requiring
harmonisation  of  the  substantive  rules  of  domestic  law,  does  not  go  beyond  what  is
necessary to attain that objective.

32

(22)

[In accordance with Article 3 of the Protocol on the position of the United Kingdom
and Ireland, annexed to the Treaty on European Union and the Treaty establishing the
European Community, these Member States have stated their intention of participating
in the adoption and application of this Regulation. / In accordance with Articles 1 and
2 of the Protocol on the position of the United Kingdom and Ireland, annexed to the
Treaty  on  European  Union  and  the  Treaty  establishing  the  European  Community,
these  Member  States  are  not  participating  in  the  adoption  of  this  Regulation,  which
will accordingly not be binding on those Member States.]

(23)

In  accordance  with  Articles  1  and  2  of  the  Protocol  on  the  position  of  Denmark,
annexed  to  the  Treaty  on  European  Union  and  the  Treaty  establishing  the  European
Community, that Member State is not participating in the adoption of this Regulation,
which will accordingly not be binding on that Member State,

HAVE ADOPTED THIS REGULATION:

Chapter I - Scope

Article 1 - Material scope

This  Regulation  shall  apply,  in  situations  involving  a  conflict  of  laws,  to  non-

1.
contractual obligations in civil and commercial matters.

It shall not apply to revenue, customs or administrative matters.

2.

a)

b)

c)

d)

e)

f)

The following are excluded from the scope of this Regulation:

non-contractual  obligations  arising  out  of  family  relationships  and  relationships
deemed to be equivalent, including maintenance obligations;

non-contractual  obligations  arising  out  of  matrimonial  property  regimes  and
successions;

obligations arising under bills of exchange, cheques and promissory notes and other
negotiable instruments to the extent that the obligations under such other negotiable
instruments arise out of their negotiable character;

the  personal  legal  liability  of  officers  and  members  as  such  for  the  debts  of  a
company  or  firm  or  other  body  corporate  or  incorporate,  and  the  personal  legal
liability  of  persons  responsible  for  carrying  out  the  statutory  audits  of  accounting
documents;

non-contractual obligations among the settlers, trustees and beneficiaries of a trust;

non-contractual obligations arising out of nuclear damage.

For the purposes of this Regulation, "Member State" means any Member State other

3.
than [the United Kingdom, Ireland or] Denmark.

33

Article 2 – Universal application

Any law specified by this Regulation shall be applied whether or not it is the law of a Member
State.

Chapter II - Uniform rules

SECTION 1
RULES APPLICABLE TO NON-CONTRACTUAL OBLIGATIONS ARISING OUT OF A
TORT OR DELICT

Article 3 – General rule

1.
The law applicable to a non-contractual obligation shall be the law of the country in
which the damage arises or is likely to arise, 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 arise.

2.
However,  where  the  person  claimed  to  be  liable  and  the  person  sustaining  damage
both  have  their  habitual  residence  in  the  same  country  when  the  damage  occurs,  the  non-
contractual obligation shall be governed by the law of that country.

3.
Notwithstanding paragraphs 1 and 2, where it is clear from all the circumstances of the
case  that  the  non-contractual  obligation  is  manifestly  more  closely  connected  with  another
country, the law of that other country shall apply. A manifestly closer connection with another
country may be based in particular on a pre-existing relationship between the parties, such as
a contract that is closely connected with the non-contractual obligation in question.

Article 4 – Product liability

Without prejudice to Article 3(2) and  (3), the law  applicable to  a non-contractual obligation
arising out of damage or a risk of damage caused by a defective product shall be that of the
country  in  which  the  person  sustaining  the  damage  is  habitually  resident,  unless  the  person
claimed  to  be  liable  can  show  that  the  product  was  marketed  in  that  country  without  his
consent,  in  which  case  the  applicable  law  shall  be  that  of  the  country  in  which  the  person
claimed to be liable is habitually resident.

Article 5 – Unfair competition

1.
The  law  applicable  to  a  non-contractual  obligation  arising  out  of  an  act  of  unfair
competition  shall  be  the  law  of  the  country  where  competitive  relations  or  the  collective
interests of consumers are or are likely to be directly and substantially affected.

Where  an  act  of  unfair  competition  affects  exclusively  the  interests  of  a  specific

2.
competitor, Article 3(2) and (3) shall apply.

34

Article 6 – Violations of privacy and rights relating to the personality

1.
The law applicable to a non-contractual obligation arising out of a violation of privacy
or rights relating to the personality shall be the law of the forum where the application of the
law designated by Article 3 would be contrary to the fundamental principles of the forum as
regards freedom of expression and information.

The law applicable to the right of reply or equivalent measures shall be the law of the

2.
country in which the broadcaster or publisher has its habitual residence.

Article 7 – Violation of the environment

The  law  applicable  to  a  non-contractual  obligation  arising  out  of  a  violation  of  the
environment shall be the law determined by the application of Article 3(1), unless the person
sustaining  damage  prefers  to  base  his  claim  on  the  law  of  the  country  in  which  the  event
giving rise to the damage occurred.

Article 8 – Infringement of intellectual property rights

The law applicable to a non-contractual obligation arising from an infringement of a

1.
intellectual property right shall be the law of the country for which protection is sought.

In the case  of  a non-contractual  obligation  arising  from  an infringement  of  a  unitary
2.
Community industrial property right, the relevant Community instrument shall apply. For any
question  that  is  not  governed  by  that  instrument,  the  applicable  law  shall  be  the  law  of  the
Member State in which the act of infringement is committed.

SECTION 2
RULES APPLICABLE TO NON-CONTRACTUAL OBLIGATIONS ARISING OUT OF AN
ACT OTHER THAN A TORT OR DELICT

Article 9 – Determination of the applicable law

1.
If a non-contractual obligation arising out of an act other than a tort or delict concerns
a  relationship  previously  existing  between  the  parties,  such  as  a  contract  closely  connected
with  the  non-contractual  obligation,  it  shall  be  governed  by  the  law  that  governs  that
relationship.

Without  prejudice  to  paragraph  1,  where  the  parties  have  their  habitual  residence  in
2.
the same country when the event giving rise to the damage occurs, the law applicable to the
non-contractual obligation shall be the law of that country.

Without  prejudice  to  paragraphs  1  and  2,  a  non-contractual  obligation  arising  out  of
3.
unjust enrichment shall be governed by the law of the country in which the enrichment takes
place.

Without  prejudice  to  paragraphs  1  and  2,  the  law  applicable  to  a  non-contractual
4.
obligation  arising  out  of  actions  performed  without  due  authority  in  connection  with  the
affairs  of  another  person  shall  be  the  law  of  the  country  in  which  the  beneficiary  has  his

35

habitual residence at the time of the unauthorised action. However, where a non-contractual
obligation  arising  out  of  actions  performed  without  due  authority  in  connection  with  the
affairs of another person relates to the physical protection of a person or of specific tangible
property,  the  law  applicable  shall  be  the  law  of  the  country  in  which  the  beneficiary  or
property was situated at the time of the unauthorised action.

5.
Notwithstanding paragraphs 1, 2, 3 and 4, where it is clear from all the circumstances
of  the  case  that  the  non-contractual  obligation  is  manifestly  more  closely  connected  with
another country, the law of that other country shall apply.

Nowithstanding  the  present  Article,  all  non-contractual  obligations  in  the  field  of

6.
intellectual property shall be governed by Article 8.

SECTION 3
COMMON RULES APPLICABLE TO NON-CONTRACTUAL OBLIGATIONS ARISING
OUT OF A TORT OR DELICT AND OUT OF AN ACT OTHER THAN A TORT OR DELICT

Article 10 – Freedom of choice

1.
The  parties  may  agree,  by  an  agreement  entered  into  after  their  dispute  arose,  to
submit non-contractual obligations other than the obligations to which Article 8 applies to the
law of their choice. The choice must be expressed or demonstrated with reasonable certainty
by the circumstances of the case. It may not affect the rights of third parties.

2.
If  all  the  other  elements  of  the  situation  at  the  time  when  the  loss  is  sustained  are
located  in  a  country  other  than  the  country  whose  law  has  been  chosen,  the  choice  of  the
parties shall be without prejudice to the application of rules of the law of that country which
cannot be derogated from by contract.

3.
The parties' choice of the applicable law shall not debar the application of provisions
of  Community  law  where  the  other  elements  of  the  situation  were  located  in  one  of  the
Member States of the European Community at the time when the loss was sustained.

Article 11 – Scope of the law applicable to non-contractual obligations

The  law  applicable  to  non-contractual  obligations  under  Articles  3  to  10  of  this  Regulation
shall govern in particular:

a)

b)

c)

d)

the conditions and extent of liability, including the determination of persons who are
liable for acts performed by them;

the grounds for exemption from liability, any limitation of liability and any division
of liability;

the existence and kinds of injury or damage for which compensation may be due;

within the limits of its powers, the measures which a court has power to take under
its procedural law to prevent or terminate injury or damage or to ensure the provision
of compensation;

36

e)

f)

g)

h)

i)

the assessment of the damage in so far as prescribed by law;

the question whether a right to compensation may be assigned or inherited;

persons entitled to compensation for damage sustained personally;

liability for the acts of another person;

the  manners  in  which  an  obligation  may  be  extinguished  and  rules  of  prescription
and  limitation,  including  rules  relating  to  the  commencement  of  a  period  of
prescription or limitation and the interruption and suspension of the period.

Article 12 – Overriding mandatory rules

1.
Where  the  law  of  a  specific  third  country  is  applicable  by  virtue  of  this  Regulation,
effect  may  be  given  to  the  mandatory  rules  of  another  country  with  which  the  situation  is
closely connected, if and in so far as, under the law of the latter country, those rules must be
applied whatever the law applicable to the non-contractual obligation. In considering whether
to give effect to these mandatory rules, regard shall be had to their nature and purpose and to
the consequences of their application or non-application.

2.
Nothing in this Regulation shall restrict the application of the rules of the law of the
forum in a situation where they are mandatory irrespective of the law otherwise applicable to
the non-contractual obligation.

Article 13 – Rules of safety and conduct

Whatever  may  be  the  applicable  law,  in  determining  liability  account  shall  be  taken  of  the
rules of safety and conduct which were in force at the place and time of the event giving rise
to the damage.

Article 14 – Direct action against the insurer of the person liable

The right of persons who have suffered damage to take direct action against the insurer of the
person  claimed  to  be  liable  shall  be  governed  by  the  law  applicable  to  the  non-contractual
obligation unless the person who has suffered damage prefers to base his claims on the law
applicable to the insurance contract.

Article 15 – Subrogation and multiple liability

1.
Where  a  person  ("the  creditor")  has  a  non-contractual  claim  upon  another  ("the
debtor"),  and  a  third  person  has  a  duty  to  satisfy  the  creditor,  or  has  in  fact  satisfied  the
creditor in discharge of that duty, the law which governs the third person's duty to satisfy the
creditor shall determine whether 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 in
whole or in part.

The same rule shall apply where several persons are subject to the same claim and one

2.
of them has satisfied the creditor.

37

Article 16 – Formal validity

A  unilateral  act  intended  to  have  legal  effect  and  relating  to  a  non-contractual  obligation  is
formally  valid  if  it  satisfies  the  formal  requirements  of  the  law  which  governs  the  non-
contractual obligation in question or the law of the country in which this act is done.

Article 17 – Burden of proof

The  law  governing  a  non-contractual  obligation  under  this  Regulation  applies  to  the
1.
extent  that,  in  matters  of  non-contractual  obligations,  it  contains  rules  which  raise
presumptions of law or determine the burden of proof.

2.
Acts intended to have legal effect may be proved by any mode of proof recognised by
the law of the forum or by any of the laws  referred to  in  Article 16  under  which  that act is
formally valid, provided that such mode of proof can be administered by the forum.

Chapter III – Other provisions

Article 18 – Assimilation to the territory of a State

For the purposes of this Regulation, the following shall be treated as being the territory of a
State:

a)

b)

c)

installations  and  other  facilities  for  the  exploration  and  exploitation  of  natural
resources in, on or below the part of the seabed situated outside the State' s territorial
waters  if  the  State,  under  international  law,  enjoys  sovereign  rights  to  explore  and
exploit natural resources there;

a ship on the high  seas which  is  registered in  the State  or  bears  lettres de mer or a
comparable document issued by it or on its behalf, or which, not being registered or
bearing lettres de mer or a comparable document, is owned by a national of the State;

an aircraft in the airspace, which is registered in or on behalf of the State or entered
in its register of nationality, or which, not being registered or entered in the register
of nationality, is owned by a national of the State.

Article 19 – Assimilation to habitual residence

For companies or firms and other bodies or incorporate or unincorporate, the principal
1.
establishment  shall  be  considered  to  be  the  habitual  residence.  However,  where  the  event
giving  rise  to  the  damage  occurs  or  the  damage  arises  in  the  course  of  operation  of  a
subsidiary, a branch or any other establishment, the establishment shall take the place of the
habitual residence.

2.
Where the event giving rise to the damage occurs or the damage arises in the course of
the  business  activity  of  a  natural  person,  that  natural  person’s  establishment  shall  take  the
place of the habitual residence.

38

3.
For the purpose of Article 6 (2), the place where the broadcaster is established within
the meaning of  the directive 89/552/EEC,  as  amended by the  directive  97/36/EC,  shall  take
the place of the habitual residence.

Article 20 – Exclusion of renvoi

The application of the law of any country specified by this Regulation means the application
of the rules of law in force in that country other than its rules of private international law.

Article 21 – States with more than one legal system

1.
Where a State comprises  several territorial units,  each of which  has  its  own  rules  of
law  in  respect  of  non-contractual  obligations,  each  territorial  unit  shall  be  considered  as  a
country for the purposes of identifying the law applicable under this Regulation.

2.
A State within which different territorial units have their own rules of law in respect of
non-contractual  obligations  shall  not  be  bound  to  apply  this  Regulation  to  conflicts  solely
between the laws of such units.

Article 22 – Public policy of the forum

The  application  of  a  rule  of  the  law  of  any  country  specified  by  this  Regulation  may  be
refused  only  if  such  application  is  manifestly  incompatible  with  the  public  policy  ("ordre
public") of the forum.

Article 23 – Relationship with other provisions of Community law

This  Regulation  shall  not  prejudice  the  application  of  provisions  contained  in  the
1.
Treaties establishing the European Communities or in acts of the institutions of the European
Communities which:

–  in relation to particular  matters,  lay  down  choice-of-law  rules  relating  to  non-contractual

obligations; or

–  lay down rules which apply irrespective of the national law governing the non-contractual

obligation in question by virtue of this Regulation; or

–  prevent  application  of  a  provision  or  provisions  of  the  law  of  the  forum  or  of  the  law

designated by this Regulation.

2.
This regulation shall not prejudice the  application of Community instruments which,
in  relation  to  particular  matters  and  in  areas  coordinated  by  such  instruments,  subject  the
supply  of  services  or  goods  to  the  laws  of  the  Member  State  where  the  service-provider  is
established and, in the area coordinated, allow restrictions on freedom to provide services or
goods originating in another Member State only in limited circumstances.

39

Article 24 – Non-compensatory damages

The application of a provision of the law designated by this Regulation which has the effect of
causing non-compensatory damages, such as  exemplary or punitive damages, to be awarded
shall be contrary to Community public policy.

Article 25 – Relationship with existing international conventions

This Regulation shall not prejudice the application of international conventions to which the
Member States are parties when this Regulation is adopted and which, in relation to particular
matters, lay down conflict-of-law rules relating to non-contractual obligations.

Chapter IV – Final provisions

Article 26 – List of conventions referred to in Article 25

1.
The Member States shall notify the Commission, no later than 30 June 2004, of the list
of conventions  referred to  in  Article  25.  After  that  date,  the  Member  States  shall  notify  the
Commission of all denunciations of such conventions.

The Commission shall publish the list of conventions referred to in paragraph 1 in the

2.
Official Journal of the European Union within six months of receiving the full list.

Article 27 – Entry into force and application in time

This Regulation shall enter into force on 1 January 2005.

It shall apply to non-contractual  obligations  arising out  of  acts  occurring  after  its  entry  into
force.

This Regulation shall be binding in its entirety and directly applicable in all Member States in
accordance with the Treaty establishing the European Community.

Done at Brussels, […].

For the European Parliament
The President

For the Council
The President

40