Opinion of the European Economic and Social Committee on the Proposal for a Regulation of the European Parliament and the Council on the law applicable to non-contractual obligations (Rome II) (COM(2003) 427 final – 2003/0168 (COD))
Date: 2004-06-02
Institutions: European Economic and Social Committee
Subjects: application of the law, approximation of laws, civil law, commercial law, consumer protection, jurisdiction, law of obligations

28.9.2004

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II

(Preparatory Acts)

EUROPEAN ECONOMIC AND SOCIAL COMMITTEE

409TH PLENARY SESSION OF 2 AND 3 JUNE 2004

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the
European Parliament and the Council on the law applicable to non-contractual obligations
(Rome II)’

(COM(2003) 427 final – 2003/0168 (COD))

(2004/C 241/01)

On 8 September 2003 the Council decided to consult the European Economic and Social Committee,
under Article 262 of the Treaty establishing the European Community, on the:

Proposal for a Regulation of the European Parliament and the Council on the law applicable to non-
contractual obligations (Rome II).

The Section for the Single Market, Production and Consumption, which was responsible for preparing the
Committee's work on the subject, adopted its opinion on 4 May 2004. The rapporteur was Mr Frank von
Fürstenwerth.

At its 409th plenary session of 2 and 3 June 2004 (meeting of 2 June 2004) the European Economic and
Social Committee adopted the following opinion with 168 votes in favour and eight abstentions.

1. Summary of the conclusions

2. Introduction: Explanatory Memorandum

and

The

Economic

Social Committee
European
1.1
welcomes the Commission proposal
laying down rules on
conflict of laws regarding non-contractual obligations in the
form of a European regulation. This closes a gap which has
hitherto significantly impeded the development of a single
European legal area.

The Committee offers

to the
1.2
Commission and urges it to complete its initiative as rapidly as
possible, taking account of the suggested changes and correc-
tions set out in point 9 below, so that the regulation can enter
into force.

encouragement

its

1.3
The Committee welcomes the Commission's efforts to
remedy, through full harmonisation, the fragmentation of the
law relating to non-
important area of private international
contractual obligations. This will bring inestimable benefits in
terms of simpler application of the law. Instead of having to
establish in each individual case which system of rules on
conflict of laws will apply and familiarise themselves with these
rules which, at least in detail, differ from one Member State to
another, users of the law will in future be able to use a single
set of rules which, as regulations are directly applicable, will be
identical in all Member States.

2.1 With this regulation the Commission for the first time
sets out to create a single set of rules on conflict of laws
regarding non-contractual obligations in the European Union.
A single set of rules on conflict of laws regarding contractual
obligations has already existed since 1980, when the majority
of western European states decided to conclude the Convention
on the law applicable to contractual obligations (the Rome
Convention). Other states subsequently acceded to the Conven-
tion. The vehicle of a multilateral convention was chosen
because, at that time, the EEC Treaty did not provide a legal
basis for the adoption of an appropriate legal instrument by
the Community. Conflict of
laws regarding non-contractual
obligations is still governed by the rules of the Member States
which, although often based on a common understanding of
the subject matter, differ significantly, at least in their details,
and have been differently shaped by national case law and
academic interpretation. This results in many difficulties for
users of the law, including problems in obtaining the relevant
rules, language problems, and problems of familiarisation with
a foreign legal culture and academic and case-law interpreta-
tion. Because these areas are closely interrelated, the law on
obligations covers both the contractual and non-contractual
kind, and the provisions of the Rome Convention, while repre-
senting a major improvement, have always been considered
incomplete. The Convention has always
lacked a section
dealing with non-contractual obligations. The harmonisation of

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the rules on conflict of laws regarding non-contractual obliga-
tions promises considerable progress vis-à-vis the current situa-
tion in the Community in view of the greater certainty and
predictability it will bring to the process of determining the
applicable substantive law. It would of course be still more
beneficial to users of the law if the Rome I and Rome II instru-
instrument.
ments were to be combined in a single legal
However,
the procedures
the Committee recognises
regarding the two projects are at completely different stages
and that this is therefore a remote prospect. Rather, the priority
must be to establish a functioning system for non-contractual
obligations. The Committee regrets that, because of the reserva-
tion expressed by Denmark on the basis of Title IV of the EC
Treaty, the planned legal instrument will not be directly applic-
able in that Member State (although there will be an option for
voluntary application), and the harmonisation effect will there-
fore be less than ideal. The Committee is glad that the United
Kingdom and Ireland have expressed a willingness to apply the
instrument.

that

2.2 The legislative background

2.2.1
The regulation should be seen against the backdrop of
a broad range of Commission legislative activities, whether
complete, planned or still in preparation. The Committee has
on several occasions had the opportunity to comment on indi-
vidual Commission proposals.

2.2.2
field of procedural civil law, in particular:

Attention should first be drawn to activities in the

— the adoption of the 1968 Brussels Convention in the form

of a regulation (1);

— the proposal for a Council Regulation creating a European

enforcement order for uncontested claims (2);

— the Regulation on the service in the Member States of judi-
cial and extrajudicial documents in civil or commercial
matters (3);

— the Council Regulation on cooperation between the courts
of the Member States in the taking of evidence in civil or
commercial matters (4);

(1) Council Regulation (EC) No 44/2001 of 22 December 2000 on
jurisdiction and the recognition and enforcement of judgments in
civil and commercial matters, OJ L 12, 16.1.2001, p. 1.

(2) Proposal for a Council Regulation creating a European enforcement
order for uncontested claims, COM(2002) 159 final of 18.4.2002.
(3) Council Regulation (EC) No 1348/2000 of 29 May 2000 on the
service in the Member States of judicial and extrajudicial documents
in civil or commercial matters, OJ L 160, 30.6.2000, p. 37.

(4) Council Regulation (EC) No 1206/2001 of 28 May 2001 on coop-
eration between the courts of the Member States in the taking of
evidence in civil or commercial matters, OJ L 174, 27.6.2001, p. 1.

— the Commission Recommendation on the principles applic-
able to bodies responsible for out-of-court settlement of
consumer disputes (5);

— the Council Decision establishing a European Judicial

Network in civil and commercial matters (6).

2.2.3
field of substantive civil law, in particular:

Attention should also be drawn to activities in the

— the Commission Communication of 11.7.2001 on Euro-

pean contract law (7),

— the Consumer Credit Directive (8),

— the Council Directive on unfair

terms

in consumer

contracts (9).

2.2.4
The initiative is particularly closely related to the
Commission's work on conflict of substantive laws, which it
began with the publication of a Green Paper on the conversion
of the Rome Convention into a Community instrument (10).
The Rome II Regulation is complementary to, and a natural
extension of, the Rome I Regulation proposed in the Green
Paper.

All

2.2.5
these activities are geared to the objectives of
establishing a European area of justice, creating a legal frame-
work which makes it easier for all economic operators to use
the European internal market,
increasing legal certainty and
facilitating application of the law by the courts and European
citizens' access to the law.

3. Legal basis

The purpose of the regulation is the unification of the
3.1
rules on conflict of laws regarding non-contractual obligations.
The harmonisation of conflict rules falls under Article 65(b)
TEC. This means that the Commission is empowered to act
where this is necessary for the smooth operation of the internal
market. In the Committee's view, this is the case, as harmonisa-
tion will help to ensure equal treatment of economic operators
in the Community in cross-border cases,
legal
certainty, simplify application of the law and thus promote

increase

(5) Commission Recommendation of 30 March 1998 on the principles
applicable to the bodies responsible for out-of-court settlement of
consumer disputes (98/257/EC), OJ L 115, 17.4.1998, p. 31.

(6) Council Decision of 28 May 2001 establishing a European Judicial
Network in civil and commercial matters (2001/470/EC), OJ L 174,
27.6.2001, p. 25.

(7) Communication from the Commission to the Council and the Euro-
pean Parliament on European contract law (2001/C 255/01), OJ C
255, 13.9.2001, p. 1.
(8) OJ C 61, 10.3.1990, p. 14.
(9) OJ L 95, 21.4.1993, p. 29.
(10) Commission Green Paper on the conversion of the Rome Conven-
tion of 1980 on the law applicable to contractual obligations into a
Community instrument and its modernisation (COM(2002) 654
final).

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willingness to enter into cross-border business, as well as
promote the mutual recognition of legal acts of the Member
States by making it easier for nationals of other Member States
to check that they are legally correct.

Committee wholeheartedly welcomes this. If the circumstances
of a case require that a specific system of law be applied, it
makes no difference whether or not it is that of a Member
State.

4. Material

scope,

application of

third-country law

(Articles 1, 2)

4.1
The regulation is intended to apply to conflict of laws in
civil and commercial matters (Article 1(1)). In order to avoid
misunderstandings,
should be specifically stated. The
Commission could use the terminology of Council Regulation
(EC) No 44/2001 (Article 1), as this is clearly defined. The
exclusion of tax and customs matters is self-evident. There is
no harm in specifically mentioning it, however.

this

The regulation does not set out to regulate the entire
4.2
area of non-contractual obligations. The Commission would
therefore be well advised not to aim too high and thereby
make the project unwieldy. The exclusion of family, mainte-
nance and succession issues (Article 1(2)) is therefore to be
welcomed. In view of their social implications, these matters
are traditionally dealt with in conflict rules by means of sepa-
rate instruments.

4.3
The exclusion of obligations arising under the bills of
exchange or cheques, as well as those arising out of nuclear
damage (Article 1(2)), is justified by the fact that these matters
are adequately dealt with in separate agreements (1), the scope
of which extends beyond the Community and the continued
existence of which should not be called into question.

4.4
The exclusion of company law matters in Article 1(2)(f)
is unavoidable, as the issues in question are so closely bound
up with the company statute as to require regulation in this
context.

4.5
Trusts are a specific feature of Anglo-American law.
They are a legal vehicle situated mid-way between company
law and the law on foundations, functionally similar to the
German Treuhand and without legal personality. Trusts are
unknown in the legal systems of the continental European
states. Because of these specific features and because of their
proximity to company law they were excluded from the scope
of the Rome Convention (Article 1(2)(g)). As the regulation
excludes company law,
trusts
should also be excluded (Article 1(e)).

is logically consistent that

it

4.6
The regulation requires the specified law to be applied,
whether it is the law of a Member State or of a third country
(Article 2). In so doing it is following a generally recognised
standard in conflict of laws, which in principle prohibits discri-
mination against other systems of law in conflict rules. The

(1) The Geneva Convention providing a uniform law for bills of
the Geneva
exchange and promissory notes of 7 June 1930,
Convention providing a uniform law for cheques of 19 March
1931, the Paris Convention of 29 July 1960 and a number of
complementary conventions.

5. Rules applicable to non-contractual obligations arising

out of a tort or delict (Articles 3 to 8)

5.1
Article 3, which deals with obligations arising out of a
tort or delict, goes to the heart of the matter. Theoretically, a
number of criteria, usually grouped together without distinc-
tion under the catch-all heading lex loci delicti
(commissi)
could be applied here, i.e. the law of the place where the event
occurs, that of the place where the damage arises, that of the
place in which the indirect consequences of the event arise or
that of the place of habitual residence of the injured party. All
these criteria have a basis in tradition and strong arguments in
their favour. All are in fact used in various current systems of
conflict rules. The priority task of the Commission is therefore
to introduce a uniform set of rules in all Member States. This is
the key task, and the question as to which of the existing solu-
tions is adopted is secondary to this. With regard to subsequent
practical application, it must be borne in mind that in most
cases all or many of these criteria in practice coincide. The
place of habitual residence of the injured party will generally be
the same as the place where the event occurred, which will in
turn be the same as the place where the damage arose. In prac-
tice, therefore, any dispute over the criterion to be applied will
perhaps be rather theoretical. The Commission has opted for
the law of the country in which the damage arises. It is perhaps
questionable whether this is consistent with recent develop-
ments in legal consolidation in this area (2), but the Commis-
sion's choice is justifiable on the grounds that it gives priority
to protection of the injured party, without however completely
neglecting the interests of the party causing the damage. This
would for example be the case if the law of the habitual place
of residence of the injured party alone were to apply. Exclusive
reliance on the law of the place where the event occurred
would inappropriately favour the party causing the damage (3),
as the injured party's legitimate claim to protection would not
be met. The Commission's attempt to balance the interests of
the various parties seems in every respect acceptable. The
restriction placed on the general rule by Article 3(2) in cases
where both parties have their habitual residence in the same
country is
realistic and prevents unnecessary recourse to
foreign systems of law. Paragraph 3 is appropriate as a general
corrective and corresponds functionally to Article 4(5) of the
Rome Convention. In practice, however, care will have to be
taken to ensure that this exception clause for individual cases is
not used in those Member States which have hitherto applied
the system of law of the place where the event occurred to
circumvent the new approach intended by the Commission.

(2) In contrast, for example, to the law in force in Germany since 1999
(Article 40(1) of the implementing law for the Code of Civil Law -
EGBGB), which takes the place where the event occurred as the
decisive criterion.

(3) Who is likely to be familiar with local law, will not need to concern
himself with other systems of law and may benefit from a lower
level of liability for dangerous practices.

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liability (Article 4),

In cases involving product

5.2
the
applicable law is that of the place where the person sustaining
damage has his habitual residence. The approach adopted can
be seen as a compromise proposal, particularly in the light of
the sometimes stormy debates preceding the hearing of 6
January 2003. Other possible criteria discussed seem less
appropriate: the place of purchase may be purely fortuitous,
and under certain circumstances may even be virtually impos-
sible to establish (Internet purchases). In product liability cases
the place in which the damage arises may also be fortuitous (if
for example the purchaser suffers the damage when travelling).
Finally, the place of manufacture might also not be a satisfac-
tory criterion, as, against the background of globalisation, this
may have little relevance to the issue. The criterion actually
chosen, on the other hand, focuses on protecting the interests
of the injured party. The choice of this criterion is all the more
justified, given that, at the hearing held by the Commission on
1 January 2003, the representatives of industry, which is most
directly affected by the proposal, and the insurance sector
mainly came out in favour of that approach as a concession to
the consumer representatives. The restriction to the general
rule (marketing without consent) takes sufficient account of the
legitimate interests of industry, as its representatives themselves
conceded at the hearing.

5.3
The provisions of the regulation on unfair competition
(Article 5) are based on the principle traditionally applied in
this area, namely that the applicable law shall be that of the
country in which competition is directly and substantially
affected. This rule entails equal
treatment of domestic and
foreign competitors in relation to the rules which they are
required to observe. The same subject is, however, dealt with
differently in Article 4(1) of the draft Directive on unfair busi-
ness practices (1), with reference being made to the Member
State of establishment principle. Although the explanatory
memoranda to these two legal instruments do not address this
difference, the disparity in the application of general principles
of Community and internal market law can be resolved as
follows: Article 5 of the regulation refers to external Com-
munity law relating to non-Member States (or in areas not
covered by the directive), whereas Article 4(1) of the directive
deals with relations between Member States in the internal
market. If this is in fact the intention, the Commission would
do well to make it clear in the explanatory memoranda to the
two legal instruments. However, this still leaves an unaccep-
table situation whereby the same rules apply to EU and non-EU
competitors within a given Member State, whereas different
the competitors in question are from
rules may apply if
different EU Member States (this is, however, a question of the
degree of harmonisation of
substantive competition law
brought about by the directive).

Committee suggests that consideration be given to changing
the title of this provision to ‘Competition and unfair trade prac-
tices’, to make it clearer that the regulation is intended to cover
all infringements of competition comprehensively.

5.4
It might at first sight appear surprising to find rules on
violations of privacy and rights relating to the personality
(Article 6) in a legal instrument dealing with conflict of laws
regarding non-contractual obligations, as in many systems of
law these issues fall within the ambit of law relating to the
person. Recently, however, a different approach has gained
ground in many Member States, with this issue being brought
into the ambit of torts and delicts. In this sense, it is reasonable
to deal with it here. Moreover, there is an undeniable link with
the issues dealt with in Articles 5 and 8. The rule laid down in
Article 6(1) is worthy of support. The same is true of the rule
on the right to reply in Article 6(2). The Committee wonders
whether the exception in favour of the lex fori might not in
certain circumstances be rendered superfluous by Article 22.

5.5 With regard to violation of the environment (Article 7),
the basic rule is consistent with the reference to the tort and
delict provisions of Article 3, although the person sustaining
damage has the option to base his claim on the law of the
country in which the event giving rise to the damage occurred
(which may be more favourable for him). Clearly, by providing
an exception to the general rule which, disguised as a conflict
of laws provision, allows the injured party the choice of applic-
able law, the Commission is pursuing objectives which actually
have nothing to do with conflict of laws, but which are rather
intended to encourage potential environmental polluters to
take environmental protection very seriously by threatening
them with the application of a more stringent system of
substantive law. This is also made clear in the explanatory
memorandum to Article 7.

The principle applicable to protection of

intellectual
5.6
property rights (Article 8), that the applicable law shall be that
of the country for which protection is sought, is already gener-
ally accepted in this area. The consequent equal treatment of
EU and foreign citizens in a given jurisdiction is welcome. A
situation where a foreign citizen's intellectual property received
either greater or lesser protection than those of an EU citizen
would be difficult to justify. Article 8(2) is therefore merely
stating the obvious.

6. Rules applicable to non-contractual obligations arising

out of an act other than a tort or delict

The restriction on the general provision of Article 5(1)
is
intended to deal with a case which in practice is likely to occur
only rarely, namely where an act of unfair competition exclu-
sively affects the interests of a specific competitor. This justifies
the general rules on torts and delicts. The
application of

(1) Proposal for a Directive of the European Parliament and of the
Council concerning unfair business-to-consumer commercial prac-
tices in the Internal Market and amending directives 84/450/EEC,
97/7/EC and 98/27/EC, COM(2003) 356, 18.6.2003.

6.1
Although the law on torts and delicts, dealt with in
Chapter II, Section 1 of the regulation, forms the core of non-
contractual obligations, rules dealing with unjust enrichment
and actions performed without due authority are nonetheless
also needed. Other non-contractual obligations, varying in
number and scope, are recognised in the Member States, which
could be regulated by a general clause, as the Commission
rightly does in Article 9(1).

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6.2
If a non-contractual obligation is based on an existing
legal relationship between the parties (which would include
contracts), it is self-evident that the law governing the existing
legal relationship would apply (secondary connection). The
Rome Convention, which lays down rules on application,
should, however, be applied to contracts specifically referred to
in the regulation. Article 9(1) is, however, worded sufficiently
flexibly to permit its application in conjunction with the provi-
sions of the Rome Convention without any conflict arising. The
provisions of Article 9(2) correspond to the text of Article 3(2)
of
the regulation and are therefore justified for the same
reasons.

including those set out in Articles 4-8, to which it is not
intended to apply. The Commission should consider this and, if
appropriate, incorporate a corresponding rule into Section 3.
In this case Article 3(3) and Article 9(5) should be deleted.

The Committee considers Article 9(6) to be superfluous,
6.6
is already achieved by the special rule
as the same effect
contained in Article 8. It would do no harm to retain the provi-
sion, however.

6.3
The provision on unjust enrichment, which applies the
law of the country in which the enrichment takes place (Article
9(3)),
is consistent with the principles recognised in most
Member States. If the enrichment takes place on the basis of an
(ineffective) contractual relationship,
the logic of Article 9
dictates that Article 9(1) shall apply (1). This should be stated
more explicitly in the operative part of the text so as to leave
no doubt in the minds of those less well versed in the law. The
rule set out in Article 38(1) and (3) of the German civil law
implementing law (EGBG), which follows the same principle,
could serve as a model. According to information provided by
the Commission representative, this would be the case only if
no secondary connection could be established under Article
9(1) or (2). The Committee feels that this should be stated
much more clearly in order to prevent misunderstandings on
the part of users of the law.

6.4 With regard to actions performed without due authority,
the regulation applies the law of the country in which the
beneficiary has his habitual residence (with the exception of the
special cases referred to in the second sentence of Article 9(4)).
This rule confers an advantage on the beneficiary in relation to
the conflict rules. If the law of the beneficiary's habitual place
of residence were applied, this would place him at an advan-
tage. One way, apparently not considered by the Commission,
of achieving neutrality in the conflict rules would be to declare
applicable the law of the place where the transaction occurs.
The Commission is asked to consider whether a solution of this
kind would not be more appropriate. Especially as,
in the
second sentence of Article 9(4), the Commission has already
adopted a similar approach. According to information provided
by the Commission representative, this would be the case only
if no secondary connection could be established under Article
9(1) or (2). The Committee feels that this should be stated
much more clearly in order to prevent misunderstandings on
the part of users of the law.

The exception clause of Article 9(5), which invokes the
6.5
law of another country if
this is manifestly more closely
connected with the obligation, is consistent with Article 3(3) of
the regulation and is therefore justified. The question arises as
to whether an overarching principle cannot be derived from
this which would apply to all the provisions of the regulation,

(1) This is confirmed, albeit very briefly,

in the explanatory memor-

andum (p. 22).

7. Common rules applicable to non-contractual obliga-
tions arising out of a tort or delict and out of an act
other than a tort or delict

The title of Section 3 of Chapter II

7.1
is unnecessarily
complicated and difficult to understand. The Committee recom-
mends that the example of the Rome Convention be followed
and that the section be entitled ‘Common Provisions’.

7.2
By granting the parties the freedom to choose the
system of law after the dispute has arisen (Article 10), the regu-
lation is rightly following a progressive trend which can, for
example, also be seen in Article 42 of the German EGBG or
Article 6 of the Dutch private international law. The Committee
welcomes this. The reservation regarding non-applicable law in
Article 10(2) and (3) is standard practice for preventing parties
from circumventing the law and is therefore unexceptionable,
although it does make practical application of the law more
complicated.

7.3
The provisions regarding the scope of the regulation
contained in Articles 3-10 are based in a modified form on the
model of Article 10 of the Rome Convention. The considerable
detail testifies to the Commission's commendable efforts to
achieve a high level of legal certainty.

7.4
One potential problem area, however, is the provision
of Article 11(d), in view of the fact that, in accordance with
generally accepted principles, the procedural law will be subject
to the lex fori. The Commission should leave this principle
intact. Any procedural steps for enforcing and (in a preventive
way) safeguarding material claims should be taken in accord-
ance with the law of the competent jurisdiction. The question
as to whether such a material claim exists should be dealt with
in accordance with the law designated under Articles 3-10. The
wording of the explanatory memorandum suggests that this
may have been the Commission's intention. Where court
procedures and material claims are inextricably linked, an
exception from the lex fori rule would appear justified and the
lex causae could be applied.

7.5
Article 12, which deals with the difficult subject of over-
riding mandatory rules, is based, mutatis mutandis, on Article 7
of the Rome Convention and is therefore in line with standard
practice in conflict rules. The title, which differs from that used
in the Rome Convention, reflects developments in terminology
since 1980.

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the Committee considers that

7.6
Article 13 provides for the automatic applicability of
rules of safety and conduct, which is in principle justified.
However,
the rules applied
should be those in force at the place where the perpetrator
acted, as he could be expected to observe them. The provisions
of Article 7 of the Hague Convention on the law applicable to
traffic accidents can, contrary to the assertions of the explana-
tory memorandum (p. 25), be interpreted in this way, as the
article refers to the rules in force at the place and time of the
accident. The Commission representative
also interpreted
Article 13 in this way. The Committee considers that this is
not made sufficiently clear, at least in some language versions.
The Committee therefore calls on the Commission to state
unequivocally in Article 13 of the regulation that the applicable
rules of safety and conduct shall be those in force at the place
where the perpetrator acted.

7.7
The rule regarding direct action against the insurer of
the person claimed to be liable is appropriate and is the
substantive corollary to the procedural rule set out in Article
11(2) of Council Regulation (EC) No 44/2001.

The rule regarding subrogation (Article 15) is consistent
7.8
with Article 13 of
the Rome Convention and poses no
problem. The Commission will need to make sure that this
remains true when the Rome Convention is reworked as a
European regulation (Rome I Regulation). The same is true of
Article 17 (Burden of proof), which is consistent with Article
14 of the Rome Convention. Article 16 is a successful adapta-
tion of the provisions of Article 9(4) of the Rome Convention
which,
in the light of the different subject matter, can only
serve as a starting point.

8. Other provisions/Final provisions

8.1
The matters dealt with in Chapters III and IV are predo-
minantly technical rules consistent with general standards in
conflict of laws; they therefore pose no problem and require no
detailed comment. This applies in particular to Article 20
(Exclusion of renvoi), which is consistent with Article 15 of the
Rome Convention, Article 21 (States with more than one legal
the Rome
system), which is consistent with Article 19 of
Convention, Article 22 (Public policy of the forum), which is
consistent with Article 16 of the Rome Convention and Article
25 (Relationship with existing international conventions),
which is consistent with Article 21 of the Rome Convention.

8.2
For the purposes of the regulation, Article 18 assimilates
to the territory of a state certain areas which do not normally
fall within such territory. This has the effect of closing certain
undesirable gaps in the law and preventing fortuitous applica-
tion of systems of law. The Committee welcomes this.

The habitual place of residence of a person plays a
8.3
central role in current private international
law, and conse-
quently in the regulation, when determining the applicable law.

Although determining the habitual place of residence of a
natural person is usually unproblematic, doubts may arise in
relation to legal persons. The regulation disposes of such
doubts in an appropriate way by declaring the main place of
business to be the decisive criterion. It would not have been
appropriate to model this provision on Article 60 of Council
Regulation (EC) No 44/2001, as this regulation generally takes
the place of permanent residence rather than that of habitual
residence as the criterion, and also as the threefold solution
adopted there would have meant less legal certainty.

Article 24 was

8.4
incorporated into the text by the
Commission only as a result of proposals made at the hearing
of January 2003. It is based on Article 40(3) of the German
EGBG,
the purpose of which is to prevent, by means of
substantive law, claims being lodged which are generally
regarded in the Community as excessive, thus rendering super-
fluous any dispute or discussion as to whether such claims are
incompatible with public policy. The Committee wholeheart-
edly endorses the Commission's intention. But would the inter-
ests of a party claiming compensation be served if (for other-
wise perfectly sound legal reasons) he were to be denied
compensation for damage suffered merely because, under a
foreign system of law, provision was made both for damages
which would be considered acceptable in the Member States
but also for punitive (e.g. triple) damages which would not be
considered acceptable? The Committee fears that the current
wording of Article 24 might have exactly this effect. It there-
fore proposes that the provision be reworded as follows:

‘The application of a provision of the law designated by this
Regulation shall give rise to no claim for damages only where
such damages would clearly serve purposes other than the
appropriate compensation of the injured party.’

8.5
Article 25 of the regulation contains a proviso on inter-
national conventions to which Member States are parties,
giving these priority regarding conflict-of-law rules relating to
non-contractual obligations. This provision broadly corre-
sponds to Article 21 of the Rome Convention but, unlike the
Rome Convention, does not exempt future treaty commitments
which deviate from Community law. This difference arises
from the intention that the regulation should be binding on
legislative authorities and from the need to prevent
national
further fragmentation of the law in the Community in the
future. The Committee welcomes this proviso, as it enables the
Member States to continue to honour existing treaty commit-
ments and to continue to be parties to important conventions,
which in some cases are applied worldwide. In this context, the
Committee would quote as examples the Berne Convention on
the protection of literary and artistic works of 9 September
1896, the Agreement on trade-related aspects of intellectual
property rights (TRIPS), the International Convention for the
unification of certain rules of law relating to assistance and
salvage at sea of 23 September 1910 and the International
Convention relating to the limitation of the liability of owners
of sea-going ships.

28.9.2004

EN

Official Journal of the European Union

C 241/7

9. Conclusion

The Committee calls on the Commission, once corrections
have been made, to complete work on the regulation as rapidly
as possible so that it can enter into force. The Commission
should:

— clarify the relationship between the Article 5 of the regu-
lation and Article 4(1) of the directive on unfair competi-
tion and adapt the explanatory memorandum accordingly;

— reconsider whether giving the injured party the choice of
applicable law in cases involving violation of the environ-
ment (Article 7) is really appropriate;

— clarify the relationship between Article 9(3) and (4), on the
one hand, and Article 9(1) and (2), on the other, in the text
of the regulation;

— consider whether,

it would not be more
appropriate to declare applicable the system of law of the
place where the transaction takes place;

in Article 9(4),

Brussels, 2 June 2004.

— consider whether Article 9(5) should be made a general

principle of the regulation and inserted in Section 3;

— amend the title of Section 3 to read ‘Common Provisions’;

— make it clear in Article 13 that the rules of safety and
conduct applied shall be those in force at the place where
the event occurred;

— reword Article 24 to read as follows:

‘The application of a provision of the law designated by this
Regulation shall give rise to no claim for damages only
where such damages would clearly serve purposes other
than the appropriate compensation of the injured party.’

The President

of the European Economic and Social Committee

Roger BRIESCH

Opinion of the European Economic and Social Committee on the ‘Communication from the
Commission to the Council, the European Parliament, the Economic and Social Committee and the
Committee of the Regions — A Stronger European-based Pharmaceutical Industry for the Benefit
of the Patient — A Call for Action’

(COM(2003) 383 final)

(2004/C 241/02)

On 16 October 2003, the European Commission decided to consult the European Economic and Social
Committee, under Article 262 of the Treaty establishing the European Community, on the ‘Communication
from the Commission to the Council, the European Parliament, the Economic and Social Committee and
the Committee of the Regions — A Stronger European-based Pharmaceutical Industry for the Benefit of
the Patient — A Call for Action’.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the
Committee's work on this subject, adopted its opinion on 4 May 2004. The rapporteur was Mrs O'Neill.

At its 409th plenary session of 2 and 3 June 2004 (meeting of 2 June), the European Economic and Social
Committee adopted the following opinion by 164 votes to 1 with 10 abstentions.

1. Background

1.1
It has long been recognised that the European-based
pharmaceutical industry plays a critical role in both the indus-
trial and health sectors. Within European institutions there has
been considerable emphasis on developing the various compo-
nents which make up the industry and the consequent advan-
tages to patients.

1.2
To this effect the Lisbon Council in 2000 set the EU a
strategic goal of ‘building the most competitive and dynamic

knowledge-based economy in the world, capable of sustainable
economic growth with more and better jobs and greater social
cohesion’, in which the pharmaceutical industry would play a
vital role.

1.3
The Council of Ministers, in its conclusions on Medical
Products and Public Health in June 2000, underlined the
innovative medicines, with significant added
importance of
therapeutic value,
to the attainment of both industrial and
public health sector goals.