Communication from the Commission to the European Parliament pursuant to the second subparagraph of Article 251 (2) of the EC Treaty concerning the common position of the Council on the adoption of a Regulation of the European Parliament and of the Council on the law applicable to non-contractual obligations ("Rome II")
Date: 2006-09-27
Institutions: European Commission
Subjects: area of freedom, security and justice, civil law, commercial law, jurisdiction, law of obligations, mutual recognition principle

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.9.2006 
COM(2006) 566 final 

2003/0168 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to the second subparagraph of Article 251 (2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Regulation of the European 
Parliament and of the Council on the law applicable to non-contractual obligations 
("Rome II") 

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2003/0168 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to the second subparagraph of Article 251 (2) of the EC Treaty 

concerning the 

common position of the Council on the adoption of a Regulation of the European 
Parliament and of the Council on the law applicable to non-contractual obligations 
("Rome II") 

1. 

BACKGROUND 

Date  of  transmission  of  the  proposal  to  the  EP  and  the  Council
(document COM(2003) 427 final – 2003/0168 (COD) 

22.7.2003 

Date  of  the  opinion  of  the  European  Economic  and  Social 
Committee: 

2.6.2004 

Date of the opinion of the European Parliament, first reading: 

6.7.2005 

Date of transmission of the amended proposal: 

21.2.2006 

Date of adoption of the common position (qualified majority vote): 

25.9.2006 

2. 

OBJECTIVES OF THE COMMISSION PROPOSAL 

International jurisdiction, recognition and enforcement in a Member State of judgments given 
in another Member State are dealt by the Regulation No. 44/2001, which applies in civil and 
commercial matters both to contractual and non-contractual obligations. As regards applicable 
law, the rules  on contracts  were  harmonised between the Member States by the 1980 Rome 
Convention on the law applicable to contractual obligations. However, there are no general 
harmonised rules within the Community for determining the law applicable to non-contractual 
obligations. The Commission proposal is intended to fill this gap.  

Thus,  the  Commission  proposal  aims  at  harmonising  the  applicable  law  rules  on  non-
contractual  obligations  of  civil  and  commercial  nature  (traffic  accidents,  product  liability, 
unfair  competition  etc.)  and  adopt  common  rule  across  the  EU  for  the  determination  of  the 
law applicable to such obligations.  

The  aims  of  the  harmonisation  of  these  rules  is  to  offer  higher  level  of  legal  certainty  to 
individuals and economic operators as heretofore and avoid "forum shopping" which leads to 
potentially different substantive results for the parties depending on which court was seized of 
the matter.  

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3. 

COMMENTS ON THE COMMON POSITION 

3.1. 

General comment 

The  Council’s  common  position  retains  the  essence  of  the  Commission’s  initial  proposal  as 
modified by the amended proposal which reflected a number of amendments adopted by the 
European Parliament in its first reading. 

The substantive differences in the common position in comparison with the amended proposal 
of  the  Commission  and  the  Parliament’s  amendment  are  commented  on  in  further  detail 
below. 

3.2. 

Substantive departures from the Commission’s amended proposal 

Article  1(2)(g)  reflects  the  Commission’s  amended  proposal  (Article  1(2)(h))  where  the 
Commission suggested the exclusion from scope of violations of privacy and of rights relating 
to personality when perpetrated by the media. The common position goes, however, further. It 
does not limit this exclusion only to non-contractual obligations entered into by the media, but 
extends it to all and any such non-contractual obligation. The main reason for this approach 
was the ultimate inability to agree on the scope (definition) of media in this context.  

This exclusion is mitigated by the wording of the review clause (Article 30) which focuses the 
attention to this specific area of non-contractual obligation as a specific subject of the report 
on the application of the future Regulation. 

Article  5  on  product  liability  departs  in  its  drafting  approach  considerably  from  the 
Commission’s  proposal  (Article  6  of  the  amended  proposal),  albeit  not  in  its  intention.  The 
common  position  reflects  the  need  for  a  specific  rule  on  products  liability  which  strikes  an 
appropriate balance between the interests of the victim and the person liable.  

The Commission continues to regret the approach in the common position which provides for 
a  rather  complex  system  of  cascade  application  of  connecting  factors.  It  remains  persuaded 
that its original solution offered an equally balanced solution for the interests at stake, while 
expressed in much simpler drafting. 

Article 6 extends the application of the rule on unfair competition also to acts restricting free 
competition,  while  Article  7  of  the  Commission’s  amended  proposal  applies  only  to  unfair 
commercial practices. It follows from the Explanatory Memorandum to the amended proposal 
(point 3.4., Amendment 29) that the absence of an explicit rule for competition cases in the 
amended proposal was due to the then pending public consultation on the Commission Green 
Paper on "Damages actions for breach of EC antitrust rules". Indeed, the Commission did non 
want to pre-empt that consultation by including already in its amended proposal an applicable 
law rule for non-contractual obligations arising out of a breach of the competition rules. The 
Commission did, however, stipulate in the Explanatory Memorandum that in the course of the 
co-decision  procedure,  it  may  support  a  different  solution  for  competition  cases.  The 
Commission reserves the right to do so particularly in order to preserve the effectiveness of 
the right of natural and legal persons to seek compensation for loss caused by an infringement 
of  the  competition  rules.  Having  regard  to  the  Council  common  position,  the  Commission 
maintains  its  position  that  it  may  support  a  different  solution  for  competition  cases  in  the 
course of the co-decision procedure. 

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Article 9 introduces a specific rule on the law applicable to non-contractual obligations arising 
out of industrial action. The provision on these lines was part of the Parliament’s amendments 
which  the  Commission  did  not  accept  and  consequently  was  not  included  in  its  amended 
proposal.  

The text of the provision in the common position is a redraft which attempts to give effect to 
the main objections of the Commission during the discussions in the Council. Its scope is now 
defined  more  precisely  and  is,  in  particular,  limited  to  the  issue  of  liability  of  employers, 
workers and/or trade unions in the context of an industrial action. The text is, however, still 
unclear  that  it  should  not  extend  to  relationships  vis-à-vis  third  parties  and  the  Commission 
regrets this lack of clarity.  

Article 16 departs from Article 13 of the Commission’s amended proposal which contained an 
additional  paragraph  dealing  with  the  possibility  for  the  court  to  give  effect  to  overriding 
mandatory rules of another country than the country whose law is applicable under the rules 
of the instrument. This provision in the Commission’s proposal did not reflect any particular 
Community interest; it was aiming at consistency as it was inspired by a similar provision in 
the  1980  Rome  Convention  on  the  Law  Applicable  to  Contractual  Obligations.  The 
Commission has accepted this deletion. 

Article  26  on  public  policy  does  not  reflect  the  wording  of  Article  23  of  the  Commission’s 
amended proposal, which in turn was the result of the earlier discussions in the Council where 
the  original  Commission’s  proposal  for  a  specific  article  dealing  with  non-compensatory 
damages  was  rejected.  Subsequent  to  the  discussions  on  the  amended  proposal,  the  idea 
reflected in the amendment was moved into a recital and ultimately dropped completely when 
no  agreement  could  be  achieved  over  its  content,  while  there  is  no  disagreement  that  the 
public policy clause does offer sufficient guarantee and protection against potential negative 
effects of awards of extreme non-compensatory damages.  

Article  27  departs  from  Article  23  in  the  Commission’s  initial  proposal  (Article  3  of  the 
amended  proposal)  which  contained  a  much  more  detailed  rule  explaining  the  relationship 
between the different sources of Community law (in particular as regards the relationship with 
specific instruments promoting the proper functioning of the internal market). In view of the 
recent  developments  in  the  European  Parliament  and  the  Council  in  the  context  of 
negotiations  of  other  proposals  such  specifically  tailored  provision  in  this  instrument  seems 
no longer necessary. 

Article  28  on  the  relationship  with  other  international  conventions  differs  from  the 
Commission’s amended proposal in that it  

a) does not limit the application of paragraph 1 to multilateral conventions only and to such 
which are concluded in "particular matters", 

b) contains a specific rule in paragraph 2 for the priority of the Regulation over conventions 
concluded exclusively between the Member States, 

c)  as  a  consequence  of  the  above,  the  provision  gives  priority  to  The  Hague  1971  Traffic 
Accidents  and  the  1973  Products  Liability  Conventions  in  all  circumstances,  even  when  all 
relevant aspects of the situation are situated in the Community. 

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While the first two above mentioned departures from the amended text of the proposal do not, 
in principle, generate difficulties for the Commission, the Commission continues to regret the 
approach  adopted  in  the  common  position,  giving  a  general  priority  to  multilateral 
conventions  even  when  all  relevant  aspects  of  the  situation  are  locating  only  within  the 
Community.  The  European  Parliament  wished  in  such  circumstances  to  give  priority  to  the 
new regulation over the Hague Traffic Accidents Convention. The approach in the Common 
position undermines the strivings for harmonised solutions within the Community.  

Even though this aspect is somewhat mitigated by the specific reference to traffic accidents 
issues in the Review Clause (Article 30 in the common position), which is intended to give 
special  attention  to  the  issue  of  traffic  accidents  in  the  report  on  the  application  of  the 
Regulation  in  order  to  evaluate  the  effects  of  absence  of  fully  harmonised  rules  on  law 
applicable  on  traffic  accidents  within  the  Community,  the  Commission  still  would  have 
preferred the text proposed in its amended proposal (Article 24(2) of that proposal).  

The  Commission  regrets  that  the  declaration  which  it  made  during  the  final  stage  of  the 
negotiations  in  the  Council1  is  not  accurately  reflected  in  the  recital  33  of  the  common 
position.  

3.3. 

Parliament's amendments 

Overall,  the  common  position  incorporates,  either  fully  or  in  spirit,  most  of  the  European 
Parliament’s amendments on the substantive provisions of the proposal which were accepted 
by the Commission and reflected in its amended proposal.  

There  are,  however,  some  important  divergences  between  the  amended  proposal  and  the 
common position as regards the Parliament’s amendments which have already been referred 
to in point 3.2 above, such as: 

Article 9 in the common position reflects amendment 31 by the European Parliament which 
the Commission did not accept and was not part of its amended proposal; 

Article  27  in  the  common  position  does  not  incorporate  in  its  entirety  Article  3  of  the 
amended proposal which reflected Parliament's amendment 24; 

Article  28  in  the  common  position  is  based  on  a  different  perspective  when  compared  to 
Article  24  of  the  amended  proposal  as  regards,  in  particular,  the  relationship  to  the  Hague 
1971 Traffic Accidents Convention as suggested by the Parliament’s amendment 53. 

3.4. 

New provisions introduced by the Council:  

Article  2  is  a  provision  of  a  technical  nature  which  intends  to  provide  definition  of  certain 
concepts  used  throughout  the  Regulation  with  the  intention  to  simplify  the  drafting  of  its 
individual provisions. 

1 

At  the  JHA  Council  meeting  in  Luxembourg  (27  and  28  April  2006)  the  Commission  made  this 
declaration: "The Commission is prepared, in appropriate cases, to examine the possibility of  making 
proposal  to  the  Council  authorising  Member  States  to  conclude  international  agreements  concerning 
specific sectoral matters which contain provisions on the law applicable to non-contractual obligations. 
This  remains  without  prejudice  to  the  possibility  of  the  Community  to  negotiate  and  conclude  such 
international agreements in accordance with the provisions of Article 300 EC." 

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Article  12  introduces  a  specific  proposal  for  non-contractual  obligations  preceding  the 
conclusion  of  a  contract.  Such  specific  provision  was  not  included  in  the  Commission’s 
proposal,  even  though  the  intention  was  always  to  cover  this  type  of  obligations  by  this 
instrument. This reflected the line taken in the case law of the European Court of Justice in 
the context of the 1968 Brussels Convention (replaced by Regulation 44/2001), whereby this 
type of obligations is to be considered non-contractual2. The Commission has originally opted 
for a more flexible solution in the Article 5(3) of its amended proposal, whereas the Council 
seems to prefer a more detailed provision on the issue. The content of the proposed provision 
leads, in principle, to the same result as envisaged by the Commission, i.e. to the application 
of the law of the country which is most closely connected with the non-contractual obligation.  

4. 

CONCLUSION 

The Commission accepts the common position in the light of the fact that it includes the key 
elements included in its initial proposal and Parliament’s amendments as incorporated into its 
amended proposal. 

2 

Following  the  same  reasoning,  this  type  of  obligations  was  excluded  from  the  scope  of  the 
Commission’s proposal for a Regulation on the Law Applicable to Contractual Obligations ("Rome I") 
adopted on 15 December 2005 - COM(2005) 650 final, 2005/0261 (COD). 

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