EU Puts In Place New Harmonised Civil Liability Rules

by Ulrika Lomas, for LawAndTax-News.com, Brussels

17 May 2007

After four years of negotiations, the European Parliament and the Council, meeting in the Conciliation Committee on Tuesday evening, approved a regulation harmonising the rules concerning the law applicable to non-contractual obligations (Rome II).

The aim is to ensure that courts in all the Member States apply the same law in the event of cross-border disputes in matters of tort/delict, thus facilitating the mutual recognition of court decisions in the European Union.

The rules that have been adopted make it possible to strike a proper balance between the interests of the various parties involved in a cross-border dispute and to designate a law which is closely connected with the situation.

"I am glad that the two legislative bodies have at last agreed on this instrument, which, by its very nature, potentially concerns all the citizens and firms of the Union," stated Vice-President Franco Frattini, European Commissioner for Justice and Home Affairs.

He continued: "This is a fundamental instrument both for the completion of the European area of justice and for the proper functioning of the internal market. It is unacceptable that, as regards compensation for damage caused to persons and property, the settlement of a dispute varies considerably depending on which court it is referred to."

The initiative more particularly concerns questions related to civil liability for damage caused to others, particularly in the event of an accident. It applies, for example, to road accidents, defective products and environmental pollution.

Expanding trade and travel in the Union mean that disputes of this nature are bound to become more frequent. However, currently, EU Member States have no common rules to designate the applicable law in non-contractual matters, and each court observes its national rules. Accordingly, the legal solutions are likely to vary widely from one Member State to another, and parties might be tempted to refer the dispute to the court which will apply the law that is most favourable to them (known as forum shopping).

The Rome II rules aim to strike a reasonable balance between the interests of the alleged perpetrator of the damage and the victim. The Regulation adopts the solution applied in the majority of Member States and establishes a general rule that the law of the country in which the damage occurs (for example, the law of the place of the road accident) will apply, unless the parties both have their habitual residence in another country, in which case the law of that country will apply.

There are a number of specific rules for the commonest specific torts/delicts such as product liability, environmental damage, anti-competitive practices, etc.

Regarding the highly controversial question of media violations of privacy, the co-legislators chose to exclude them from the scope of the Regulation, but called on the Commission to present a detailed study by the end of 2008.

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