Hague Draft Threatens Online Businesses With Cross-Border Litigation

by Ulrika Lomas, Tax-news.com, Brussels

05 June 2001

Delegates of the Hague Conference on Private International law will meet on the 6th of June to attempt to finalise a draft convention which has been under discussion for seven years. The convention, when finalised, will set rules for jurisdiction and the enforcement of foreign judgement in other countries, and would permit consumers to raise actions in their home courts, rather than allowing websites to use their terms and conditions to determine where they can be sued. The draft also contains provisions which ensure that the judgement of a court in one country can be enforced by other countries should the occasion arise.

Critics fear that international e-commerce growth may be restricted by the draft, warning that rather than attempting to comply with the laws of the strictest countries in order to avoid liability for their content, many online businesses may just refuse to do business with consumers from certain countries. However, this is already the prevailing wisdom among many websites, who will not do business with consumers in countries where they are unsure of local laws.

Countries involved in drafting the convention include the United States, Canada, Australia, Japan and a European contingent, and negotiations have been ongoing since 1996. Most of the discussion surrounding the draft took place before the advent of e-commerce, and although it was this event that injected the proceedings with a sense of urgency, many feel that its terms may be difficult to apply as a result of rapid development in the e-commerce arena.

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