Conflict among Conflict Rules – PEOPIL & BIICL Conference – London – 24 March 2015
Article originally published in http://travellawyersblog.com/2015/04/02/conflict-among-conflict-rules/
In this blog post, I will briefly use one of the many examples of obscurity to show how Rome 2 creates conflicting co-existence between conflict rules: article 28(2). I will attempt to explain the problem though a couple of examples.
On January 10, 2012, Mr. Bond, Mr. James Bond, a United Kingdom national originally born in Australia and with official residence in Dordogne (France), decides to take a holiday trip with his boyfriend, Mr. Clouseau, a French national with residence in Biarritz (France).
They take Mr. Clouseau’s car, a lovely yellow Citröen 2CV, registered and insured in France. While discovering some of the many wonderful places in Spain, they decide to stop by Valencia, in order to enjoy one of the typical “paellas”, for which this venue is world famous. Before arriving, and still on the highway, their car is violently hit from behind by a public transport bus, owned and registered by the Municipality of Valencia and insured by a Spanish insurance company.
Mr. Clouseau, who was driving at the time of the accident, escapes totally unharmed. Unfortunately, this is not the case for Mr. Bond (who was seated in the front passenger seat and properly wearing his seatbelt), who suffers a head and brain injury. The Police Investigation determined that the accident was directly caused by the negligence committed by the bus driver.
After several weeks of hospitalization in Spain, Mr. Bond is transferred to a Hospital in Biarritz, while his French social insurer is advancing all medical expenses. Once stabilised, Mr. Bond moves (or is moved) to Australia to continue his recovery process. As a result, Mr. Bond sustains a relevant past and future loss of income.
This (not too) fictional case poses several challenging questions. The most obvious is identifying the defendant, and subsequently jurisdiction and applicable law. These issues cannot be taken as isolated silos, as they are linked. Let’s elaborate on this.
First, who are the potential defendants? Well, at a first glance, it is clear that the bus driver and the bus insurer are deemed to be liable, because they caused the accident.
But, can be the car driver (and, of course, his insurer) be directly responsible for the harm caused to the passengers occupying that vehicle? For the purposes on this short blog, I will assume that the European Motor Insurance Directives indirectly impose a strict and no fault liability regime, making any driver liable for the damages caused, with no regard of where the fault lies, in case there is one.
This means that Mr. Bond could eventually sue Mr. Clouseau and his insurer, a possibility that Mr. Bond would be more inclined to pursue after Mr. Clouseau broke off the relationship with him.
Would the applicable law be the same in one side or the other of the Pyrenees? This is an interesting question. We have here two potential conflict rules that may eventually be applicable, the first being the Rome 2 regulation and the second The Hague Convention of 4 May 1971 on the Law Applicable to Traffic Accidents.
Based on Regulation 44/2001 (sorry, Regulation 1215/2012, it took me more than ten years to get the original number in my head…), French domiciled parties (the car driver and its insurer) can be sued in France, and Spanish domiciled parties (the bus driver and its insurer) can be sued in Spain.
If Mr. Bond filed an action against the bus driver and its insurer in Spain then both conflict rules would lead to the application of Spanish law. Why?
The basic general provision of Rome 2 establishes that:
“[U]nless otherwise provided for in this Regulation, the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs 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 occur.”
This would also be the case if the Hague Convention was to be applied, as article 3 states that, and I quote again, “The applicable law is the internal law of the State where the accident occurred.” None of the exceptions to this rule, to be found in article 4, apply to this case. Spanish law would be, for sure, the applicable if the lawsuit was filed in Spain against the bus driver and its insurer.
But what if Mr. Bond filed an action for damages in France against his former boyfriend Mr. Clouseau and its insurer? In this scenario, Rome 2 provides, as article 4(2) states, that “where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.” However, if the Hague Convention applied, then article 3 would still apply and therefore the French Court should apply Spanish law.
France or Spain?
The difference in result would be substantial in each jurisdiction, mainly due to the evaluation of damages. I recall that evaluation of loss of income in France is based on an actuarial calculation, which is not far from what you know in the UK as the Odgen Tables. But Spain is very different: the Spanish scale of damages, mandatorily applied to RTA and widely applied by Courts to all kinds of personal injury, vastly ignore the loss of income (fortunately, a brand new scale of damages will see the light of day soon – except if the insurance lobby succeeds in their attempt to block it).
Regulation or Convention?
The Rome 2 Regulation contains a compatibility rule in article 28, which states in paragraph 1 that:
“This regulation shall not prejudice the application of international conventions to which one or more Member States are parties at the time when this Regulation is adopted and which lay down conflict-of-law rules relating to non-contractual obligations.”
On the face of it, this general provision would appear to command the application of the Convention over the Regulation, given that both France and Spain have ratified the Convention. But if we continue reading, paragraph 2 of article 28:
“However, this Regulation shall, as between Member States, take precedence over conventions concluded exclusively between two or more of them in so far as such conventions concern matters governed by this Regulation.”
The question here, then, is the meaning to be assigned to the phrase “conventions concluded exclusively between two or more of them,” and particularly the adverb “exclusively.”
Does “exclusively” mean that the Regulation will apply only if the Convention in conflict was ratified by Member States, irrespective of whether theirs laws were involved in the conflict of laws or not? Or does it refer more to the fact that the scope of the conflict of laws is exclusively limited to Member States?
While the literal drafting of this paragraph (the quality of which is highly disputable) might lead you to think that this provision will not be applicable when non EU States ratified the Convention, an understanding based in logic and in the objectives and primacy of the European Law is that, since two Member States are necessarily bound by the Regulation and the conflict of law is limited to both States, the Regulation should prevail for the shake of uniformity, which is one of the goals of the Regulation. Only if the conflict of laws implied the potential application of the law of a non Member State would the Convention would prevail. The literal interpretation would, in addition, leave this provision without almost any applicability, as it will be difficult to find multilateral Conventions on related matters only signed by Member States.
Let us imagine another an example. This time, it is a collision in Germany between two cars both registered in France and carrying only passengers with their habitual residence in France, with a third car involved that is registered in German. If the claim was to be brought in Germany, the Regulation would apply (Germany is not a signatory of the Convention) and it would designate French law towards the drivers and victim passengers, as they are habitually residing in France. However, if the case were to be brought in France, the Convention (France is a signatory of the Convention) would lead to the application of German law, due to the fact that all of the vehicles involved in the accident were not registered in the same State.
In the example above, the German law would provide less favourable compensation for non-pecuniary damages than French law, so it would appear to be preferable that the injured victims, as habitual residents in France, bring their case in Germany where the French law would apply under the Regulation, rather than in France where the German law would apply under the Convention.
Isn’t it nonsense?
But there is a difference between this example and the previous example I presented. Germany is not a signatory State of the Convention but Spain is. So, while the German Court could only apply the provisions of Article 4(2) of the Regulation (i.e. the law of the drivers’ and passengers’ common country of habitual residence – which would result in the application of French law), the Spanish and/or the French Court would apply the provisions of Articles 3 and 4 (b) of the Convention in accordance with the strict interpretation of Article 28 (2) of the Regulation, which would ultimately result in the application of Spanish law.
It is therefore of clear relevance to question the real scope of article 28(2) of the Regulation, and see if it really should be construed as excluding the application of the Regulation.
The Convention has been concluded neither exclusively between France and Spain as Member States, nor exclusively between France, Spain and another Member State. Twelve EU Members States are also party to the Convention, which would mean that the Regulation would never apply for those twelve EU Member States.
But that seems to be the scope of the adverb “exclusively,” which syntactically does not permit any different meaning. However, it is logically surprising that this drafting of Article 28(2) must lead to considering that EU Member States cannot apply, between them, the European Regulation, because they also are parties to a Convention signed with States that are not EU Member States.
Would it not be more in accordance with the central principle of primacy of European law, to consider that the Regulation shall, as between EU Member States, take precedence exclusively over conventions concluded between two or more of them? In other words, the Regulation should only take precedence over the Convention when the latter has been concluded between an EU Member State(s) and a non-EU Member State(s).
Cour de cassation
This is, however, not the solution issued by the French Court of cassation on 30 April 2014 in a cases paralleling the aforementioned Spanish accident. The Cour de cassation ruled that:
“… the Hague Convention… having not been concluded exclusively between States members of the European Union, but equally by third States, the 864/2007 Regulation did not precede over it, so that it did not affect that Convention’s application….”
Discussion on the meaning and of the adverb “exclusively” is probably not over, though. I still think that there is room for discussion here and an eventual request for a preliminary ruling could be made, when the opportunity arises, to the ECJ. The question could be put as follows:
Must article 28(2) of the Regulation (EC) No 864/2007 Of The European Parliament And Of The Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) be interpreted as precluding the applicability of the rules of conflict established by the foresaid Regulation in favour those of an international Convention previously subscribed between several States, both Member States and non Member States, since the dispute only concerns Member States that have ratified such international Convention?
If one was to simply move the word “exclusively” backwards in the provision, you would see the following new provision:
“However, this Regulation shall, as between Member States, take precedence exclusively over conventions concluded between two or more of them in so far as such conventions concern matters governed by this Regulation”.
This drafting looks far more reasonable and much more in accordance with the aims and goals of the European Law, and particularly this specific regulation.