Conflict of tort laws

In Conflict of Laws, the choice of law rule for tort is the proper law.

History

The first attempts to establish a coherent choice of law rule for tort cases involving a foreign law element varied between favouring the lex fori and the lex loci delicti commissi, i.e. the law of the place where the tort was committed. The public policy (ordre public) of territorial sovereignty was always the principal consideration. Hence, the forum courts always claimed their right to apply their laws to determine whether any lawsuit initiated in their jurisdiction allowed a remedy. Equally, it is the commission of a tort that vests a right of action in a claimant and therefore, it should always be for the law of the place where that right was created to determine the extent of any remedy flowing from it. In the end, a compromise emerged where the lex loci delicti was the first point of reference but courts retained a discretion to substitute the lex fori if the foreign law was deemed unfair and other practical considerations pointed to the application of forum law. In the U.S., see the New York decision in Babcock v. Jackson, 191 N.E.2d 279 (N.Y. 1963) for a discussion of the issues. This led to a debate in which state interests, rather than strict territorial connections, were suggested as the basis of a new test. In 1971, the American Law Institute produced the Second Conflicts Restatements and section 6 provides that the applicable law should be the one with the “most significant relationship” to the tort. In other common law states, a parallel movement occurred and resulted in the adoption of a proper law test. In substance, both forms are similar in their approach.

Explanation

The presumptive choice of law rule for tort is that the proper law applies. This is the law that has the greatest relevance to the issues involved. In public policy terms, this is likely to be the law of the place of the where the key elements of the "wrong" were performed or occurred (the lex loci delicti). So if A is a pedestrian injured by B's negligent driving, the law of the state in which the injury is sustained has the best claim to be applied because, in public policy terms, the citizens of that state have a clear interest in regulating the standard of driving on their roads. That either or both the parties might have domiciles outside that state would be irrelevant. But, if A buys a car from B in State X and drives it into State Y where A is injured by a defect in the car, the situation is not so clear cut. There is potential liability both for breach of contract and for negligent misstatement, deceit and failure to adequately maintain the vehicle prior to sale. There is no genuine connection either in fact or law with the law of State Y. It was pure chance that the injury was sustained there. In fact, the law of State X is the lex loci contractus and the most appropriate law since everything relevant to the potential tortious liability occurred in that state which has the greatest interest in maintaining consumer confidence in the motor trade. Thus, no matter where A sues B, the forum court should apply the law of State X to resolve the various causes of action. For these purposes, the forum conveniens would be the State in which B has residence and/or holds assets. One of the key considerations in any Conflict dispute is the enforceability of the resulting judgment. Courts are more willing to accept cases with a foreign law element when one of the parties is domiciled or has residence within their territorial jurisdiction, or has assets against which judgment can be levied.

However, if the tort was intentional, there are two competing theories as to which law is the most appropriate. For example, A writes a defamatory letter in State X and posts it to B in State Y, clearly damaging the reputation of C in State Y. The initiatory or subjective theory provides that the proper law is the law of the state in which all the initial components of the tort occurred. In the example given, A may never have left State X and the argument would be made that State X would have the better claim to determine the extent of liability for those who, whether temporarily or not, owe it allegiance. Hence, if A sent a reference to B about C in the ordinary course of business, or submitted for publication by B a review of an artistic work by C, the policy claims of State X would be strong. The terminatory or objective theory provides that the law of the State in which the last component occurred (i.e. where the loss or damage was sustained) should be the proper law. Here, the argument is that unless and until the damage is sustained, the tort is not complete. Unlike criminal law, there is no liability for attempted tort. Hence, since the tort does not exist to give rise to liability until the letter is read by B in State Y, only State Y has an interest in the application of its laws. There is no international agreement on which theory is to be preferred and each state therefore applies its local choice of law rules. But the enforceability of any judgment would be a relevant consideration. Suppose that the law of State X might offer a partial or complete defence to A. Hence, C naturally prefers to invoke the jurisdiction of State Y's courts. If there is no system for reciprocal and automatic registration and enforcement of judgments between the two states, State Y (and any other State in which jurisdiction might be sought) would be reluctant to accpet the case since no court likes to waste its time in hearing a case if it is not going to be enforceable.

In summary, therefore, selecting the proper law in tort cases is subject to a balancing of public policy and practical considerations and, although each set of choice of law rules will give an indication of likely outcome, the individual decisions on the merits are not stricly subject to precedent and outcomes may vary depending on circumstances.

European harmonisation provisions

Under Article 3 of the proposed Rome II on the Law Applicable to Non-Contractual Obligations (22nd July, 2003), there would be a general presumption that the lex loci delicti will apply subject to either:

• an exception in Paragraph 2 for the application of the law any common habitual residence between the parties. The concept of habitual residence is the civil law equivalent of the common law test of domicile. This exception will be satisfactory so long as the laws are substantially the same on the claimed relief.
• a further exception in Paragraph 3 for cases in which “the non-contractual obligation is manifestly more closely connected with another country. . .” the so-called proxomity criterion.

Until formal guidance is given on the circumstances in which either exception will operate, there will either be considerable forum shopping to select the state's with the most favourable interpretation, or courts will resolve the uncertainty by applying the lex fori.

In product liability cases, Article 4 selects the law of the injured party’s habitual residence if the product was marketed there with the consent of the defendant. The rationale is that if a defendant knows of, and is benefiting from, sales in the plaintiff’s state, the choice of that law is reasonable.

Article 6 specifies the lex fori for actions arising out of breach of privacy or defamation, a rule that may increase the risk of forum shopping. Whether the plaintiff has any right of reply in a defamation case with be determined under the law of the state where the broadcaster or publisher is established.

In cases where contract and tort issues overlap, Article 9 proposes that the same law govern both sets of issues.