15

Sep

2015

Regulation 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations: presentation

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The Regulation is about the applicable law as regards non-contractual obligations.

When do I have to apply the Regulation ?

This Regulation shall apply, in situations involving a conflict of laws, to non-contractual obligations.

What is the scope of applicable law ?

The law applicable to non-contractual obligations governs in particular:

 
  • the basis and extent of liability, including determining who may be held liable;
  • the grounds for exemption from liability and the limitation or division of liability;
  • the existence, nature and assessment of damage and the remedy claimed;
  • the measures the court may take to prevent or terminate injury or damage and ensure compensation;
  • the manner in which an obligation may be extinguished and the rules relating to prescription or limitation;
  • the question as to whether the right to seek compensation can be transferred to someone else, including by inheritance;
  • persons entitled to compensation for damage they have sustained;
  • liability for the acts of another person.
Certain non-contractual obligations are excluded from the scope of the regulation.

These include:

 
  • revenue, customs and administrative matters;
  • state liability;
  • specific non-contractual obligations arising out of, for example, matrimonial property regimes and family relationships, nuclear damage or violations of privacy and rights relating to personality, including defamation.

Which law have to be applied under this Regulation ?

The Regulation stipulates general rules and specific rules.

General rules:

The law applicable to a non-contractual obligation arising out of a tort/delict is:

 
  • the law of the country where the damage occurs; or
 
  • the law of the country where both parties were primarily living or had their main place of business when the damage occurred; or
 
  • if the case is more closely connected with the law of another country, the law of that country.

Specific rules:

Product liability:

The law applicable to a non-contractual obligation arising out of damage caused by a product shall be:

 
  • the law of the country in which the person sustaining the damage had his or her habitual residence when the damage occurred, if the product was marketed in that country; or, failing that,
 
  • the law of the country in which the product was acquired, if the product was marketed in that country; or, failing that,
 
  • the law of the country in which the damage occurred, if the product was marketed in that country.

However, the law applicable shall be the law of the country in which the person claimed to be liable is habitually resident if he or she could not reasonably foresee the marketing of the product, or a product of the same type, in the country the applicable law.

Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated above, the law of that other country shall apply.

A manifestly closer connection with another country might be based in particular on a pre-existing relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.

Unfair competition and acts restricting free competition:

The law applicable to a non-contractual obligation arising out of an act of unfair competition shall be:

The law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected.

Where an act of unfair competition affects exclusively the interests of a specific competitor, the general rules above shall apply.

The law applicable to a non-contractual obligation arising out of a restriction of competition shall be:
  • The law of the country where the market is, or is likely to be, affected. 
 
  • When the market is, or is likely to be, affected in more than one country, the person seeking compensation for damage who sues in the court of the domicile of the defendant, may instead choose to base his or her claim on the law of the court seised, provided that the market in that Member State is amongst those directly and substantially affected by the restriction of competition out of which the non-contractual obligation on which the claim is based arises;
 
  • Where the claimant sues, in accordance with the applicable rules on jurisdiction, more than one defendant in that court, he or she can only choose to base his or her claim on the law of that court if the restriction of competition on which the claim against each of these defendants relies directly and substantially affects also the market in the Member State of that court.
Environmental damage:

The law applicable to a non-contractual obligation arising out of environmental damage or damage sustained by persons or property as a result of such damage shall be the law of the country where the damage occurs unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred.

Infringement of intellectual property rights:

The law applicable to a non-contractual obligation arising from an infringement of an intellectual property right shall be the law of the country for which protection is claimed.

In the case of a non-contractual obligation arising from an infringement of a unitary Community intellectual property right, the law applicable shall, for any question that is not governed by the relevant Community instrument, be the law of the country in which the act of infringement was committed.

There are also specific rules in the following matters:

Industrial action
Unjust enrichment
Negotiorum gestio
Culpa in contrahendo (applicable to a non-contractual obligation arising out of dealings prior to the conclusion of a contract)

Can I choose the applicable law under this Regulation ?

Under certain conditions, the regulation also allows the parties to choose, by mutual agreement, which law applies to a non-contractual obligation.

The parties may agree to submit non-contractual obligations to the law of their choice:

 
  • by an agreement entered into after the event giving rise to the damage occurred; or
 
  • where all the parties are pursuing a commercial activity, also by an agreement freely negotiated before the event giving rise to the damage occurred.

The choice shall be expressed or demonstrated with reasonable certainty by the circumstances of the case and shall not prejudice the rights of third parties.

Where all the elements relevant to the situation at the time when the event giving rise to the damage occurs are located in a country other than the country whose law has been chosen, the choice of the parties shall not prejudice the application of provisions of the law of that other country which cannot be derogated from by agreement.

Where all the elements relevant to the situation at the time when the event giving rise to the damage occurs are located in one or more of the Member States, the parties' choice of the law applicable other than that of a Member State shall not prejudice the application of provisions of Community law, where appropriate as implemented in the Member State of the forum, which cannot be derogated from by agreement.

Otherwise, the parties cannot choose the applicable law in the following matters:

Infringement of intellectual property rights and Unfair competition and acts restricting free competition: the law applicable under these matters may not be derogated from by an agreement.

Nasser Merabet
Lawyer
avocat@nmerabet.fr