Harmonising conflicts of law rules

On July 22, 2003 the European Commission announced that it had adopted a proposal for a new regulation on the law applicable to non-contractual obligations. The new regulation, known as Rome II, will apply to torts, including environmental liabilities, and aims to improve legal certainty as to the identity of the national rules that will be applied in any given situation.

Currently, it is possible in cross-border disputes for a claimant to make a choice about which country to bring proceedings in. Rome II should mean that the same law applies whichever forum is chosen and will apply, regardless of the nationality or domicile of the parties involved, whenever a national court in an EU member state (except Denmark, in which the Brussels Regulation on jurisdiction and enforcement of judgements does not apply) has to decide on the law applicable to a dispute about non-contractual obligations.

Except where specific exceptions apply, the general rule is that the law to be applied (whether EU or otherwise) will be that of the place in which direct damage arises or is likely to arise. This is subject to two exceptions. First, if both claimant and defendant are habitually resident in the same country then the law of that country will apply. Second, if the obligation is manifestly more closely connected with another country then the law of that country will be applied. It will be possible for the parties to a dispute to choose an applicable law other than that provided by the regulation, but only after the dispute has arisen. Where there is cross-border pollution, the proposed regulation would allow the victim to opt for either the law of the place where the damage is sustained or the law of the place where the event giving rise to the damage occurred.

This should encourage higher standards of environmental protection throughout the Community and is a positive development for manufacturers established in more highly regulated countries such as the UK since it should make it slightly more difficult for competitors to under-cut prices by opting to manufacture goods in EU countries with less stringent environmental regimes.

The proposed regulation will ensure that a single set of conflict rules will apply throughout the EU. This will make it much easier for businesses to predict their environmental liabilities with greater certainty and avoid unintentional non-compliance with environmental legislation.



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