Rome II
If you’ve ever despaired at the pernicketiness of governing law clauses such as this:—
- This agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
Then you have the Rome II EU Regulation (864/2007/EC (EUR Lex) to blame. Enacted in July 2007 it applies to all EU Member States[1] and is designed to harmonise the “conflict of laws” rules across Member States[2] dealing with with non-contractual disputes.
Non-contractual obligations
In this context If you’ve ever despaired at the pernicketiness of governing law clauses such as this:—
This agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.
Then you have the Rome II EU Regulation[3] to blame. Enacted in 2007, it applies to all EU Member States, except Denmark but still including the UK, and is designed to harmonise the “conflict of laws” rules across Member States, except Denmark but still including the UK, dealing with non-contractual disputes.
“But still including the UK”? Didn’t the UK take back control?
Brexit does not necessarily mean Brexit. The UK still is a party to Rome I and II as they form part of the “EU retained law” which the UK continues to apply post Brexit.
“Non-contractual obligations”
Breach of “non-contractual obligations” includes actions based on tort (e.g. negligence), competition law and statutory duty. But, fabulously, not those arising out of the negotiable nature of bills of exchange, cheques and promissory notes and other negotiable instruments, or company law or defamation — though it’s hard to see how you could have a non-contractual obligation to defame someone.
But the main thing is to ensure any concurrent claims in contract and tort can be — must be — decided in the same forum. This is mostly interesting where the parties to a contract are in different jurisdictions, and each will prefer their own jurisdiction to hear a non-contractual dispute. But even there, frankly, a concurrent claim in tort would only be relevant in most cases to builders.
Of course, the sensible thing would be to expressly exclude tort claims under the contract. But for those not prescient enough to do that, there’s always this magic incantation.. But, brilliantly, it does not apply to disputes as to non-contractual obligations arising out of the negotiable nature of bills of exchange, cheques and promissory notes and other negotiable instruments. Or company law or defamation — though it’s kind of hard to see how you could have a non-contractual obligation to defame someone.
But point to note here: the main thing is to ensure any claims in contract and tort are governed by the same forum. Of most interest in cross-border cases where parties are in different jurisdictions and that wouldn’t follow as a matter of course. and even there, frankly, a concurrent claim in tort would only be relevant in most cases to builders.
Of course, the sensible thing would be to expressly exclude tortious claims under the contract. But for those not prescient enough to do that, there’s always this magic incantation.
Jurisdiction: you choose!
Parties can agree to submit non-contractual obligations to the law of their choice. Previously, English courts haven’t been sure as to whether this is cricket. Rome II confirms that it is:
- Where the agreement was made after the event giving rise to the damage; or
- Where all parties are pursuing a commercial activity, if freely negotiated before the event giving rise to the damage occurred.