Practitioners need to know key jurisdiction rules to avoid expensive mistakes such as submission to an unfriendly jurisdiction. But applicable law (or proper law, as common lawyers say) can be checked in the textbooks when a dispute with foreigners arises, so this complex aspect of conflicts law gets less day to day attention from busy lawyers than jurisdiction law. However, a new law, called Rome II, will harmonise conflicts of applicable law in  tort and delict in all EU states except Denmark from 11 January 2009 and will make the law less difficult to understand and apply. An earlier law, Rome I, has standardised conflicts of applicable contracts law.

Article 4 is the most important article in Rome II. Article 4.1 provides that the law applicable to a non-contractual obligation arising out of tort/delict shall be the law of the country where the damage occurs. It is irrelevant that the event giving rise to the damage occurred in another country, or that there are indirect consequences of that event in another country. 

Article 4 provides two exceptions however.  First, where the parties to the incident were both habitually resident in the same country at the time the damage occurred, the law of that country shall apply.  Secondly, where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with another country other than that where the damage occurred or where both parties are habitually resident, the law of the other country will apply. 

The regulation makes special provisions for product liability claims and also makes special rules for other areas such as environment liability. 

Where a claim arises out of damage caused by a product, the applicable law will be that  of the country where the claimant was habitually resident at the time the damage occurred if the product was marketed in that country. Failing that, it will be the law of the country where the product was acquired if the product was marketed in that country. Failing that, it will be the law of the country in which the damage occurred, if the product was marketed in that country. The regulation contains two other exceptions relating to product liability however, which provide that the law applicable shall be the law of the country:

(1)      in which the company sued is habitually resident if it could not have reasonably foreseen the marketing of its products, or products of the same type, in any of the countries referred to above or  

(2)      where the circumstances of the case are manifestly more closely connected with a country other than a country referred to above, the law of that other country will apply.

A remarkable feature of the regulation is that its provisions will decide which national law to be applied in any court in an EU member state (except Denmark) where a tort or delict claim is made, even if one of the parties is from outside the European Union.  This is the case also in Rome I in contractual disputes.  Thus if a person who habitually lives in Tokyo is allegedly injured by a defect in a drug manufactured in Ireland and marketed in Japan, and sues the Irish company in Ireland, the applicable law applied by the Irish court will be Japanese law.

Roddy Bourke is a litigation partner in McCann FitzGerald, Dublin, Ireland