Rome II Regulation (864/2007)

The Rome II Regulation (Regulation (EC) 864/2007) determines the law applicable to non-contractual obligations in civil and commercial matters. Adopted after a protracted legislative process marked by controversy over the applicable law for defamation and privacy, the Regulation entered into force on 11 January 2009. It applies in all Member States except Denmark. The Regulation is universal in application: the designated law applies whether or not it is the law of a Member State.

Scope

Article 1 provides that the Regulation applies to non-contractual obligations in civil and commercial matters, including torts, unjust enrichment, negotiorum gestio (agency without authority), and culpa in contrahendo (pre-contractual liability). Excluded matters include revenue, customs, and administrative matters; obligations arising from family relationships; matrimonial property; negotiable instruments; and violations of privacy and rights relating to personality (including defamation).

The exclusion of privacy and defamation was the most contentious issue during the legislative process. The Commission originally proposed a specific rule for media violations, but Member States could not agree. Article 1(2)(g) excludes these matters entirely, leaving them to the existing national conflict-of-laws rules.

General Rule — Lex Loci Damni

Article 4(1) establishes the general rule: the law applicable to a non-contractual obligation arising out of a tort or delict is the law of the country in which the damage occurs, irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.

The lex loci damni rule reflects the proximity principle and the objective of legal certainty. The damage location is where the direct injury is suffered, not where consequential economic loss occurs. In DFDS Torline (Case C-18/02), decided under the Brussels I Regulation but influential for Rome II, the Court held that damage occurs where the harmful event directly produces its effects on the immediate victim.

Article 4(2) provides an exception: where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time of damage, the law of that country applies.

Escape Clause

Article 4(3) contains an escape clause: where it is clear from all the circumstances of the case that the tort or delict is manifestly more closely connected with a country other than indicated by Article 4(1) or (2), the law of that other country applies. A manifestly closer connection may be based in particular on a pre-existing relationship between the parties, such as a contract that is closely connected with the tort or delict.

The Court of Justice in Kuksa (Case C-483/20) clarified that the escape clause must be interpreted strictly and should not undermine the general rule’s certainty. The manifestly closer connection must be established on the basis of a comprehensive assessment of all relevant factors.

Special Rules

Articles 5 through 9 establish special rules for specific torts. Article 5 applies to product liability, designating the law of the victim’s habitual residence where the product was marketed there, or the law of the country where the product was acquired, or the law of the country where the damage occurred, subject to a foreseeability limitation.

Article 6 addresses unfair competition and acts restricting free competition. The applicable law is the law of the country where competitive relations or the collective interests of consumers are, or are likely to be, affected. For competition torts (Article 6(3)), the applicable law is the law of the country where the market is, or is likely to be, affected.

Article 7 covers environmental damage: the claimant may choose between the law of the country where the damage occurred (lex loci damni) and the law of the country where the event giving rise to the damage occurred (lex loci acti). This favour principle benefits environmental claimants.

Article 8 applies to infringement of intellectual property rights: the applicable law is the law of the country for which protection is claimed (lex loci protectionis). Party choice is prohibited, preserving the territorial nature of IP rights.

Article 9 applies to industrial action: the applicable law is the law of the country where the industrial action is taken.

Freedom of Choice

Article 14 allows the parties to choose the law applicable to a non-contractual obligation by an agreement entered into after the event giving rise to the damage occurred. Before the event, the parties may agree on the applicable law only where all pursue a commercial activity and the choice is freely negotiated.

The choice must be express or clearly demonstrated by the circumstances, and cannot prejudice the application of overriding mandatory provisions or third-party rights.

Unjust Enrichment, Negotiorum Gestio, and Culpa in Contrahendo

Articles 10 through 12 cover non-contractual obligations other than tort. Unjust enrichment (Article 10) is governed by the law that governs the relationship between the parties (if one exists, e.g., a contract), or the law of the common habitual residence, or the law of the country where the enrichment occurred. Negotiorum gestio (Article 11) follows a similar pattern.

Culpa in contrahendo (Article 12) is governed by the law that applies to the contract or would have applied had the contract been concluded. Where no contract exists, the law of the country where the damage occurs, or the law of the common habitual residence, or the law of the manifestly closer connection applies.

Scope of the Applicable Law

Article 15 defines the scope of the governing law, covering the basis and extent of liability, grounds for exemption, limitation and prescription, assessment of damages, remedies, and the burden of proof. The law governing the non-contractual obligation also determines who is entitled to compensation for damage sustained personally.

Public Policy and Overriding Mandatory Provisions

Article 26 permits the application of a provision of the law of the forum in a situation where they are mandatory irrespective of the law otherwise applicable. Article 21 permits refusal to apply a foreign law provision where its application would be manifestly incompatible with the public policy of the forum.