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The Rome II Regulation and Traffic Accidents: Uniform Conflict Rules with Some
Room for Forum Shopping – How so?

Article · April 2010

DOI: 10.1080/17536235.2010.11424374

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 SZEGEDI TUDOMÁNYEGYETEM UNIVERSITY OF SZEGED
Állam- és Jogtudományi Kar Faculty of Law

NEMZETKÖZI MAGÁNJOGI DEPARTMENT OF PRIVATE

TANSZÉK INTERNATIONAL LAW

H-6722 Szeged, Rákóczi tér 1. Tel/Fax: (36)62/343-179

e-mail: [email protected]

The Rome II Regulation and Traffic Accidents:

Uniform Conflict Rules with Some Room for Forum
Shopping – How So?

Nagy, Csongor István*

Published in 6(1) Journal of Private International Law 93-108 (2010)

The numbers inserted in the text refer to the page-numbers in the above publication.

* Doctor iuris (Eötvös Loránd University of Sciences, Budapest), LLM (Central European University, Budapest/New
York), PhD (Eötvös Loránd University of Sciences), SJD (Central European University), associate professor of law
at University of Szeged, Department of Private International Law and at Budapest University of Technology and
Economics, Department of Business Law, head of the International and EU Law Department of the István Bibó
College of Law (Budapest), external research fellow at the Competition Law Research Center (Pázmány Péter
Catholic University, Budapest), admitted to the Budapest Bar.

Electronic copy available at: http://ssrn.com/abstract=1737713

6(1) Journal of Private International Law 93-108 (2010)

*93
THE ROME II REGULATION AND TRAFFIC ACCIDENTS: UNIFORM
CONFLICT RULES WITH SOME ROOM FOR FORUM SHOPPING – HOW SO?

NAGY, CSONGOR ISTVÁN*

A. INTRODUCTION

The Rome II Regulation1, having entered into force on 11 January 2009,2 establishes uniform
conflict rules on the Community level for non-contractual obligations and flatters itself on
improving legal certainty (predictability) and on excluding harmful forum-shopping by
“europeanizing” and unifying this branch of conflict of laws. Nevertheless, the self-assessment is
exaggerated because the Rome II Regulation ‘gives way’ to the 1971 Hague Convention on the
law applicable to traffic accidents3, which remains applicable in its Contracting States. As traffic
accidents represent a very large number of incidents where non-contractual obligations arise there
is a significant hole in the uniformity provided by Rome II. Depending on which court in the
Community exercises jurisdiction the law applicable is governed either by the Rome II
Regulation or the 1971 Hague Convention.4 There are substantial differences between the tort
laws of the Member States regarding the system of liability (strict liability, liability based on fault
or mixed systems), the level of compensa*94tion, especially in case of personal injury (moral
damages, pain and suffering etc.), and the period of limitation.5

* Doctor iuris (Eötvös Loránd University of Sciences, Budapest), LLM (Central European University, Budapest/New
York), PhD (Eötvös Loránd University of Sciences), SJD candidate at Central European University, assistant
professor of law at University of Szeged, Department of Private International Law and adjunct professor of law at
Budapest University of Technology and Economics, Department of Business Law, Eurojus Legal Counsel at the
European Commission Representation in Hungary, external research fellow at the Competition Law Research Center
(Pázmány Péter Catholic University, Budapest), admitted to the Budapest Bar. The author is indebted to Professor
Peter Hay for his invaluable help and for his comments on this paper. All views and any errors remain the author’s
own.
1
Regulation 864/2007 EC [2007] OJ L 40/199 (hereafter: Rome II Regulation).
2
The Regulation entered into force on 11 January 2009 and it “shall apply to events giving rise to damage which
occur after its entry into force.” [Rome II Regulation, Art 31-32]. Cf. Morse in Dicey and Morris, First Supplement
to the Fourteenth Edition (London, Sweet and Maxwell, 2007), para S 35-168.
3
The Convention was concluded on 4 May 1971 and entered into force on 3 June 1975.
4
See generally T K Graziano, “The Rome II Regulation and the Hague Conventions on Traffic Accidents and
Product Liability – Interaction, conflicts and future perspectives” (2008) 26 Nederlands Internationaal Privaatrecht
425; T Thiede and M Kellner, “’Forum Shopping’ zwischen dem Haager Übereinkommen über das auf
Verkehrsunfälle anzuwendende Recht und der Rom II-Verordnung” (2007) Versicherungsrecht 1624.
5
See Rome II Study on compensation of cross-border victims in the EU. Compensation of victims of cross-border
road traffic accidents in the EU: comparison of national practices, analysis of problems and evaluation of options for
improving the position of cross-border victims. Final report prepared for the European Commission DG Internal
Market and Services. Final version of the final report – Part II – Analysis. 2008. pp. 20-47., available at
http://ec.europa.eu/internal_market/insurance/motor_en.htm. Consultation Paper on the Compensation of victims of
Cross-Border Road Traffic Accidents in the European Union, 2009. p. 2-3. and pp. 4-5., available at
http://ec.europa.eu/internal_market/consultations/2009/cross-border-accidents_en.htm
2

Electronic copy available at: http://ssrn.com/abstract=1737713

6(1) Journal of Private International Law 93-108 (2010)

The above forum-shopping perspective – i.e. by choosing the place of litigation the plaintiff
may indirectly choose between two conflict regimes, which in turn may lead to the application of
different substantive laws – is facilitated by Community jurisdiction rules. In the case of a traffic
accident it may reasonably be expected that the courts of three Member States have jurisdiction.6
For instance, if a Hungarian crashes with a German in Austria, the Hungarian victim may sue in
all three Member States concerned: Germany, Austria and Hungary. In Germany the law-suit
could be based on the defendant’s domicile (general jurisdiction),7 while the ground of the
Austrian courts’ jurisdiction is that the harmful event occurred in Austrian territory8. Under such
circumstances Hungarian courts have jurisdiction if the Hungarian party does not sue the
tortfeasor directly but goes instead against the latter’s liability insurer: in Odenbreit the European
Court of Justice held that on the basis of the Brussels I Regulation “the injured party may bring
an action directly against the insurer before the courts for the place in a Member State where that
injured party is domiciled, provided that a direct action is permitted and the insurer is domiciled
in a Member State.”9

B. PROBLEM SETTING

The above situation arises from Article 28 of the Rome II Regulation, which settles the
Regulation’s relationship with existing international treaties. In this regard, the general rule is the
following:

“This Regulation shall not prejudice the application of international conventions to which one or more Member
States are parties at the time when this Regula*95tion is adopted and which lay down conflict-of-law rules relating to
non-contractual obligations.”10

An exception to this general rule provides:

However, this Regulation shall, as between Member States, take precedence over conventions concluded exclusively
between two or more of them in so far as such conventions concern matters governed by this Regulation.11

Accordingly, the Rome II Regulation prevents the application of an international treaty only if the
latter is “concluded exclusively between two or more” Member States, that is to say, if the
Contracting States are all members of the EC. The 1971 Hague Convention on the law applicable
to traffic accidents has non-EC Contracting States: Belarus, the former Yugoslav republics (from
which only Slovenia is a member of the EC) and Switzerland. Consequently, not the exception
embedded in Article 28(2) but the general rule is to be applied, which means that the Rome II

6
In addition, an additional forum could be provided by Art 5(4) of the Brussles I Regulation: “as regards a civil
claim for damages or restitution which is based on an act giving rise to criminal proceedings, in the court seised of
those proceedings, to the extent that that court has jurisdiction under its own law to entertain civil proceedings”.
7
Regulation 44/2001 EC [2001] OJ L 1/12 (hereafter: Brussels I Regulation), Art 2(1)
8
Brussels I Regulation, Art 5(3)
9
C-463/06 FBTO Schadeverzekeringen NV v Jack Odenbreit [2007] ECR I-11321. para 31.
10
Rome II Regulation, Art 28(1)
11
Rome II Regulation, Art 28(2)
3
6(1) Journal of Private International Law 93-108 (2010)

Regulation conflict rules ‘give way’ to those in the 1971 Hague Convention.12 What is more,
given that more than half of the Member States have acceded to the Convention, its geographical
map suggests that forum-shopping has a real perspective.

The following EC Member States have ratified the Convention: Austria, the three Benelux
countries, the Czech Republic, France, Latvia, Lithuania, Poland, Slovakia, Slovenia and Spain.
Portugal signed the Convention; nevertheless, it has failed to ratify it.13 The following EC
Member States are not parties to the Convention but bound by the Rome II Regulation: Bulgaria,
Cyprus, Estonia, Finland, Germany, Greece, Hungary, Ireland, Italy, Malta, Romania, Sweden
and the United Kingdom.14 Obviously, the courts of the latter countries do not apply the
Convention,15 as opposed to their lawyers, who should reasonably take it into account when
advising their clients on the place of litigation, in the light of the potentially applicable law.
The questions to be answered are the following: what are the respective conflict rules
included in the Rome II Regulation and in the 1971 Hague Con*96vention regarding traffic
accidents and what are the theoretical and practical differences between the two regimes? The
dissimilarities help us to depict the most important forum shopping scenarios.
This paper examines the forum shopping perspectives linked to delictual liability (torts)
arising from traffic accidents including direct actions against the liability insurer. The Fourth EC

12
It is to be stressed that the 1971 Hague Convention is certainly not the only one example for such an exception.
The Hague Convention on the Law Applicable to Products Liability, concluded on 2 October 1973 and having
entered into force on 1 October 1977, may also amount to a noteworthy instance.
13
See the website of the Hague Conference on Private International Law:
http://www.hcch.net/index_en.php?act=conventions.status&cid=81 accessed on 10 February 2009.
14
Denmark is neither a party to the Convention, nor bound by the Rome II Regulation. See Rome II Regulation, Art
1(4)
15
Not even for the purpose of discovering whether it refers back to the lex fori as Art 24 of the Rome II Regulation
excludes renvoi. (“The application of the law of any country specified by this Regulation means the application of
the rules of law in force in that country other than its rules of private international law.”)
4
6(1) Journal of Private International Law 93-108 (2010)

Motor Insurance Directive established a direct right of action for the injured parties of traffic
accidents:

Each Member State shall ensure that injured parties referred to in Article 1 in accidents within the meaning of that
provision enjoy a direct right of action against the insurance undertaking covering the responsible person against
civil liability.16

C. THE ROME II REGULATION AND TRAFFIC ACCIDENTS

The Rome II Regulation regulates non-contractual obligations in a rather exhaustive manner;

thus, besides delictual liability (torts), it also covers unjust enrichment, negotiorum gestio and
culpa in contrahendo. The Regulation establishes an elaborate scheme for delictual liability,
which consists of a general rule (Article 4) and several special rules devoted to particular types of
delictual liability: *97 product liability (Article 5), unfair competition and acts restricting free
competition (Article 6), environmental damage (Article 7), infringement of intellectual property
rights (Article 8] and industrial action (Article 9). As the 1971 Hague Convention deals with non-
contractual obligations arising from traffic accidents, from the perspective of comparison, only
the Rome II Regulation’s general rule is relevant.
The Rome II Regulation’s general rule on delictual liability (torts) consists of three layers:
the law of the country where the damage occurred (lex loci damni), the law of the common
habitual residence17 and a rule of displacement in favour of the law of the country to which the
tort/delict is manifestly more closely connected.
According to the basic rule,

“the law applicable to a non-contractual obligation arising out of a tort/delict shall be 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.”18

The Regulation does not accept the principle of lex loci delicti commissi (the law of the place
where the harmful action or omission occurred).19 At the same time it is to be stressed that the
damnum relevant from the point of view of determining the applicable law should not be
confused with the damnum in relation to which the tortfeasor may be liable from a substantive
law point of view. From the perspective of determining the applicable law, not all detriments

16
Directive 2000/26 EC [2000] OJ L 65/181, Art 3.
17
The Rome II Regulation does not define the term ‘habitual residence’ for natural persons acting outside their
business, see Art. 23. See also T C Hartley, “Choice of Law for non-contractual liability: selected problems under the
Rome II Regulation” (2008) 57 International and Comparative Law Quarterly 899, 902. The terms may have been
borrowed from the Hague conventions, which, nevertheless, consitently refrain from defining this concept.
18
Rome II Regulation, Art 4(1). Emphasis added.
19
For the sake of terminological clarity, it is necessary to define the two basic terms used throughout the present
paper. Damnum means the injury or damage caused, while delictum designates the conduct (or omission) giving rise
to the injury or damage occurred. It is important to define these terms, especially because the term delictum may be
defined in different ways, and may cover various component factors, which might be spread over several countries,
see recital 15 of the Rome II Regulation. By way of example, in Art 5(3) of the Brussels I Regulation the term
‘harmful event’ may embrace both the conduct giving rise to injury and the injury itself, see case 21/76 Bier BV v
Mines de Potasse d’Alsace, [1976] ECR 1735.
5
6(1) Journal of Private International Law 93-108 (2010)

resulting from an injurious act or omission (delict, tort) but only the direct ones are to be taken
into account.20 The place of the damnum is to be established irrespective of the ‘indirect
consequences’. Obviously, the foregoing is far from implying that the indirect consequences
would not be relevant from a substantive law point of view. Quite the contrary: Article 4(1) of the
Rome *98 II Regulation deals exclusively with the conflict of laws relevance of indirect
damages. Recital 17 of the Regulation provides clear guidance in this regard:

in cases of personal injury or damage to property, the country in which the damage occurs should be the country
where the injury was sustained or the property was damaged respectively.

Accordingly, on the basis of the above it is to be concluded that in the case of traffic accidents –
taking into account the above definition of damnum – the place of the delictum (conduct) and that
of the damnum (injury) do not just coincide in most cases but – disregarding some exceptional
and unlikely situations – they always coincide. For instance, such an exceptional case would be if
the tortfeasor overtakes the injured party on a German highway and as a consequence the latter
slips off the road and crashes into a tree in Austria; here the accident would happen on the
Austrian-German border. In such a case the delictum and the damnum occur in two different
countries; nevertheless, the probability of such accidents seems to be very small.21
The principle of common domicile became in effect the commonplace of the conflict rules
regarding delictual liability.22 Accordingly, the Rome II Regulation provides that if the habitual
residence of the parties is in the same country, not the lex loci damni but the common habitual
residence determines the applicable law. According to Article 4(2) of the Rome II Regulation:

where the person claimed to be liable and the person sustaining damage both have their habitual residence in the
same country at the time when the damage occurs, the law of that country shall apply.

Finally, in the third step, the Rome II Regulation contains an escape clause:23

Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with
a[nother] country (…), the law of that other country shall apply. A manifestly closer connection with another country
might be *99 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.24

20
See Cs I Nagy, “A jogellenes károkozás kollíziós szabályai a Róma II Rendeletben” (2008) 55 Magyar Jog 542,
543-544.
21
This understanding of the difference between the two concepts of conduct and injury was clear to the drafters of
the Rome II Regulation but appears to have been slightly different to the drafters of the 1971 Hague Convention. In
the explanatory report an example is given that would indicate that the understanding of place where the damage
occured included indirect consequences of the event. If so, non-coincidence of delictum and damnum would be not
only be of academic interest. See E W Essén, Explanatory report of the Convention on the law applicable to traffic
accidents (1970), 14 available at http://www.hcch.net/upload/expl19e.pdf, accessed on 10 February 2009, that also
contains an example of an accident in which delictum and damnum do not coincide.
22
The principle’s roots are to be found in the German Rechtsanwendungsverordnung of 7 December 1942 (RGB1. I
706), see J Kropholler, Internationales Privatrecht (Tübingen, Mohr Siebeck 2004) 516-518, in the US judgment in
Babcock v Jackson, 12 N.Y.2d 473 (1963), and in the House of Lords judgment in Boys v Chaplin, [1969] 2 All ER
1085.
23
See recital 14 of the Rome II Regulation.
24
Rome II Regulation, Art 4(3).
6
6(1) Journal of Private International Law 93-108 (2010)

In sum, on the basis of the Rome II Regulation – save for certain exceptional situations – the law
of the country to be applied is that where the traffic accident occurred, unless both the tortfeasor
and the injured party “have their habitual residence in the same country” in which case the law of
that country applies. However, the Regulation requires the court to apply a different law if the
case is manifestly more closely connected to that legal system.

D. THE 1971 HAGUE CONVENTION

Although restricted to non-contractual questions concerning traffic accidents, the 1971 Hague
Convention also involves a scheme comprising a general rule and exceptions. Nonetheless, the
Convention contains much more complex and elaborate provisions than the Rome II Regulation.
Furthermore, the Convention – at least in abstracto – rests on the perfectly opposite footing.
First, the Convention proceeds from the principle of lex loci delicti commissi (the general rule is
the “internal law of the State where the accident occurred”).25 Second, the exceptions to the
general rule are based on a connecting factor unknown to the Regulation: the internal law of the
State where the vehicle is registered or habitually stationed (‘vehicle’s legal domicile’).
Accordingly, under the 1971 Hague Convention, in conformity with the principle of lex loci
delicti commissi, the general rule is the locus of the traffic accident: the law of the state to be
applied is that in which the traffic accident occurred. The Convention establishes several
exceptions to this general rule, which are all related to the vehicle’s ’legal domicile’ (registration,
in the absence of that or if there is more than one place of registration, or if there is no substantive
relationship with the place of registration as defined by the Convention, the place where the
vehicle is habitually stationed26).
The first exception (a) relates to one-car accidents, e.g. a vehicle crashes into a tree, runs
over a pedestrian, and envisages the application of the law of registration (or habitual station).

Where only one vehicle is involved in the accident and it is registered in a State other than that where the accident
occurred, the internal law of the State of registration is applicable to determine liability *100
- towards the driver, owner or any other person having control of or an interest in the vehicle, irrespective of their
habitual residence,
- towards a victim who is a passenger and whose habitual residence is in a State other than that where the accident
occurred,
- towards a victim who is outside the vehicle at the place of the accident and whose habitual residence is in the State
of registration.
Where there are two or more victims the applicable law is determined separately for each of them.27

The second exception (b) relates to accidents involving more than one vehicle where the vehicles
involved have a common ’legal domicile’, i.e. they are registered or habitually stationed in the
same country.

25
It is widely understood that the term ‘internal law’ refers to the substantive law provisions of the invoked legal
system (those rules that govern the matter, diretly) with the exclusion of conflict rules. Accordingly, the problem of
renvoi, similarly to the Rome II Regulation, does not emerge under the 1971 Hague Convention. See E W Essén,
supra n 22, 14.
26
The French version of the Convention speaks about ‘stationnement habituel’, which may be rather translated as
’habitual parking place’.
27
Art 4(a)
7
6(1) Journal of Private International Law 93-108 (2010)

Where two or more vehicles are involved in the accident, the provisions of a) are applicable only if all the vehicles
are registered in the same State.28

Notably, while the 1971 Hague Convention knows the principle of ’common legal domicile’, the
connecting factor, however, is the ’legal domicile’ of the vehicle, contrary to the Rome II
Regulation, which employs the ’legal domicile’ of the parties (common habitual residence).
According to the third exception (c):

Where one or more persons outside the vehicle or vehicles at the place of the accident are involved in the accident
and may be liable, the provisions of a) and b) are applicable only if all these persons have their habitual residence in
the State of registration. The same is true even though these persons are also victims of the accident.29

Since the second main connecting factor used by the Convention, apart from the place of the
accident, is the ’legal domicile’ of the vehicle, the provisions of Article 6 have utmost
importance. The vehicle’s ’legal domicile’ is, in principle, determined with reference to the place
where the vehicle is registered. Nonetheless, Article 6 also deals with the situation where the
vehicle is not registered, is registered in more than one country or the registration is meaningless.

In the case of vehicles which have no registration or which are registered in several States the internal law of the
State in which they are habitually stationed shall replace the law of the State of registration. The same shall be true if
neither the owner nor the person in possession or control nor the driver of the vehicle has his habitual residence in
the State of registration at the time of the accident.30 *101

From the perspective of forum-shopping, the concept of ‘no meaningful relationship’ has a
significant role. Article 6 provides that if none of the persons that are connected to the vehicle,
i.e. the owner, the person in possession or control and the driver, has his habitual residence in the
country where the car is registered at the time of the accident, it is not the locus of registration
that determines the vehicle’s ’legal domicile’. Instead, in such cases the law of the place where
the vehicle is habitually stationed replaces the law of the place of registration.
Nevertheless, it is important to emphasize that in several cases it is still the locus of
registration that at the end of the day determines the vehicle’s ’legal domicile’, notwithstanding
the absence of any meaningful relationship. First, if a company registered and seated in country
‘A’ is leasing a car owned by a company registered and seated in country ‘B’, the principle of
registration cannot be questioned under Article 6. If the vehicle is registered in country ‘B’
(provided it is not registered in country ‘A’), the former would determine the car’s ‘legal
domicile’ since the owner’s habitual residence is in the country of registration. Second, the
concept of ’habitual station’ invoked in order to act as a substitute for the place of registration
does not solve the problem completely. Even though individual countries may have diverging
regimes, it is usually the very circumstance that the vehicle is normally located (or put it another
way: ’habitually stationed’) in the country concerned that triggers the duty of registration; and
since the vehicle registry is an official register, it is definitely capable of entailing the
presumption, though rebuttable, that the vehicle is usually situated in the country of registration.
Proving the contrary would point out that the owner or the operator (user) failed to meet his duty
to register, and eventually to pay the corresponding fees and taxes. Finally, in certain cases the
28
Art 4(b)
29
Art 4(c)
30
Art 6
8
6(1) Journal of Private International Law 93-108 (2010)

Convention excludes the examination of whether there is a genuine link with the place of
registration. In the case of ’one-car accidents’, regarding liability towards the driver, owner or
any other person having control of or an interest in the vehicle, there is no opportunity to prove
the lack of genuine link: in such cases the law of the place of registration is applicable even if
neither the owner, nor the possessor, nor any person having control over the vehicle has habitual
residence in the country of registration.31 The practical bearing of the foregoing rule is expanded
by Article 5(2) of the Convention, which provides that “the law applicable under Articles 3 and 4
to liability towards the owner of the vehicle governs liability for damages to goods carried in the
vehicle other than goods” connected to a passenger, who is a victim of the accident, that “either
belong to the passenger or have been entrusted to his care”. Liability for damages to the latter’s
goods is thus governed by the law applicable to the liability towards the passenger himself. *102

E. COMPARISON

The above parallel analysis of the Rome II Regulation and of the 1971 Hague Convention
suggests that the general rules of the two regimes (lex loci damni v place of the traffic accident)
lead virtually to the application of the very same law, since damnum designates the ’direct’
damage, which in case of a traffic accident almost always comes about at the place of the
accident itself. As mentioned above, Recital 17 of the Regulation contains unequivocal wording
in this regard: “in cases of personal injury or damage to property, the country in which the
damage occurs should be the country where the injury was sustained or the property was
damaged respectively.”
The practical differences between the two regimes result from the respective special rules
(exceptions) of the Regulation and of the Convention. The exceptions embedded in the 1971
Hague Convention – leading to the application of the law of the vehicle’s ’legal domicile’, which
is, in principle, the place of registration – have considerable consequences. The exceptions in
Article 4 of the Convention relate, nevertheless, solely to two groups of cases: the first is ‘one-car
accidents’; while the second covers traffic accidents with two or more vehicles, where the cars
share a common ’legal domicile’ (the vehicles are registered or habitually stationed in the same
country). All this implies that although the forum shopping based on the differences between the
two conflict regimes does have a practical perspective, that perspective concerns only a rather
small minority of traffic accidents.
Irrespective of habitual residence, the law of the place of registration is to be applied to the
liability towards “the driver, owner or any other person having control of or an interest in the
vehicle”. This group of cases embraces the instance when the driver or the operator causes
damage to the vehicle and therefore the owner claims recovery. Such a scenario, of course, raises
the problem of concurrent liability, automatically:32 there is probably a contractual relationship
between the owner, on the one hand, and the driver or operator, on the other, which is to be taken
into account. The problem is complicated by the fact that while in civil-law systems the
gratuitous use of a ‘thing’, or here, vehicle, is based on contract (commodatum, or commodate in
Scots law), in common law gratuitous promises, i.e. promises without consideration, are not
binding unless made under seal. Nevertheless, the contractual relationship is far from barring a
legal action based on delictual liability (tort). Even though in French and Belgian law the plaintiff

31
Art 4(b)(1)
32
See supra n 24, 9.
9
6(1) Journal of Private International Law 93-108 (2010)

cannot found his case on delictual liability, if there is a contract between the parties,33 by way of
example, in *103 Austrian, German and Hungarian law the plaintiff has the option of choosing
his statement of claim’s underlying cause of action, with the obvious exclusion of double
recovery.34 In English tort law such a choice is in principle also possible, with some proviso.35 It
is worthy of emphasis that it is highly uncertain which law governs the question of whether such
concurrent liability exists: is it the lex contractus or the law that applies to delictual liability. This
is a question of characterization: is this question contractual or delictual in nature? The 1971
Hague Convention does not deal with this issue,36 leaving it to the conflict rules of the forum. It
is submitted that in EC conflict of laws the issue of characterizing a question as either contractual
or delictual is governed by Community law: although neither the Rome I, nor the Rome II
Regulation contains a ’general part’ properly called, the provisions relating to scope have an
independent Community meaning. Several EC private international law instruments concern the
question whether a particular matter is contractual or non-contractual. Although the question of
concurrent liability has not been specifically raised under the Brussels I Regulation, the ECJ has
consistently held that the notions of contract and non-contractual matter have an independent
Community meaning.37 Likewise, both the Rome I and the Rome II Regulation share the
common ground that these terms, due to their significance, should not be defined by reference to
national law but should be given an autonomous Community meaning.38 Furthermore, the Rome I
and Rome II regimes are intended to provide an airtight coverage to the law of obligations, of
course, with the exclusion of certain matters enumerated in the regulations themselves39. Having
said that, there is still no direct guidance in Community law on whether this issue is part of
contract law, or whether it is a more general question coming into the larger category embracing
both contracts and torts (law of obligations, droit des obligation, Schuldrecht, kötelmi jog etc.).
*104
If the owner wishes to set up a claim on the basis of delictual liability (tort) under the above
circumstances, the Rome II Regulation and the 1971 Hague Convention may lead to the
application of different laws. Let us assume that a vehicle is registered in the Netherlands, the
owner is a Dutchman, while the driver or operator is domiciled in Germany (and is leasing the
vehicle) and the accident occurs in Belgium (the vehicle crashes into a tree). The Rome II

33
Ch von Bar, U Drobnig et al, Study on property law and non-contractual liability law as they relate to contract
law (SANCO B5-1000/02/000574, 2003), 205 available at
http://ec.europa.eu/consumers/cons_int/safe_shop/fair_bus_pract/cont_law/study.pdf accessed on 10 February 2009.
34
For Austrian and German law, see ibid, 206-207. For German law see also K Larenz and M Wolf, Allgemeiner Teil
des Bürgerlichen Rechts (München, C.H. Beck 1997), 355. For Hungarian law, see Gy Eörsi, Elhatárolási
problémák az anyagi felelősség körében (Budapest, KJK 1962).
35
See Hedley Byrne v Heller [1964] AC 465, Esso Petroleum Co Ltd v Mardon [1976] QB 801, Batty v Metropolitan
Realisations Ltd [1978] QB 554, Midland Bank Ttrust Co Ltd v Hett Stubs & Kemp [1979] Ch 384, Henderson v
Merrett Syndicates Ltd [1994] 3 All ER 506; see also supra n 32, 209-211.
36
See supra n 24, 7-8.
37
For the notion of contract see Case 34/82 Martin Peters v Zuid Nederlandse Aannemers Vereniging, [1983] ECR
987. para 10, Case 9/87 SPRL Arcado v SA Haviland, [1988] ECR 01539. para 6, Case C-26/91 Jakob Handte v
Traitements Mécano-chimiques des Surfaces SA, [1992] ECR I-03967. para 10, Case C-51/97 Réunion européenne
SA v Spliethoff's Bevrachtingskantoor BV, [1998] ECR I-06511, para 15, Case C-265/02 Frahuil SA v Assitalia
SpA, [2004] ECR I-01543. para 22. For the notion of ‘tort, delict or quasi-delict’ see Case 189/87 Kalfelis v
Bankhaus Schröder, [1988] ECR 05565. para 18, Case C-261/90 Mario Reichert, Hans-Heinz Reichert and Ingeborg
Kockler v Dresdner Bank AG, [1992] ECR I-02149, para 15.
38
See Recital 7 of the Rome I Regulation, recital 11 and Article 2(1) of the Rome II Regulation
39
Article 1(2) of the Rome I Regulation, Article 1(2) of the Rome II Regulation
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6(1) Journal of Private International Law 93-108 (2010)

Regulation, disregarding certain exceptional instances, leads to the application of the law of the
country where the accident occurred (general rule), which is in this case Belgian law, while the
1971 Hague Convention points to Dutch law (law of registration for ‘one-car’ accidents). If
altering the fact pattern in a way that both parties, i.e. the owner and the driver or operator, are
domiciled in Germany, the two regimes still entail the application of different laws: according to
the Rome II Regulation German law would be applicable (place of common habitual residence),
whilst the 1971 Hague Convention points to Dutch law. It is noteworthy that the special rule
governing the delictual liability towards the driver, owner or any other person having control of
or an interest in the vehicle (place of registration) is to be applied irrespective of the parties’
habitual residence: i.e. the law of registration is applicable even if proved that the owner
registered the vehicle in the Netherlands solely for tax evasion purposes and the matter or the
parties, besides the fact of registration, have no connection to the Netherlands.
In the case of one-car accidents the law of the place of registration is to be applied to the
delictual liability towards the passenger, provided that the latter’s habitual residence is not in the
country where the traffic accident occurred. The foregoing covers the case, for instance, when a
Slovak company transports a Hungarian high school group in Austria where the bus crashes into
a tree or falls into a precipice. According to the Rome II Regulation, the law of the place of the
misadventure should be applied (Austrian law), while the 1971 Hague Convention points to the
law of the place of registration (Slovak law). Similarly, it is also a case of divergence if the
Hungarian high-school group is transported by a Hungarian company in Austria, which is,
however, leasing the bus from a Slovak company (the Hungarian company being the operator)
and the car is driven by the Hungarian company’s employee. According to the Rome II
regulation, in such a case the applicable law is determined by the common habitual residence of
the parties (which is in this case Hungarian law), while the 1971 Hague Convention leads to the
application of the law of registration (Slovak law). What is more, in the latter case there is
obviously no doubt that the registration does satisfy the conditions of Article 6, notwithstanding
the absence of any real connection to the country of registration.
The law of registration is applicable to liability towards a victim outside the vehicle
provided the latter’s habitual residence is in the country of registration. The law of the vehicle’s
legal domicile is applicable if it runs over a pedestrian *105 and the latter has his habitual
residence in the country where the car happens to be registered. For example, if a car registered in
Austria and driven by an Italian gentleman skids on a snowy road and runs over an Austrian ski
tourist in Italy, the Rome II Regulation entails the application the law of the accident’s locus
(Italian law), while the 1971 Hague Convention favours the common domicile of the vehicle and
the victim outside the car (Austrian law).
Both the Rome II Regulation and the 1971 Hague Convention know the principle of
common domicile, nevertheless, under the Convention it is the vehicle’s legal domicile that
matters, contrary to the Regulation, where it is the habitual residence of the parties that matters. A
potential example of divergence is when two cars of common legal domicile collide in a foreign
country. For instance, in Austria a car driven by an Austrian driver crashes with a car driven by a
Hungarian driver, and both vehicles are registered in Slovakia (or they are habitually stationed
there). In this case, under the Rome II Regulation the law of the country of the accident would be
applied (Austrian law), while the 1971 Hague Convention points to the country of common
registration (Slovak law). The divergence is even more striking if the accident occurs between
two Hungarians in Austria, while both vehicles are registered in Slovakia (and perhaps leased
from Slovak owners). The Rome II Regulation’s rule is clear in this regard: the law of the parties’
11
6(1) Journal of Private International Law 93-108 (2010)

common habitual residence is to be applied (Hungarian law). Nevertheless, the 1971 Hague
Convention refers to the vehicles’ common legal domicile (which triggers the application of
Slovak law), and not to that of the parties.
The above forum-shopping scenarios – for different reasons – deliberately disregarded the
principle of manifestly closest connection and the perspectives of its application. First, the
principle of closest connection covers exceptional cases and it is to be taken into consideration on
an ultima ratio basis, if the connection of the case to a particular legal system is obvious (a closer
connection does not suffice, a manifestly closer connection is required). Second, due to its
character as a general principle, it is difficult to give calculable and clear examples of cases
which have a manifestly closer connection with a law different from the otherwise applicable
one. If there were such obvious and generally definable examples, the Community legislator
would probably have incorporated them into the Rome II Regulation as lex specialis. Third, it is
mainly the 1971 Hague Convention that comprises provisions that throw temptation in the private
international lawyer’s way to resort to the exceptional concept of manifestly closest connection,
e.g. see the case of the two Hungarians crashing in vehicles registered in Slovakia. Finally,
perhaps the most characteristic example of when the closest connection would play a role is the
case when there is a contractual relationship between the parties, which establishes the
framework of the claim for damages, while the injured party also has the concurrent right to
claim damages on the basis of delictual liability. At least, the foregoing is *106 the sole example
mentioned by Article 4(3) of the Rome II Regulation for the application of the manifestly closest
connection principle:

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

Nonetheless, it is to be stressed that under the 1971 Hague Convention, as it does not contain a
principle of manifestly closer connection, there is no chance to move the claim coercively
diverted by the plaintiff’s choice of the legal basis into the course of delictual liability back into
the course of contractual conflict rules, par excellence if the contract contains a choice of law
clause and the plaintiff’s reliance on delictual liability is inspired by the desire to circumvent the
agreement on applicable law; the 1971 Hague Convention does not ensure the possibility of
applying the conflict rules on contracts to a case where the plaintiff abusively tries to base his
action on delictual liability.

F. CONCLUSIONS

On the basis of the above, it is established that Article 28 of the Rome II Regulation permits two
divergent conflict regimes on traffic accidents. Whilst the 1971 Hague Convention rests on the
principle of lex loci delicti commissi (internal law of the State where the accident occurred), the
Rome II Regulation expressly and deliberately rejects this approach and follows the principle of
lex loci damni.40 Nevertheless, the practical impact of this conceptual tension is rather limited,
since in the case of traffic accidents the place of the delictum (tort) and that of the damnum, as
defined by the Rome II Regulation (the direct damage), disregarding certain very exceptional

40
There are some exceptions in this regards, which address, nevertheless, different specific problems. See recital 33
and Art 17 of the Rome II Regulation.
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6(1) Journal of Private International Law 93-108 (2010)

cases, coincide. At the same time, the foregoing practical convergence should not be over-
simplified, either, as there are practical differences between the two regimes. The significance of
the place of registration, and the divergence between the concerned party’s habitual residence and
the concerned vehicle’s place of registration may be induced by tax avoidance or in some cases
by tax evasion. Due to the perspective of forum shopping, the 1971 Hague Convention retains a
significance also for the citizens of non-contracting States. All in all, it seems to be a serious
shortcoming of the Rome II Regulation that it leaves the applicability of the 1971 Hague
Convention intact. Thus surprisingly it is none other than the *107 flagship of the unification
movement of private international law that sinks the flagship of final and comprehensive
unification.41
The above proposition is reinforced by the fact that the 1971 Hague Convention’s
deviations from the Rome II regime are hardly defensible.42 First, the Convention attaches no
significance to the parties’ common habitual residence, which seems to be a blatant omission. The
rule provided in exchange, that is the principle of the vehicles’ common ‘legal domicile’, falls
short of making up for this shortcoming. Second, it cannot be disregarded that the special
connecting factor employed by the 1971 Hague Convention (locus of registration) – whatever the
context of this approach was in 1971 – nowadays seems to be neither reasonable, nor easily
administrable. It is submitted that the place of the vehicle’s registration does not represent a real
linkage with the persons connected to the vehicle (owner, operator, driver etc.), contrary to these
persons’ habitual residence. In this regard it is needless to emphasise the commonplace that the
non-contractual relationship exists between the parties and thus the relevance of the place of
registration is more than doubtful. What is more, the rules of registration follow the purposes of
several policies that seem to be irrelevant from a private international law point of view (tax law,
road regulations etc.) and vary from country to country. It is also not easy to determine the legal
domicile of the vehicle. First, Article 6 of the 1971 Hague Convention calls for the examination
of whether the owner, the person in possession or control of the car or the driver has his habitual
residence in the country where the vehicle is registered. At the same moment, in some cases the
Convention declares that registration itself is sufficient to establish the legal domicile of the car
and in such cases the domicile constituted by registration may not be called into question (see
liability towards the owner, driver etc., liability for damage to goods not belonging to the
passenger). Finally, even if it is to be examined whether the place of registration represents a
meaningful relationship and it is in fact established that no such relationship exists, the next step
is to determine the place where the vehicle is habitually stationed. Nevertheless, the latter brings
up difficult problems of interpretation and proof. If the vehicle is entered into an official register,
at least, it is to be presumed that it is normally located in that country and in certain cases the
owner or operator of the car will go to any great length to prove the coincidence of the place of
habitual *108 stationing and that of registration since the opposite conclusion would cast on him
the shadow of tax evasion (e.g. vehicle registration tax or vehicle excise duty, environmental tax,
road fund tax). It is also questionable who should bear the burden of proof regarding the place of

41
It is arguable that the purpose of the Hague Conference is to achieve global unification of private international law,
while the European Community’s mission is necessarily confined to regional unification. Nevertheless, it is highly
dubious whether global interests are in fact present here. The 1971 Hague Convention has been popular mainly in the
EC and only a few non-EC countries have ratified it: Belarus, the former Yugoslav states, from which only Slovenia
is a member of the EC, and Switzerland. The question is whether under such circumstances the 1971 Hague
Convention should still thwart the effectiveness of the Rome II Regulation.
42
Historically, it is, of course, not the 1971 Hague Convention but the Rome II Regulation that deviates.
13
 6(1) Journal of Private International Law 93-108 (2010)

habitual stationing.
Fortunately, the Rome II Regulation contains a review clause, which provides that the
Commission shall submit a report on the application of the Regulation by August 20, 2011.
Article 30(1)(ii) specifically mentions the 1971 Hague Convention, providing that the report shall
include “a study on the effects of Article 28 of this Regulation with respect to the Hague
Convention of 4 May 1971 on the law applicable to traffic accidents.” Accordingly, the revision
of the present situation will inevitably emerge in the near future. Nevertheless, no empirical data
is necessary for establishing that the split of the conflict regimes is an unwelcome plight, even if
they usually result in the application of the same law and that Article 28 should be amended in
such a way that the Regulation has precedence over the Convention.

14

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