“(1) Unless otherwise provided for in this Regulation, 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. (2) However, where the person claimed to be liable and the person sustaining the damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply. (3) Where it is clear from all the circumstances of the case that the tort/delict is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. A manifestly closer connection with another country might be 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.”
“I conclude that certain points are established and provide critical guidance: (i) The leading CJEU cases demonstrate that in the context of the damage head it is the manifestation of damage that is relevant, not the transaction that ultimately led to such loss. (ii) Manifestation is more likely to be associated with crystallisation of the damage than the origins of the transaction in cases where there is a difference. As I will consider further below, while the references in UMI to ‘became certain’ and ‘irreversible burden’ are not posited as the key test, they indicate what the CJEU is looking for when manifestation is not self-evident. (iii) Caution may be required to be exercised when looking at damage that may or may not occur depending on what happens in the future. In this context careful thought may be needed to distinguish between the last thing that happened to bring the loss home to the claimant and the point where the loss itself becomes clear. In Kronhofer, Mr Kronhofer was exposed to risk from the moment he invested his money with the defendant (that was the very essence of his claim), but it is nowhere suggested that the damage occurred at this time. Similarly, in UMI, UMI was bound to pay more than anticipated as soon as it signed the original contract, but its losses did not actually manifest and become certain until it settled the dispute about exactly how much. (iv) While it is obviously right that foreseeability and a consideration of factors relating to the sound administration of justice cannot provide an independent basis for a conclusion that jurisdiction resides in a particular location, the CJEU has clearly used such factors in some cases. At times the relation of these factors to the reasoning is unclear. However, their existence and the rationale for the rule seems to justify their use by way of cross-check where the analysis simply by reference to manifestation remains troublesome. This is because the existence of the special jurisdiction is justified by the principle of proximity and is effectively designed to ensure that the jurisdiction is both foreseeable and likely to facilitate the administration of justice, the efficacious conduct of proceedings, and the taking of evidence. Or as Briggs puts it (p. 274): ‘… the conclusion to which the law comes must be derived from what appears to be the underlying reason for the rule.’” ‘… the conclusion to which the law comes must be derived from what appears to be the underlying reason for the rule.’”
“The judge seems to me to have founded her decision on the indication that she found in UMI to the effect that damage manifested itself where it crystallised. In UMI, that was where the arbitration award identified what loss UMI had actually sustained, even though UMI had obviously sustained loss when it entered into the option agreement pursuant to the negligent drafting of the Czech lawyers. I am not sure, however, that jurisdiction founded on damage under article 5(3) will always be where the loss actually crystallises and is made certain. In VEB, for example, the CJEU seems to have laid down a rule that applies to cases brought in respect of listed companies breaching reporting requirements. This is not such a case. Nor is this a case like Kolassa and Lober, where there were significant connecting factors with the claimant’s domicile in that the investments were made in Austria and the losses manifested themselves there.”
“Whereas in the case of personal injury and physical damage to property it may be more straightforward to discern the country in which the damage occurs, and hence the applicable law, the fact that financial and non-material loss (such as the£100,000 loss) lacks an immediate physical manifestation presents real problems in discerning the applicable law.”
“In my judgment, the applicable law pursuant to Article 4(1) is not the place where the damage predominantly occurs. That is not what the Article says. Article 4(1) refers to ‘the law of the country in which the damage occurs’. The natural reading is that where damage occurs across several jurisdictions, there will be several applicable laws. This is, of course, also consistent with the Explanatory Memorandum.”
“The rule entails, where damage is sustained in several countries, that the laws of all the countries concerned will have to be applied on a distributive basis, applying what is known as ‘Mosaikbetrachtung’ in German law.”
“In this regard, it may be appropriate (at least as a matter of emphasis) to distinguish between torts which have horizontal multi-jurisdictional effects, and those which have vertical multi-jurisdictional effects. The publication of a libellous tweet which is read and causes loss in a number of jurisdictions, or the use of confidential information to sell infringing products in a variety of countries, may present a rather stronger case for a ‘Mosaikbetrachtung’ of applicable laws than a case such as the present, in which the defendants began causing loss to the claimant in one country, but adjusted their modus operandi so as to continue causing loss of essentially the same kind to the same claimant in another country.”
“The definition of ‘damage’ in Art.2(1) of the Regulation, as well as the stated need for foreseeability of court decisions and the need to strike a reasonable balance between the interests of the parties, suggest that the court should seek to identify and locate the outward consequences of the defendant’s conduct—or of an event for which the defendant is claimed to be legally responsible—and then to treat as the relevant ‘damage’ those consequences which are closely and foreseeably linked to that conduct etc., which are in some sense irreversible and which do not simply reflect or follow from other consequences occurring in another country. In undertaking that analysis, the court should assess the essential factual and legal characteristics of the ‘harmful event’ underlying the claim or claims presented in order to identify the underlying interest or interests which the putative ligation(s) would seek to protect, and then to find an appropriate method of locating the harmful consequences resulting from interference with those interests. For example, if the defendant’s allegedly false misrepresentations have led the claimant or its representative to release goods or documents held as security for a third party’s obligations, the damage can be located in the country where the security was held at the time of its release, rather than in the country where the claimant received the representations or took any decision to release. Similarly, if the defendant by a representation specifically addressed to the claimant induces the claimant to enter into an unfavourable transaction (such as a contract) with a third party, it is strongly arguable that the claimant should be taken to have suffered damage at the point, and in the place, where the claimant or his or her representative concludes the transaction, with that place being determined according to factual rather than legal criteria.”
“If one looks at the matter more broadly and asks: what was the harm which, in this case, occurred in England, it seems to me impossible to say that it was the failure to issue proceedings here; and, if the harm was that proceedings were issued in Germany, then it was in Germany that the harm was suffered.” v) In the Supreme Court, Lord Hodge at [27] referred to “the direct harm caused by the raising of the German proceedings” and “the expenditure occasioned by the German proceedings”
“Mr Justice Bright held that the applicable law was English law:[2023] EWHC 1797 (Comm) , [167]. I accept that that is arguably the case. I also accept that it is arguable that Article 4(2) of Rome II displaces the ascertainment of applicable law by reference to where loss was suffered to UAE law so far as the Bank and D10 are concerned (an issue which did not arise before Bright J). I am also satisfied that it is arguable that the applicable law of the unlawful means conspiracy claim is UAE law under Article 4(3) of Rome II. It may be there is an arguable case that BVI law governs the claims (it is not clear to me if anyone is contending for this as a fall-back).”
“Where a State comprises several territorial units, each of which has its own rules of law in respect of non-contractual obligations, each territorial unit shall be considered as a country for the purposes of identifying the law applicable under this Regulation.”
“The concept of a ‘territorial unit’ for these purposes does not, it is submitted, require a separate court system, but it does suggest a degree of constitutional separation. Thus, the fact that certain rules concerning non-contractual liability apply only to specific regions within a State does not mean that those regions will automatically constitute one or more separate countries for the purposes of the Regulation. If, however, the requisite degree of constitutional separation exists (most obviously, if a region has its own court system or a legislature with power to prescribe rules concerning non-contractual obligations), the territorial units must be treated as separate from each other, even if they largely share a ‘common law’, subject to local variations. For these purposes, Scotland and Northern Ireland each constitute a separate country from England and Wales. It is, perhaps, a matter of debate whether Wales constitutes a separate country from England for these purposes.”
“Article 4(3) is an exception/exceptional in these senses but in my view, there is no additional test of exceptionality and it is therefore not necessary for the court to be satisfied, for example, that the facts of the case are also exceptional or unusual in nature before applying art.4(3) . What is required is the application of the words of Article 4 with an awareness of aims of Rome II. The aim of arts 4(1) and (2) in particular, is to achieve certainty. They will provide the answer in a given case unless they can be displaced. But the Regulation also aims ‘to bring a degree of flexibility, enabling the court to adapt the rigid rule to an individual case so as to apply the law that reflects the centre of gravity of the situation.’ through art.4(3) , albeit this provision will only operate in a clear and obvious case.”
“In the end, however, it appears to me to be out of step with the ethos of the posited tort. It has its roots in the Court’s control of its own powers and resources. Thus in the 1698 malicious prosecution decision of Savile v Roberts (1698) 1 Ld Raym 374, Holt CJ referred to the ill of people ‘mak[ing] use of law for other purposes than those for which it was ordained’. The law and the purposes are the law and purposes of this court in this jurisdiction. It is not for this court to police or to second guess the use of courts of or law in foreign jurisdictions.”