The controversial draft Regulation sets out which laws apply in
non-contractual cross-border disputes, such as cases of defamation
and product liability. Where, for example, a consumer in France
buys a defective product from a seller in England, the draft Rome
II Regulation provides that the consumer could sue under French
law. This principle is known as “country of destination”.
However, the E-commerce Directive, which is due to be
implemented in all EU Member States by 17th January 2002, takes a
different approach. Under the Directive, information society
services are subject to the law of the country in which they are
established, a principle known as the country of origin. This
principle has the advantage for businesses that they need only
comply with the laws of their own state. Under the country of
destination approach, they have the burden of complying with the
laws of every state where they think the damage might occur.
Internal Market Commissioner Frits Bolkestein is reported to
have demanded that the draft Rome II Regulation be amended so as to
be consistent with Internal Market policy. It now seems he is
winning his argument. The latest draft, a copy of which was today
leaked to OUT-LAW.COM, contains wording which would avoid conflict
with EU laws based on country of origin, i.e. the E-commerce
Directive. Article 23 of the leaked draft (translated from French)
provides:
“This regulation will not affect the
application of [EU laws] which… in particular matters, subject the
services to a legal regime of a Member State in which the person
providing a service is established.”
According to Phil Murphy of the Rome2Group, a body formed
specifically to lobby against the proposed Regulation, there is
still disagreement among Commissioners. Murphy told OUT-LAW.COM, “I
understand that the German Government is especially unhappy about
the fact that anything covered under the E-commerce Directive will
be excluded.” Further, “Diana Wallis MEP has indicated that she
will sponsor a Public Hearing on the issue, but the Commission is
unwilling at present to release a draft document for discussion at
a hearing.”
