PIBL - Week 5 Tort Law

Tort Law: Overview

Introduction

• Scenario 1: Shop safety

• Scenario 2: Infringe trademark-

Jurisdiction

• Overview:

• Scope

• NB: Tort within the Brussels Ibis Regulation

Tort Law: Overview > Introduction

Today Gruma B.V . will consider:

Scenario 1: Shop safety

• Lenka from the Czech Republic enters Gruma B.V .’s pop-up store in Belgium and slips on the floor because there was no sign warning her it was wet

• She obtains hospital bills and potential loss of outcome when she returns to the Czech Republic, and sues Gruma B.V .

Scenario 2: Infringe trademark

• Gruma B.V . is accused of infringing upon Google’s trademark

Tort Law: Overview > Jurisdiction > Overview

Europe:

• Brussels Ibis Regulation

Dual instrument:

• Jurisdiction

• Recognition and enforcement

Tort Law: Overview > Jurisdiction > Scope

Substantive: Is it a “civil and commercial” matter? (Article 1 Brussels Ibis

Regulation)

• Autonomous/ independent concept

• Legal relationship

• Subject-matter of the action

NB: Torts classify as a civil and commercial matter as long as no form of state authority

Temporal Article 66: On or after 10 January 2015

Formal (Article 4)

• Is the defendant domiciled in a Member State? If a customer who slips on Gruma B.V .’s wet floor sues them => Gruma B.V . becomes defendant when sued

Tort Law: Overview > Jurisdiction > NB: Tort within the Brussels Ibis Regulation

The issue of tort is not an issue of exclusive jurisdiction under Article 24

Brussels Ibis Regulation, because in most cases regarding tort, the parties do not know each other => does not make sense to agree on a forum

Sometimes there can be a tort closely related to a contract and may have a

choice of forum but this does not occur often. This means:

• No exclusive jurisdiction under Article 24 Brussels Ibis Regulation

• Not applicable under a special type of contract (consumer/employment/insurance)

Tort Law: Overview > Jurisdiction > NB: Tort within the Brussels Ibis Regulation > Specific provisions

There is a specific provision on tort and applies in addition to the general rule of Article 4 Brussels Ibis Regulation: Article 7(2)

• Issues of tort and delict are not harmoniously applied throughout the Member State, not just one solution on how to address a tort

• The person must be domiciled in a Member State => then that person can be sued where the harmful event occured

• We define a contract as ‘freely assume obligations’ => if there’ s no contract, then there is a tort (scenario when parties did not enter freely into obligations, mostly because they don’t know each other and it results in harm)

Tort Law: Overview > Jurisdiction > NB: Tort within the Brussels Ibis Regulation > Definition of tort

Definition of tort is very broad

• What also results from Article 7(2) is negative declaratory action:

  • Sometimes (mostly in IP disputes) you may know someone that wants to initiate legal proceedings against you and that they will say you committed a tort and you'll have to pay damages, but you want the court to say you did not commit a court

  • You can ask the court for such a declaration and say that you're not infringing upon another person's intellectual property

Tort Law: Jurisdiction

Where can Lenka sue Gruma B.V .?

• What if she wants to sue them elsewhere? (Article 7(2))

• (ECJ Marinari C-364/93)

• Mines de Potasse d’Alsace (ECJ [1976] Case 21/76) → Harmful event

  • Handlungsort: (where the harm was initiated)

  • Erfolgsort: (where the damage is suffered)

Tort Law: Jurisdiction > Where can Lenka sue Gruma B.V .?

Under Article 4 Brussels Ibis Regulation, she can sue Gruma B.V . where they are domiciled => in the Netherlands

• What if she wants to sue them elsewhere? (Article 7(2))

Tort Law: Jurisdiction > Where can Lenka sue Gruma B.V > Article 7(2))

Belgium is the area where she slipped => where the harmful event occurred

• Lenka also suffers from a loss of income when she goes back to the Czech Republic, but this does not give rise to jurisdiction (ECJ Marinari C-364/93)

  • They are indirect results of the harmful event

  • However, she can claim those damages

• Harmful event => the place where you yourself or your property was injured (initial damage)

  • Mines de Potasse d’Alsace (ECJ [1976] Case 21/76)

Tort Law: Jurisdiction > Where can Lenka sue Gruma B.V > Mines de Potasse d’Alsace (ECJ [1976] Case 21/76)

Facts => Salt mine located in France, and dumped all of the

excess salt into the river Rhine that runs all the way into the

Netherlands and damaged farmers' cucumber crops in the

Netherlands

Legal rule => Where was the harmful event?

• Two possibilities:

1. Act that leads to damage

2. Damage itself

• These are two different things => most of the time, the act and the damage itself occur in the same place, simultaneously, but there are exceptions where the act that gives rise to the damage, and damage itself are not located in the same place

Tort Law: Jurisdiction > Where can Lenka sue Gruma B.V > Mines de Potasse d’Alsace (ECJ [1976] Case 21/76) > Handlungsort & Erfolgsort:

Handlungsort: (where the harm was initiated)

• “Handu” = act

• “Ort” = place (place where damage occurs)

Erfolgsort: (where the damage is suffered)

• “Erfolg” = consequence

• “Ort" = place (damage itself)

In such cases => up to victim to choose where he wants to bring his claim

Tort Law: Applicable law

How IP functions

How to determine where harmful event occurs with IP

• Wintersteiger (ECJ [2012] C-523/10)

Where can Google sue Gruma B.V .?

• General rule

• Alternative rule

• Erfolgsort => located where the trademarks are registered

Conflict of laws

• Which Regulation is applicable?

• Scope of Rome II Regulation

• Reference system of Rome II Regulation

• Article 8 Rome II Regulation

Tort Law: Applicable law > How IP functions

NB: Copyright infringement is treated as tort

In this case the letter “G” is trademarked, but you can also trademark a specific colour, etc.

Issue of IP is still very territorial

• Although there are rules that transcend borders such as some overarching instruments, in this case, for the most part, nearly everything is subject to national territory

• Meaning => if an individual wants to use this “G”, they can for instance register that trademark in the Netherlands but it'll only be valid in the Netherlands

Tort Law: Applicable law > How to determine where harmful event occurs with IP

With Gruma B.V ., although they are only physically present in some countries, their website can be viewed by many other jurisdictions, their products all have their logo, which can be shipped to many other countries, etc. => Other companies with a similar trademark can argue that if Gruma B.V . distributing their products in their jurisdictions, Gruma B.V . is infringing upon their IP

• Wintersteiger (ECJ [2012] C-523/10)

Tort Law: Applicable law > How to determine where harmful event occurs with IP > Wintersteiger (ECJ [2012] C-523/10)

Handlungsort:

• Domicile of the infringing party (e.g. by placing infringing texts or photos online)

Erfolgsort:

• Damage can only occur in a Member State if the right that is allegedly infringed is protected in that Member State

• Usually the place of registration => you can only infringe upon another person's trademark if they have registered and protected that trademark somewhere

• Jurisdiction limited to damage occuring within the territory of the court seized

  • If the claim against Gruma B.V . is brought to the Dutch court, the Dutch court only has jurisdiction over damage done in the Netherlands

Tort Law: Applicable law > Where can Google sue Gruma B.V .? > General rule

The Netherlands => the domicile of Gruma B.V . is based

This is based on the general rule of Article 4 Brussels Ibis Regulation => sues someone based on where they are located

Tort Law: Applicable law > Where can Google sue Gruma B.V .? > Alternative rule

Article 7(2) => The place of establishment of the infringement is where the handlungsort is located => equates to the place of domicile / establishment of the infringer (also the Netherlands)

Damage occurring in these countries => Netherlands, Belgium and Germany

Tort Law: Applicable law > Where can Google sue Gruma B.V .? > Erfolgsort => located where the trademarks are registered

(the Netherlands, Germany and Belgium; damage felt here)

• The Netherlands courts have jurisdiction on the basis of Article 7(2)

  • Dutch court only has jurisdiction over damages occurred in the Netherlands

• Belgium courts have jurisdiction on the basis of Article 7(2)

  • Belgian court only has jurisdiction over damages occured in Belgium

• Germany courts have jurisdiction on the basis of Article 7(2)

  • German court only has jurisdiction over damages occured in Germany

Tort Law: Applicable law > Conflict of laws > Which Regulation is applicable

Europe: Regulation on the law applicble to non contractual obligations (Rome II Regulation) (Lex loci damni)

• NB: Rome I Regulation applies to contractual obligations, not tort

• In certain situations we continue to apply other Conventions instead of the Rome II Regulation

  • Hague Convention on traffic accidents

  • Hague Convention on product liability

  • Always ask whether this is an issue of product liability?

    • If yes: then remember there may be differences, and look at which States are Contracting States to the Hague Convention on Product Liability

    • If no: if they are not a signatory, then use Rome II Regulation

Tort Law: Applicable law > Conflict of laws > Scope of Rome II Regulation

Temporal scope: 11 January 2009 (The harmful event itself needs to occur after this date)

Material scope: Article 1 and 2 (Applies to non-contractual obligations in civil and commercial matters)

• Nobody should be exercising as a state authority

• Should not be a contract

Formal scope: Article 3 (universal => applies, regardless of whether the law belongs to a Member State)

Tort Law: Applicable law > Conflict of laws > Reference system of Rome II Regulation > Overview

Freedom of choice (Article 14)

Key characteristics

• Party autonomy/ legal certainty

• Rare

• Expressed verbally or in writing

• Implied

Parties can always agree after the damage has occurred, but it can also be prior (given that they pursue a commercial activity)

If the parties didn’t make a choice of law, we fall back on the general rule of the Rome II Regulation (Article 4)

Law otherwise applicable:

• Special torts / delicts (Articles 5-9)

• Regular torts / delicts (Article 4)

• Non-contractual obligations other than those arising out of tort /

delict (Articles 10-13)

Tort Law: Applicable law > Conflict of laws > Reference system of Rome II Regulation > Refernce system list

1) First, check first if the parties have a shared habitual residence

because paragraph 2 prevails over paragraph 1 in Article 4

Exceptions:

• Article 4(2) => parties have a common habitual residence; check first if parties have shared habitual residence – if no habitual residence then law of where the damage occured is applicable

• Article 4(3) => manifestly closer connection – a link that’s more closely connected to the parties

2) Then, check Article 14 => party autonomy is very clearly valued like

in the Brussels Ibis Regulation

3) Parties can make a choice of law prior to the tort, of the applicable law

if it involves professional parties => choice of law does not occur that

often

• Can only make a choice of law when its between professional parties and not general, natural parties

Tort Law: Applicable law > Conflict of laws > Article 8 Rome II Regulation

Under the Brussels Ibis Regulation there is no specific provision for IP infringement, but there is under the Rome II Regulation => the law that applies is the law of the country for which protection is claimed

• E.g. If there is a trademark registered in the Netherlands and someone infringes upon a Dutch trademark then Dutch law will apply

Article 8(3): Parties cannot make a choice of law when it comes to IP => not up o the parties to decide whether an intellectual property is valid, it is up to national law to decide

Chapter 7: Torts > Introduction

Activities in this European area of justice can be developed or established in many ways:

by opening a branch office, physically going abroad to negotiate or conclude

agreements, doing business with the help of a representative or agent, marketing

products, or by performing actions that ultimately have (harmful) effects on persons or

goods in EU Member States

Chapter 7: Torts > Jurisdiction in tort or delict cases > A person domiciled n a Member State

In matters relating to tort or delict a person domiciled in a Member State may be sued in the courts of that Member State (Article 4 Brussels Ibis Regulation)

• They may also be sued in the courts of another Member State of the place where the harmful event occured or may occur (Article 7(2) Brussels Ibis Regulation)

Chapter 7: Torts > Jurisdiction in tort or delict cases > A person domiciled outside a Member State

If a person is domiciled outside a Member State => jurisdiction of the court in tort cases in principle cannot be based on the Brussels Ibis Regulation

• E.g. A company based in China that operates unlawfully in the Netherlands cannot be sued in the Dutch courts on the basis of the Brussels Ibis Regulation, but it can be sued on the basis of Article 6(e) DCCP

Each Member State has its own jurisdiction rules for such international situations covered by the Brussels Ibis Regulation

Chapter 7: Torts > How has the Court of Justice interpreted the place of the harmful event to date?

The handlungsort as the place of the harmful event was launched by the Court of Justice in the Bier v. Mines de Potasse judgement => damage in the Netherlands caused by the dumping of salt in France into the Rhine

• Here for the first time the court distinguishes between handlungsort and erfolgsort, but does not elaborate on this

• In this case, it was clear that the place of the causal event is the place where the publisher of the publication in question is established

Chapter 7: Torts > Zuid-Chemie case

European Court of Justice concluded: Article 7(2) must be interpreted as meaning that, in the context of a dispute, the words ‘place where the harmful event occured’ designate the place where the initial damage occured as a result of the normal use of the product or the purpose for which it was intended

Chapter 7: Torts > Multiple locus; location of the primary damage (Erfolgsort

Chapter 7: Torts > Definition of the term (place where the harmful event occured

Chapter 7: Torts > Jurisdiction in tort or delict cases: Brussels Ibis Regulation

Chapter 7: Torts > Primary damage at the same time ind different countries: scattered delicts

In the case of a ‘spreading offence’ such as defamation by means of a press article distributed in the territory of several Member States, the harmful effects take effect simultaneously in several places

• The courts of each of these places will in principle have jurisdiction in order to ensure the proper administration of justice and the proper conduct of proceedings as an Erfolgsort

Chapter 7: Torts > E-Date/Martinew judgement

In the event of an alleged infringement of personality rights by means of content placed online on an internet website, the person who considers that their rights have been infringed has the option of bringing an action for liability, in respect of all the damage caused, either before the court of the Member State in which the publisher of that content is established or before the courts of the Member State in which the centre of his interests is based

That person may also bring his action before the courts of each Member State in the territory of which content placed online is or has been accessible

Chapter 7: Torts >The applicable law to torts > The Rome II Regulation

The law applicable to tort/delict and non-contractual obligations should from

January 11, 2009 be determined by reference to the Rome II Regulation

Chapter 7: Torts > The applicable law to torts Scope of application of the Rome II Regulation

Temporal scope: for the Regulation to apply, the harmful event must have

occured on or after 11 January 2009 (Article 31)

• Earlier events are governed by the Member States’ national conflict of law rules

Substantive scope: Article 1 defines the substantive scope

• The Regulation covers non-contractual obligations in civil and commercial matters

• The scope of the Rome II Regulation covers all non-contractual obligations except the specific matters listed in paragraph 2

• Article 2(1) defines damage as any consequence arising out of tort/delict (Articles 4-9)

• The Regulation covers not only the non-contractual obligation that has already arisen but also the non-contractual obligation that is likely to arise (Article 2(2))

• Excluded => non-contractual obligations arising out of violation to privacy and rights relating to personality, including defamation (Article 1(2)(g)) => National conflict rules of the Member States apply to this

Formal scope: According to Article 3, the Regulation has a universal formal

scope. The law designated by the Regulation applies whether or not it is the law of the Member States

• Meaning => for the Regulation to be applicable, it is not necessary for the event giving rise to damage to have occured within the EU, nor is it required that the parties to be domiciled / habitually resident in the territory of a Member State

Chapter 7: Torts > The following can be deduced from conflict-of-laws rules

1) The parties are free to choose the applicable law; however, exceptions to this rule are provided for in Articles 6(4) & 8(3);

2) If no choice of law has been made, it should be determined whether there is a specia tort or delict, as referred to in Articles 5 - 9, in which case these conflict rules apply

3) If there is no special tort or delict, the applicable law shall be determined on the basis of Article 4

4) If no choice has been made, and the non-contractual obligation is not a tort or delicts the rules set out in Articles 10, 11, and 12 shall apply, with the exception of the situation set out in Article 13

5) However, the law designated as applicable may be infringed on the basis of Article 16 (rules of precedence), Article 17 (local rules of safety and conduct) and Article 26 (public policy)

Chapter 7: Torts > Choice of law

Article 14 of the Rome II Regulation gives primacy to the choice of law

• This provision is based on party autonomy and the desire to obtain certainty about the applicable law

• If the parties have made a choice of law => the court must respect this

Chapter 7: Torts > Choice of law > The choice of law proviso incorporated the protection principle

In order to protect weaker parties, the free choice of law is only allowed after the event causing the damage has taken place

However, if the two parties are engaged in commercial activity, this protection is not necessary and they can agree, for example within the framework of a contract that claims arising from unlawful acts in connection with that contract should be subject to the same law

The choice must be made expressly orally in front of the judge or in writing

The choice must be ‘freely negotiated’

Chapter 7: Torts > The parties are not allowed to make a choice of law in three areas

1) Article 6(4) prohibits making a choice in respect of unfair competition and acts restricting free competition

2) With regard to the infringement of intellectual property rights, Article 8(3) provides the same

3) Article 13 declares the provisions of Article 8 (including paragraph 3) applicable mutatis mutandis to non-contractual obligations mentioned in Chapter III of the Regulation arising from infringements of intellectual property rights (unjust enrichment)

=> such obligations are subject to the lex protectionis of Article 8 and the parties are not allowed to make a choice of law

Chapter 7: Torts > Unfair competition and acts restricting free competition

Article 6(1) subjects the non-contractual obligation arising out of an act of unfair competition to the law of the country where competitive relations or the collective interests of consumers are, or are likely to be affected

Article 6 covers non-contractual obligations concerning:

(1) Disruption to the market as a whole

(2) Harm to the interests of a specific competitor

(3) Harm to the collective and diffuse interests of consumers (as opposed to the individual interests of a specific consumer)

Chapter 7: Torts > Infringement of intellectual property rights

Article 8 contains special rules for non-contractual obligations arising from an infringement of an intellectual property right

Intellectual property refers to the totality of exclusive rights on intellectual creations

Chapter 7: Torts > Infringement of intellectual property rights > Two categories can be distinguished

1) Industrial property – inventions (patents), trademarks, industrial

designs and geographical indications

2) Copyright – which includes literary and artistic works

Chapter 7: Torts > Lex loci protectionis principle (territorial principle)

= application of the law of the country for which protection is sought

Under this principle, each country may apply its own law to infringements of an ntellectual property right in force in its territory

I.e. Infringements of an industrial property right are governed by the law of the State where the patent was granted, where the trademark was registered or the design was filed

This lex loci protectionis principle also underlies Article 8(1) which subjects the non-contractual obligation arising from an infringement of an intellectual property right to the law of the country for which protection is claimed

Chapter 7 : Torts > The general conflict of laws rule (Article 4)

If no choice of law has been made and there is no special tort or delict, the applicable law is determined on the basis of Article 4

• Article 4(1) states that the law applicable to a tort / delict is the law of the country in which the damage occurs (lex loci damni), irrespective of the country in which the event giving rise to the damage occured and irrespective of the country in which the indirect consequences of that event occur

• Article 4(2) constitutes an exception to the main rule of the lex loci damni in the event that both parties have their habitual residence in the same country

• Article 4(3) is an escape clause from Articles 4(1) and (2) where it is clear from all the circumstances of the case that the tort / delict manifestly more closely connected with another Member State

Chapter 7 : Torts > General rule: lex loci damni

Article 4(1) provides as a basic rule that the law of the place where the direct damage occured or is likely to occur must be applied

In most cases, this corresponds to the law of the victim’ s country of habitual residence

In the event of an accident, the place where the direct damage occured is the place of the accident, irrespective of any financial or non-material damage arising in another country

• Application of the lex loci damni rule means that if damage occurs in several countries, the law of the countries concerned must be applied in a distributive manner, in accordance with the ‘Mosaikbetrachtung’ => therefore, the damage and amount of compensation be determined in accordance with the law of that country

Chapter 7 : Torts > General exception clause and accessory connection

Like Article 5(1) of the Rome I Regulation, Article 4(3) of the Rome II Regulation contains a general exception clause

• Paragraph 3 stipulates that there must be a manifest, closer connection

• The application of the secondary connection mechanism should not have the result of depriving the weaker party of the protection of the law which would otherwise be applicable