After 4 years Diana's Rome II report passes the final hurdle

4.03.45pm BST (GMT +0100) Wed 11th Jul 2007

The European Parliament has approved a conciliation agreement on Rome II. As reported on the EP's website, after almost four years of negotiations, back in May, Parliament and Council representatives struck a deal on the regulation on the law applicable to non-contractual obligations, known as Rome II. The European Parliament agreed to introduce rules on road traffic accidents and environmental damages and delete the controversial provision on defamation by media. Diana Wallis MEP is the Parliament's rapporteur and who, by coincidence, was chairing the session of votes when her report was agreed.

The so-called "Rome II" Regulation aims to facilitate litigation between citizens from different European countries on matters such as traffic accidents, accidents caused by defective products and environmental damage by harmonising national legal provisions.

The regulation sets out the general rule that the law applicable to a non-contractual obligation arising out of a tort (roughly speaking, an action or inaction which causes damage or injury for which there can be recourse to civil law proceedings) is the law of the country in which the damage occurs, irrespective of the country in which the event giving rise to the damage took place. Nevertheless, for situations where the tort is manifestly more connected with another country, the regulation provides for specific rules to allow courts to treat individual cases in the most appropriate way. Finally, the involved parties are also free to agree on the law applicable to their circumstances, if the choice is demonstrated "with reasonable certainty".

Traffic accidents represent the majority of cross-border disputes involving EU citizens. Non-contractual obligations arising out of family relationships, matrimonial property issues and succession rights are excluded from the regulation.

After two readings by Parliament and Council under the co-decision procedure, the main points of disagreement remaining between MEPs and EU governments concerned violation of privacy, including defamation, road traffic accidents, the definitions of environmental damage and of unfair competition, and the review clause. All these points were settled at a formal conciliation meeting on 15 May, with the outcome being described as "historic" by Diana who piloted the legislation through Parliament. "It is the first time Parliament has dealt with such an instrument in co-decision. The first, but not the last", she said.

Road traffic accidents

At Parliament's insistence, the provisions on personal injuries and related compensation are, in the end, to be included in the regulation. This issue turned out to be particularly complex, due to the different practices followed in the Member States regarding the level of compensation awarded to victims of road traffic accidents.

According to the approved text, in a case of personal injury caused by a car accident where the victim is not in his or her home state, the court concerned should take into account the actual losses and costs incurred by the victim. Moreover, the Commission is asked to present, before the end of 2008, a study on all options for improving the position of cross-border victims, including insurance aspects and, if appropriate, a Green Paper.

Defamation by the media

At second reading, MEPs had approved an amendment to regulate the violation of privacy by print or audiovisual media. According to that text, the law applicable in case of defamation by media would have been the one of the country to which the publication or broadcasting service is principally directed or, if this is not apparent, the country in which editorial control is exercised. However, national governments strongly opposed the Parliament's position and the Conciliation Committee agreed to leave this matter to be discussed in the future under the review clause.

Unfair competition and environmental damage

MEPs insisted and obtained a definition of environmental damage to be introduced in the Regulation. According to the approved article, "environmental damage" will cover any damage of natural resources, such as water, land or air, or any damage to a natural resource service, as well as to the diversity of living organisms. On unfair competition, Parliament successfully insisted on having a clear rule to ensure courts apply one single law and thus to avoid "forum-shopping". The agreed text says that, in case of restriction of competition, the applicable law is the law of the country where the market is, or is likely to be, affected.

The review clause

MEPs obtained two review clauses: a special review clause with a shorter timetable (by 2008) to address the issue of defamation and road traffic accident and a general one, whereby the Commission will present a study on the application of Rome II 4 years after its entry into force. This report will also provide a study on the extent to which national courts apply foreign law. The Regulation will be applicable in all Member States 18 months after the date of adoption.