Non-Contractual Obligations and the Rome II Regulation - Research Paper Example

Non – Contractual Obligations and the Rome II Regulation The European Union is finding it difficult to enact legislation with regard to defamation, which would address not only the demands of the plaintiffs but also that of the press. In the same way, the international law dealing with defamation disputes, is failing to satisfy the press. International legislation proved inadequate to safeguard their interests. A major assumption in this context is that the EU would adopt legislation similar to the law prevailing in the United States and thereby implementing the single publication rule. The adoption of the American style of legislation would promote a system in which the legislation of the other nations would not be undermined1. The European Council had withdrawn provisions relating to privacy and rights of personality from the new legislation. The EC is facing political pressure from member states. However, the European Parliament had acceded to review this issue separately and agreed to examine other alternatives in this regard2. The proposal to rule out the country of origin principle and to extend the provisions to fall within the scope of the rules pertaining to the law of torts is not an appropriate measure and would be deemed to be self – defeating in its purpose. This new stance would only serve to create uncertainty and imbalances in competition. The very spirit of the European Union rests on mutual recognition and such recognition would be contrary to it. The disputing member states’ legislations invariably absorb internal market objectives. However, these legislations would be unable to accommodate the principle of origin, in situations where it tries to preserve the new regulatory legislation. The Rome II Regulation has designed the new regulatory rules on the basis of the principle of origin3. The Rome II Regulation is designed to mitigate distortion in competition. Thus, the departure from the objectives of private law to the aims of regulatory provisions has been welcomed by the majority. This process would be more effective than that of the principle of origin which mainly deals with the laws that protect the invasion of privacy. Regulatory policy is thus preferable; in order to avoid conflict between the different legislations and to ensure that there is a balance between the freedom of expression and the protection of privacy. The study conducted by Paul Beaumont emphasizes that there is a lacuna in the rule of origin of publication. For instance, wealthy celebrities usually sue smaller newspapers and magazines in different countries. This lacuna has to be resolved by the regulatory rules4. As long as the applicable rules permit an individual to sue for tortuous damages, caused to him due to defamation and invasion of privacy, in the jurisdiction where the article had been published; there are bound to be instances of forum shopping cases in cross – border litigation relating to the press. Several options exist for the claimant, with regard to filing a suit. Accordingly, the claimant has the option to choose that option, which is more beneficial to him in a particular jurisdiction. The courts in that jurisdiction would award suitable liabilities, damages and cost of court procedures to the claimant. It has been the practice for quite some time now, for the English courts to favour the claimants in cases of defamation and invasion of privacy. However, of late, this scenario is gradually changing5. In the famous case of Jameel v Wall Street Journal6, the court held that the law of defamation favours the claimants. However, the court opined that trivial intrusions by investigative journalists into the private life of individuals would not have any significant effect on them. The court also observed that investigative journalism by newspapers was not to be discouraged, as it was in the interests of the general public. Therefore, such investigative journalism could not be construed to affect the interests of the claimants. Despite this fact, making derogatory observations about prominent celebrities and public figures would always invite the risk of defamation claims7. In Campbell v MGN Ltd8, the House of Lords kept things in check by deciding that an invasion of privacy had transpired. Whereas, in Reynolds v Times Newspapers Ltd9the House of Lords upheld action of the newspaper as it was deemed to be investigative journalism that was genuinely in the public interest. Their Lordships also emphasized the fact that the press had to be accorded greater freedom. Article 6(1) of the first EC proposal on Rome II of 22 July 2003 says that breach of privacy or personality rights would be dealt with by a special choice of law rule. Under this article, the legislation pertaining to the cases in which non – contractual obligations arise due to violation of personality rights as well as violation of privacy, would be the laws of the forum. Article 3 maintains that ‘The law applicable to a non-contractual obligation shall be the law of the country in which the damage arises or is likely to arise’. The Commission’s explanation to this conflict clearly established the divergence of domestic legislations of the member states in this regard. In its initial informal draft proposal, the Commission had recommended that the law of the country, where the claimant generally resides, was to be applied. However, this recommendation was opposed vehemently, because the published material might not have been disseminated in the area where the claimant normally resides. While condemning opposition to its recommendations, the Commission reviewed the decision in Shevill and argued that the place of damage according to Article 3, in this context, was to be any place where there was a distribution of the publication. Such a place would be the place where the victim’s reputation had been allegedly tarnished. Article 6(1) was at a later stage, included in order to protect the press against the legal provisions of foreign nations, which were not member states of the European Union. This Article was specifically drafted to provide protection to the press in foreign nations where there was a violation of human rights and where constitutional measures had been initiated to repeal the freedom of the press. Thus Article 6(1) provides freedom of expression to the press by the application of the law of forum. This protects the press against any law pertaining to the place of injury that is in contradiction with the public policy of the forum10. In 1994, the UK Government suggested this to its Parliament in the Private International Law (Miscellaneous Provisions) Bill11. In Boys v Chaplin12, a proposal was made to incorporate the general rule contained in this Bill, regarding the inclusion of the place of injury rule if significant damage had occurred there. This was consequent to the fear expressed by the press that the implementation of foreign defamation laws would restrict their freedom of expression. The Bill’s public policy exception circumvents such restriction. The underlying fact was that Article 10 of the ECHR had to be considered by the English courts. That article had already established a standard regarding the freedom of expression. The courts were at liberty to employ that standard and to abstain from implementing any law that would contradict Article 10 on the basis of public policy. The government had to heed to the representations of the press and it accordingly, it agreed to exclude defamation from the general rule. Defamatory acts and violation of privacy are torts under Article 6, which primarily deals with violations of privacy and rights relating to the personality. The original proposal of the European Commission was that the claimant could invoke the laws prevailing in his country of residence in respect of tortuous acts, with regard to privacy and personality. However, there was severe opposition to this principle of origin by the member states. The new regulatory mechanism under Article 6 operates in accordance with the rules in Article 3. In the event of a conflict between the principle of origin with the basic principles of the forum, such as freedom of expression and information, the forum laws will be applicable. Article 6(2) stipulates that the law of habitual residence of the publisher or the broadcaster is applicable to any right to reply or other equivalent measure13. However the authority of the Community was challenged by several media organisations as well as by the Newspaper Society in proposing the new regulatory mechanism particularly with respect to defamation, privacy and other related torts. Their main contention was that the Community had very limited legal capacity and authority over media content. They argued that the Commission had not considered the fact that the harmonisation of conflicting laws was required to promote the internal market and that it was essential to recognise the laws relating to privacy and defamation14. Regulation 864/200715attempts to harmonise the Member States legislations so as to apply similar rules, while dealing with cases of non – contractual obligation in civil and commercial issues. The general regulatory mechanism of Rome II is the application of the legislation of the nation in which the damage took place. The exception to this general rule is that if the parties have their habitual residence in another nation then the law of that nation could be applicable16. The European Parliament and the European Council, in conjunction with the Conciliation Committee had drafted a Regulation to harmonise the member states’ legislation relating to non – contractual obligations. The culmination of this effort was Regulation 864/2007. This Regulation is also known as Rome II, and it aims to harmonise the rules of member states with regard to cross – border disputes that arise out of torts. This permits courts throughout the EU to apply the same law in such matters and it promotes mutual recognition of court decisions by all the member states. Rome II maintains a balance of interests between the offender of a tort and the victim of such tortuous act. In the matter of media violations of privacy, the co-legislators felt it to be expedient to leave them out of the scope of the Regulation; however, they directed the Commission to conduct a thorough examination of the situation by the end of 200817. Previously, the United Kingdom had been favourable to plaintiffs in cases of defamation and to defendants in claims of invasion of privacy. However, subsequent to the case of Jameel v Wall Street Journal18, a drift in attitude was perceived. In that case Lord Hoffman had stated that for some time the courts had reviewed the law of defamation in favour of claimants and the law of privacy against them. However, there was no hazard involved in trivial intrusions into private life. Investigative journalism that promotes the interests of general public is essential, but on occasion such investigations injure the reputation of prominent public personalities. In order to maintain the balance in such investigative reports and in order to favour privacy, the House of Lords upheld privacy in the case of Campbell v MGN Ltd19, while supporting the freedom of the press in Reynolds v Times Newspapers Ltd20. This has enabled the press to publish investigative articles in the genuine interests of the public. The European Publishers Council is opposed to the Rome II Regulation. The Regulation determines the law to be applied in cross – border non – contractual disputes. The European Publishers Council contends that enacting amendments to this legislation would enable European citizens to sue against defamation or invasion of privacy anywhere in the EU. The EPC claimed that the EU’s Council of Ministers had refused to accept the amendments proposed by the European Parliament. Those amendments would have been instrumental in reducing the possibilities of forum – shopping. The Members of European Parliament proposed that the legislation of the nation in which the media operates should be applied to disputes involving invasion of privacy or defamation. They also suggested that if the legislation was inappropriate then the legislation of the nation in which the editorial control was located should be applied. According to the EPC Chairman Francisco Pinto Balsemão, the proposal of the EU will create an environment in which media and reporters would have to face major problems while publishing or broadcasting information and that there would be legal uncertainty. Media persons and journalists would be required to have knowledge of the legislation in all he member states of the EU, if they wanted to publish any piece of information. The UK’s representatives in the EU Parliament had failed to consider this aspect of Rome II and they did not table this in the ministerial meetings. It is anticipated that the EU President, would address this problem, on a priority basis in the near future. There is an urgent need to amend the defamation clause in this Regulation21. The European Publishers Council had expected the Rome II Regulation to exclude the media. The EPC had argued that the Regulation was not ideal for newspapers, magazines and online publishers22. On 18 January 2006, the European Parliament included the disputable clause into the Rome II Regulation. This clause clearly describes which nation’s legislation applies to cross – border defamation cases. The Members of European Parliament rescinded a clause relating to unfair competition, which applies the law of the nation where the damage takes place. The United Kingdom’s rapporteur Diana Wallis demanded a reinsertion of the clause dealing with defamation and invasion of privacy. However, the European Council had already dropped that clause23. Cases are to be heard, as per the provisions of this Regulation, in accordance with the law applicable to the place where the damage had ensued and the place of filing the case is to have no bearing on this. This is as per Article 3. Nevertheless, Article 6(1) permits the courts to avoid defamation laws that would infringe their freedom of expression legislation. The major drawback lies in the fact that the legislation in respect of freedom of expression, in several of the member states; is at variance with the international norms in this context. Due to the provisions of Article 6(1), a publisher is exposed to the risk of having a defamation case against him being tried in a foreign country, where the law could quite possibly be very stringent and could also be subjected to laws that violate Article 10 of the ECHR. This is especially true in the case of publications on the internet. It is one of the chief objectives of this Regulation to harmonize the different member state legislations, which are applicable to non – contractual commitments that are the outcome of an act that is neither a tort nor a delict. It discourages forum shopping and had direct effect in the national law. The law that is applied to any defamation case, as per Article 3, is to be the law that pertains to the country, in which the damage occurred or is likely to transpire. It had been clarified in the Explanatory Memorandum that the damage would be deemed to have taken place in the place where the purportedly defamatory matter had been disseminated. However, Article 6(1) provides an exception, to the extent that in cases relating to the infringement of privacy or personality rights, the applicable law would be that of the forum. This Article prevents the application of foreign law that would breach the freedom of expression or protection of information of the forum24. In a 2006 meeting of the Legal Affairs Committee of the European Parliament, the European Commissioner Franco Frattini made a strident call for the exclusion of media libel from the ambit of Article 6 of the draft regulation pertaining to the Rome II Regulation. It was his considered opinion that the extant legislative arrangements in this regard, were more than adequate25. At first, the European Commission had recommended that the relevant jurisdiction should be that of the country where the damage had occurred or was likely to do so; or that of the country hearing the case, if the law of the country where the damage was alleged, infringed the fundamental tenets of the law relating to the freedom of speech and expression of the place of action. This resulted in significant opposition from the media, which expressed the legitimate fear that an allegedly defamed person would select the forum that had the most stringent laws in such contexts, in order to maximize the harassment that could be caused to the press26. There was a conspicuous lack of unanimity amongst the member states regarding the country where such cases were to be tried. Some countries like France and Belgium promoted the application of the law of the country, wherein most of the damage had transpired or was likely to occur or if such specification was unfeasible, the country of editorial control. This approach was hailed by the European Newspaper Publishers’ Association27. The courts of the member states are loath to apply the legislation of a nation that would result in the summary dismissal of the allegedly defamed individual’s claim. A salient example is provided by the filing of a defamation case in English courts against a publisher hailing from the US. This is due to the fact that a significant number of actions, which would be admissible under the legislation of the UK, would be considered to be in violation of the First Amendment, in the US, resulting in their dismissal in a US court. It has accordingly, become the practice for courts to impose their respective national laws on foreign publishers. This has resulted in a quagmire of jurisdiction and defamation laws. One of the principal objectives of bringing about a common market in the EU was the mitigation of the cost involved in conducting trade in other member states. To this end, the Brussels Convention of 1968 was the first choice of law accord. This convention was applicable to contractual and tortuous disputes between citizens of the member states. This convention permits the filing of a defamation suit, wherever the alleged act of defamation had taken place. A landmark case in respect of the forum where a defamation claim was to be heard is the case of Fiona Shevill v. Presse Alliance SA. A French periodical, France – Soir had accused a student of the UK of money laundering. Despite, the fact that the student was in France at the time of publication of that article; she filed a defamation suit in an English court, only after her return to the UK. The French periodical contended that in accordance with the Brussels Convention, the case should have been filed in France, as the allegedly defamatory event had transpired there28. The ECJ on a referral being made to it, held that the plaintiff could file a suit in any place, where damage had occurred. However, if she filed in France, then she would be eligible for damages sustained throughout the EU, but on filing in the UK, these would be restricted to only what had been sustained in the UK. This decision has served to clarify that a claim for damages in a forum, other than the actual place of occurrence of the damage, could restrict the amount of damages claimed. In addition, this decision has permitted victims of alleged defamation to file suit in a forum of their choice. Since, the law regarding defamation is at considerable variance, throughout the member states; such a choice gives considerable scope to the alleged victim to obtain a substantially higher compensation29. Therefore, the matter to be included in this Regulation should be as follows: The law applicable in respect of non-contractual obligations arising out of violations of privacy and rights relating to personality, including defamation, shall be that of the country of origin (country of establishment or editorial control of the publisher). The reason for recommending this text is based on the analysis that follow. Most of the Member States that had expressed their opinion in this context, had advocated that the jurisdiction for any defamation suit should be that of the country of origin of the damage. Thus, a strong case has been made out by the publishers as well as a sizeable number of the member states to make the applicable jurisdiction that of the country of establishment or editorial control of the publisher. Moreover, one of the fundamental principles on which the internal market of the EU is based, is that of the country of origin. In the Shevill case the ECJ had decided that the plaintiff would be awarded greater compensation by filing a suit in the place of origin of the damage, rather than filing it in the place of her choice. In this manner, filing in the place of origin is beneficial to the individual, whereas it places a greater burden of care on the publisher. However, the publisher is expected to be fully conversant with the law of the country of his establishment. This is beneficial to the publisher as well as society at large. As such, the EU as a blossoming democracy has to accord greater importance to the freedom of the press than to individuals. If the law were to be framed in this manner, then the publisher would not be unnecessarily victimized by having to countenance a number of lawsuits, across the EU. It is essential to prevent any move to curtail fundamental rights on the pretext of market harmonization. Moreover, Article 3 of the Rome II Regulation is at variance to the basic tenets of freedom of information and expression. Therefore, it would be in the fitness of things to specify the country of origin of the damage, as the place, under whose sole jurisdiction the defamation suit is to be tried. Bibliography 1. Aaron Warshaw, Uncertainty From Abroad: Rome II And The Choice Of Law For Defamation Claims 2. Article 6 – Violations of privacy and rights relating to the personality. Commission of the European Communities, Proposal for a Regulation of the European Parliament and the Council on the Law applicable to Non – Contractual Obligations, 14 January 2008. http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/com/2003/com2003_0427en01.pdf 3. Article XIX. Submission to Legal Affairs and Internal Market Committee European Parliament. Retrieved on January 14, 2008 from http://www.article19.org/pdfs/analysis/european-parliament-defamation-jan-2004.pdf 4. Boys v Chaplin (1971) AC 356 5. Campbell v MGN Ltd (2004) 2 AC 457 6. European Parliament 2004-2009 Session document 7. (EU) EP/JHA/JUSTICE: Franco Frattini wants media libel to be excluded from draft Rome II regulation. February 4, 2006. Agence Europe. Retrieved on January 14, 2008 http://global.factiva.com/ha/default.aspx 8. European Journalists Call on Brussels to Drop New Legal Threat to Media. June 27th 2005. International Federation of Journalists. Retrieved on January 14, 2008 http://www.ifj.org/default.asp?Index=3206 9. EU Briefing Report, September 3, 2007, http://www.thompsonhine.com/publications/publication1239.html 10. Fiona Shevill v. Presse Alliance, 1995 E.C.R. I-415 11. Freedom of speech, conflict of laws and the country of origin principle 12. Jameel v Wall Street Journal (2006) UKHL 44 13. JUSTICE AND HOME AFFAIRS: PARLIAMENT BACKS ROME II WITH A DEFAMATION CLAUSE. 5 February 2007. Europolitics Information Society. English. Copyright 2007 Europe Information Service 14. Lisa M. Austin, October 2007, Privacy and Private Law: the Dilemma of Justification, 14 January 2008. http://www.law.nyu.edu/clppt/program2007/readings/austin.pdf 15. Opinions of the Lords of Appeal on Jameel and others v Wall Street Journal Europe Sprl, Session 2005 -06, 14 January 2008. http://www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd061011/jamee-1.htm 16. Publishers Fear 'Rome II' Will Put Press Freedom In Peril.10 December 2005.Europe Information. Available at http://www.eis.be 17. Proceedings of the Special Public Bill Committee, House of Lords, Session 1994-95 HL Paper 36. 18. Reynolds v Times Newspapers Ltd (2001) 2 AC 127 19. Regulation (EC) No 864/2007 of the European Parliament and the Council of the European Union on the Law applicable on Non – contractual Obligations (Rome II). http://www.britchamitaly.com/images/stories/Article%20Archive/2007_legal_newsletter_no._6_-_non-contractual_obligations.pdf 20. ROME II WELCOMED. 12 May 2006. Europolitics. English, Copyright 2006 Europe Information Service 21. R Wai, 2002, Transnational Liftoff and Juridical Touchdown: The Regulatory Function of Private International Law in a Global Age, 40 Colum. Journal of Transnational Law. 209. 22. The Rome II Regulation, 8th report of Session 2003 – 04, European Union Committee http://www.publications.parliament.uk/pa/ld200304/ldselect/ldeucom/66/66.pdf Read More