Chapter 6

THE LAW APPLICABLE TO

NON-CONTRACTUAL
OBLIGATIONS

PROFESSOR
DR. ABDUL GHAFUR HAMID
 Introduction: The law applicable to
Non-contractual obligations
 With globalization, the area of law that we know as ‘torts”
has become much more important.
 In many countries, torts has become a favourite topic in the
field of choice of law.
 Apart from the traditional law of tort, globalization has put
forward new forms of obligations relating to, for example,
product liability, unfair competition, environmental damage
and infringement of intellectual property rights.
 That is why the recent Rome II Regulation choses to use
the new nomenclature of “non-contractual obligations”,
which goes beyond the traditional law of tort.
 6.1 The Law of the Place of the
Tort
 In the course of the 20th century. Most legal
systems developed conflict rules which applied the
law of the place of the tort (lex loci delicti).
 In 1994, a survey showed that the law of the
place of the tort was the primary choice of law
rule in almost all European countries. Though the
notion of the “place of tort” was differently
expressed.
 The adoption of the law of the place of the tort as
the prevailing doctrine reflected in part ideas as to
the “territoriality” of law.
 The Law of the Place of the Tort

 However, there are strong arguments against a

mechanical application of the law of the place of
the tort to each and every issue arising out of each
and every kind of tort.
 It may be difficult to determine, as in cases where
the defendant’s acts take place in one country, and
the ensuring harm to the claimant is sustained in
another.
 The application of the law of the place of the
tort will not always produce just solutions
 The application of the law of the place of the tort regardless
of the habitual residence of the tortfeasor and the victim, and
regardless of the type of issue and the type of the tort
involved, may lead to results which seem wholly
inappropriate.
 Let say a Scotsman employed by a Scottish firm, negligently
driving his employer’s lorry causes the death of another
Scotsman employed by the same firm who is a passenger in
the same lorry, so committing a tort under both English and
Scots law.
 There is hardly a strong case for applying English law to the
Scottish widow’s claim for compensation, just because the
accident happened in a town in England, a mere 40 miles
south of the border.
6.2 The quest for the proper law of
the tort
 Considerations of this kind led many writers to suggest
that tort liability should be governed by “the proper law of
the tort”, the law of the country with which the tort had
its closest and most real connection.
 It was suggested that a proper law approach, which the
common law had used with great success in the field of
contract, would if intelligently applied furnish a much
needed flexibility and facilitate a more rational solution of
the problems that arise when acts done in one country
and harm ensues in another.
The quest for the proper law of the tort
 The proper law approach can take a stronger or
weaker form.
 The stronger version places great emphasis on
the virtue of flexibility, and argues that the
primary choice of law rule should be that of the
proper law.
 This stronger form of the proper law thesis was
adopted by the American Law Institute’s
Restatement Second of the Conflict of Laws.
 The American approach: Second
Restatement of the Conflict of Laws

The general rule adopted by the Second

Restatement of the Conflict of Laws is that:
“The rights and liabilities of the parties with
respect to an issue in tort are determined by
the local law of the state which, as to that
issue, has the most significant relationship
to the occurrence and the parties.”
 Certainty and flexibility: weaker form of
proper law of tort
 The stronger form of the proper law doctrine has been
criticized by some because it sacrifices the advantages of
certainty, predictability and uniformity of result which are
claimed to follow from the application of the law of the
place of the tort.
 The balance of arguments may favour the weaker form of
the proper law theses. This accepts the value of having a
clear rule, such as the application of the law of the place
of the tort, to be applied in the majority, and perhaps the
great majority, of cases. But it also stresses the value of
flexibility: where a proper law analysis identifies another
law with which the tort is much more closely connected, it
should be possible for a court to apply that other law.
 6.3 Choice of law in tort: the common
law rules
 Before the adoption of the Private International
Law (Miscellaneous Provisions) Act 1995, choice of
law in tort was determined entirely by the
common law.
 At common law, if the tort occurs in England,
English law applies, even if the case has strong
connections with a foreign country.
 If, however, the tort occurs abroad, the applicable
law is determined in accordance with the rule in
Phillips v Eyre (as adapted by subsequent cases).
 The Rule in Philips v Eyre

 In 1870, the common law rule was formulated in a

celebrated dictum of Willes J. in Philips v Eyre:
 “As a general rule, in order to found a suit in England for a
wrong alleged to have committed abroad, two conditions
must be fulfilled. First, the wrong must be of such a
character that it would have been actionable if committed in
England. Secondly, the act must not have been justifiable by
the law of the place where it was done.
 The rule in Philips v Eyre came eventually to be understood
as a rule of “double actionalibility”, as the wrong must be
actionable by both lex fori and lex loci delicti.
The rule in Philips v Eyre:
“double actionalibility”
 The rule in Philips v Eyre: the two limbs

 It is the first limb, the application of the lex fori,

which is the distinctive feature of the rule. Its
survival for over a century is one of the oddities
of the English legal history.
 Nowhere else in the English conflict of laws did a
claimant have to surmount a double hurdle and
show that the claim was valid not only by the
appropriate foreign law, but also by English
domestic law.
 The rule in Philips v Eyre [Cont.]

 The second limb of the rule, referring to the law of the

place of the tort, was relatively uncontroversial. Its
effect can be seen from the facts of Philips v Eyre itself:
 “An action for assault and false imprisonment was
brought in England on the basis of events in Jamaica
said to be the responsibility of the defendant, who was
Governor of Jamaica,. The defendant pleaded that the
acts complained of were done by him in the course of
suppressing a rebellion which had broken out, and that
his acts were subsequently declared lawful by an Act of
Indemnity passed by the Island legislature.”
 The rule in Philips v Eyre [Cont.]

 It was held that as the actions of the defendant were not

legally wrongful in the law of Jamaica, there was no liability
in the law of the place of the tort and so the action failed.
 From the HL’s interpretation of the case in Boys v Chaplin,
it was clear that the second limb would be satisfied if there
were civil liability between the parties in the law of the
place of the tort.
 There was no requirement that the defendant’s conduct be
classified as tortious by the foreign law; it was sufficient if
by that law the defendant’s liability to pay damages was
contractual, quasi-contractual, quasi-delictual, or sui
generis.
 A more flexible approach:
Boys v Chaplin

 The common law choice of law rules comprise a

general rule and an exception.
 The leading authority is the decision of the HL in
Boys v Chaplin [1971] AC 356., a case which
brought about a significant change in the law
through its reinterpretation of the rule in Phillips v
Eyre.
 Boys v Chaplin: Facts of the case
 In Boys v Chaplin, P and D were members of the British
armed forces, resident in England. While both were
temporarily stationed in Malta, they were involved in a road
accident in which P was injured as a result of D’s
negligence.
 P sued D in England. Under the laws of England and Malta
D was liable to P.
 Under the Maltese law, however, P was entitled to recover
only pecuniary loss which amounted in this case to & 53,
whereas by English law P was also entitled to recover
damages for pain and suffering and loss of amenity , which
the trial judge assessed at & 2,250.
 P succeeded in recovering for his pecuniary and non-
pecuniary losses.
 Boys v Chaplin: the general rule
Held: As a general rule a claimant can recover
damages for a tort committed abroad only if two
requirements are satisfied:
(1) the defendant’s conduct must be actionable as a
tort under English law; and
(2) the defendant must be civilly liable under the lex
loci delicti.
Under this rule, the defendant is liable only to the
extent that he is liable under both the law of the
forum and the lex loci delicti (double actionalibity
rule)
The general rule: double actionability
 The general rule: double actionability

 The double actionability rule is unusual in

the sense that, instead of identifying a law
to govern the relationship between the
parties, it requires the claimant to
overcome a double hurdle in order to
establish the defendant’s liability.
 Accordingly, the double actionability rule
gives the claimant the worst of both
worlds.
 Boys v Chaplin: The exception
 The application of the double actionability rule to
the facts of Boys v Chaplin would have led to P’s
claim for non-pecuniary losses failing because they
were not recoverable by Maltese law, the lex loci
delicti.
 To avoid this unfortunate solution, Lord Wilberforce
propounded an exception to the double
actionability rule.
 Boys v Chaplin: The exception
 The exception formulated by the HL was that
“where the application of the double actionability
rule would lead to an unjust decision, a particular
issue may, by way of exception, be governed by
the law of the country that had the most
significant relationship with the occurrence and
the parties (the proper law of the tort).”
 There is no suggestion in the HL that the proper
law approach should become the general rule.
 The general rule (double actionablity) must be
applied unless clear and satisfying grounds are
shown why it should be departed from.
 Application of the ‘exception’
 Boys v Chaplin was a suitable case in which to apply the
exception.
 It was appropriate to apply English law to that issue, given
that England was the country to which both parties
belonged.
 Accordingly P was entitled to recover damages for non-
pecuniary losses, even though such recovery was denied by
Maltese law.
 [If, however, in Boys v Chaplin, D, or both of the parties,
were Maltese, the most significant relationship would be
found with Maltese law. Thus, the claim for non-pecuniary
losses would have been rejected on the application of
Maltese law.]
6.4 Choice of law in tort: the 1995 Act

 The rule in Philips v Eyre or the double

actionability rule gives the predominant role to
English law because the defendant cannot be
liable unless he is liable under English law. It is
not obvious why this should be the case.
 Dissatisfaction with the common law rules led to
a review of choice of law in tort and led to the
enactment of the Private International Law
(Miscellaneous Provisions) Act 1995.
The double actionability rule replaced by a
new general rule: the law of the place of
the tort
 The general effect of Part III of the 1995 Act was
to abolish the double actionability rule and
substitute a statutory general rule applying the law
of the place of the tort with an exception derived
from the common law development in Boys v
Chaplin.
 Under the 1995 Act, the general rule in section 11,
in effect, is that a tort is governed by the law of
the place of the tort (lex loci delicti ).
 Section 11, the general rule:
The law of the place of the tort
(1) The general rule is that the applicable law is the
law of the country in which the events constituting
the tort or delict in question occur.
(2) Where elements of those events occur in
different countries, the applicable law under the
general rule is to be taken as being—
(a) for a cause of action in respect of personal
injury caused to an individual or death resulting from
personal injury, the law of the country where the
individual was when he sustained the injury;
 Section 11, the general rule:
The law of the place of the tort

 (b) for a cause of action in respect of

damage to property, the law of the
country where the property was when it
was damaged; and
 (c) in any other case, the law of the
country in which the most significant
element or elements of those events
occurred.
 Section 12, the exception:
the proper law of the tort

 In most cases there is no need to look beyond

the general rule in s. 11.
 However, s. 11 is subject to an exception
contained in s. 12, whose basic effect is: “the
applicable law under the general rule may be
displaced by the law of another country with
which the tort is more closely connected [the
proper law of the tort].”
6.5 Choice of law in tort:
Malaysian position
 6.6 The Rome II Regulation
 Discussion of a European instrument on the law applicable to
non-contractual obligations as a counterpart of the Rome
Convention began in 1998.
 Eventually the Rome II regulation was adopted in 2007. it
applies from January 11, 2009.
 Scope: The Regulation applies, in situations involving a
conflict of laws, to non-contractual obligations in civil and
commercial matters.
 No definition of “non-contractual obligations” but a definition
of “damage”. It covers any consequence arising out of
tort/delict, unjust enrichment, or culpa in contrahendo (pre-
contractual matters, such as violation of the duty of
disclosure and the breakdown of contractual negotiations).
 6.6.1 Party autonomy
 The Regulation adopts the notion of party
autonomy, an idea more familiar in relation to
contract disputes.
 At first sight the notion of a choice of law
agreement in relation to a tort might seem
improbable: the parties may not have foreseen the
event giving rise to the claim.
 A choice of law agreement after the event may,
however, be entirely sensible; and, as we have
seen, the term “non-contractual obligations” is
wider than tort.
 Choice of law in torts: Article 4

 Article 4 of the Rome II Regulation contains

general rules applicable to torts, saving
certain other types of non-contractual
obligations for later treatment.
 The primary rule is that in Art 4(1).
 6.6.2 The primary rule: Art 4(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.”
 The primary rule: Art 4(1)

 The explanation of this primary rule in Art 4(1) is

set out in the Recitals as follows:
“In cases of personal injury or damage to property,
the country in which the damage occurs should be
the country where the injury was sustained or the
property was damaged respectively.” (Recital 17).
As set out in the above Recital, Art 4(1) of the Rome
II Regulation adopts the same approach as is
adopted in Section 11(2) of the PIL (Miscellaneous
Provisions) Act 1995.]
 6.6.3 The common habitual residence
exception: Art 4(2)
The primary rule of the law of the place of the tort
has to give way if both parties have their ‘habitual
residence’ in the same country at the time the
damage occurs. This first exception is in Art 4(2):

“However, where the person claimed to be liable and

the person sustaining damage both have their
habitual residence in the same country at the time
when the damage occurs, the law of that country
shall apply.”
 6.6.4 The ‘more closely connected’
exception (proper law of the tort): Art
4(3)
Art 4(3) contains a more general exception to the
primary rule:
“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.”
 How the exception in Art 4(3) will work:
Johnson v Coventry Churchill International Ltd.
 This is a common law case.
 P, an English joiner, entered into what was held to
be a contract of employment with D., an English
company which placed English personnel seeking to
work abroad. P worked in Germany and was injured
on a building site. This would give rise in English
law to liability for breach of the employer’s duty to
provide a safe system of work, but there would be
no liability in German law in the absence of a wilful,
as opposed to negligent, breach.
 How the exception in Art 4(3) will work:
 The English court held that the then general rule of
double actionability would be displaced in favour of
the application of English law. The parties were both
English and justice to P seemed to dictate the
application of English law (Exception under Boys v
Chaplin, proper law of tort).
 If we apply the Rome II Regulation to this case,
Germany is plainly the country in which the damage
occurred but there would seem a strong case, based
on the contractual relationship, for invoking art 4(3)
and holding that the tort was manifestly more
closely connected with English law than with
Germany.
 Thank you
For
Your kind attention