Conflict of laws
Encyclopedia
Conflict of laws is a set of procedural rules that determines which legal system and which jurisdiction's applies to a given dispute. The rules typically apply when a legal dispute has a "foreign" element such as a contract agreed to by parties located in different countries, although the "foreign" element also exists in multi-jurisdictional countries such as the United Kingdom
and the United States
.
The term conflict of laws itself originates from situations where the ultimate outcome of a legal dispute depended upon which law applied, and the common law courts manner of resolving the conflict between those laws. In civil law
lawyers and legal scholars refer to conflict of laws as private international law. Private international law has no real connection with public international law, and is instead a feature of local law which varies from country to country.
The three branches of conflict of laws are
legal tradition, such as in the United States, England, Canada, and Australia. Private international law (droit international privé) is used in France, as well as in Italy, Greece, and the Spanish and Portuguese speaking countries. International private law (internationales Privatrecht) is used in Germany
(along with other German-speaking
countries), Russia
and Scotland
.
Within the federal systems where legal conflicts among federal states require resolution, as in the United States
, the term conflict of laws is preferred simply because such cases do not involve an international issue. Hence, conflict of laws is a general term to refer to disparities among laws, regardless of whether the relevant legal systems are international or inter-state. The term, however, can be misleading when it refers to resolution
of conflicts between competing systems rather than "conflict" itself.
The term private international law was coined by American lawyer
and judge Joseph Story
, but was abandoned subsequently by common law scholars and embraced by civil law lawyers.
Ancient Greeks
dealt straightforwardly with multistate problems, and did not create choice-of-law rules. Leading solutions varied between the creation of courts for international cases, or application of local law, on the grounds that it was equally available to citizens of all states.
More significant developments can be traced to Roman law
. Roman civil law (jus civile) being inapplicable to non-citizens, special tribunals had jurisdiction to deal with multistate cases. The officers of these specialized tribunals were known as the praetor peregrini. The Praetor peregrini did not select a jurisdiction whose rules of law should apply. Instead, they "applied" the "jus gentium." The jus gentium
was a flexible and loosely-defined body of law based on international norms. Thus the praetor peregrini essentially created new substantive law
for each case. Today, this is called a "substantive" solution to the choice-of-law issue.
The modern conflict of laws is generally considered to have begun in Northern Italy
during the late Middle Ages
and in particular at trading cities such as Genoa
, Pisa
and Venice
. The need to adjudicate issues involving commercial transactions between traders belonging to different cities led to the development of the theory of statuta, whereby certain city laws would be considered as statuta personalia "following" the person whereby it may act, and other city laws would be considered as statuta realia, resulting in application of the law of the city where e.g. the res would be located (cf. lex rei sitae).
Maritime law was also a great driver of international legal rules; providing for the enforcement of contracts, the protection of shipwrecked sailors and property, and the maintaining of harbours.
The modern field of conflicts emerged in the United States during the 19th century with the publishing of Joseph Story
's treatise on the conflict of laws in 1834. Story's work had a great influence on the subsequent development of the field in England such as those written by A.V. Dicey. Much of the English law
then became the basis for conflict of laws for most commonwealth countries
.
However, in the U.S., Story's work fell out of fashion in the mid-20th century. Traditional conflict of law rules were widely perceived as too rigid and unresponsive to the needs of a highly mobile society undergoing the Second Industrial Revolution
. They were replaced with a number of approaches, of which the most important is the governmental interests analysis pioneered by law professor Brainerd Currie
in a landmark series of essays. As a result of Currie's work, the rules for conflict of laws in the United States
have diverged significantly from the rules in use at the international level.
In those states with an underdeveloped set of Conflict rules, decisions on jurisdiction tend to be made on an ad hoc basis, with such choice of law rules as have been developed embedded into each subject area of private law
and tending to favour the application of the lex fori
or local law. In states with a more mature system, the set of Conflict rules stands apart from the local private civil law and adopts a more international point of view both in its terminology and concepts. For example, in the European Union
, all major jurisdictional matters are regulated under the Brussels Regime
, e.g. the rule of lis alibi pendens
from Brussels 1 Regulation applies in the Member States and its interpretation is controlled by the European Court of Justice
rather than by local courts. That and other elements of the Conflict rules are produced supranationally and implemented by treaty
or convention. Because these rules are directly connected with aspects of sovereignty
and the extraterritorial application of laws in the courts of the signatory states, they take on a flavour of public
rather than private law because each state is compromising the usual expectations of their own citizens that they will have access to their local courts, and that local laws will apply in those local courts. Such aspects of public policy
have direct constitution
al significance whether applied in the European context or in federated
nations such as the United States, Canada
, and Australia
where the courts have to contend not only with jurisdiction and law conflicts between the constituent states or territories, but also as between state and federal courts, and as between constituent states and relevant laws from other states outside the federation.
For example, suppose that Alexandre who has a French nationality and residence in Germany, corresponds with Bob who has American nationality, domicile in Arizona, and residence in Austria, over the internet
. They agree to the joint purchase of land in Switzerland, currently owned by Heidi who is a Swiss national, but they never physically meet, executing initial contract documents by using fax
machines, followed by a postal exchange of hard copies. Alexandre pays his share of the deposit but, before the transaction is completed, Bob admits that although he has capacity to buy land under his lex domicilii and the law of his residence, he is too young to own land under Swiss law. The rules to determine which courts would have jurisdiction and which laws would be applied to each aspect of the case are defined in each state's laws so, in theory, no matter which court in which country actually accepts the case, the outcome will be the same (albeit that the measure of damages might differ from country to country which is why forum shopping is such a problem). In reality, however, moves to harmonise the conflictual system have not reached the point where standardization of outcome can be guaranteed.
Different jurisdictions follow different sets of rules. Before embarking on a conflict of law analysis, the court must determine whether a property agreement governs the relationship between the parties. The property agreement must satisfy all formalities required in the country where enforcement is sought.
Whereas commercial agreements or prenuptial agreements generally do not require legal formalities to be observed, when married couples
enter a property agreement, stringent requirements are imposed, including notarization, witnesses, special acknowledgment forms. In some countries, these must be filed (or docketed) with a domestic court, and the terms must be “so ordered” by a judge. This is done in order to ensure that no undue influence
or oppression has been exerted by one spouse against the other. Upon presenting a property agreement between spouses to a court of divorce, that court will generally assure itself of the following factors: signatures, legal formalities, intent, later intent, free will
, lack of oppression, reasonableness and fairness, consideration, performance, reliance, later repudiation in writing or by conduct, and whichever other concepts of contractual bargaining apply in the context.
In the absence of a valid and enforceable agreement, here’s how the conflict of law rules work:
Note that Lex Fori also applies to all procedural relief (as opposed to substantive relief). Thus, issues such as the ability to grant pre-trial relief, procedure and form, as well as statutes of limitations are classified as “procedure” and are always subject to domestic law where the divorce case is pending.
and other forms of legally binding agreement include a jurisdiction or arbitration
clause specifying the parties' choice of venue for any litigation (called a forum selection clause
). Then, choice of law clause
s may specify which laws the court or tribunal should apply to each aspect of the dispute. This matches the substantive policy of freedom of contract
. Judges have accepted that the principle of party autonomy allows the parties to select the law most appropriate to their transaction. Obviously, this judicial acceptance of subjective intent excludes the traditional reliance on objective connecting factors, but it does work well in practice.
, rather than law because of the issue of sovereignty. If the local court is actually giving extraterritorial effect to a foreign law, it is less than sovereign and so acting in a way that is potentially unconstitutional. The theoretical responses to this issue are:
On the one hand, this notion is used to describe the situation where a local court applies a rule other than the Lex fori (local law).
On the other hand, it could mean that the rule is being applied to a factual situation that occurred beyond the territory of its state of origin. As an example of this situation, one can think of an American court applying British tort statutes and case law to a car accident
that took place in London
where both the driver and the victim are British citizens but the lawsuit was brought in before the American courts because the driver's insurer is American. One can then argue that since the factual situation is within the British territory, where an American judge applies the English Law, he does not give an extraterritorial application to the foreign rule. In fact, one can also argue that the American judge, had he applied American Law
, would be doing so in an extraterritorial fashion.
Once the lex causae
has been selected, it will be respected except when it appears to contravene an overriding mandatory rule of the lex fori. Each judge is the guardian of his own principles of ordre public (public order) and the parties cannot, by their own act, oust the fundamental principles of the local municipal law which generally underpin areas such as labour law
, insurance, competition regulation, agency rules, embargoes, import-export regulations, and securities exchange regulations. Furthermore, the lex fori will prevail in cases where an application of the lex causae would otherwise result in a fundamentally immoral outcome, or give extraterritorial effect to confiscatory
or other territorially limited laws.
In some countries, there is occasional evidence of parochialism
when courts have determined that if the foreign law cannot be proved to a "satisfactory standard", then local law may be applied. In the United Kingdom
, in the absence of evidence being led, the foreign law is presumed to be the same as the lex fori. Similarly, judges might assume in default of express evidence to the contrary that the place where the cause of action arose would provide certain basic protections, e.g. that the foreign court would provide a remedy to someone who was injured due to the negligence of another. Finally, some American courts have held that local law will be applied if the injury occurred in an "uncivilized place that has no law or legal system."
If the case has been submitted to arbitration
rather than a national court, say because of a forum selection clause, an arbitrator may decide not to apply local mandatory policies in the face of a choice of law by the parties if this would defeat their commercial objectives. However, the arbitral award may be challenged in the country where it was made or where enforcement is sought by one of the parties on the ground that the relevant ordre public should have been applied. If the lex loci arbitri
has been ignored, but there was no real and substantial connection between the place of arbitration and the agreement made by the parties, a court in which enforcement is sought may well accept the tribunal's decision. But if the appeal is to the courts in the state where the arbitration was held, the judge cannot ignore the mandatory provisions of the lex fori.
is a treaty organization that oversees conventions designed to develop a uniform system. The deliberations of the conference have recently been the subject of controversy over the extent of cross-border jurisdiction on electronic commerce
and defamation issues. There is a general recognition that there is a need for an international law of contracts: for example, many nations have ratified the Vienna Convention on the International Sale of Goods
, the Rome Convention on the Law Applicable to Contractual Obligations
offers less specialized uniformity, and there is support for the UNIDROIT
Principles of International Commercial Contracts, a private restatement, all of which represent continuing efforts to produce international standards as the internet and other technologies encourage ever more interstate commerce. But other branches of the law are less well served and the dominant trend remains the role of the forum law rather than a supranational system for Conflict purposes. Even the EU, which has institutions capable of creating uniform rules with direct effect
, has failed to produce a universal system for the common market. Nevertheless, the Treaty of Amsterdam does confer authority on the Community's institutions to legislate by Council Regulation in this area with supranational effect. Article 177 would give the Court of Justice jurisdiction to interpret and apply their principles so, if the political will arises, uniformity may gradually emerge in letter. Whether the domestic courts of the Member States would be consistent in applying those letters is speculative.
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
.
The term conflict of laws itself originates from situations where the ultimate outcome of a legal dispute depended upon which law applied, and the common law courts manner of resolving the conflict between those laws. In civil law
Civil law (legal system)
Civil law is a legal system inspired by Roman law and whose primary feature is that laws are codified into collections, as compared to common law systems that gives great precedential weight to common law on the principle that it is unfair to treat similar facts differently on different...
lawyers and legal scholars refer to conflict of laws as private international law. Private international law has no real connection with public international law, and is instead a feature of local law which varies from country to country.
The three branches of conflict of laws are
- Jurisdiction – whether the forum court has the power to resolve the dispute at hand
- Choice of law – the law which is being applied to resolve the dispute
- Foreign judgments – the ability to recognize and enforce a judgment from an external forum within the jurisdiction of the adjudicating forum
Terminology
Its three different names conflict of laws, private international law, and international private law are generally interchangeable, although none of them is wholly accurate or properly descriptive. The term conflict of laws is primarily used in jurisdictions of the Common LawCommon law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
legal tradition, such as in the United States, England, Canada, and Australia. Private international law (droit international privé) is used in France, as well as in Italy, Greece, and the Spanish and Portuguese speaking countries. International private law (internationales Privatrecht) is used in Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
(along with other German-speaking
German language
German is a West Germanic language, related to and classified alongside English and Dutch. With an estimated 90 – 98 million native speakers, German is one of the world's major languages and is the most widely-spoken first language in the European Union....
countries), Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
and Scotland
Scotland
Scotland is a country that is part of the United Kingdom. Occupying the northern third of the island of Great Britain, it shares a border with England to the south and is bounded by the North Sea to the east, the Atlantic Ocean to the north and west, and the North Channel and Irish Sea to the...
.
Within the federal systems where legal conflicts among federal states require resolution, as in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, the term conflict of laws is preferred simply because such cases do not involve an international issue. Hence, conflict of laws is a general term to refer to disparities among laws, regardless of whether the relevant legal systems are international or inter-state. The term, however, can be misleading when it refers to resolution
Resolution (policy debate)
In policy debate, a resolution or topic is a normative statement which the affirmative team affirms and the negative team negates. Resolutions are selected annually by affiliated schools....
of conflicts between competing systems rather than "conflict" itself.
The term private international law was coined by American lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
and judge Joseph Story
Joseph Story
Joseph Story was an American lawyer and jurist who served on the Supreme Court of the United States from 1811 to 1845. He is most remembered today for his opinions in Martin v. Hunter's Lessee and The Amistad, along with his magisterial Commentaries on the Constitution of the United States, first...
, but was abandoned subsequently by common law scholars and embraced by civil law lawyers.
History
The first instances of conflict of laws in the Western legal tradition can be traced to Greek law.Ancient Greek law
Ancient Greek law is a branch of comparative jurisprudence relating to the laws and legal institutions of Ancient Greece.Greek law has been partially compared with Roman law, and has been incidentally illustrated with the aid of the primitive institutions of the Germanic nations...
Ancient Greeks
Ancient Greece
Ancient Greece is a civilization belonging to a period of Greek history that lasted from the Archaic period of the 8th to 6th centuries BC to the end of antiquity. Immediately following this period was the beginning of the Early Middle Ages and the Byzantine era. Included in Ancient Greece is the...
dealt straightforwardly with multistate problems, and did not create choice-of-law rules. Leading solutions varied between the creation of courts for international cases, or application of local law, on the grounds that it was equally available to citizens of all states.
More significant developments can be traced to Roman law
Roman law
Roman law is the legal system of ancient Rome, and the legal developments which occurred before the 7th century AD — when the Roman–Byzantine state adopted Greek as the language of government. The development of Roman law comprises more than a thousand years of jurisprudence — from the Twelve...
. Roman civil law (jus civile) being inapplicable to non-citizens, special tribunals had jurisdiction to deal with multistate cases. The officers of these specialized tribunals were known as the praetor peregrini. The Praetor peregrini did not select a jurisdiction whose rules of law should apply. Instead, they "applied" the "jus gentium." The jus gentium
Jus gentium
Ius gentium, Latin for "law of nations", was originally the part of Roman law that the Roman Empire applied to its dealings with foreigners, especially provincial subjects...
was a flexible and loosely-defined body of law based on international norms. Thus the praetor peregrini essentially created new substantive law
Substantive law
Substantive law is the statutory or written law that defines rights and duties, such as crimes and punishments , civil rights and responsibilities in civil law. It is codified in legislated statutes or can be enacted through the initiative process.Substantive law stands in contrast to procedural...
for each case. Today, this is called a "substantive" solution to the choice-of-law issue.
The modern conflict of laws is generally considered to have begun in Northern Italy
Northern Italy
Northern Italy is a wide cultural, historical and geographical definition, without any administrative usage, used to indicate the northern part of the Italian state, also referred as Settentrione or Alta Italia...
during the late Middle Ages
Late Middle Ages
The Late Middle Ages was the period of European history generally comprising the 14th to the 16th century . The Late Middle Ages followed the High Middle Ages and preceded the onset of the early modern era ....
and in particular at trading cities such as Genoa
Genoa
Genoa |Ligurian]] Zena ; Latin and, archaically, English Genua) is a city and an important seaport in northern Italy, the capital of the Province of Genoa and of the region of Liguria....
, Pisa
Pisa
Pisa is a city in Tuscany, Central Italy, on the right bank of the mouth of the River Arno on the Tyrrhenian Sea. It is the capital city of the Province of Pisa...
and Venice
Venice
Venice is a city in northern Italy which is renowned for the beauty of its setting, its architecture and its artworks. It is the capital of the Veneto region...
. The need to adjudicate issues involving commercial transactions between traders belonging to different cities led to the development of the theory of statuta, whereby certain city laws would be considered as statuta personalia "following" the person whereby it may act, and other city laws would be considered as statuta realia, resulting in application of the law of the city where e.g. the res would be located (cf. lex rei sitae).
Maritime law was also a great driver of international legal rules; providing for the enforcement of contracts, the protection of shipwrecked sailors and property, and the maintaining of harbours.
The modern field of conflicts emerged in the United States during the 19th century with the publishing of Joseph Story
Joseph Story
Joseph Story was an American lawyer and jurist who served on the Supreme Court of the United States from 1811 to 1845. He is most remembered today for his opinions in Martin v. Hunter's Lessee and The Amistad, along with his magisterial Commentaries on the Constitution of the United States, first...
's treatise on the conflict of laws in 1834. Story's work had a great influence on the subsequent development of the field in England such as those written by A.V. Dicey. Much of the English law
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
then became the basis for conflict of laws for most commonwealth countries
Commonwealth of Nations
The Commonwealth of Nations, normally referred to as the Commonwealth and formerly known as the British Commonwealth, is an intergovernmental organisation of fifty-four independent member states...
.
However, in the U.S., Story's work fell out of fashion in the mid-20th century. Traditional conflict of law rules were widely perceived as too rigid and unresponsive to the needs of a highly mobile society undergoing the Second Industrial Revolution
Second Industrial Revolution
The Second Industrial Revolution, also known as the Technological Revolution, was a phase of the larger Industrial Revolution corresponding to the latter half of the 19th century until World War I...
. They were replaced with a number of approaches, of which the most important is the governmental interests analysis pioneered by law professor Brainerd Currie
Brainerd Currie
Brainerd Currie was a law professor noted for his work in conflict of laws and his creation of the concept of the governmental interests analysis. He was the father of law professor David P. Currie....
in a landmark series of essays. As a result of Currie's work, the rules for conflict of laws in the United States
Conflict of laws in the United States
The choice of law rules in the conflict of laws in the United States have diverged from the traditional rules applied internationally. Choice of law is a procedural stage in the litigation of a case when it is necessary to reconcile the differences between the laws of different states, and in the...
have diverged significantly from the rules in use at the international level.
The stages in a conflict case
- The court must first decide whether it has jurisdiction and, if so, whether it is the appropriate venue given the problem of forum shoppingForum shoppingForum shopping is the informal name given to the practice adopted by some litigants to get their legal case heard in the court thought most likely to provide a favorable judgment...
. - The next step is the characterization of the cause of action into its component legal categories which may sometimes involve an incidental questionIncidental questionIn the Roman conflict of laws, an incidental question is a legal issue that arises in connection with the major cause of action in a lawsuit. The forum court will have already decided that it has jurisdiction to hear the case and will be working through the next two stages of the conflict process,...
(also note the distinction between proceduralProcedure (conflict)In all lawsuits involving conflict of laws, questions of procedure as opposed to substance are always determined by the lex fori, i.e. the law of the state in which the case is being litigated.-What issues are procedural?:...
and substantive laws). - Each legal category has one or more choice of lawChoice of lawChoice of law is a procedural stage in the litigation of a case involving the conflict of laws when it is necessary to reconcile the differences between the laws of different legal jurisdictions, such as sovereign states, federated states , or provinces...
rules to determine which of the competing laws should be applied to each issue. A key element in this may be the rules on renvoiRenvoiIn conflict of laws, renvoi is a subset of the choice of law rules and it may be applied whenever a forum court is directed to consider the law of another state.-The procedure for conflict cases:...
. - Once the applicable law is decided, that law must be proved before the forum court and applied to reach a judgment.
- The successful party must then enforce the judgment which will first involve the task of securing cross-border recognition of the judgment.
In those states with an underdeveloped set of Conflict rules, decisions on jurisdiction tend to be made on an ad hoc basis, with such choice of law rules as have been developed embedded into each subject area of private law
Private law
Private law is that part of a civil law legal system which is part of the jus commune that involves relationships between individuals, such as the law of contracts or torts, as it is called in the common law, and the law of obligations as it is called in civilian legal systems...
and tending to favour the application of the lex fori
Lex fori
Lex fori is a legal term used in the conflict of laws used to refer to the laws of the jurisdiction in which a legal action is brought...
or local law. In states with a more mature system, the set of Conflict rules stands apart from the local private civil law and adopts a more international point of view both in its terminology and concepts. For example, in the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, all major jurisdictional matters are regulated under the Brussels Regime
Brussels Regime
The Brussels Regime is a set of rules regulating which courts have jurisdiction in legal disputes of a civil or commercial nature between individuals resident in different member states of the European Union and the European Free Trade Association...
, e.g. the rule of lis alibi pendens
Lis alibi pendens
The principle of lis alibi pendens applies both in municipal law, public international law, and private international law to address the problem of potentially contradictory judgments. If two courts were to hear the same dispute, it is possible they would reach inconsistent decisions. To avoid...
from Brussels 1 Regulation applies in the Member States and its interpretation is controlled by the European Court of Justice
European Court of Justice
The Court can sit in plenary session, as a Grand Chamber of 13 judges, or in chambers of three or five judges. Plenary sitting are now very rare, and the court mostly sits in chambers of three or five judges...
rather than by local courts. That and other elements of the Conflict rules are produced supranationally and implemented by treaty
Treaty
A treaty is an express agreement under international law entered into by actors in international law, namely sovereign states and international organizations. A treaty may also be known as an agreement, protocol, covenant, convention or exchange of letters, among other terms...
or convention. Because these rules are directly connected with aspects of sovereignty
Sovereignty
Sovereignty is the quality of having supreme, independent authority over a geographic area, such as a territory. It can be found in a power to rule and make law that rests on a political fact for which no purely legal explanation can be provided...
and the extraterritorial application of laws in the courts of the signatory states, they take on a flavour of public
Public law
Public law is a theory of law governing the relationship between individuals and the state. Under this theory, constitutional law, administrative law and criminal law are sub-divisions of public law...
rather than private law because each state is compromising the usual expectations of their own citizens that they will have access to their local courts, and that local laws will apply in those local courts. Such aspects of public policy
Public policy (law)
In private international law, the public policy doctrine or ordre public concerns the body of principles that underpin the operation of legal systems in each state. This addresses the social, moral and economic values that tie a society together: values that vary in different cultures and change...
have direct constitution
Constitution
A constitution is a set of fundamental principles or established precedents according to which a state or other organization is governed. These rules together make up, i.e. constitute, what the entity is...
al significance whether applied in the European context or in federated
Federation
A federation , also known as a federal state, is a type of sovereign state characterized by a union of partially self-governing states or regions united by a central government...
nations such as the United States, Canada
Canada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
, and Australia
Australia
Australia , officially the Commonwealth of Australia, is a country in the Southern Hemisphere comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands in the Indian and Pacific Oceans. It is the world's sixth-largest country by total area...
where the courts have to contend not only with jurisdiction and law conflicts between the constituent states or territories, but also as between state and federal courts, and as between constituent states and relevant laws from other states outside the federation.
Choice of law rules
Courts faced with a choice of law issue have a two-stage process:- the court will apply the law of the forum (lex fori) to all procedural matters (including, self-evidently, the choice of law rules); and
- it counts the factors that connect or link the legal issues to the laws of potentially relevant states and applies the laws that have the greatest connection, e.g. the law of nationalityNationalityNationality is membership of a nation or sovereign state, usually determined by their citizenship, but sometimes by ethnicity or place of residence, or based on their sense of national identity....
(lex patriaeLex patriaeThe term lex patriae is Latin for the law of nationality in the conflict of laws which is the system of public law applied to any lawsuit where there is a choice to be made between several possibly relevant laws and a different result will be achieved depending on which law is...
) or domicileDomicile (law)In law, domicile is the status or attribution of being a permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after they have left it, if they have maintained sufficient links with that jurisdiction or have not displayed an intention to leave...
(lex domiciliiLex domiciliiThe lex domicilii is the Latin term for "law of the domicile" in the conflict of laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are applied....
) will define legal statusStatus (law)A person's status is a set of social conditions or relationships created and vested in an individual by an act of law rather than by the consensual acts of the parties, and it is in rem, i.e. these conditions must be recognised by the world. It is the qualities of universality and permanence that...
and capacityCapacity (law)The capacity of both natural and legal persons determines whether they may make binding amendments to their rights, duties and obligations, such as getting married or merging, entering into contracts, making gifts, or writing a valid will...
, the law of the state in which land is situated (lex situsLex situsThe term lex situs refers to the law of the place in which property is situated for the purposes of the conflict of laws. For example, property may subject to tax pursuant to the law of the place of the property or by virtue of the domicile of its owner...
) will be applied to determine all questions of titleTitle (property)Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership...
, the law of the place where a transaction physically takes place or of the occurrence that gave rise to the litigation (lex loci actus) will often be the controlling law selected when the matter is substantive, but the proper lawProper lawThe Doctrine of the Proper Law is applied in the choice of law stage of a lawsuit involving the conflict of laws.-Explanation:In a conflicts lawsuit, one or more state laws will be relevant to the decision-making process. If the laws are the same, this will cause no problems, but if there are...
has become a more common choice.
For example, suppose that Alexandre who has a French nationality and residence in Germany, corresponds with Bob who has American nationality, domicile in Arizona, and residence in Austria, over the internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
. They agree to the joint purchase of land in Switzerland, currently owned by Heidi who is a Swiss national, but they never physically meet, executing initial contract documents by using fax
Fax
Fax , sometimes called telecopying, is the telephonic transmission of scanned printed material , normally to a telephone number connected to a printer or other output device...
machines, followed by a postal exchange of hard copies. Alexandre pays his share of the deposit but, before the transaction is completed, Bob admits that although he has capacity to buy land under his lex domicilii and the law of his residence, he is too young to own land under Swiss law. The rules to determine which courts would have jurisdiction and which laws would be applied to each aspect of the case are defined in each state's laws so, in theory, no matter which court in which country actually accepts the case, the outcome will be the same (albeit that the measure of damages might differ from country to country which is why forum shopping is such a problem). In reality, however, moves to harmonise the conflictual system have not reached the point where standardization of outcome can be guaranteed.
Conflict of law rules in matrimonial cases
In divorce cases, when a court is attempting to distribute marital property, if the divorcing couple is local and the property is local, then the court applies its domestic law lex fori. This becomes much more complicated when local laws allow polygamy. For example, Saskatchewan Canada stands alone as a province in Canada that allows more than one spouse at a time per person. Each province has similar marital property laws, but what happens when one or more provinces ignore the federal polygamy law? In this case some of the spouses receive/give marital property from two or more simultaneous spouses, while others may only receive/give from one spouse only, depending on whether their home province allows polygamy. The case becomes even more complicated if foreign elements are thrown into the mix, such as when the place of marriage is different from the territory where divorce was filed; when the parties' nationalities and residences do not match; when there is property in a foreign jurisdiction; or when the parties have changed residence several times during the marriage. Each time a spouse invokes the application of foreign law, the process of divorce slows down, as the parties are directed to brief the issue of conflict of laws and provide translations of the foreign laws.Different jurisdictions follow different sets of rules. Before embarking on a conflict of law analysis, the court must determine whether a property agreement governs the relationship between the parties. The property agreement must satisfy all formalities required in the country where enforcement is sought.
Whereas commercial agreements or prenuptial agreements generally do not require legal formalities to be observed, when married couples
Marriage
Marriage is a social union or legal contract between people that creates kinship. It is an institution in which interpersonal relationships, usually intimate and sexual, are acknowledged in a variety of ways, depending on the culture or subculture in which it is found...
enter a property agreement, stringent requirements are imposed, including notarization, witnesses, special acknowledgment forms. In some countries, these must be filed (or docketed) with a domestic court, and the terms must be “so ordered” by a judge. This is done in order to ensure that no undue influence
Undue influence
Undue influence is an equitable doctrine that involves one person taking advantage of a position of power over another person. It is where free will to bargain is not possible.-Undue influence in contract law:...
or oppression has been exerted by one spouse against the other. Upon presenting a property agreement between spouses to a court of divorce, that court will generally assure itself of the following factors: signatures, legal formalities, intent, later intent, free will
Free will
"To make my own decisions whether I am successful or not due to uncontrollable forces" -Troy MorrisonA pragmatic definition of free willFree will is the ability of agents to make choices free from certain kinds of constraints. The existence of free will and its exact nature and definition have long...
, lack of oppression, reasonableness and fairness, consideration, performance, reliance, later repudiation in writing or by conduct, and whichever other concepts of contractual bargaining apply in the context.
In the absence of a valid and enforceable agreement, here’s how the conflict of law rules work:
- Movable v. Real EstateReal estateIn general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
- In general, applicable matrimonial law depends on the nature of the property. Lex situs is applied to immovable propertyImmovable propertyImmovable property is an immovable object, an item of property that cannot be moved without destroying or altering it - property that is fixed to the Earth, such as land or a house. In the United States it is also commercially and legally known as real estate and in Britain as property...
(i.e., real estate), and the law of matrimonial domicile applies to movable property, provided there has been no subsequent change in the spouses’ domicile.
- Full Mutability Doctrine - property relations between spouses are governed by their latest domicile, whether acquired before or after the marriage. This is also the norm in England, except for a few cases where severe injustice results from a harsh application. In those cases, the court also examines whether newly acquired property can be traced back to property owned before the change.
- Immutability Doctrine - the original personal law of the parties at the time of marriage continues to govern all property including subsequently acquired property, regardless of a later change in domicile or nationality. This is the Continental approach in France, Germany and Belgium. Also, with certain reservations, see Art. 7 of the 1976 Hague ConventionHague Conference on Private International LawThe Hague Conference on Private International Law is the preeminent organisation in the area of private international law....
on Marriage and Matrimonial Property Regimes. Also in Israel: “property relations between spouses shall be governed by the law of their domicile at the time of the solemnization of the marriage, provided that they may by agreement determine and vary such relations in accordance with the law of their domicile at the time of making the agreement”. Note that the Israeli application of the Immutability Doctrine does not distinguish between personal and real property. Both are subject to the law of domicile at marriage. - Partial Mutability or Mutability of New Acquisition - this is the American approach to conflicts of law in matrimonial property division cases. All movable property acquired during the marriage is subject to the parties’ domicile law at the time of acquisition, and not that of the original or intermediate domicile. What was acquired before the marriage is governed by the law of the parties' domicile at the time of marriage. Thus, if rights vested in a property when and where it was purchased, it would not be adversely affected by a later change of domicile.
- Lex Fori - In many cases, courts simply avoid this complicated and expensive analysis by applying their local law to the parties' entire property, even if there is a foreign element. This is based on the assumption that laws around the world are basically similar in their treatment of marriage as a co-partnership. Since the partnership can be placed in the forum, the forum’s law applies to all its aspects.
Note that Lex Fori also applies to all procedural relief (as opposed to substantive relief). Thus, issues such as the ability to grant pre-trial relief, procedure and form, as well as statutes of limitations are classified as “procedure” and are always subject to domestic law where the divorce case is pending.
Pre-dispute provisions
Many contractsContract (conflict)
In the conflict of laws, the validity of a contract with one or more foreign law elements will be decided by reference to the so-called "proper law" of the contract.-History:...
and other forms of legally binding agreement include a jurisdiction or arbitration
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
clause specifying the parties' choice of venue for any litigation (called a forum selection clause
Forum selection clause
A forum selection clause in a contract with a conflict of laws element allows the parties to agree that any litigation resulting from that contract will be initiated in a specific forum...
). Then, choice of law clause
Choice of law clause
A choice of law clause or proper law clause is a term of a contract in which the parties specify that any dispute arising under the contract shall be determined in accordance with the law of a particular jurisdiction.-Explanation:...
s may specify which laws the court or tribunal should apply to each aspect of the dispute. This matches the substantive policy of freedom of contract
Freedom of contract
Freedom of contract is the freedom of individuals and corporations to form contracts without government restrictions. This is opposed to government restrictions such as minimum wage, competition law, or price fixing...
. Judges have accepted that the principle of party autonomy allows the parties to select the law most appropriate to their transaction. Obviously, this judicial acceptance of subjective intent excludes the traditional reliance on objective connecting factors, but it does work well in practice.
The status of foreign law
Generally, when the court is to apply a foreign law, it must be proved by foreign law experts. It cannot merely be pleaded, as the court has no expertise in the laws of foreign countries nor in how they might be applied in a foreign court. Such foreign law may be considered no more than evidenceEvidence (law)
The law of evidence encompasses the rules and legal principles that govern the proof of facts in a legal proceeding. These rules determine what evidence can be considered by the trier of fact in reaching its decision and, sometimes, the weight that may be given to that evidence...
, rather than law because of the issue of sovereignty. If the local court is actually giving extraterritorial effect to a foreign law, it is less than sovereign and so acting in a way that is potentially unconstitutional. The theoretical responses to this issue are:
- (a) that each court has an inherent jurisdictionInherent jurisdictionInherent jurisdiction is a doctrine of the English common law that a superior court has the jurisdiction to hear any matter that comes before it, unless a statute or rule limits that authority or grants exclusive jurisdiction to some other court or tribunal...
to apply the laws of another country where it is necessary to achieving a just outcome; or - (b) that the local court creates a right in its own laws to match that available under the foreign law. This explanation is sustainable because, even in states which apply a system of binding legal precedents, any precedent emerging from a conflicts case can only apply to future conflicts cases. There will be no ratio decidendiRatio decidendiRatio decidendi is a Latin phrase meaning "the reason" or "the rationale for the decision." The ratio decidendi is "[t]he point in a case which determines the judgment" or "the principle which the case establishes."...
that binds future litigants in entirely local cases. - (c) that the national court, when applying a foreign law, does not give an extraterritorial effect but recognizes, through its own "conflict of laws rule", that the situation at hand falls under the scope of application of the foreign rule. In order to understand this argument one must first define the notion of extraterritorial application of a rule. This notion is susceptible to two distinct meanings:
On the one hand, this notion is used to describe the situation where a local court applies a rule other than the Lex fori (local law).
On the other hand, it could mean that the rule is being applied to a factual situation that occurred beyond the territory of its state of origin. As an example of this situation, one can think of an American court applying British tort statutes and case law to a car accident
Car accident
A traffic collision, also known as a traffic accident, motor vehicle collision, motor vehicle accident, car accident, automobile accident, Road Traffic Collision or car crash, occurs when a vehicle collides with another vehicle, pedestrian, animal, road debris, or other stationary obstruction,...
that took place in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
where both the driver and the victim are British citizens but the lawsuit was brought in before the American courts because the driver's insurer is American. One can then argue that since the factual situation is within the British territory, where an American judge applies the English Law, he does not give an extraterritorial application to the foreign rule. In fact, one can also argue that the American judge, had he applied American Law
Law of the United States
The law of the United States consists of many levels of codified and uncodified forms of law, of which the most important is the United States Constitution, the foundation of the federal government of the United States...
, would be doing so in an extraterritorial fashion.
Once the lex causae
Lex causae
In the conflict of laws, lex causae is the law or laws chosen by the forum court from among the relevant legal systems to arrive at its judgement of an international or interjurisdictional case....
has been selected, it will be respected except when it appears to contravene an overriding mandatory rule of the lex fori. Each judge is the guardian of his own principles of ordre public (public order) and the parties cannot, by their own act, oust the fundamental principles of the local municipal law which generally underpin areas such as labour law
Labour and employment law
Labour law is the body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations. As such, it mediates many aspects of the relationship between trade unions, employers and employees...
, insurance, competition regulation, agency rules, embargoes, import-export regulations, and securities exchange regulations. Furthermore, the lex fori will prevail in cases where an application of the lex causae would otherwise result in a fundamentally immoral outcome, or give extraterritorial effect to confiscatory
Confiscation
Confiscation, from the Latin confiscatio 'joining to the fiscus, i.e. transfer to the treasury' is a legal seizure without compensation by a government or other public authority...
or other territorially limited laws.
In some countries, there is occasional evidence of parochialism
Parochialism
Parochialism means being provincial, being narrow in scope, or considering only small sections of an issue. It may, particularly when used pejoratively, be contrasted to universalism....
when courts have determined that if the foreign law cannot be proved to a "satisfactory standard", then local law may be applied. In the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, in the absence of evidence being led, the foreign law is presumed to be the same as the lex fori. Similarly, judges might assume in default of express evidence to the contrary that the place where the cause of action arose would provide certain basic protections, e.g. that the foreign court would provide a remedy to someone who was injured due to the negligence of another. Finally, some American courts have held that local law will be applied if the injury occurred in an "uncivilized place that has no law or legal system."
If the case has been submitted to arbitration
Arbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
rather than a national court, say because of a forum selection clause, an arbitrator may decide not to apply local mandatory policies in the face of a choice of law by the parties if this would defeat their commercial objectives. However, the arbitral award may be challenged in the country where it was made or where enforcement is sought by one of the parties on the ground that the relevant ordre public should have been applied. If the lex loci arbitri
Lex loci arbitri
The lex loci arbitri is the Latin term for "law of the place where arbitration is to take place" in the conflict of Laws. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on which laws are...
has been ignored, but there was no real and substantial connection between the place of arbitration and the agreement made by the parties, a court in which enforcement is sought may well accept the tribunal's decision. But if the appeal is to the courts in the state where the arbitration was held, the judge cannot ignore the mandatory provisions of the lex fori.
Harmonization
To apply one national legal system as against another may never be an entirely satisfactory approach. The parties' interests may always be better protected by applying a law conceived with international realities in mind. The Hague Conference on Private International LawHague Conference on Private International Law
The Hague Conference on Private International Law is the preeminent organisation in the area of private international law....
is a treaty organization that oversees conventions designed to develop a uniform system. The deliberations of the conference have recently been the subject of controversy over the extent of cross-border jurisdiction on electronic commerce
Electronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
and defamation issues. There is a general recognition that there is a need for an international law of contracts: for example, many nations have ratified the Vienna Convention on the International Sale of Goods
United Nations Convention on Contracts for the International Sale of Goods
The United Nations Convention on Contracts for the International Sale of Goods is a treaty offering a uniform international sales law that, as of August 2010, has been ratified by 77 countries that account for a significant proportion of world trade, making it one of the most successful...
, the Rome Convention on the Law Applicable to Contractual Obligations
Rome Convention (contract)
The Convention on the Law Applicable to Contractual Obligations 1980 is a measure in private international law or conflict of laws which aims to create at least a harmonised, if not a unified, choice of law system in contracts within the European Union...
offers less specialized uniformity, and there is support for the UNIDROIT
UNIDROIT
The International Institute for the Unification of Private Law, also known as UNIDROIT, is an independent intergovernmental Organisation based in Rome, Italy...
Principles of International Commercial Contracts, a private restatement, all of which represent continuing efforts to produce international standards as the internet and other technologies encourage ever more interstate commerce. But other branches of the law are less well served and the dominant trend remains the role of the forum law rather than a supranational system for Conflict purposes. Even the EU, which has institutions capable of creating uniform rules with direct effect
Direct effect
Direct effect is the principle of European Union law according to which provisions of Union law may, if appropriately framed, confer rights and impose obligations on individuals which the courts of European Union member states are bound to recognise and enforce...
, has failed to produce a universal system for the common market. Nevertheless, the Treaty of Amsterdam does confer authority on the Community's institutions to legislate by Council Regulation in this area with supranational effect. Article 177 would give the Court of Justice jurisdiction to interpret and apply their principles so, if the political will arises, uniformity may gradually emerge in letter. Whether the domestic courts of the Member States would be consistent in applying those letters is speculative.
See also
- Hague Conference on Private International LawHague Conference on Private International LawThe Hague Conference on Private International Law is the preeminent organisation in the area of private international law....
- International Institute for the Unification of Private Law
- Lex loci rei sitaeLex loci rei sitaeThe lex loci rei sitae is a doctrine which states that the law governing the transfer of title to property is dependent upon, and varies with, the location of the property for the purposes of the conflict of laws...
- List of Hague Conventions on Private International Law
- Place of the Relevant Intermediary ApproachPlace of the Relevant Intermediary ApproachThe Place of the Relevant Intermediary Approach, or PRIMA, is a conflict of laws rule applied to the proprietary aspects of security transactions, especially collateral transactions...
External links
- The European Institute for International Law and International Relations
- CONFLICT OF LAWS .NET - News and Views in Private International Law
- American Society of Comparative Law Official website
- ASIL Guide to Electronic Resources for International Law
- Hague Conference on Private International Law official website.
- Max Planck InstituteMax Planck SocietyThe Max Planck Society for the Advancement of Science is a formally independent non-governmental and non-profit association of German research institutes publicly funded by the federal and the 16 state governments of Germany....
for Comparative and International Private Law - British Institute of International and Comparative Law
- International Chamber of Commerce
- International Court of Arbitration
- International Institute for the Unification of Private Law(UNIDROIT)
- United Nations Commission for International Trade Law
- U.S. State DepartmentUnited States Department of StateThe United States Department of State , is the United States federal executive department responsible for international relations of the United States, equivalent to the foreign ministries of other countries...
Private International Law Database - Why the Hague Convention on jurisdiction threatens to strangle e-commerce and Internet free speech, by Chris Sprigman
- EEC Rome convention 1980
- International & Foreign Law Community
- Republic of Argentina v NML Capital Ltd [2010] EWCA Civ 41, regarding a hedge fund's enforcement of claim against ArgentinaArgentinaArgentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...