1 1 1 [ideas clarity results] jurisdiction, choice of law, choice of forum and the internet a n...

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Jurisdiction, choice of law, choice of forum and the internet An insoluble conundrum? Sophie Dawson, [email protected] Kiyingi, [email protected]


“The realm of the conflict of laws is a dismal swamp, filled with quaking quagmires, and inhabited by learned but eccentric professors who theorize about mysterious matter in a strange and incomprehensible jargon”

Dean Prosser, “Interstate Publication”, 51 Michigan Law Review959 at 971 (1953)


overview

Jurisdiction, choice of law and forum

Choice of law Australian choice of

law principles for torts

Negligent misrepresentation: Voth

Defamation: Gutnick

Australian choice of law principles for contracts

Rome conventions Jurisdiction, forum &

enforcement conclusion


Old rules, new medium

Amplification of old problems: global corner stores

Increases competition, consumer choice, innovation many businesses do not have resources to obtain

advice on and comply with rules in multiple jurisdictions

global soap box freedom of speech & diversity of opinion

difficult to locate actions (being overcome?) and easy to move them.


Jurisdiction, choice of law & forum1. Jurisdiction

service in jurisdiction or sufficient connection to invoke applicable “long arm” provisions (eg. cause of action arises in jurisdiction) (actions in personam)

2. choice of law - which law applies

3. forum non-conveniens

“clearly inappropriate forum”, “oppressive in the sense of seriously and unfairly burdensome, prejudicial or damaging or vexatious in the sense of productive of serious and unjustified trouble and harassment”: Voth v Manildra Flour Mills (1990) 171 CLR 538 at 564-565

4. Enforcement: Foreign Judgements Act 1991 (reciprocal)


Differing significance

Choice of law Dictates the rules which a

person must comply with to avoid becoming liable and thus:

compliance costs whether compliance

feasible. affects enforcement costs clarity and consistency

paramount. One set of rules should

apply

Jurisdiction/ Forum Does not necessarily affect

substantive rules nor compliance costs

Overwhelming issue is enforcement costs.

different considerations: relative financial power ease of enforcement

by court.

Enforcement of foreign judgements

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CHOICE OF LAW


Choices much the same

Place where cause of action arises Place of impact/damage

each impact (eg. defamation)

first impact Predominant impact

Place of residence of Plaintiff Defendant’s act (eg. negligent misrepresentation,

breach of contract)


Choices..

Defendant’s principal place of business Place of Plaintiff’s domicil Plaintiff’s place of business Law of the Forum (eg. where not raised/ proved)

Contract: place performed place of offer, acceptance, etc.

Mixture: eg. “closest and most real connection”


None perfect

Eg. Residence or business of a party enforcement cheap for that party not always predictable for other party may be hundreds of applicable laws could put business in jurisdiction with favourable laws

law of forum: forum shopping law of place of server: haven shopping. balance required: consumer protection,

certainty and business efficiency.


Australian choice of law rule for Torts: the lex loci delicti Torts within Australia:

"The lex loci delicti should be applied by courts in Australia as the law governing all questions of substance to be determined in a proceeding arising from an International tort. And laws that bear upon the existence, extent or enforceability of remedies, rights and obligations should be characterised as substantive and not as procedural laws." John Pfeiffer Pty Limited v Rogerson (2000) 203 CLR 503 at 544.


Australian Choice of Law Torts: the Lex Loci Delicti foreign torts: Regie National des Usine

Renault SA v Zhang (2002) 187 ALR 1 at 4.

Car crash in New Caledonia Renault in France plaintiff in Australia

New Caledonia (French) law applies


When in Rome

Distillers, approved in Voth:

“It is manifestly just and reasonable that a defendant should have to answer for his wrongdoing in the country where he did the wrong.”

Voth (negligence by representation):

“it is some act of the defendant, and not its consequences, that must be the focus of attention.”


When in Rome cont’

Voth: accountant in Missouri allegedly negligent

in advice to 2 NSW companies. Damage in NSW.

“The act of the appellant giving the respondents their cause of complaint was committed in Missouri and thus the tort, if there was one, was committed in Missouri.”


Application of choice of law rules to defamation

Hedigan J cause of action arises in place of

publication (completes cause of action) publication takes place upon

comprehension confirmed multiple publication rule

time - Duke of Brunswick place - Godfrey v Demon Internet


Multiplicity of laws: an old issue

“It is an amazing and a sobering thought that by the utterance of a single ill-considered word a man may today commit forty-nine separate torts, for each of which he may be severally liable within the United States alone, and without regard to any additional liability he may incur in the possessions and territories and in foreign countries...”

William L Prosser, 1953

(“Interstate Publication”,51 Michigan Law Review 959)


Arguments

Appellant: Single publication rule Interveners:

Multiple publication rule survives publication still where comprehended however, place of cause of action does not

necessarily equate to place of publication: act of publishing is focus.


Contract

Chosen by parties If not chosen or choice set aside,

jurisdiction with closest connection with contract, taking into account:

place of residence/business of parties; place where relationship is centred; place where contract made place where contract performed


Internet

Place of formation of contract and performance problematic in internet context

vendors could face multiple laws if courts routinely find choice of law clauses to be void.

Rome Convention Countries (not Australia) have presumption that the place of residence of of central administration of the person who is to perform the obligations “characteristic of the contract”.


Others

Copyright: Intellectual property tort traditionally place of infringement: difficult to locate Has been held that it is like real property & that courts

will not entertain claims under foreign laws.

Obscenity, racial vilification etc. Eg. Yahoo cases


Conventions

Australia is not party to any conventions dealing with choice of law

The Rome Convention governs choice of law for signatory countries in relation to contract (subject to some exceptions)

The Draft Proposal for a Council Regulation on the Law Applicable to Non-Contractual Obligations (the "Rome II Regulation") extends to other causes of action.


Rome II

General rule: article 3."The law applicable to a non-contractual obligation arising out of a tort or a delict shall be the law of the country in which the loss is sustained, irrespective of the country or countries in which the harmful event occurred and irrespective of the country in which the indirect consequences of the harmful event are sustained...

However, if it appears from the circumstances as a whole that there is a substantially closer connection with another country and there is no significant connection between the non-contractual obligation and the country whose law would be the applicable law ... the law of that other country shall be applicable"


JURISDICTION, FORUM AND ENFORCEMENT Differing tests: eg. US Zippo test depends on extent to

which website is “active” within a jurisdiction. Lugano/ Brussels conventions (1988/1968, EU) deal with

jurisdiction & enforcement. Australia is not a party. Updated by Regulation 44/2001 on 22 December 2000 Australia is one of 40 countries negotiating the Hague

draft convention on jurisdiction and enforcement of judgments in civil and commercial matters:

covers jurisdiction, forum and enforcement does not deal specifically with internet issues will co-exist with, but sometimes override, Brussels & Lugano.


The Way Forward

Conventions? Greater emphasis on place of defendant? No reason to think at this stage that common law will

develop consistently internationally.

1 1 1 [ideas clarity results] jurisdiction, choice of law, choice of forum and the internet a n...

Documents

choice of law forum

choice of forum

jurisdiction forum

ideas clarity results

significance choice

enforcement costs clarity

consumer choice

jurisdiction actions