EU disputes granted choice of state law

Business partners from different EU countries will be able to agree which national law will apply in future disputes in advance under reforms proposed by the European Commission.

The Commission has suggested further changes to the Rome II Convention, which has been under review since 2003. It has also backed the European Parliament in suggesting that companies can agree to ignore the convention’s existing rules on these disputes. These rules say that, generally, the law of the country where certain damage occurs must apply.

The change will be particularly relevant, said the Commission, to business- to-business claims over defective products. “With increased trade and mobility within the [European] Union, this kind of litigation becomes widespread,” said a Commission statement. The change could allow defendant companies to have liability cases heard in their own country.

EU Justice Commissioner Franco Frattini said the aim was to ensure that the “outcome of a cross-border dispute is no longer wholly dependent on… which member state’s court” hears a case.