Codifying Torts Conflicts: The 1999 German Legislation in Comparative Perspective

Summary

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I. The German Codification Of 1999: Characteristic Features A. Closing The Gap B.Choosing Tort Law 1. The Ground Rule: Lex Loci With A Pro-Plaintiff Tack 2. Override I: The Common Home State Exception 3. Override Ii: The Closer Connection Escape Clause 4. Override III: Choice of Law by the Parties 5. The Order Of Analysis: Applying The Statute In Retrograde 6. Damages: Public Policy Limitations 7. Direct Action Against Insurers: Broad Permission 8. Addendum: Beware Of Renvoi! II. The European Environment: An Emerging Regional Consensus A. National Legislation: Modern Developments 1. The Persistence Of Territorialism 2. The Rise of the Closest Connection Principle 3. The Issue Of Party Autonomy B. International Conventions 1. The European Draft Convention on Tort Conflicts ("Rome II") 2. The Hague Convention On Traffic Accidents 3. The Hague Convention On Products Liability III. The Transatlantic Context: Indications Of An International Trend? A. The Second Restatement B. Choice-Of-Law Statutes C. Two Recent Drafts IV. Conclusion Appendix Artikel 40 Unerlaubte Handlung Article 40 Torts Artikel 41 Wesentlich engere Verbindung Article 41 Significantly Closer Connection Artikel 42 Rechtswahl Article 42 Choice of Law by the Parties

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Codifying Torts Conflicts: The 1999 German Legislation in Comparative Perspective

Professor of Law, University of Michigan; Dr. iur., Universität Freiburg, 1982; LL.M. University of Michigan, 1983. Thanks to Dorothee Janzen, LL.M., University of Michigan, 2000, for research assistance and many valuable comments.

While American conflicts law consists overwhelmingly of cases, continental Europe has a long and proud tradition of codifying private international law. 1 Particularly in the last two decades, Europe has witnessed a wave of national codifications and international conventions in this area. But at the turn of our century, the process of European conflicts codification is far from complete. While some areas, notably contracts, are broadly covered,2 others, such as corporations, are still in flux.

Tort conflicts lie somewhere in the middle. While there is still no general European convention in force addressing them,3 they have been codified in most but not all individual countries. But the last two years have brought considerable progress: Germany finally joined the countries with codified tort conflicts rules, and an international working group drafted a European Convention on the law applicable to non-contractual obligations.

I will look at the modern codification of tort conflicts rules in the national, European, and transatlantic contexts. The innermost of these three concentric circles is the 1999 German legislation; its characteristic features are interesting enough in their own right for American conflicts scholars (I). These features are then considered in their European environment; here, we see that the new German law accords with a growing regional consensus about the basics of tort conflicts (II). Finally, we will look at written tort conflicts rules in the United States and Canada; the similarities with the European texts indicate an international trend in the resolution of transboundary tort cases (III).

I. The German Codification Of 1999: Characteristic Features

A. Closing The Gap

Germany's choice-of-law rules are contained in the Introductory Act to the Civil Code (BGB).4 Originally enacted together with the Code in 1896, they were completely overhauled in 1986.5 Yet, the rules in the reformed Act of 1986 were still fragmentary. They covered general issues (such as renvoi and public policy), persons, the form of legal transactions, family law, succession, and contracts, but they remained virtually silent on non-contractual obligations (such as torts),6property, agency, and corporations. In these areas, the government found insufficient consensus and thus left them to caselaw and scholarship for the time being.

In the long run, such incompleteness is difficult to tolerate in a legal culture committed to comprehensive codification. Nonetheless, the project to cover the remaining areas languished for almost a decade. Suddenly in 1998, the federal cabinet presented a draft to the legislature which passed it within a few months. All this happened virtually without discussion or public attention.7 The provisions entered into force on June 1, 1999.8

The new legislation fills two important gaps in the German private international law statute. First, it adds choice-of-law rules governing non-contractual obligations. This category comprises not only torts (article 40) but also unjust enrichment (article 38) and management of another's affairs (article 39). Second, the legislation contains new rules on property (articles 43-46). Provisions on agency and on corporations are still lacking.

The overall approach is a moderately conservative blend of territorialism and th...

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