Cross border tort disputes

Yashaswini Prasad, Jindal Global Law School

Editor’s note:

A tort related claim involves multiple factors such as the place of the tort, the nationality and domicile of the parties, etc. Determining jurisdiction of where the tort was committed is one of the major hurdles faced in cross border torts. Laws of limitations and damages also may vary cross countries. This paper examines which law should be used to govern all these issues, and in which type of torts – the conflict between lex fori, lex loci delicti and the treat of double actionability.

In private international law disputes, the court chooses which law is applicable in each legal issue involved in the case. In choosing, the intensity and nature of the link between the law and the case plays a huge role. In cross border torts, if (a) when the act is committed in one country but the proceedings are brought forth in another, the law of the forum where the claim is brought, or the law of the forum where the tort was committed, may apply and in case (b) when the act is committed in one country but its effect is felt in another country, the law of the forum where the tortious act was committed or the law of the place where its effects were felt may apply. The court chooses on the basis of rules of private international law. Theories vary as to whether the lex fori or the lex loci delicti must be chosen, or if the court must only apply the law most connected with the facts and circumstances in a particular claim/case. The aim must always be to apply the theory in such a way that it provides certainty and is still flexible enough to accommodate complex cases.

Introduction

The problem of discerning the appropriate applicable law in the case of cross-border torts is extremely complicated. The reason behind this is that at a very basic level of the facts of a tort related claim there are multiple connecting factors such as the place of the tort, the nationality and domicile of the parties, etc. To add to this basic concern, in the case of cross border torts an added problem of determining the actual jurisdiction where the tort was committed arises. In addition there are also a wide variety of tortious issues that may arise – limitation, damages, etc. The question that then arises is whether the same law should govern all of these issues. It is important to note that there are also different types of tort – negligence, nuisance, defamation, etc. This then begs the question, should the same rule in determining the applicable laws apply regardless of the type of tort? An additional issue to consider is that application of a foreign law may lead to liability being imposed for torts that are unknown in the domestic jurisdiction.[i]

An expansive set of solutions has been used by various nations in order to deal with this issue and even among these solutions there has been considerable evolution over a period of time. This paper discusses the various “choice of law rules” followed across jurisdictions – lex fori, lex loci delicti, double actionability, etc. –focusing specifically on the position in England as well as in India.

Choice of Law

In the case of a Private International Law dispute, the court where the claim has been brought, after deciding on the matter of jurisdiction – whether it has the power to hear the case – must determine “which law” to apply in resolving the dispute. This process of electing the applicable law is known as “Choice of Law.” The choice of law is not encompassing of the case as a whole, i.e. choice of law does not function as “one case one law.” Each legal issue in a case must be decided in accordance to the appropriate law and therefore choice of law in a dispute is on the basis of the legal issues brought up in the claim; and it is important to note that there can be any number of issues in a claim. A conflict of laws in choice of law arises when there is more than one “connecting factor” (the point of contact, which matters the most or is the most relevant) involved. In choosing between two laws, the intensity and nature of the link between the law and the case plays a huge role. In determining the intensity and nature of the relationship multiple factors such as domicile, nationality, place of incident, can play a role. And sometimes, many of these considerations themselves have different meanings under different legal systems.[ii] Therefore in order to deal with this extensive ambiguity, certain sets of rules – lex fori, lex loci, lex causae, etc., – are applied in order to determine the applicable law. These rules are referred to as “choice of law rules.” [iii]

Choice of Law in Cross Border Tort Disputes

Torts as commonly understood in Common law are civil wrongs against an individual, his property, and/or reputation. This includes negligence, trespass, defamation, etc. In certain instances the act may qualify as both a tort and a crime at the same time, for example assault. A tortious act may also arise from a contractual background, in which case the injured party is given the choice of suing either for breach of contract or damages for tort. The option of claiming relief either in contract or tort is offered in English law[iv] as well as India.[v]

In the case of a tort the most basic principle in the case of the law to be applied is lex loci delicti – the law of the place where the tortious activity was committed. [vi]  However, this clarity is available only when the tort is domestic in nature and there is not conflict of laws involved. There are newer more contemporary approaches adopted by various jurisdictions, such as, the significant relationship rule,[vii] the governmental interest approach,[viii] and the comparative impairment analysis approach.[ix] The most basic and chronologically the oldest approach however, in the case of a tort or delict has always been lex loci delicti. The real problem of choice of law arises in the case of cross border torts, i.e. with the arrival of a foreign element. Two such scenarios are,  (a) when the act is committed in one country but the proceedings are brought forth in another; (b) when the act is committed in one country but its effect is felt in another country.[x] Now with the possibility of conflicting laws – in case (a) the law of the forum where the claim is brought, i.e. lex fori, or the law of the forum where the tort was committed, i.e. lex loci delicti; and in case (b) the law of the forum where the tortious act was committed or the law of the place where its effects were felt; the question that then arises is which of the competing laws must be chosen and on what basis.

In order to solve this conflict in choice of law, in the case of cross border torts, the country whose law will be chosen to solve the dispute is selected through application of the rules of Private International Law. There are three main theories in relation to choice of law in cross border tort cases, they are[xi]:

  • The lex fori,
  • The lex loci delicti, and
  • The proper law or social environment theory.

Theories Related To Choice of Law in The Case of Cross Border Tort Disputes

The Lex Fori Theory

According to this approach the applicable is the law of the forum where the claim has been brought. The application of lex fori is rather simplistic and straightforward as there is no need to determine where the tortious activity occurred, or to prove that it was in fact a tort in the law of the country where the act occurred.[xii]  On the other hand this could work to the disadvantage of the defendant as the plaintiff could then indulge in forum shopping – choosing a forum that is most favourable to him. The defendant may become liable for an act, which may amount to a tort in the forum state – lex fori – but not in the place where it was committed – lex loci delicti.[xiii] Contrarily, if the act committed is not a tort under lex fori, but it is under ­lex loci delicti – the plaintiff does not suffer as even if he cannot successfully bring a claim in the forum state, he can bring it in the place where the act has been committed.[xiv]

Friedrich Karl von Savigny an advocate of the lex fori method proposed that tortious liability is comparable to criminal liability and thus is closely related to the public policy of the forum state and therefore should be governed by lex fori.[xv]  This view is criticised by C. F. Forsyth, who says that Savigny’s view opinion has been discredited to a large extent, as there is a clear demarcation between crime and tort today. Forsyth also goes on to criticize the lex fori approach for being “fickle” as it is only established “ex post facto” once the plaintiff decides where he wishes to sue.[xvi]

There are barely any proponents of the application of the lex fori theory in the contemporary world[xvii] as even with its simplicity, if it were applied as a general rule, it would result in arbitrariness and unfair decisions. Thus in a quest for a more fair basis for choice of law, we move to the lex loci delicti theory.

The Lex Loci Delicti Theory

In accordance to this theory the applicable law in the case of a cross border tort ought to be the law of the place where the tortious act has been committed.  Willis, J., observed in Phillips v. Eyre that “the civil liability arising out of a wrong derives its birth from the law of the place, and its character is determined by that law.”[xviii] Similarly, Westlake has also opined on the matter that in the event of tortious act that disrupts the social order of any country, it is the law of that country where the act has been committed that must then apply as it would be the best authority of the matter.[xix]

The problem with the lex loci regime arises when the facts amounting to the tortious act take place in more than one country, i.e. the act is committed in one country and the injury is felt in another. It then becomes hard to decide which country is then the loci delicti – the place where the act commenced or the place where the effect of the injury was felt.[xx] This can be dealt with to a certain extent if one adopts the view that the lex loci delicti theory is based on the “vested rights doctrine.” In which case, a plaintiff’s claim is derived from the law of the jurisdiction where the injury occurred and depends entirely upon such law for its existence.  Thus, when the place where the act commenced or the place where the effect of the injury was felt is two different states, the substantive law of the state where the injury occurs applies. [xxi]

Additionally there can also be problems in applying this theory when the parties have almost no connection to the place where the tort occurred, i.e. the lex loci delicti may be entirely coincidental and by chance.[xxii] For example a couple living in state X are on vacation in state Y, there is an accident while they are driving in state Y and the wife is injured. She wants to sue her husband. The application of the laws of state Y in such a case would merely be by chance and in the event that the laws of state Y do not support her claim (but state X’s laws do) this would be highly unfair and application of state Y’s laws will be arbitrary.[xxiii]

The real problem with the lex loci delicti theory is not that is inherently unfair and arbitrary, but that it is not flexible and cannot address every single question in complex situations.[xxiv] The possibility of unfairness only arises in complex situations, like in the instance of the lex loci delicti being entirely fortuitous. In order to deal with this inefficiency of the lex loci delicti theory there was a move towards creating a “proper law,” which is based on “the most significant connection with the chain of acts and circumstances in the particular case in question.”[xxv]

The Proper Law or Social Environment Theory

In accordance to this approach the applicable law must be the one that has the most significant connection with the facts and circumstances in a particular claim/case.[xxvi] Lord Denning reiterated this position to a certain extent in the case of Boys v. Chaplin, where he said that a proper law of tort ought to be determined by establishing which law has the most significant connection to both the parties as well as the act done. [xxvii] The proper law theory seeks to fill the gaps in the lex loci delicti theory. In the words of Morris, “a proper law approach, intelligently applied, would furnish a much-needed flexibility”[xxviii] in the process of choice of law.

The main criticism to this theory of choice of law is that it results in a fair amount of uncertainty and unpredictability;[xxix] and while it is conceded that in most situations there wouldn’t be a need to look at a law outside of lex loci delicti it is still prudent to have an approach that is flexible enough to include complex situations as well as the normal ones.[xxx]

Position in England

With regards to the position of choice of law in the case of cross border torts, there are three considerations – (a) position at common law, (b) statutory reform, and (c) reliefs. While the position at common law in England was previously settled, there was a drastic alteration of English law on the matter through the enactment by Parliament of the Law Reform (Miscellaneous Provisions) Act 1995, under which a different set of choice of law rules were introduced. The position on defamation related torts is still unchanged and is still the same as settled in common law. Additionally the matter of relief in English law is considered to be a procedural matter and so the choice of rules that apply to them is lex fori.[xxxi] This paper will only discuss the position at common law as it also relevant to India, as the few cases that have dealt with the question of choice of law in India have placed reliance on English Common Law Decisions.

The Position at Common Law

The settled position in Common law in the case of cross border torts, and as applicable to defamation related claims even today is the “double actionability rule,” the foundation of which rule was laid down in the case of Phillips v. Eyre.[xxxii]

Seven judges decided the case of Phillips v. Eyre. The brief facts of the case are: The Governor of Jamaica, Edward Eyre declared marital rule in 1865 in order to put down an insurrection. At this time Phillips was arrested at his house, handcuffed and put on a ship and taken away. Post the suppression of the insurrection an act indemnifying the Governor of any acts committed during the suppression was passed. Governor Eyre then returned to England. Phillips had returned to England prior to the Governor. Phillips then brought a claim against Eyre for assault and false imprisonment in an English Court. Eyre pleaded the act of the Jamaican Parliament indemnifying him for anything done during the suppression period as a defence. The Court of Exchequer Chamber sustained the defence, on the grounds that “the civil liability arising out of a wrong derives its birth from the law of the place, and its character is determined by that law.”[xxxiii]

The basic rule in Phillips v. Eyre was laid down as follows:

“As a general rule, in order to found a suit in England for a wring alleged to have been 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.”[xxxiv] 

The “Double Actionability Rule” was thus established as the general rule relating to cross border torts. The two limbs[xxxv] of the rule are:

(a) The act must be “actionable” as a tort in England; and

(b) The act must be “non-justifiable” by the law of the place where it was committed.

The first limb originated in a case decided by the Privy Council two years prior to the case of Phillips v. EyreThe Halley[xxxvi] case in 1868. In this case the Privy Council dismissed a claim on an employer’s vicarious liability on the grounds that such a tort was not recognised in English Law.[xxxvii]

The second limb as initially formulated in the case of Phillips v. Eyre was overruled in the case of Boys v. Chaplin.[xxxviii] This was due to the interpretation of the term “non-justifiability” in the case of Machado v. Fontes.[xxxix] In the Machado case it was held that even if the nature of liability of the act committed was not civil in the lex loci delicti, it would satisfy the second limb as formulated in the Phillips v. Eyre case.  In the Machado case even criminal liability under lex loci delicti was held to satisfy the “non-justifiability” requirement. This was later overruled in the case of Boys v. Chaplin, where the term “non-justifiable” was replaced with the term “actionable.” The Boys v. Chaplin case additionally established an exception to the general rule of double actionability, by way of making the awarding of reliefs a procedural matter. Thus the decision of the Boys v. Chaplin case ousted the law of the forum of place of tort and restored the law of the forum as far as the awarding of damages and other reliefs was concerned. This position was later clarified to some extent in the case of Red Sea Insurance Co Ltd v. Bouygues where the general rule was held to be double actionability, providing for an exception in appropriate cases, where the plaintiff could rely on either lex fori or lex loci delicti individually for his or her claim to be actionable.[xl]  

Position in India

The Indian position on choice of law rules in the case of cross border torts is in the early stages of development. There seem to be only two decisions on the matter. For the most part, Indian jurisprudence on the matter follows the early English Court decisions, prior to the engrafting of exceptions to the “double actionability” rule by the English Courts.[xli]

The first decision on the matter is of the Madras High Court.[xlii] The court was dealing with a claim of defamation. The facts of the case are: The then Raja of Cochin (which was at the time an independent Indian State), sent a communication to the plaintiff excommunicating him from his caste. This communication was then sent to British India. The Madras High Court applying the “double actionability” rule dismissed the claim stating that as the communication was from a superior to a subordinate with no trace of malice, the defence of qualified privilege would apply thus not giving rise to civil liability under the laws of the State of Cochin.

The second case is that of The Kotah Transport Ltd. V. The Jhalawar Bus Service Ltd.[xliii] In this case the plaintiff filed for damages for injury caused due to rash and negligent driving by the defendant’s driver. The accident took place in Jhalawar, and the action was brought in Kotah; both these places were then independent Indian States. The court found for the plaintiff as there was nothing in the law of the state of Jhalawar that justified his actions, and the act was a tort under the laws of the state of Kotah, and thus the requirements of “double actionability” was satisfied.

Conclusion

In conclusion as far as choice of law in the matter of cross border torts is concerned, the real problem is not really what theory to apply – lex fori, lex loci delicti, or proper law – but how to apply the theory in such a way that it provide certainty and is still flexible enough to accommodate complex cases.

As far as India is concerned, our courts are yet to develop a concrete position on the matter. It would be advantageous if they could evolve a rule independent from those already in place, by adopting the best of both Civil and Common law, i.e. a flexible version of lex loci delicti akin to the proper law or social environment theory.

Edited by Neerja Gurnani

[i] G.C. Cheshire, P.M. North & J.J. Fawcett, Cheshire and North’s Private International Law 605 (13 ed. 1999).

[ii] F.E Noronha, Private International Law In India 68-69 (1 ed. 2010).

[iii] R. Hayward & A. J. Mayss, Conflict of Laws 1 (4 ed. 2006).

[iv] J. Chitty & H. G Beale, Chitty On Contracts: General Principles 142 (1 ed.2012).

[v] Manju Bhatia v. New Delhi Municipal Council, AIR 1998 SC 223.

[vi] Norris v. Taylor, 460 So. 2d 151 (1984, Supreme Court of Alabama).

[vii] Enron Wind Energy Sys. v. Marathon Elec. Mfg. Corp. (In Re Enron Corp.), 367 B.R. 384 (2007, he U.S. Bankruptcy Court for the Southern District of New York).

[viii] District of Columbia v. Coleman, 667 A.2d 811 (1995, District of Columbia Court of Appeals).

[ix] Bernhard v. Harrah’s Club, 16 Cal. 3d 313 (1976, Supreme Court of California).

[x] A. M. Setalvad, Conflict of Laws 648 (1 ed.2007).

[xi] P. Diwan & P. Diwan, Private International Law: Indian and English 551 (4 ed.1998).

[xii] Supra x, at 649.

[xiii] Supra x, at 648, 649; L.A. Collins, A.V. Dicey & J.H.C. Morris, Dicey and Morris on The Conflict of Laws 913 (12 ed.1993); Hayward & Mayss, supra iii, at 131.

[xiv] Collins, Dicey & Morris, supra xiii, at 913.

[xv] F. K. Savigny & W Guthrie, Private International Law 205-206 (1 ed.1869).

[xvi] C. F Forsyth, Private International Law: The Modern Roman-Dutch Law Including The Jurisdiction of The Supreme Court 304 (3 ed. 1996).

[xvii] Supra xi, at 552.

[xviii] Phillips v Eyre, 6 L.R. Q.B. 1, 28 (1870, Queen’s Bench).

[xix] J. Westlake, A Treatise on Private International Law, or, The Conflict of Laws with Principal Reference to its Practice in The English and Other Cognate Systems of Jurisprudence 282 (7 ed.1858).

[xx] See W. W. Cook, The Logical and Legal Bases of The Conflict of Laws 345 (2 ed.1942); See also W. W. Cook, The Logical and Legal Bases of the Conflict of Laws, 33 Yale Law Journal 457, 466 (1924) (discussing how to determine the place where the tort was committed).

[xxi] Myers v. Hayes International Corp., 701 F. Supp. 618 (1988, United States District Court Middle District of Tennessee).

[xxii] Supra iii, at 131.

[xxiii] Example is based on the facts of the case Corcoran v Corcoran [1974] VR 164 (Austl.), where under the then law of New South Wales – where the accident occurred – a wife did not have the right to recover damages from her husband though such a right existed under the laws of Victoria – where they ordinarily resided – in such a scenario if the laws of New South Wales were to be applied under the principle of lex loci delicti, a right to sue that would have otherwise be available to the parties would have been unfairly denied.

[xxiv] P. Terblanche, Lex Fori or Lex Loci Delicti? The Problem of Choice of Law in International Delicts, 30 The Comparative and International Law Journal of Southern Africa 243, 250 (1997) (discussing the problems identified by the court in the application of lex loci delicti in the case of Tolofson v Jensen).

[xxv] Supra iii, at 131.

[xxvi] See supra iii, at 131; see also J.H.C. Morris, The Proper Law of a Tort, 64 Harvard Law Review 881, 888 (1951) (discussing the proper law theory).

[xxvii] Boys v Chaplin, 2 Q.B. 1 (1968, Queen’s Bench).

[xxviii] Morris, supra xxvi, at 885.

[xxix] Supra iii, at 131.

[xxx] Morris, supra xxvi, at 884-885.

[xxxi] Supra x, at 663, 674.

[xxxii] Supra xviii.

[xxxiii] Supra xviii, at 28.

[xxxiv] Supra xviii, at 28-29.

[xxxv] Supra iii, at 136.

[xxxvi] The Halley, 2 L.R. P.C. 193 (1868, Privy Council).

[xxxvii] Supra iii, at 137.

[xxxviii] Supra xxvii.

[xxxix] Machado v. Fontes, 2 Q.B. 231 (1987, Queen’s Bench).

[xl] Supra iii, at137-139.

[xli] Supra x, at 683.

[xlii] Govindan Nair v Achuta Menon, (1915) I.L.R. 39 Mad 433.

[xliii] The Kotah Transport Ltd. v. The Jhalawar Bus Service Ltd., A.I.R.1960 Raj. 224

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