Jurisdiction and applicable law in the matter of pre-contractual liability*

Introduction

The main difficulty in the international private international law discipline of pre-contractual liability consists in its characterization. Indeed, in some legal orders (for instance the German and Austrian ones) it is to be qualified in the matter of contractual liability, in others (for example the French one) it is to be qualified in the non-contractual one. These different characterizations have repercussions in the field of private international law and international civil procedure, including the European Union, which has divided since the 1968 Brussels Convention the determination of jurisdiction in contractual matters, on the one hand, and tort, on the other. Therefore, the Court of Justice of the European Union intervened on this issue in a preliminary ruling for the interpretation of (at the time) Art. 5, n. 3, of Regulation (EC) No 44/2001 and of the 1968 Brussels Convention, which provided for an alternative jurisdiction criterion for tortious matters.

In the Tacconi judgment, the Court of Justice of the European Union ruled that an action founded on the pre-contractual liability of the defendant for breach of the rule which requires the parties to act in good faith in such negotiations aimed at concluding a contract falls within the scope of matter relating to tort for jurisdiction purposes pursuant to Art. 5, n. 3, of the 1968 Brussels Convention, corresponding to the current Art. 7, n. 2, of the Brussels I-bis regulation (judgment of 17 September 2002, C-334/00, Tacconi, EU:C:2002:499, para. 27). According to the Court, the rule on the forum for contractual matters does not apply to such cases, because the latter cannot include cases in which an obligation is assessed that has not been freely assumed by one party towards another (judgment of 17 June 1992, C-26/91, Handte, EU:C:1992:268, para. 15), which is the obligation to behave in good faith when negotiating a contract (Tacconi judgment, para(s). 25-26). The rule on the forum for tort matters, on the other hand, can be applied, since it includes any issue which aims to involve the defendant’s liability and which does not fall within the contractual matter (judgment of 27 September 1988, 189/87, Kalfelis, EU:C:1988:459, para. 18; judgment of 27 October 1998, C-51/97, Réunion européenne, EU:C:1998:509, para. 22; Tacconi judgment, para. 21).

This approach has been confirmed in the later case law by the Court. In the Kolassa judgment (judgment of 28 January 2015, C-375/13, Kolassa, EU:C:2015:37), the Court of Justice of the European Union ruled that the rule on the forum for tort matters as applicable to the action by which an investor, holder of a bearer bond acquired from a professional intermediary, claimed for the issuing bank to pay for damages because of the violation of the pre-contractual information obligations (invoking the so-called prospectus liability). According to the Court, indeed, in the present case the rule on the contractual forum could not be applied since the information obligations of the bank had not been freely assumed by the bank, but derived from the law (Kolassa judgment, para(s) 40, 41, 57).

However, there is an isolated obiter dictum in the opposite. In the Ilsinger judgment, the Court of Justice of the European Union ruled that the action by which a consumer seeks an order requiring a mail-order company to pay a prize the consumer apparently won shall be classified as pre-contractual if the company has not contractually undertaken to deliver the prize (judgment of 14 May 2009, C-180/06, Ilsinger, EU:C:2009:303, para(s) 55-57). Therefore, the Court ruled out that, in such a case, the rule on the consumer’s forum could be applied, since this presupposes the conclusion of a contract between the parties. The Court, then, incidentally stated that the rule on the contractual forum, which has a broader scope, could be applied, assuming only the existence of an obligation upon one party (Ilsinger judgment, para. 57).

Current sources of law

Following the first case law of the Court of Justice of the European Union, a clear indication has been given in the European Union about the nature of the culpa in contrahendo: it was included within the scope ratione materiae of Regulation (EC) No 864/2007 on the law applicable to non-contractual obligations (hereinafter, Rome II Regulation), in particular by dedicating Recital 30 and Art. 12 to it; and it is expressly excluded from the scope of the related Regulation (EC) No 593/2008 (hereinafter, Rome I Regulation) on the law applicable to contractual obligations (Recital 10 and Art. 1, para. 2, lett. I)). Recital 30 of the Rome II Regulation specifies that the notion of culpa in contrahendo is to be understood as autonomous and “should not necessarily be interpreted within the meaning of national law” of the various Member States; the notion should also include ” violation of the duty of disclosure and the breakdown of contractual negotiations”; and the non-contractual obligations under Art. 12 should only be those having a direct link with the dealings prior to the conclusion of a contract.

The law applicable to pre-contractual liability

First, parties can reach an agreement on the application of a given law (Art. 14 of the Rome II Regulation). It is sufficient that the choice of law is subsequent to the occurrence of the fact. Only if all the interested parties carry out a commercial activity – as often happens when disputes related to pre-contractual liability arise – can the agreement be freely negotiated even earlier. Since any law can be chosen as applicable, even that of a third State, the only limit is imposed on compliance with the mandatory rules of the Member State in which all the relevant elements of the case are located, or of European Union law, if these elements are located in one or more Member States and the choice refers to the law of a third State.

Secondly, in the absence of choice, Art. 12, para. 1 identifies the law applicable to the culpa in contrahendo in the one that “applies to the contract or that would have been applicable to it had it been entered into”, regardless of whether the contract was actually concluded or not. Despite the characterization as non-contractual liability, the discipline is substantially referred to by reference to the Rome I Regulation.

If the applicable law cannot be identified pursuant to para. 1, Art. 12, para. 2 provides for a series of alternative connections, namely:

  • the law of the country in which the damage occurs, irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occurred, in harmony with the general rule under Rome II Regulation (Art. 4); or
    • the law of the parties habitual residence at the time when the event giving rise to the damage occurs, the law of that country; or

The determination of jurisdiction

Jurisdiction over pre-contractual liability claims is governed by Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (so-called Brussels I bis). In particular, claims, in the light of the aforementioned case law, can be brought not only before the court of the Member State in which the defendant is domiciled (Art. 4), but also before the court of the tort, and therefore before the courts of the place where the harmful event occurred or may occur (Art. 7, n. 2). As is well known, this expression according to the case law of the Court of Justice of the European Union includes both the place where the event giving rise to the damage occurred and the place where the damage occurred (judgment of 30 September 1976, 21/76, Bier, EU:C:1976:166, para. 24). With specific reference to the damage arising out of pre-contractual liability for breach of disclosure obligations by a bank, the Court, in the aforementioned Kolassa ruling, ruled that the event giving rise to it is located in the place where the decisions regarding the investment methods and the content of the relevant prospectuses were taken, or where such prospectuses have been drawn up and distributed, while the place where the damage is realized is where the investor has suffered the economic loss, i.e. at the bank where his/her bank account is active.

Ilaria Aquironi, Curzio Fossati

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*The English translation is provided for by the Aldricus Editorial Board; the original version by the author, in Italian, is available in this portal in the corresponding Italian section.