Giesela Rühl

Party Autonomy in the Private International Law of Contracts: Transatlantic Convergence and Economic Efficiency

It is commonly acknowledged that during the 20th century American and European choice-of-law theory have drifted apart: in the United States the American conflicts revolution swept the traditional vested rights theory out of the courts and the classrooms and gave way to a variety of novel approaches. In Europe, in contrast, legal systems decided to adhere to the classical concept of choice of law invented by Carl Friedrich von Savigny. However, the 20th century has not only seen transatlantic divergence. Almost unnoticed, American and European choice of law theory has developed into the same direction in one area of law: contract law. Both the Restatement (Second) of Conflict of Laws, which today is the most widely followed conflicts regime for contracts in the United States, and the EC Convention on the Law Applicable to Contractual Obligations (Rome Convention), which establishes uniform conflicts rules for virtually all of Western Europe, provide for free party choice of law. This article looks at principle of party autonomy in Europe and the United States in more detail. It demonstrates that the trend of convergence extends beyond basic conceptual similarities and that it reaches business reality through the jurisprudence of American and European courts. However, the article does not confine the discussion of party autonomy to a comparative analysis. It also determines the underlying reasons for the convergence of American and European law by looking at the field from an economic perspective. Two basic questions are addressed: first, what is the economic rationale for granting free party choice of law? Second, can limitations of the free party choice of law such as the infringement of public policy, the evasion of mandatory law or the lack of a substantial relationship with the chosen law be justified on economic grounds? In answering these questions the article ventures the hypothesis that the trend of convergence in choice of law can be explained with the help of economic theory.

Methods and Approaches in Choice of Law: An Economic Perspective

After years of disregard, the law and economics movement has finally taken note of the field of choice of law. However, up until today most of the contributions have focused on specific topics - such as the applicable law in contracts, torts or product liability - and skipped the underlying fundamental issues that determine the general design of choice of law rules: (1) Should courts apply foreign law at all or should they always resort to their own law? (2) Should courts create multistate substantive law specifically designed for international transactions or should they apply the law of one of the states involved? (3) Should choice of law rules resort to the unilateral method and define the reach of forum law only or should they apply the multilateral method and determine the reach of both forum and foreign law? (4) Should courts search for material justice or rather for conflicts justice? (5) Should choice of law strive for legal certainty or rather for flexibility? This article provides a comparative overview as well as an economic analysis of the answers legal scholarship has provided to these questions over time and across countries. It argues that courts should (1) be open towards application of foreign law, (2) apply the law of one of the states involved (3) determine the reach of both foreign and forum law, (4) strive for conflicts justice, and (5) apply rules instead of standards.

Choice of Law and Choice of Forum in the European Union: Recent Developments

The Oxford Civil Justice Survey fills a wide gap in the existing literature on choice of law and choice of forum in the European Union. It provides empirical evidence on how both concepts work in practice and how different legal systems are perceived by businesses. To put the survey into context and to allow for an intelligent interpretation of the results, the paper sheds light on the design of choice of law and choice of forum in the European Union in general and some recent developments in particular. It shows that choice of law and choice of forum have been recognized in Europe since the adoption of the Brussels and the Rome Conventions and that both choice of law and choice of forum have been transformed into European concepts with the conversion of the Rome and the Brussels Conventions into Community instruments. It also shows that both choice of law and choice of forum are subject to several limitations, which curtail their reach and effectiveness and, thus, reject the parties’ abilities to structure their transactions in a way that resembles national transactions. However, despite these limitations, choice of law and choice of forum remain the most important legal instruments in dealing with the uncertainties that parties to international transactions face in a world that is characterized by the multiplicity of laws.

Judicial cooperation in civil and commercial matters after brexit: which way forward?

Judicial cooperation in civil and commercial matters is generally perceived to be of a rather ‘specialist and technical nature’. However, for the many UK and EU citizens, families and businesses who work, live, travel and do business abroad, the current European framework for choice of law, jurisdiction and recognition and enforcement is of paramount importance. The article, therefore, explores how that framework might look like after Brexit and explores the merits and demerits of the various ways forward. It argues that the best option for both the UK and the EU would be to agree on the continued application of the existing EU instruments or to strive for conclusion of a new agreement that closely replicates these instruments. If no such agreement can be reached the UK should decide to apply the Rome I and Rome II Regulations unilaterally and sign the Lugano Convention of 2007 as well as the Hague Convention on Choice of Court Agreements of 2005.