Question
Plasto plc has its seat in England. It has a factory in Spain, which makes plastic goods. Luigi, habitually resident in Italy, is the manager of Plasto’s factory in Spain, which is near the border with Portugal. Owing to Luigi’s negligent failure to take reasonable care in supervising the manufacturing process, there was an explosion in the factory. Mona, who is habitually resident in Italy, and Alfonse, habitually resident in Spain, were both employed at Plasto’s Spanish factory at the time of the explosion and suffered injuries. As a result of his injuries, Alfonse who had been offered a job in England is unable to take up employment. The explosion caused damage to the house of Carlos, habitually resident in Portugal. The house of Carlos was located in Portugal, near the border with Spain, close to Plasto’s factory. Mona, Alfonse and Carlos wish to sue Luigi and Plasto plc.
Advise each claimant on the applicable law.
Fellow Student’s Response
Plasto Plc is a company that has a seat in England and a plastic goods factory in Spain. Article 23 (1) of the Rome II Regulation[1] (Rome II) covers the identifies the habitual residence of a company. The article states:
“Where the event giving rise to the damage occurs, or the damage arises, in course of operation of a branch, agency or other establishment…shall be treated as the place of habitual residence.”
This would, therefore, place the factory in Spain as the habitual residence as the branch, agency or other establishment because this was where the damage occurred.
Applicable Law to Mona
Mona who is habitually resident in Italy would like to sue Luigi for her injuries suffered in the explosion. An explosion caused by his negligence. Article 4[2] of the Rome II Regulation (Rome II) it covers the general rules for Torts/delicts. As Mona and Luigi both have their habitual residence in Italy under Article 4(2)[3] the applicable law will be Italian law. Therefore, the advice to Mona would be to raise a claim against Luigi in Italy.
As highlighted above, Plasto PLC is habitually resident in Spain, therefore under 4(1) Spanish Law would be applicable in Mona’s claim against them.
It is, however, important to highlight article 4(3) which is a clause that offers slightly more flexibility in situations outside of 4(1) & 4 (2). Part of 4 (3) states:
A manifestly closer connection with another country might be based in particular on a preexisting relationship between the parties, such as a contract, that is closely connected with the tort/delict in question.
Although it is not clarified whether the relationship between Mona and Luigi was manifestly closer, such as contract, which is likely. If this was the case, then Article 4(3) may apply and identify Spanish Law as more appropriate, as it could be closely connected.
Applicable Law to Alfonse
Alfonse has a habitual residence in Spain and Luigi in Italy. Alfonse wishes to sue Luigi for his injuries sustained during the explosion. Article 4(1) would apply as the parties have different habitual residence thus differing from the case of Mona. Article 4(1) states “it shall be the law of the country in which the damage occurs”. Therefore, as the explosion and injuries occurred in Spain, Spanish Law would be applicable, and Alfonse advised on this basis.
Furthermore, Alfonse’s injuries meant he was unable to take up employment in England for a new role. Recital 17 of Rome II states that the law applicable for personal injury or damage to property would be the country where it happened. In this case, it would be Spain. Moreover, the Private International Law (Miscelleneous Provisions) Act 1995 provision 11 (2)(a)[4] it concurs that any personal injury claim will be in the country that the injury occurred, Spain.
Applicable Law to Carlos
Carlos is habitually resident in Portugal and due to the Spanish factories close proximity to Portugal, his property was damaged in the explosion. As the damage occurred in Portugal Article 4(1) would position Portuguese Law as applicable. Therefore, Carlos could raise a claim against Luigi and Plasto PLC in Portugal.
Interestingly, should there have been any environmental damage occurred such as pollution in a connecting river as an example, due to the explosion and could it could be proven. This would have raised another scenario under Article 7[5], which states:
“The law applicable to a non-contractual obligation arising out of environmental damage or damage sustained by persons or property as a result of such damage shall be the law determined pursuant to Article 4(1), unless the person seeking compensation for damage chooses to base his or her claim on the law of the country in which the event giving rise to the damage occurred.”
This would, therefore, give Carlos the right to take proceedings to both the Spanish and Portuguese courts, whichever he deemed more favourable.
[1] The Rome II Regulation Article 23(1)
[2] The Rome II Regulation Article 4
[3] The Rome II Regulation Article 4(2)
[4] Private International Law (Miscelleneous Provisions) Act 1995 provision 11 (2)(a)
[5] The Rome II Regulation Article 7
