Council regulation (EC) 44/2001 and internet consumer contracts: Some thoughts on article 15 and the futility of applying ‘in the box’ conflict of law rules to the ‘out of the box’ borderless world

Abstract

The Internet is by definition a borderless medium. Reflecting on the Council Regulation (EC) 44/2001 and Internet Consumer Contracts, this article develops some thoughts on the futility of applying some traditional conflict of law rules to the borderless world. It focuses on a few aspects attempting to establish when thinking ‘out of the box’ may be of benefit to consumers and their protection under article 15.

Notes

1 ‘A perfect market—a survey of e-commerce’, The Economist, 15 May 2004.

2 ‘E-commerce takes off’, The Economist, 15 May 2004, p 9.

3 The Economist survey (op cit, note 1, p 4) indicates indeed that half of the 60 million consumers in Europe who have an Internet connection bought products offline after having investigated prices and details online.

4 Council Regulation (EC) 44/2001of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgements in Civil and Commercial Matters, OJ 16 January 2001, L12.

5 Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters of 27 September 1968, replaced by the Council Regulation (EC) 44/2001, known as the Brussels Regulation.

6 [1997] ECR I—3767.

7 See quote in J Calais-Auloy and F Steinmetz Droit de la Consommation, Précis Dalloz, 6th edn Dalloz, 2000, p 9.

8 See quote in J Calais-Auloy and F Steinmetz Droit de la Consommation, Précis Dalloz, 6th edn Dalloz, 2000, p 9.

9 Under French law, the debate on this point is abundant and yet still very much divided. Before 1995, case law supporting both theories could be found. Some cases extended the benefit of consumer protection rules to professionals having contracted in the course of their trade, but outside their professional competencies. Other cases adopted a restrictive definition of ‘consumer’. Since 1995, the Cour de Cassation has elaborated a different test. The protective rules of consumer protection cannot be applicable when the contract has a direct link with the professional activity. The appreciation of the link being direct or indirect is a question left for judges to decide on a case-by-case basis. As a result, it seems that the link is more often that not considered to be direct, adopting in practice a restrictive conception of the notion of consumer, leaving little room for protection of the profane.

10 The Regulation took effect on 1 March 2002.

11 Convention on Jurisdiction and the Enforcement of Judgements in Civil and Commercial Matters of 27 September 1968.

12 See C Riefa ‘Article 5 of the Rome Convention on the Law Applicable to Contractual Obligations of 19 June 1980 and Consumer E-contracts: the need for reform’, Information & Communications Technology Law Vol 13, No 1, pp 59–73, 2004, at 66–67.

13 Information Society Services are defined by the Directive 98/34/EC of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of the rules on information society services, OJ L 204/37, 21 July 1998. The definition laid down in this Directive is referred to by the E-commerce Directive. Information Society Services are ‘any services normally provided for remuneration, at a distance, by means of electronic equipment for the processing and storage of data, and at the individual request of a recipient of a service’.

14 H Rowe ‘E-commerce: jurisdiction over on-line contracts and non-contractual cross-border disputes, Part 1’, Journal of International Banking and Financial Law Vol 19, No 2, pp 51–55, 2004, at 51.

15 H Rowe ‘E-commerce: jurisdiction over on-line contracts and non-contractual cross-border disputes, Part 1’, Journal of International Banking and Financial Law Vol 19, No 2, pp 51–55, 2004, at 52.

16 H Rowe ‘E-commerce: jurisdiction over on-line contracts and non-contractual cross-border disputes, Part 1’, Journal of International Banking and Financial Law Vol 19, No 2, pp 51–55, 2004, at 52.

17 H Rowe ‘E-commerce: jurisdiction over on-line contracts and non-contractual cross-border disputes, Part 1’, Journal of International Banking and Financial Law Vol 19, No 2, pp 51–55, 2004, at 52.

18 Point (3) referred to by the author relates to cases where the contract is concluded with a person who pursues a commercial or professional activity in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State.

19 ‘Proposal for a Council Regulation (EC) on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (presented by the Commission)’, COM (1999) 348 final 99/0154 (CNS).

20 An additional unwanted implication for e-commerce of the Brussels Regulations' provisions on jurisdiction over consumer contracts is, for instance, McClean points out that an English company may not accept orders from parties in New Zealand because it has anxiety about being hauled into court on the other side of the world (D McClean Morris: Conflict of Laws, Sweet & Maxwell, 2003). Thus, an unwanted consequence of the Brussels Regulations may be that consumers located in geographically isolated countries may find themselves excluded from new forms of commerce characterized by e-commerce. While Article 15(1)(c) of the Brussels Regulation does allow businesses the right to refuse to deal with persons in a particular jurisdiction by limiting the scope of the unqualified ‘directed at’ test, this could not have been an intended outcome of its adoption.

21 Even though this situation would not trigger the applicability of Article 15, it would in fact give rise to other bases for jurisdiction under Article 5, Brussels Regulation.

22 M Foss and L Bygrave ‘International consumer purchases through the Internet: jurisdictional issues pursuant to European Law’, International Journal of Law and Information Technology Vol 8, No 99, 2000, at Lexis-Nexis.

23 M Foss and L Bygrave ‘International consumer purchases through the Internet: jurisdictional issues pursuant to European Law’, International Journal of Law and Information Technology Vol 8, No 99, 2000, at Lexis-Nexis.

24 Riefa, ‘Article 5 of the Rome Convention on the Law Applicable to Contractual Obligations of 19 June 1980 and Consumer E-contracts: the need for reform’, Information & Communications Technology Law Vol 13, No 1, pp 59–73, 2004, at 68.

25 Riefa, ‘Article 5 of the Rome Convention on the Law Applicable to Contractual Obligations of 19 June 1980 and Consumer E-contracts: the need for reform’, Information & Communications Technology Law Vol 13, No 1, pp 59–73, 2004, at 68.

26 Riefa, ‘Article 5 of the Rome Convention on the Law Applicable to Contractual Obligations of 19 June 1980 and Consumer E-contracts: the need for reform’, Information & Communications Technology Law Vol 13, No 1, pp 59–73, 2004, at 68.

27 Article 17 of the Brussels Regulation invalidates jurisdiction clauses contained in agreements between consumers and a supplier, subject to three exceptions. The first exception is an agreement on jurisdiction entered into after a dispute has arisen. The second exception is an agreement that enables the consumer to sue in additional courts. The third exception covers an agreement entered into between a consumer and a supplier (both of whom at the time of the conclusion of their contract are domiciled or habitually resident in the same Member State) where such agreement confers jurisdiction on the courts of that Member State (to the exclusion of the courts of a subsequently acquired domicile elsewhere). Such an agreement shall be enforceable unless this choice of jurisdiction is contrary to the law of that Member State.

28 P Stone ‘The treatment of electronic contracts and torts in private international law under European Community legislation’, Information & Communications Technology Law Vol 11, No 2, pp 121–139, 2002, at 123.

29 Brussels Regulation, Article 16, Cl. 1.

30 If an English court was seised of a dispute, then English law would be applicable to determine domicile of both consumer and professional. The CJJA 1982 would then be applicable. It states that domicile is the place of residence. Residence is deemed acquired after 3 months of continuous residence in England. However, in England only one domicile can be discovered for one person. On the other hand, by seising another judge in another European country, it is possible for the law of that country to apply to define the domicile of the consumer or the professional. This may lead to multiple domiciles being discovered.

31 At present ADR solutions may be available to consumers under article 17(1), at a stage where the dispute has already arisen. Clauses in contracts to the effect of choosing a jurisdiction prior would be ineffective.

32 W Roebuck ‘Jurisdiction and e-commerce’, CTLR Vol 8, No 2, pp 29–32, 2002, at 29.

33 EC Enterprise Directorate General, ‘The European E-business Report 2003’ (2003) at p 10 available at: http://www.ebusiness-watch.org/marketwatch/resources/E-Business-2003.pdf, [10 March 2004].

34 Web-influenced sales are sales where customers first search for information about the availability and price of products and services on the Internet before buying the selected item in a ‘traditional’ way, possibly in the shop that had the best online offer.

35 http://www.europa.eu.int/information_society/eeurope/index_en.htm [10 March 2004].