Vitorino shelves ‘Rome II’ plan following attacks

Date: 20/07/2000

By Peter Chapman

JUSTICE and Home Affairs Commissioner Antonio Vitorino has shelved proposals for a new framework to govern the handling of cross-border legal disputes after critics claimed they would drive a stake through the EU's single market and threaten its emerging electronic commerce policy.

Brussels sources say the Portuguese Commissioner has come under intense pressure to amend his plans and has now decided to redraft the proposals and launch them in the form of a Green Paper on the issue in the autumn.

Vitorino's climb-down follows a fierce debate over a similar proposal to extend the scope of an international treaty known as the Brussels Convention setting out which courts can hear international legal disputes.

Industry and MEPs were angered that the proposals were being pushed through without proper discussion. "After the debacle with the Brussels proposals they had to do this," said Mike Pullen, an e-commerce specialist with UK law firm DLA.

The latest proposals, which were circulated earlier this year to other Commission departments, cover the applicable law governing cross-border legal rows which do not relate to contracts. These include disputes over car accidents, marketing rules such as those banning 'buy one get one free' offers, defamation and libel.

Under the plan known as 'Rome II', which builds on an existing treaty known as the Rome Convention, laws in the country where the dispute originated would generally take precedence. This is known in legal jargon as the 'country of destination'.

However, EU single market rules mean that, in general, a firm can sell its goods legally in a foreign member state as long as its operations are deemed legal in its home market or 'country of origin'.

Commission sources outside Vitorino's department claim the draft regulation is "inconsistent" with the country-of-origin approach adopted in swathes of EU legislation, including vital directives on e-commerce and related laws on digital signatures, broadcasting and data protection.

They claim the draft rules also run counter to Union laws in the advertising and marketing fields which ban member states from imposing national regulations on companies based in another member state, except in cases where they can show that the restrictions are fully justified.

Commission insiders fear Rome II could be used by some member states to impose their own rules such as the 'unfair' German legislation which bans 'buy one get one free' offers. "This is contrary to the Commission's policy which has led to the opening of infringement proceedings against member states," said one.

British Conservative MEP and former law lecturer Theresa Villiers said the proposals would also deter small and medium-sized firms from venturing onto the Web. "A small company operating on the Internet risks being sued in 15 member states. The problem is how is a small business going to know what the rules are in different jurisdictions?" she said.

Justice and Home Affairs Commissioner António Vitorino has shelved proposals for a new framework to govern the handling of cross-border legal disputes after critics claimed they would drive a stake through the EU's single market and threaten its emerging electronic commerce policy.