8TH ANNUAL MCGILL CONFERENCE
ON INTERNATIONAL
AVIATION LIABILITY & INSURANCE
Recent developments in aviation liability & insurance:
The 1973 Hague Convention on the law applicable to products
liability: choice of law issues in aviation cases
Thomas Rouhette
April 17, 2015
2 applicable texts before the European Courts to the law
governing the aircraft manufacturer's liability
-
1973 Hague Convention: in force in 11 European countries (Croatia,
Finland, France, Luxembourg, Macedonia, Montenegro, the Netherlands,
Norway, Serbia, Slovenia and Spain)
-
Rome II Regulation: in force within the EU (except Denmark) and
applicable for events giving rise to damage which occured after January
11, 2009.
 Both texts are applicable to the liability of aircraft manufacturers
 The Hague Convention prevails over the Rome II Regulation
whenever it is found applicable
 The designated law has a universal application (shall be applied
whether or not it is the law of a Signatory country/ Member state)
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2
Conflict-of-laws rules applicable to products liability
1973 Hague Convention
Main
connecting
factors
(by order of
priority)
Secondary
connecting
factors
Subsidiary
rule
Rome II Regulation
• State of the habitual residence of the person directly • State of the habitual residence of the person directly
suffering damage
suffering damage
• State of the place of injury
• State where the product was acquired by the person
directly suffering damage
• State of the place of injury
• State of the principal place of business of the person
claimed to be liable
• The product has to be marketed in the State
designated by the main connecting factor
• State where the product was acquired by the person
directly suffering damage
 Plaintiff can choose between
• State of the principal place of business of the person
claimed to be liable
• State of the habitual residence of the person claimed
to be liable
AND
• State of the place of injury
• State of the principal place of business of the person
Superseding rule
claimed to be liable (if the requirement of • State with manifestly closer connections with the tort
foreseeability is not satisfied by neither of the main
connecting factors)
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3
Scope of the applicable law
•
Matters determined by the law made applicable by the Hague Convention
& Rome II include:
–
the basis and extent of liability
–
the grounds for exemption, any limitation and division of liability
–
the kinds, form and extent of compensation
–
the question whether a right to claim may be transferred
–
the persons who may claim compensation for damage sustained personally
–
liability for the acts of another person
–
the rules of prescription and limitation
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4
Scope of the applicable law
•
•
Matters excluded from the scope of the applicable law by the Explanatory
Report of the Hague Convention and which are covered by Rome II:
–
Choice-of-law clauses in an agreement, whether made before or after the injury,
between the person directly injured and the manufacturer
 article 14 of Rome II applies as lex fori and determines the conditions in which
parties may enter into such agreement
–
Direct actions of victims against insurers
 such action is admitted under Article 18 of Rome II if the law applicable to the
manufacturer's liability or the law applicable to the insurance contract so provides
–
Recourse actions and subrogation
 under Article 19 and 20 of Rome II, the applicable law is the one governing the
merits of the main claim
Grey area for matters not expressly enumerated by both texts
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5
Risk of conflict between the two texts
• As the connecting factors of both texts are not identical, the
application of either text may lead to the designation of different
applicable laws
• Lack of uniform application of the Rome II Regulation within the
EU because of the ratification and non denunciation of the Hague
Convention by 7 Member States
• Risk of forum shopping
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6
Risk of conflict – DHL case study
• DHL Flight 611 / Bashkirian Airlines Flight 2937
Mid-air collision accident on 1 July 2002 in German airspace
• Relatives of the Russian victims sued the US manufacturers of the
anti-collision instrument known as TCAS (Traffic Collision
Avoidance System) before the Spanish Courts
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7
Risk of conflict – DHL case study
1973 Hague Convention
(Spain jurisdiction)
Rome II Regulation
(ex: German jurisdiction)
Main
connecting
factors
(by order of
priority)
• Habitual residence of the person directly suffering • State of the habitual residence of the person directly
damage  RUSSIA
suffering damage  RUSSIA
Secondary
connecting
factors
• State of the principal place of business of the person • The product was marketed in the State designated by
claimed to be liable
the main connecting factor
 US (Arizona & New Jersey)
 YES
• State where the product was acquired by the person
directly suffering damage
• State of the place of injury  GERMANY
 Factor rejected by the Spanish Court
Subsidiary
rule
• State of the principal place of business of the person
claimed to be liable
 US (Arizona & New Jersey)
Arizona / New Jersey
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Russia
8
Irrelevance of the 1973 Hague Convention in aviation cases
•
Difficult combination of the main & secondary connecting factors in
aviation cases
 irrelevance of the State of the place of injury as a connecting factor
 ambiguity on the determination of the place of acquisition of the product
•
Easier recourse to the alternative rule set in Article 6  distortion of the
spirit of the Hague Convention
•
"Forum shopping" of plaintiffs in an attempt to apply US law to obtain
higher compensation
•
1973 & 1971 Hague Conventions share the same philosophy although
different logic should be applicable to plane and car accidents
•
Conflict-of-laws rules provided by the Rome II Regulation are better
suited to modern society and to aviation liability cases
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9
What if US law is found applicable by the Hague Convention?
Should the forum grant the million-dollar-compensation
provided by some jury trial verdicts in the US?
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10
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