Jurisdiction, choice of
law, choice of forum and
the internet
An insoluble conundrum?
Sophie Dawson, sophie.dawson@bdw.com.au
Samallie Kiyingi, samallie.kiyingi@bdw.com.au
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“The realm of the conflict of laws is a dismal
swamp, filled with quaking quagmires, and
inhabited by learned but eccentric professors
who theorize about mysterious matter in a
strange and incomprehensible jargon”
Dean Prosser, “Interstate Publication”, 51 Michigan Law Review959 at 971
(1953)
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overview
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Jurisdiction, choice of
law and forum
Choice of law
Australian choice of law
principles for torts

Negligent misrepresentation:
Voth
Defamation: Gutnick
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
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Australian choice of law
principles for contracts
Rome conventions
Jurisdiction, forum &
enforcement
conclusion
Old rules, new medium
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Amplification of old problems:


global corner stores
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Increases competition, consumer choice, innovation

many businesses do not have resources to obtain
advice on and comply with rules in multiple
jurisdictions
global soap box


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[ideas
freedom of speech & diversity of opinion
difficult to locate actions (being overcome?) and easy
to move them.
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Jurisdiction, choice of law &
forum
1. Jurisdiction
service in jurisdiction or sufficient connection to invoke applicable
“long arm” provisions (eg. cause of action arises in jurisdiction)
(actions in personam)
2. choice of law - which law applies
3. forum non-conveniens
“clearly inappropriate forum”, “oppressive in the sense of seriously
and unfairly burdensome, prejudicial or damaging or vexatious in the
sense of productive of serious and unjustified trouble and
harassment”: Voth v Manildra Flour Mills (1990) 171 CLR 538 at 564565
4. Enforcement: Foreign Judgements Act 1991 (reciprocal)
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Differing significance

Choice of law


Dictates the rules which a
person must comply with to
avoid becoming liable and
thus:
 compliance costs

whether compliance
feasible.
affects enforcement costs
clarity and consistency
paramount.
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Jurisdiction/ Forum
One set of rules should apply
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
Does not necessarily affect
substantive rules nor
compliance costs
Overwhelming issue is
enforcement costs.
different considerations:
 relative financial power
 ease of enforcement by
court.
Enforcement of foreign
judgements
CHOICE OF LAW
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Choices much the same
Place where cause of action arises
 Place of impact/damage


each impact (eg. defamation)
first impact

Predominant impact

Place of residence of Plaintiff
 Defendant’s act (eg. negligent misrepresentation, breach of

contract)
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Choices..
Defendant’s principal place of business
 Place of Plaintiff’s domicil
 Plaintiff’s place of business
 Law of the Forum (eg. where not raised/ proved)
 Contract:
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place performed
place of offer, acceptance, etc.
Mixture: eg. “closest and most real connection”
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None perfect
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Eg. Residence or business of a party
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enforcement cheap for that party
not always predictable for other party
may be hundreds of applicable laws
could put business in jurisdiction with favourable laws
law of forum: forum shopping
law of place of server: haven shopping.
balance required: consumer protection, certainty and
business efficiency.
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Australian choice of law rule
for Torts: the lex loci delicti

Torts within Australia:
"The lex loci delicti should be applied by courts in
Australia as the law governing all questions of
substance to be determined in a proceeding arising
from an International tort. And laws that bear upon
the existence, extent or enforceability of remedies,
rights and obligations should be characterised as
substantive and not as procedural laws." John Pfeiffer
Pty Limited v Rogerson (2000) 203 CLR 503 at 544.
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Australian Choice of Law
Torts: the Lex Loci Delicti

foreign torts: Regie National des Usine
Renault SA v Zhang (2002) 187 ALR 1 at 4.

Car crash in New Caledonia
Renault in France

plaintiff in Australia
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New Caledonia (French) law applies
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When in Rome

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Distillers, approved in
Voth:
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“It is manifestly just and reasonable
that a defendant should have to
answer for his wrongdoing in the
country where he did the wrong.”
“it is some act of the defendant, and not
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Voth (negligence by
representation):
its consequences, that must be the
focus of attention.”
When in Rome cont’
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
Voth:

accountant in Missouri allegedly negligent in advice to 2 NSW
companies. Damage in NSW.

“The act of the appellant giving the respondents their cause of complaint
was committed in Missouri and thus the tort, if there was one, was
committed in Missouri.”
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Application of choice of law
rules to defamation
Hedigan J
 cause of action arises in place of publication
(completes cause of action)
 publication takes place upon comprehension
 confirmed multiple publication rule
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[ideas
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time - Duke of Brunswick

place - Godfrey v Demon Internet
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Multiplicity of laws: an old
issue
“It is an amazing and a sobering thought that by the
utterance of a single ill-considered word a man may
today commit forty-nine separate torts, for each of
which he may be severally liable within the United
States alone, and without regard to any additional
liability he may incur in the possessions and territories
and in foreign countries...”
William L Prosser, 1953
(“Interstate Publication”,51 Michigan Law Review 959)
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Arguments
Appellant: Single publication rule
 Interveners:
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[ideas
Multiple publication rule survives
publication still where comprehended
however, place of cause of action does not
necessarily equate to place of publication: act of
publishing is focus.
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Contract
Chosen by parties
 If not chosen or choice set aside, jurisdiction
with closest connection with contract, taking
into account:


place of residence/business of parties;
place where relationship is centred;

place where contract made

place where contract performed

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Internet
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Place of formation of contract and performance
problematic in internet context
vendors could face multiple laws if courts routinely
find choice of law clauses to be void.
Rome Convention Countries (not Australia) have
presumption that the place of residence of of central
administration of the person who is to perform the
obligations “characteristic of the contract”.
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Others

Copyright:


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Obscenity, racial vilification etc.

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Intellectual property tort
traditionally place of infringement: difficult to locate
Has been held that it is like real property & that courts will not
entertain claims under foreign laws.
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Eg. Yahoo cases
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Conventions

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Australia is not party to any conventions dealing with
choice of law
The Rome Convention governs choice of law for
signatory countries in relation to contract (subject to
some exceptions)
The Draft Proposal for a Council Regulation on the
Law Applicable to Non-Contractual Obligations (the
"Rome II Regulation") extends to other causes of
action.
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Rome II
General rule: article 3.
"The law applicable to a non-contractual obligation arising out of a tort or a delict shall be the law of
the country in which the loss is sustained, irrespective of the country or countries in which the
harmful event occurred and irrespective of the country in which the indirect consequences of the
harmful event are sustained...
However, if it appears from the circumstances as a whole that there is a substantially closer
connection with another country and there is no significant connection between the non-contractual
obligation and the country whose law would be the applicable law ... the law of that other country
shall be applicable"
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JURISDICTION, FORUM AND
ENFORCEMENT
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Differing tests: eg. US Zippo test depends on extent to which
website is “active” within a jurisdiction.
Lugano/ Brussels conventions (1988/1968, EU) deal with
jurisdiction & enforcement. Australia is not a party.
Updated by Regulation 44/2001 on 22 December 2000
Australia is one of 40 countries negotiating the Hague draft
convention on jurisdiction and enforcement of judgments in civil
and commercial matters:

covers jurisdiction, forum and enforcement
does not deal specifically with internet issues
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will co-exist with, but sometimes override, Brussels & Lugano.
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The Way Forward
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
Conventions?

Greater emphasis on place of defendant?
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No reason to think at this stage that common law will develop
consistently internationally.
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