Encyclopedia of Private International Law
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Encyclopedia of Private International Law

Edited by Jürgen Basedow, Giesela Rühl, Franco Ferrari and Pedro de Miguel Asensio

The role and character of Private International Law has changed tremendously over the past decades. With the steady increase of global and regional inter-connectedness the practical significance of the discipline has grown. Equally, so has the number of legislative activities on the national, international and, most importantly, the European level. With a world-class editor team, 500 content items and authorship from almost 200 of the world’s foremost scholars, the Encyclopedia of Private International Law is the definitive reference work in the field. 57 different countries are represented by authors who shed light on the current state of Private International Law around the globe, providing unique insights into the discipline and how it is affected by globalization and increased regional integration. The Encyclopedia consists of three inter-linked pillars, enhanced by sophisticated search and cross-linking functionality. The first pillar consists of A-Z coverage of the scope and substance of Private International Law in the form of 247 entries. The second pillar comprises detailed overviews of the Private International Law regimes of 80 countries. The third pillar presents valuable, and often unique, English language translations of the national codifications and Private International Law provisions of those countries. This invaluable combination represents a powerful research tool and an indispensable reference resource.
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Chapter S.13: Substance and procedure

Richard Garnett

I. Introduction

The distinction between substance and procedure lies at the heart of all major systems of private international law. Matters of procedure are governed by the law of the forum and matters of substance are subjected to the law of the cause of action or obligation, selected by application of the appropriate choice-of-law rule of the forum. The distinction between substance and procedure must also be analysed against the wider context of private international law, whose objectives are the pursuit of uniformity of outcome in decisions of national courts and the discouragement of forum shopping. Such aims are compromised when national systems of choice of law allow too wide a scope for the operation of forum law at the expense of foreign rules. Accordingly, a narrow and limited definition of procedure focusing on the idea of the conduct or regulation of court proceedings is increasingly being adopted by most national and transnational legal systems in recognition of these concerns. In the case of forum law-specific choice-of-law rules, however, there is no need to employ the substance–procedure distinction, since forum law is also the law of the cause of action. It is also important to mention that conventions on uniform substantive law (→Uniform substantive law and private international law), such as the CISG (United Nations Convention of 11 April 1980 on Contracts for the International Sale of Goods, 1489 UNTS 3), can render the substance–procedure dichotomy redundant by creating autonomous rules on certain matters.

II. Historical development

The rule that forum law governs procedural matters (lex fori regit processum) is of great antiquity, having been first pronounced by Balduinus of the glossator school in the 13th century. He drew the distinction between norms which the judge used to conduct the proceeding and those employed to resolve the merits of the dispute before the court. Later, European writers continued to follow the distinction which is now the universally admitted position in civil law countries (Audit). Common law countries, by contrast, did not adopt the rule that forum law governs procedure until the 18th century and even upon doing so, gave a much wider scope to the concept of procedure, holding that it embraced all aspects of relief and enforcement in a suit (the remedy) (Huber v Steiner [1835] 2 Bing 202, 210). Under the common law approach, it was only matters involving the abrogation of ‘the right’ as opposed to the remedy, which were considered substantive and so could be governed by foreign law. The consequence, therefore, was that a greater range of matters were referred to forum under the common law interpretation of procedure than under the more restrictive civil law view. It is unclear, however, whether the common law right-remedy analysis of substance and procedure has been entirely abandoned and p. 1668it is arguable that this view still represents the law in Commonwealth countries apart from →Australia and →Canada. By contrast, EU instruments on choice of law such as the Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I), [2008] OJ L 177/6; →Rome Convention and Rome I Regulation) and the →Rome II Regulation (Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II), [2007] OJ L 199/40), grant a wide field of operation to the law of the obligation and so implicitly construe procedure in line with the narrow civil law view, for example, see the scope of the applicable law in art 15 of Rome II Regulation and art 12 of Rome I Regulation.

III. The current position and general principles

As described in section II. above, there has traditionally been a divide between civil law countries who adopted a narrow ‘mechanics of litigation’ view of procedure and common law jurisdictions who favoured an approach based on enforcement and remedy. More recently, however, there are signs of this strict common law/civil law dichotomy breaking down with an approach developed in Australia and Canada that is very similar to that adopted in European civil law countries. Matters affecting the mode, conduct or regulation of court proceedings are classified as procedural but matters affecting the existence, extent or enforceability of the rights and duties of the parties to an action are substantive: John Pfeiffer Pty Ltd v Rogerson [2000] 203 CLR 503; Tolofson v Jensen [1994] 120 DLR (4th) 289. The effect of this reformulation of the distinction in Australian and Canadian law has been to reduce the number of issues which are regarded as procedural and subjected to forum law. In other Commonwealth jurisdictions, however, including England, →Hong Kong and →New Zealand, the traditional right-remedy approach has been generally maintained (Harding v Wealands [2007] 2 AC 1), although in England the impact of EU law has altered the position.

In the →USA perhaps the most widely accepted view is that taken in the 1971 Restatement (Second) of Conflict of Laws (American Law Institute, Restatement of the Law, Second: Conflict of Laws 2d, St. Paul 1971; →Restatement (First and Second) of Conflict of Laws). Under the Restatement (Second) of Conflict of Laws no attempt is made to classify issues according to whether they are substantive or procedural, but instead the focus is on defining the scope of operation of forum law in respect of individual issues. Significantly, however, in determining whether forum law should govern, the Restatement (Second) of Conflict of Laws adopts criteria similar to those seen in the recent Australian/Canadian approach; for example, a provision of forum law will not be applied where its purpose is found to ‘affect the decision of the issue’ or ‘the ultimate result’ (Restatement (Second) of Conflict of Laws § 122, comment a.). Where, by contrast, a provision merely concerns ‘the conduct of the trial’, then forum law should be applied.

The trend in US law to marginalize the substance–procedure distinction is also increasingly seen in recent EU codifications on →choice of law – in particular the Rome I and II Regulations referred to above. The provisions in both instruments dealing with choice of law in matters at the interface of substance and procedure are similar, with the drafters conspicuously excluding matters relating to evidence and procedure from the scope of the Regulations (art 1(3) Rome I Regulation and art 1(3) Rome II Regulation). Instead, certain issues are directly subjected to the applicable law of the obligation. The overall effect of the EU approach is to reduce the scope of forum law, especially when compared to the common law right-remedy approach. Such an outcome is consistent with the intention of the drafters of the EU texts, namely, to promote uniformity of result within the EU and to leave less to depend on national choice-of-law rules. Yet, it is important to note that the scope of Rome I and II Regulation is limited – confined to contractual and non-contractual obligations respectively – which means that choice-of-law issues will continue to arise requiring resolution according to national law principles.

In applying the substance–procedure distinction courts have also had to examine important questions of →classification. First, it is generally accepted among common law courts that when characterizing an issue as substantive or procedural the law of the forum applies, not the law of the cause of action. Hence, in the case of ‘self-characterizing’ provisions, where the legislature expressly states that a provision in a p. 1669statute is substantive or procedural, the prevailing view is that where such a provision forms part of the law of the cause of action, it is to be ignored and forum law principles of classification are to be applied to determine its effect.

IV. The principles applied

With these general principles in mind, attention will now shift to examining the application of the substance–procedure distinction to specific issues. The test which will be predominantly employed is that based on the narrow conduct of court proceedings view of procedure, which applies in civil law countries and increasingly represents the preferred approach in common law jurisdictions, as outlined above. The impact of EU law, principally through the Rome I and II Regulations, will also be addressed.

1. Service of process and jurisdiction

It is well established that the manner of effecting service of originating process on a defendant is governed by the law of the forum court. Where, however, service out of the jurisdiction on a foreign defendant is involved the laws of most countries and international instruments (see, for example, the Hague Service Convention (Hague Convention of 15 November 1965 on the service abroad of judicial and extrajudicial documents in civil or commercial matters, 658 UNTS 163) and the European Service Regulation (Regulation (EC) No 1393/2007 of the European Parliament and of the Council of 13 November 2007 on the service in the Member States of judicial and extrajudicial documents in civil or commercial matters (service of documents), and repealing Council Regulation (EC) No 1348/2000, [2007] OJ L 324/79) now also require the forum court to have regard to the law of the country where service is to be effected (law of the country of service).

It is also well established that the rules governing the jurisdiction of a country’s courts are procedural and governed by the law of the forum, although on occasion, may require the application of foreign substantive law, for example art 7(1) of the Brussels I Regulation (recast) (Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast), [2012] OJ L 351/1; →Brussels I (Convention and Regulation)). Two exceptions, however, exist to this principle. The first arises in the case of a jurisdiction or choice-of-court clause whose interpretation and validity is governed by the law applicable to the clause (subject to overriding mandatory rules of the forum). The second exception concerns immunity from jurisdiction under foreign and forum law. Given the severity of the impact of immunity on the rights of the parties – in that no litigation can be brought against the defendant – a substantive classification is warranted. Consequently, immunity under foreign law only applies in the forum if it forms part of the law of the cause of action. In the case of rules of foreign state immunity under forum law, however, because such laws emanate from non-derogable rules of public international law, they must nevertheless be applied as overriding mandatory rules of the forum.

2. Parties to litigation

The question of whether a claimant or defendant has separate legal personality or capacity to sue is substantive, as it directly affects the parties’ rights and is governed by the law of the entity’s domicile or country of formation. By contrast, the question of whether the claimant or defendant is the type of entity that can be a party to litigation in the forum is procedural and governed by forum law, given its proximity to the conduct of court proceedings. The question of whether the claimant or defendant is the proper party to particular litigation is governed by the law of the cause of action. Consequently, the right of a claimant to sue directly the tortfeasor’s liability insurer is substantive and governed by the law of the country creating such obligation. This position also applies under EU law; see art 18 Rome II Regulation. The right of a tortfeasor to recover contribution from another tortfeasor arising from a primary wrong is substantive, as it directly relates to the rights and liabilities of the parties. This position also applies under EU law, see art 15(b) Rome II Regulation. A claimant’s right to subrogation is also substantive and governed by the law of the obligation under national law rules (and also under EU law, art 19 Rome II Regulation) as is the issue of vicarious liability (under EU law art 15(g) Rome II Regulation) and the question of whether a right to sue for →damages survives the death of the victim and passes to his or her estate (see again Rome II Regulation, art 15(e)).

p. 1670An issue which has divided common law courts is the status of a statutory derivative action, that is, a claim brought by a minority shareholder against a company for a wrong done to the company. While some courts have held that the right to bring a derivative action is procedural, others have suggested (correctly) that it is substantive, being intrinsically related to the rights and obligations of the parties: Konamaneni v Rolls Royce Industrial Power (India) Ltd [2002] 1 WLR 1269.

3. Judicial administration

Issues concerning the constitution and competence of courts, the rules governing how an action is commenced, rules governing the form and requirements of pleadings, court powers to manage and conduct the proceedings, whether legal representation is required, and the rules governing dismissal for abuse of process are all procedural. Also procedural are the right to a jury trial or a public hearing, whether a party has a right to appeal, and any duty on a claimant to give notice to the defendant before commencing proceedings (at least where a failure to do so does not extinguish the cause of action). The right to recover costs and legal expenses is also best classified as procedural as a tool in the management and control of the litigation process, although some US courts have held the issue to be substantive. Under the →CISG also, some courts have held the right to recover costs and legal expenses to be an item of ‘damages’ falling under art 74 CISG.

Questions relating to the administration and distribution of a debtor’s assets, including issues of priority between creditors, are procedural matters governed by the law of the forum. The rationale for this view is practicality and efficiency, especially where the administration involves large numbers of claims by creditors from different jurisdictions. Authority is, however, split on the nature and status of the right of the creditor who makes a claim to a fund (for example relying on a maritime lien). Some English and Australian decisions have regarded such a right as procedural and not applicable where it arises under the law of the cause of action. Canadian and US courts, by contrast, favour a substantive classification on the basis that the recognition of foreign security interests has little to do with the conduct of court proceedings but impacts significantly on the rights and liabilities of the parties: The Strandhill [1926] SCR 680. This view is to be preferred and would likely be adopted in European civil law countries. Under EU law, where a maritime lien arises in the context of a contract, it would likely be one of ‘the consequences of a breach’ (art 12(1)(c) Rome I Regulation) or if in the context of a non-contractual obligation, it would arguably be a ‘measure . . . to ensure the provision of compensation’ (art 15(d) Rome II Regulation).

The form and requirements of a judgment and methods of enforcing a court’s orders are procedural, as they fall within the rubric of the forum’s power of management and control of its proceedings.

4. Evidence

The law of evidence is partly procedural and partly substantive. The issue as to what are the material facts in a given case to prove, such as whether a contract exists, is substantive and governed by the law of the obligation. By contrast, the matter of how the facts in issue are to be proved, including the methods of proof which may be used (whether by oral or documentary evidence) is procedural. The question of admissibility of evidence has been traditionally regarded as procedural in common law countries. Yet in the US and some European civil law countries, there is a noticeable trend in favour of a substantive classification on the basis that a decision as to whether an item of evidence is admissible may have a direct impact on the outcome of the litigation and so should be determined by the law of the obligation. In the case of admissibility of documentary evidence, common law courts have also treated such an issue as procedural. Again in contrast, many European civil law countries appear to take the view that if a document is formally valid according to the law of the place of its execution (lex loci actus) then it should be admitted into evidence in the forum. The rationale for such a view is that the parties, at the time of executing the document, are more likely to have the place of execution in mind than the ultimate forum which will adjudicate the matter. EU instruments, such as the Rome I Regulation, take a slightly ambivalent view on the question with art 18(2) providing that a contract or an act intended to have legal effect may be proved by any mode of proof recognized by either the law of the forum, the law of the obligation or the law of the place of execution under which that contract or act is formally valid. Article 11 of the CISG provides an p. 1671autonomous rule to the effect that a contract to which the Convention applies may be proved by any means, including witnesses.

Common law countries have also traditionally drawn a distinction between extrinsic evidence relied upon to interpret a document and such evidence which adds to or varies the document’s terms. The first situation is classified as an issue of interpretation of the instrument and governed by the law of the cause of action but the second case is seen as an issue of admissibility of evidence and governed by forum law. The consequence of this view is that the common law parole evidence rule – by which oral evidence may not be admitted to contradict the terms of a subsequent written agreement – will apply to a contract governed by the law of a civil law country where no such rule exists. Once again, the CISG provides a solution that overrides domestic law: the parole evidence rule does not apply to contracts subject to the →CISG (see art 11 CISG again). By contrast, the position increasingly taken in common law and European civil law countries is to consider the issues of both interpretation and variation to be substantive given their equally clear impact on the rights and liabilities of the parties as they determine the meaning and existence of the terms of an agreement. Article 18(2) of the Rome I Regulation (referred to above) offers some support for a substantive view of the issue.

The issue of →burden of proof was originally considered by common law countries to be procedural, but more recently there has been a movement in favour of a substantive classification, driven by the fact that the question of which party bears the burden of proof can have a plainly outcome determinative effect in certain cases: Fiona Trust and Holding Corporation v Privalov [2010] EWHC 3199 (Comm) para. An example is where a claimant can provide no evidence of a right which he or she claims, yet under the law of the obligation which creates the right, the burden of proof would rest on the person denying the right to prevent the claimant succeeding. The substantive analysis is adopted by most courts and commentators in the US (see Restatement (Second) of Conflict of Laws § 133) and in European civil law countries. Under the EU Rome I and II Regulations, the applicable law of the obligation will apply to the extent that it contains, in the law of the obligation, rules which determine the burden of proof. Presumptions are treated in the same manner as the burden of proof at least where they are not linked to the conduct or regulation of the forum court’s proceedings in which case a procedural view will be adopted.

A statutory provision which requires that, for a transaction to be enforceable, it must be evidenced in writing has long been regarded as procedural in common law countries. Yet, as this issue clearly affects the rights of the parties and the outcome of litigation, a substantive classification is appropriate – which is the approach taken in the USA and recent decisions in Canada and Australia: Tipperary Developments Pty Ltd v the State of Western Australia [2009] 38 WAR 488. The view of European civil law countries is likely to be the same on this issue. Article 11 of the CISG provides an autonomous rule that a contract of sale need not be concluded in or evidenced by writing and is not subject to any other requirement as to form.

The question of whether a witness is competent or compellable to testify is clearly procedural and governed by forum law. Also, issues such as the weight or value to be given to admitted evidence, rights to disclosure, summons against third parties, search and seizure orders, expert reports, the method by which witness evidence is to be received and whether examination of witnesses may occur are all procedural issues as they lie at the heart of the forum’s conduct of its proceedings. The Rome I (art 18(2)) and II (art 22(2)) Regulations suggest that this view would also apply under EU law by providing that any mode of proof must be capable of being administered by the forum.

5. Estoppel

The status of the doctrine of →estoppel is more complex. Issue estoppel arises where a particular matter has been decided in earlier proceedings and a party is precluded from raising it in subsequent proceedings and cause of action estoppel (res judicata) prevents a subsequent suit being brought on the same cause of action. In respect of both such estoppels it is universally accepted that such matters are procedural and governed by the law of the forum of adjudication. In the context of issue and cause of action estoppel based on a foreign judgment, however, English, US and some Commonwealth courts have accepted that the law of the country in which the judgment was rendered should also be applied to determine whether the judgment was ‘final and p. 1672conclusive’ and so eligible for recognition in the forum: Carl-Zeiss Stiftung v Rayner and Keeler Ltd (No 2) [1967] 1 AC 853. To that extent, therefore, both the law of the forum and the law of the country of rendition apply.

Other common law estoppels, such as estoppel by representation of existing fact, estoppel by convention, promissory and proprietary estoppel, are best regarded as substantive, given their close connection to the rights and liabilities of the parties.

6. Privilege

Another possible exception to the exclusivity of forum law in the area of taking evidence concerns privilege and other bars on disclosure of evidence. Article 11 of the Hague Evidence Convention (Hague Convention of 18 March 1970 on the taking of evidence abroad in civil or commercial matters, 847 UNTS 241) allows a party to resist disclosure in the context of a request for oral testimony or production of documents where a privilege exists under the law of the requesting or requested states or where there is a duty or obligation not to provide evidence under either or both laws. Article 14 of the Evidence Regulation (Council Regulation (EC) No 1206/2001 of 28 May 2001 on cooperation between the courts of the Member States in the taking of evidence in civil or commercial matters, [2001] OJ L 174/1) is to the same effect. Common law countries have also examined the more general question as to whether lawyer–client privilege should be classified as substantive or procedural and what law should be applied. Privilege has traditionally been seen as a question of admissibility of evidence and governed exclusively by forum law with the result that any privilege available under the law of the cause of action would not be relevant. Query, however, whether this view will continue to apply in countries such as Canada and Australia, where it may be argued that privilege should now be considered substantive, at least where it is likely to affect the outcome of a case.

7. Statutes of limitation

The traditional common law approach to limitation questions was based on the right-remedy view of substance and procedure. Where a limitation provision merely ‘barred the remedy’ such as where it was expressed in terms such as ‘an action shall not be brought except within X period’ it was considered procedural and not applicable in the forum where it was part of a foreign law of the cause of action. It was only where the limitation statute extinguished the claimant’s action that it was classified as substantive and applied as part of the law of the cause of action. Such a view no longer applies in English law after the Foreign Limitation Periods Act 1984 (c 16) or in Australia and Canada who now treat all limitation provisions as substantive and applicable as part of the law of the cause of action: John Pfeiffer Pty Ltd v Rogerson [2000] 203 CLR 503. The law of the cause of action also determines whether a party has a right to an extension of time. The same approach has long applied in European civil law countries and also under EU law: see art 12(1)(d) Rome I Regulation and art 15(h) Rome II Regulation. Note, however, that forum law may still apply where the effect of applying a foreign limitation provision would be to cause the claimant or defendant great hardship or where it would be otherwise manifestly contrary to public policy. Something more than the fact that the forum’s limitation period is more generous than the foreign provision is required to establish hardship, however, such as where the claimant was misled by the defendant as to the operation of the provision. Note that the UNCITRAL Limitation Convention (Convention of 14 June 1974 on the Limitation Period in the International Sale of Goods, 1151 UNTS 3; 13 ILM 952) imposes an autonomous rule for limitations in contracts to which the Convention applies.

Time provisions other than limitations by contrast, such as the period for filing a defence or an appeal, are universally regarded as procedural as they fall within the scope of the court’s powers to manage litigation.

8. Remedies: non-monetary relief

The position in common law countries has long been that a claimant can only obtain →remedies which are available under forum law. The rationale for this view is that remedies are part of the court’s machinery for resolving disputes and it is not practical for the forum to have to implement foreign remedies alien to the forum’s traditions and processes. The form of the remedy sought in litigation is therefore a matter of procedure: Phrantzes v Argenti [1960] 2 QB 19. Once, however, it is established that the remedy sought exists under forum law and the law of the cause of action it is then for the latter law to p. 1673determine whether such relief may be granted on the facts of the case. Such a result is consistent with the view that remedies have a direct impact on the rights and liabilities of the parties and so are at least partly substantive. EU law arguably draws a similar distinction with art 15(d) of the Rome II Regulation providing that the law of the obligation applies to ‘a measure designed to prevent or terminate injury or damage’ and art 12(1)(c) of Rome I Regulation providing that the same law applies to ‘the consequences of a . . . breach of obligations’ but that in both cases any remedy sought must be ‘within the limits conferred by the forum’s procedural law’.

a) Interim relief

The traditional position in common law countries is that the availability of all interim measures such as interlocutory injunctions (→Injunction), freezing or search orders (→Freezing injunctions and search orders) and →anti-suit injunctions are procedural and hence governed by forum law. Such a view is justifiable where such remedies are integrally related to the conduct of proceedings in the forum. The absoluteness of this procedural classification, however, must now be questioned. First in the case of anti-suit injunctions, where the injunction is sought only to protect the processes of the forum court, a procedural analysis is appropriate but where enforcement of contractual or equitable rights is involved, a substantive classification is more appropriate. The position under EU law is likely to be similar, with art 15(d) of the Rome II Regulation providing that the law of the obligation applies to ‘a measure designed to prevent or terminate injury or damage’, which would likely be the case with an anti-suit injunction designed to enforce equitable rights. Interlocutory relief is not, however, covered by the Rome I Regulation and so national law rules must apply to cases in which interim relief is sought in relation to contracts subject to the Regulation. In common law countries, where an interlocutory injunction is sought to restrain a breach of contract or a tort, the law of the obligation will be applied to determine whether a breach has occurred at least to the level of an arguable case. Once this is shown, principles of forum law are then applied to determine whether the injunction will be granted on the facts. In the case of freezing and search orders, however, art 15(d) of the Rome II Regulation arguably goes further in applying the law of the obligation, since such orders would seem to be ‘measures . . . to ensure the provision of compensation’. The effect of this provision is that provided that such a remedy exists under both the laws of the forum and the obligation, it is for the law of the obligation to determine whether it will be granted in the specific case.

b) Final relief

In common law countries, final non-monetary relief such as orders for specific performance, rescission, declarations and →injunctions have historically been regarded as procedural because they originated in the medieval equitable jurisdiction based on conscience. More recent commentary and the majority of US courts, however, assert that final relief, where closely connected to the merits of the case, should be classified as substantive and governed by the law of the cause of action. Such a view also applies in EU law. Under art 12(1)(c) of the Rome I Regulation, the law of the obligation applies to ‘the consequences of a total or partial breach of obligations’ (which would include all final remedies in relation to contracts). Likewise, art 15(d) of the Rome II Regulation applies the law of the obligation to a measure designed to prevent or terminate injury or damage. Under both instruments again, however, the remedy sought must be ‘within the limits conferred by the forum’s procedural law’, which requires the form of relief at least to exist within the forum’s armoury.

In common law countries, →set-off was historically regarded as procedural while in European civil law countries, a distinction has been drawn between a case where the effect of the defendant’s claim of set-off was to discharge or extinguish its liability to the claimant on the original claim (regarded as substantive), and where a cross claim is merely brought by the defendant in the same proceeding (procedural). There has been a recent movement in common law countries, in particular the USA (see Restatement (Second) of Conflict of Laws § 128) to follow the civil law approach. In EU law, it appears that set-off is to be generally classified as substantive without regard to whether it extinguishes the original liability. Article 17 of the Rome I Regulation provides that where the right to set-off is not agreed by the parties, set-off shall be governed by the law applicable to the claim against which the right to set-off is asserted.

9. p. 1674Damages

In the area of →damages for tort and contract, the distinction between substance and procedure has arisen frequently. In common law and civil law jurisdictions it is well established that the issue of available heads of damages (economic loss, physical injury) is classified as substantive and governed by the law of the cause of action. It is also universally accepted that the right to claim interest on a contractual debt is substantive and governed by the law applicable to the contract. A substantive classification also applies in the case of the right to pre-judgment interest, that is, interest by way of damages dating from the time of accrual of the cause of action, although some English courts maintain that the issue is procedural. The classification of the rate of pre-judgment interest has also divided common law courts with Canadian tribunals favouring a substantive view but English courts considering the issue to be procedural. The question of deductibility from an award of damages of benefits already received by the claimant now appears to be accepted as substantive by most common law countries; see Cox v Ergo Versicherung AG [2014] 2 WLR 948. European civil law countries, in line with their narrower ‘process’ idea of procedure, would likely take a substantive view of these questions. All jurisdictions also accept that where general tort law recovery has been abolished by statute and replaced by a no fault administrative scheme then such a scheme is substantive and applicable as part of the law of the cause of action.

Perhaps the most difficult question in relation to damages concerns quantification and assessment. English courts have long regarded the issue of assessment of damages as wholly procedural. Such an approach not only embraces the computational aspect of assessment of, but also the situation where the legislature imposes a cap on damages, unless such a cap is included in a contract. So, for example, if a foreign law of the cause of action restricted damages for non-economic loss an English court could ignore such a limitation on the ground that it is procedural: Harding v Wealands [2007] 2 AC 1. While Canadian courts have taken a similar approach, in Australia this view has been rejected with the High Court declaring that ‘all questions about the . . . amount of damages that may be recovered . . . be treated as substantive issues’: John Pfeiffer Pty Ltd v Rogerson [2000] 203 CLR 503. According to this approach, any issue regarding the assessment of damages is determined by the law of the cause of action. In applying this test, the forum court may receive evidence from foreign experts as to the likely ranges of recovery in the event that the matter went to trial in the foreign country. There is evidence of such an approach also being taken in European civil law countries which suggests a confluence with the Australian position. All jurisdictions would agree, however, that the forum cannot apply a rule under foreign law which requires a body such as a jury or special assessor to conduct an assessment as this would be beyond its procedural powers.

The position taken in European civil law countries and Australia also likely applies under EU law. Article 15(c) of the Rome II Regulation provides that the applicable law of the non-contractual obligation ‘shall govern in particular . . . the existence, nature and the assessment of damage or the remedy claimed’ and art 12(1)(c) of the Rome I Regulation uses similar language in relation to contract. The effect of such provisions is that the available heads of damages and limitations or caps on damages are subjected to the law of the obligation. Further, all questions relating to the award of pre-judgment interest including the right to claim such interest and at what rate, are also so classified. The issue of deductibility of benefits would also likely fall within art 15(c) of the Rome II Regulation as a matter relating to the assessment of damages.

The more complex question again under EU law is whether all issues relating to the assessment of damages are referred to the applicable law. Since both art 15(d) of the Rome II Regulation and art 12(1)(c) of Rome I provide that the forum is only obliged to act within the limits of its procedural powers, a forum court would not apply a rule under foreign law which requires a body such as a jury to conduct an assessment. Yet, in assessing damages under the law of the obligation a court could again receive evidence from foreign experts as to likely ranges of recovery. The position under EU law is therefore close to that which applies in Australia and may be evidence of an emerging global trend. Finally, art 74 of the CISG imposes an autonomous rule for the award of damages in contracts to which the Convention applies.

p. 1675Literature

  • Edgar Ailes, ‘Substance and Procedure in the Conflict of Laws’ (1941) 39 Mich.L.Rev. 392;

  • Bernard Audit, Droit International Privé (3rd edn, Economica 2005);

  • Adrian Briggs, ‘Conflict of Laws and Commercial Remedies’ in Andrew Burrows and Edwin Peel (eds), Commercial Remedies: Current Issues and Problems (OUP 2003) 271;

  • Alfonso-Luis Caravaca and Javier González, Derecho Internacional Privado, vol 1 (6th edn, Editorial Conares 2005);

  • Lord Collins of Mapesbury and others (eds), Dicey, Morris and Collins on the Conflict of Laws (15th edn, Sweet & Maxwell 2012);

  • Walter Cook, ‘“Substance” and “Procedure” in the Conflict of Laws’ (1933) 42 Yale L.J. 333;

  • Andrew Dickinson, The Rome II Regulation (OUP 2008);

  • James Fawcett and Janeen Carruthers, Cheshire, North and Fawcett Private International Law (14th edn, OUP 2008);

  • Richard Garnett, Substance and Procedure in Private International Law (OUP 2012);

  • Reinhold Geimer, International Zivilprozessrecht (5th edn, Verlag Dr Otto Schmidt 2005);

  • Martin Illmer, ‘Neutrality Matters: Some Thoughts about the Rome Regulations and the So-called Dichotomy of Substance and Procedure in European Private International Law’ (2009) 28 CJQ 237;

  • Mary Keyes, ‘Substance and Procedure in Multistate Tort Litigation’ (2010) 18 Torts L.J. 201;

  • David McClean, International Co-operation in Civil and Criminal Matters (OUP 2002);

  • Luther L McDougal, Robert L Felix and Ralph U Whitten, American Conflicts Law (5th edn, Transnational Publishers 2001);

  • Marie-Laure Niboyet, ‘Contre Le Dogme de La Lex Fori en Matière de Procédure’ in Tristan Azzi (ed), Vers de Nouveaux Equilibres Entre Ordres Juridiques Mélanges en L’Honneur d’Hélène Gaudemet-Tallon (Dalloz 2008) 363;

  • Richard Plender and Michael Wilderspin, The European Private International Law of Obligations (3rd edn, Sweet and Maxwell 2009);

  • Elsabe Schoeman, ‘Rome II and the Substance-Procedure Dichotomy’ [2010] LMCLQ 81;

  • Istvan Szászy, International Civil Procedure: A Comparative Study (Sijthoff 1967);

  • Janet Walker, Castel & Walker Canadian Conflict of Laws (6th edn, LexisNexis Butterworths 2005);

  • Russell J Weintraub, Commentary on the Conflict of Laws (4th edn, Foundation Press 2001).