Tag: Damage

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Advocate General Richard de la Tour in Volvo Trucks on the location of damage, in competition law follow-on damages suits, and on national CPR rules varying Brussels Ia.

I apologise I could not find a snappier title to this post however Richard de la Tour AG’s Opinion in C-30/20 Volvo Trucks yesterday (no English version had been published at the time of writing) does cover a lot of issues.

Applicant ‘RH’ brings a follow-on action, based on the EC finding of a cartel in the truck manufacturers market. Volvo contest Spain as the locus delicti commissi under A7(2) BIa, however that element is neither referred to the CJEU nor picked up by the AG. That is unfortunate for there is in my view most certainly scope for clarification as I discuss here.

There is also discussion whether A7(2) assigns international jurisdiction only, or also territorial jurisdiction. The referral decision in the end only refers the latter question to the Court. The Advocate General engages with quite a few more and I am not sure the CJEU itself will be inclined to entertain them all.

On that issue of territorial jurisdiction, the AG refers in particular to CJEU Wikingerhof to confirm with some force that A7(2) assigns both international and territorial jurisdiction. Other cases (and in particular AG Opinions) eg in CJEU Löber v Barclays already suggested the same and the overwhelming majority of scholarship has the same view, even if not always explicitly expressed. The AG in current Opinion refers ia to ratio legis, and the clear contrast in formulation between eg A4 and A7.

Next the AG discusses at length locus damni. CDC and Tibor-Trans (markets affected) are the core judgments which the discussion is anchored upon. The discussion here is  rounded up at 94 with the suggestion by the AG that in principle it is the location where the goods (here: the trucks) are purchased, which qualifies as the locus damni. He then revisits the awkward (see my handbook at 2.458) identification of registered office as locus damni, as it has been put forward by the CJEU in CDC. flyLAL further picked up on that discussion and the AG here, too, reviews that judgment. He concludes in the case at issue at 110 that the place of registered office of the claimant should be a fall-back option in case the locus damni does not correspond to the place where that claimant carries out its activities. None of this makes the application of A7(2) any more straightforward, of course.

Finally, the AG concurs with the view expressed by a number of Member States and the EC that the Member States should be able to employ their internal CPR rules to vary the principled territorial consequence of A7(2), which could to lead to a specialised court in the specific case of competition law. Here I disagree, despite the suggested limitation of not endangering effet utile (ia per CJEU Joined Cases C‑400/13 and C‑408/13 Sanders and Huber) and I do not think the justification (at 127 ff) for competition law specifically, justifies special treatment different from say intellectual property law, consumer law, environmental law etc. Claimants will be encouraged to dress up claims as relating to competition law if the centralised court is their court of choice, which will further endanger predictability.

A most rich Opinion and as noted I wonder how much of it the CJEU will be happy to engage with.

Geert.

EU Private International Law, 3rd ed. 2021, Heading 2.2.12.2.8.

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Vestel v HEVC Advance (Delaware) and Philips (NL). High Court denies stand-alone competition law damage both on the basis of Article 7(2) BRU Ia and residual CPR rules.

In [2019] EWHC 2766 (Ch) Vestel Elektronik v HEVC Advance and Koninklijke Philips NV, Hacon J found no jurisdiction in a stand-alone competition law damages case (no finding of infringement yet; claim is one of abuse of dominant position). He rejected the existence of jurisdiction against Philips NV (of The Netherlands) on the basis that no damage existing or potential could be shown grounding Article 7(2) Brussels Ia tortious Jurisdiction. Against the Delaware defendant, the relevant CPR rules applied per Four Seasons v Brownlie did not lead to jurisdiction either.

Geert.

(Handbook of) EU Private International Law, 2nd ed. 2016, Chapter 2, Heading 2.2.12.1

 

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Lloyd v Google. Court of Appeal overturns High Court, establishes jurisdiction viz US defendant. Takes a wider approach to loss of control over personal (browser-generated information) data constituting ‘damage’.

Update 4 June 2021 see a reference by the Austrian Supreme Court here, on the issue of whether loss of date control constitutes damage.

Update 16 July 2020 the Supreme Court has granted leave to appeal.

I reported earlier on Lloyd v Google at the High Court. The case involves Google’s alleged unlawful and clandestine tracking of iPhone users in 2011 and 2012 without their consent through the use of third party cookies.

The Court of Appeal in [2019] EWCA Civ 1599 has now overturned the High Court’s approach, nota bene just a day before the CJEU’s Eva Glawischnig-Piesczek v Facebook judgment.

Warby J in  [2018] EWHC 2599 (QB) Lloyd v Google (a class action suit with third party financing) had rejected jurisdiction against Google Inc (domiciled in the US) following careful consideration (and distinction) of the Vidal Hall (‘Safari users) precedent. In essence, Warby J held that both EU law (reference is made to CJEU precedent under Directive 90/314) and national law tends to suggest that “damage” has been extended in various contexts to cover “non-material damage” but only on the proviso that “genuine quantifiable damage has occurred”. This did not mean that misuse of personal data could not be disciplined under data protection laws (typically: by the data protection authorities) or other relevant national courses of action. But where it entails a non-EU domiciled party, and the jurisdictional gateway of ‘tort’ is to be followed, ‘damage’ has to be shown.

The Court of Appeal has now overturned. A first question it considered was whether control over data is an asset that has value. Sir Geoffrey Vos C at 47 held ‘a person’s control over data or over their BGI (browser-generated information, GAVC) does have a value, so that the loss of that control must also have a value’. Sir Geoffrey did not even have to resort to metanalysis to support this:  at 46: ‘The underlying reality of this case is that Google was able to sell BGI collected from numerous individuals to advertisers who wished to target them with their advertising. That confirms that such data, and consent to its use, has an economic value.’ And at 57: ‘the EU law principles of equivalence and effectiveness (‘effet utile’, GAVC) point to the same approach being adopted to the legal definition of damage in the two torts which both derive from a common European right to privacy.’

(The remainder of the judgment concerns issues of reflection of damage on the class).

Conclusion: permission granted to serve the proceedings on Google outside the jurisdiction of the court.

All in all an important few days for digital media corporations.

Geert.

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Lloyd v Google. High Court rejects jurisdiction viz US defendant, interprets ‘damage’ in the context of data protection narrowly.

Update 11 December 2018 leave to appeal applied for.

Warby J in  [2018] EWHC 2599 (QB) Lloyd v Google (a class action suit with third party financing) considers, and rejects, jurisdiction against Google Inc (domiciled in the US) following careful consideration (and distinction) of the Vidal Hall (‘Safari users) precedent.

Of note is that the jurisdictional gateway used is the one in tort, which requires among others an indication of damage. In Vidal Hall, Warby J emphasises, that damage consisted of specific material loss or emotional harm which claimants had detailed in confidential court findings (all related to Google’s former Safari turnaround, which enabled Google to set the DoubleClick Ad cookie on a device, without the user’s knowledge or consent, immediately, whenever the user visited a website that contained DoubleClick Ad content.

In essence, Warby J suggests that both EU law (reference is made to CJEU precedent under Directive 90/314) and national law tends to suggest that “damage” has been extended in various contexts to cover “non-material damage” but only on the proviso that “genuine quantifiable damage has occurred”.

Wrapping up, at 74: “Not everything that happens to a person without their prior consent causes significant or any distress. Not all such events are even objectionable, or unwelcome. Some people enjoy a surprise party. Not everybody objects to every non-consensual disclosure or use of private information about them. Lasting relationships can be formed on the basis of contact first made via a phone number disclosed by a mutual friend, without asking first. Some are quite happy to have their personal information collected online, and to receive advertising or marketing or other information as a result. Others are indifferent. Neither category suffers from “loss of control” in the same way as someone who objects to such use of their information, and neither in my judgment suffers any, or any material, diminution in the value of their right to control the use of their information. Both classes would have consented if asked. In short, the question of whether or not damage has been sustained by an individual as a result of the non-consensual use of personal data about them must depend on the facts of the case. The bare facts pleaded in this case, which are in no way individualised, do not in my judgment assert any case of harm to the value of any claimant’s right of autonomy that amounts to “damage”…”

The judgment does not mean that misuse of personal data cannot be disciplined under data protection laws (typically: by the data protection authorities) or other relevant national courses of action. But where it entails a non-EU domiciled party, and the jurisdictional gateway of ‘tort’ is to be followed, ‘damage’ has to be shown.

Geert.

 

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Lazar: CJEU relates ‘ricochet’ losses to initial damage under Rome II.

Lazar v Allianz, Case C-350/14, was held on 10 December last. It addressed the issue of ‘ricochet’ damage in the Rome II Regulation on the law applicable to non-contractual obligations. Ricochet or ‘reflective’ or ‘indirect’ losses occur when someone suffers losses as a result of a tort directly causing damage to someone else.

The request has been made in a dispute between Mr Lazar, who resides in Romania, and the Italian insurance company Allianz SpA regarding compensation for material and non-material damage which Mr Lazar claims to have suffered in jure proprio by reason of the death of his daughter, a Romanian national who was resident in Italy, which occurred in Italy as a result of a road traffic accident caused by an unidentified vehicle. For Mr Lazar, it is more interesting for Italian law to be considered the lex causae.

The Opinion of Wahl AG neatly summarised the two opposing views: (at 40-41 of his Opinion):

According to the first view, (…) material and non-material damage suffered by the family members of a person who has died in another Member State does not necessarily constitute indirect consequences of the tort/delict for the purposes of Article 4(1) of the Rome II Regulation. It would follow in particular that, because it is based on an obligation that is distinct from the obligation as between the opposing party and the person who died in the accident, a claim for compensation in respect of material rights claimed by the close relatives of a person who has died as a result of a traffic accident which occurred in the State of the court seised must be assessed by reference to the law of the place in which the damage sustained by those relatives occurred, namely the place of their habitual residence, unless it can be demonstrated that, in accordance with Article 4(3) of the Rome II Regulation, it is clear from all the circumstances of the case that there are manifestly closer connections with another country.

According to the second view (…) the damage sustained, in their country of residence, by the close relatives of a person who has died in a road accident which occurred in the State of the court seised must be regarded as constituting indirect consequences of the damage suffered by the immediate victim of the accident. The term ‘country in which the damage occurs’ must be interpreted as referring to the place which caused the damage, which, in the main proceedings, is the place of the road accident.

He eventually opined in favour of the second view, taking inspiration ia from CJEU case-law on Article 7(2) of the Brussels I Recast (previously Article 5(3) Brussels I)- even though at 51 he cautioned against lifting interpretation from the jurisdictional Regulation for use in the applicable law Regulation. His main arguments were as follows:

(at 74) the interpretation whereby the general rule under which the expression ‘country in which the damage occurs’ in Article 4(1) of the Rome II Regulation extends to the place of the direct damage — in this case the place of the fatal collision — has the benefit of simplicity and objectivity where all the damage alleged actually originates from the same source.

(at 75) this is consistent with the foreseeability pursued by the drafting of the Rome II Regulation. In most cases, the person liable is able to anticipate the consequences in other countries of his conduct or of the conduct of persons for whom he is responsible. Similarly, the victim is generally informed of the legal context to which he was exposed or exposed his property. In other words, both the person liable and the victim were informed and took the necessary steps, in particular with regard to insurance, in connection with the applicable law in the country or countries in which damage might potentially occur.

(at 76) the general rule for determining the applicable law in the Rome II Regulation is characterised by neutrality. Taking the example of the material damage suffered by the survivors of a person who has died as a result of a traffic accident, it may be considered that the neutrality of the law would be jeopardised in so far as that damage is still located in the victim’s place of residence. (The AG notes that in other instances Rome II is not neutral: he refers in particular to Articles 6 (on acts of competition) and 7 (on environmental damage).

(at 77) such an interpretation is also consistent with the other idea underlying connecting factors in private international law, namely the idea of proximity, which is intended, as far as possible, to connect a situation to the law of the country with which it is most closely connected. Whilst the place of the accident is undeniably related to the other components of the liability, the domicile of the indirect victim is not necessarily so related. 

(at 79) the Rome II Regulation introduces corrective mechanisms which make it possible, in several respects, to avoid the apparent rigidity of the rule of the place in which the damage occurs.

Conclusion (at 83) ‘The term ‘place in which the damage occurs’ must, further to the case-law on the Brussels Convention and the Brussels I Regulation, be understood as meaning the place of the occurrence of the event, in this case the road accident, which directly produced its harmful effects upon the person who is the immediate victim of that event.’

The Court itself, much more succinctly, agrees.

A singular event, therefore, leads to one applicable law, even if its ricochet effect causes damage elsewhere. That such damage is actionable separately (for it may create multiple obligations in tort) or even iure proprio does not impact that analysis.

A word of caution, however: the judgment only holds for singular events. More complex events, especially of a continuing kind, are much more likely to create direct harmful effects in a multitude of persons, potentially therefore also leading to more loci damni. The ricochet effect therefore is highly likely to echo again at Kirchberg.

Geert.

 

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Slowdown of recovery is not ‘environmental damage’ under the EU Directive. The High Court in Anglers’ Society.

R (Seiont, Gwyrfai and Llyfni Anglers’ Society) v Natural Resources Wales has a long history. That’s not meant to be a fairy tale opening: it actually has legal relevance.

Article 2(2) of the environmental liability Directive provides the following definition: “ ‘damage’ means a measurable adverse change in a natural resource or measurable impairment of a natural resource service which may occur directly or indirectly.” ‘Environmental damage’ is further defined in Article 2(1), providing a variety of layers which need ‘unpacking’ in the words of Hickinbottom J. He concludes, after lengthy and instructive analysis, that  “damage” as defined in article 2(2) of the EL Directive is restricted to a deterioration in the environmental situation, and does not in addition include the prevention of an existing, already damaged environmental state from achieving a level which is acceptable in environmental terms – or a deceleration in such achievement. Since “environmental damage” is a subset of “damage”; “environmental damage” necessarily has that same restriction.

The judgment is very considered and there is not much point in repeating it here: please refer to the text for a thorough read on the ELD, the water framework Directive, habitats and much more.

Geert.

 

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The ECJ giveth and the ECJ taketh away in environmental impact assessment: Incremental projects subject to further EIA scrunity, but with limited scope for compensation

Two important weeks at the ECJ for those interested in the application of the Environmental Impact Assessment (EIA) Directive. In Case C-244/12 Salzburger Flughaven, the Court on 21 March rebuked Austria for operating a threshold for projects made subject to an EIA, which effectively meant that whole classes of projects (in particular: gradual extensions of small airports) are in advance exempt from EIA. In Case C-420/11 Leth, however, this time concerning Vienna-Schwechat airport, the Court on 14 March all but ruled out (see Hans Vedder for further analysis on the liability front) a Francovich type claim (compensation for a breach of EU law by a Member State) for pecuniary damage (a drop in property value) as a result of an infringement of the EIA Directive.

Ms Leth’s avenues for compensation may not be entirely closed off, however it is clear that the ECJ’s approach to the EIA Directive is one of extreme sympathy for the environment, less so for individuals’ damage as a result of insufficient EIA. As always, plenty of material to distinguish these cases from others (in particular, Leth), however the trend would seem clear.

Geert.