Desde 2009, a legislação do Reino Unido sobre responsabilidade civil pode ser usada em disputas arbitrais por escolha das partes. Em artigo enviado para a Consultor Jurídico, o especialista Rupert Choat discorre sobre as vantagens e desvantagens de optar pela lei britânica. Choat é sócio do escritório internacional Cameron McKenna, com sede em Londres. Leia abaixo o artigo em inglês.
The adoption of the Rome II Regulation by the United Kingdom makes it possible for parties to agree to the application of English tort law even though all other elements of their relationship are situated outside of England. Although this will not bind third parties or override the local laws of a jurisdiction not party to Rome II, it will amount to an effective choice between the parties to the contract and in any arbitration involving tort claims. Parties considering entry into international construction contracts subject to English law should consider carefully the implications of Rome II. English tort law may be more or less advantageous to either contracting party than the local law.
English tort law: What is it and how is it relevant to construction contracts?
Tort law in England (sometimes referred to as delict in other jurisdictions) is the law of torts or civil wrongs. Torts include such things as trespass, nuisance and assault, but also include a general right of action for negligence in respect of certain types of damage.
Actions for the tort of negligence frequently appear in claims for defective works in England. These claims are often brought alongside claims that the work fails to comply with a contractual standard. In such cases, a claimant may allege that the works fail to achieve a certain contractual specification and/or that the work has been performed negligently.
There are a number of reasons why tort claims are made alongside contractual claims. Claims in tort may allow the employer to take advantage of a longer limitation period (sometimes referred to as prescription in other jurisdictions) than is applicable to claims under contract. Claims in tort may also permit the employer to recover a greater amount of damages depending on the circumstances. Tort claims therefore remain an important part of the law applicable to construction contracts in England.
Prior to the Rome II Regulation, it was not thought possible for parties to nominate the applicability of English tort law regardless of the nature and location of the contract to which they had agreed (see Morin v Bonhams & Brooks). Applicability would depend instead on a comparison of the place in which the tort was committed with any other factors connecting the tort to England. An express choice of English tort law would only be one factor connecting the tort to England and could be outweighed by others.
The Rome II Regulation applies in the UK from 11 January 2009 and now permits the parties to expressly nominate English tort law to govern their relationship. Such a nomination is permitted if the parties are pursuing a commercial objective and the nomination is expressed or demonstrated with reasonable certainty.
One question which is yet to be explored under Rome II is the extent to which existing contractual choice of law clauses will lead to the applicability of English tort law. For example, the clause in Morin v Bonhams & Brooks was thought to be sufficiently broad to express a contractual choice for – in that case – Monegasque tort law. It stated that “all transactions to which these conditions apply and all matters connected therewith shall be governed by Monegasque law”. One might however contrast the standard FIDIC choice of law clause which states simply that “the contract shall be governed by the law of [relevant country]”. It may be open to question whether such a narrowly drafted provision would be capable of demonstrating with reasonable certainty that the parties intended to apply English tort law.
Why choose English tort law?
There are both procedural and substantive risk-based reasons why parties may wish to choose English tort law. Procedurally, if the contract is to be governed by English law, it is simpler if English tort law is to apply also. Any arbitral tribunal will then only be required to apply a single system of law, rather than applying a mixture of English contract law and local tort laws.
Substantively, the primary relevance of English tort law to a construction project arises through the tort of negligence when considering liability for defective works. In such circumstances, English tort law may extend contractual liability in the following ways:
• The maximum limitation period under English law for negligence actions is 15 years from the date of the negligent act giving rise to damage. This will usually be a greater period than the 12 year limitation period allowed to contracts under seal (i.e. deeds) or the six year period allowed to simple contracts.
• The quantum of damage recoverable in tort, particularly for loss of profit and/or loss of production, can be greater than in contract in certain circumstances.
• The rules governing causation in tort are more lenient than in contract. For example, they allow liability to be established even where a defendant’s contribution to the event giving rise to loss is very small (i.e. 10%).
For the purpose of illustration, one might assume that a defect in a power plant manifests itself in the works 12 years after taking over, causing a greater than usual loss of revenue due to a particularly lucrative power purchase agreement. One might also assume that the manifestation of the defect and the losses which followed were partially due to the employer’s poor maintenance of the plant. In such circumstances, English tort law may provide a remedy where a contractual claim is likely to fail, although the existence of any tort law claim will still remain subject to any limitations or exclusions of liability contained in the contract.
These attributes of English tort law are obviously more desirable for employers than contractors. However, opportunities also exist for contractors. In particular, a recent Court of Appeal decision has called into question whether liability in tort should apply at all for defective works on certain types of construction projects. Contractors engaged on such projects may therefore benefit from a more limited exposure to liability in tort under English law than would otherwise be the case. We explain the effect of this decision further below.
Robinson v Jones
Under English law, a tort claim for defective work will usually be characterised as a claim for “pure economic loss” if it cannot be shown to be a claim for property damage (or personal injury). In such circumstances, it is not sufficient merely to show negligence on the part of the contractor; the claimant must also prove a relationship of sufficient “proximity”, typically by showing an “assumption of responsibility” by the contractor for damage caused by defective works. Previously, claimants had sought to rely on their construction contract to demonstrate a sufficient assumption of responsibility by the contractor. If the contractor had agreed to be liable for defective work, so the argument ran, then he must also have sufficiently assumed responsibility for the purposes of the law of tort. Definitive guidance has now been given by the Court of Appeal as to this line of argument in Robinson v P.E. Jones (Contractors) Ltd.
In 1991 Mr Robinson contracted with P.E Jones, a firm of builders, to buy a property which was at that time under construction. Having gone undetected for more than 12 years, in 2004 testing by British Gas revealed that the chimney flues and gas fires were defective. There was no damage to the property itself, but the works needed to be replaced. The loss was therefore pure economic loss. Seeking to gain the benefit of a longer limitation period, Mr Robinson argued that the builder owed him a duty of care in the tort of negligence as well as in contract.
Although the court recognised that a concurrent duty of care can arise in both contract and the tort of negligence, it held that a builder does not, by reason of the building contract, owe a tortious duty of care not to cause pure economic loss. The court drew a distinction between agreements with professional persons, such as architects or engineers, and building contracts, stating that there is likely to be an assumption of responsibility, and therefore a duty of care, in the case of the former but that the same cannot be said of building contracts generally. In a particularly strong passage of the judgment, Stanley Burnton LJ put the position as follows: “… it must now be regarded as settled law that the builder/vendor of a building does not by reason of his contract to construct or complete the building assume any liability in the tort of negligence in relation to defects in the building giving rise to purely economic loss. The same applies to a builder who is not the vendor, and to the seller or manufacturer of a chattel.”
This reasoning has been criticised on the basis that a building contract does involve a considerable assumption of responsibility by the builder, however, the Court of Appeal’s decision will remain law in England until the matter arises for consideration by the Supreme Court.
This conclusion would not, however, appear to close the door on tort claims for defects. The distinction drawn by the court between professional or design contracts and purely construction contracts raises difficult questions where the two become merged, such as in Design and Build, EPC or Turnkey contracts. For such contracts there still remains considerable scope for the parties to argue that the contractor has assumed responsibility for the design and construction of the works.
It is understood that new editions of the FIDIC forms scheduled for release later this year and in 2013 will increase the robustness of design obligations undertaken by contractors. Parties considering using these forms might therefore wish to consider the implications under English tort law of such provisions and in particular, whether English tort law provides any greater or lesser scope for meeting their objectives.
The applicability of English tort law to international construction projects is presently in a state of change and development. Parties involved in contractual negotiations in respect of such projects should bear the following points in mind:
• The UK’s agreement to the Rome II Regulation allows parties to decide whether to apply English tort law to the project. Any such decision needs to be expressed with “reasonable certainty” and existing choice of law clauses (such as FIDIC’s) may not be sufficient to do so.
• The applicable English tort law potentially provides opportunities and risks for employers and contractors. Depending on the nature of the project, Robinson v Jones may exclude tortious liability for defective works, to the advantage of contractors. Alternatively, if the project includes a large design element, tortious liability for defective work may in certain circumstances be more extensive than in contract, to the advantage of employers.
• In every case, local tort law should also be considered to identify any advantages over English tort law and to identify any local requirements which cannot be contracted out of; these advantages can then be weighed together with the advantage of uniformity mentioned above.
References: Morin v Bonhams & Brooks  EWHC 467 (Comm); Robinson v P.E. Jones (Contractors) Ltd  EWCA Civ 9.
Rupert Choat is a partner and head of Construction Disputes at CMS Cameron McKenna, London. He is one of two UK lawyers recommended by independent directory Legal500 for both construction and international arbitration. He also won the International Law Office’s Client Choice Award for Construction (UK) in 2010 and 2012, and is listed in the International Who’s Who of construction lawyers and Super Lawyers 2013.