Friday, 13 August 2010

The Conflict of Laws (Eady v The World)

Every nation state has its own laws, and methods of enforcing them. Most federal countries, and some non-federal ones (such as the United Kingdom), have several versions of these applying in different parts of their territory, forming separate legal jurisdictions.

How these different legal systems interact at the level of civil law (as opposed to criminal law) forms what is known as private international law, also called the conflict of laws. Conflict of laws is perhaps a more accurate description because, as mentioned, conflict issues can arise within a nation state as well as between nation states.

Conflict of Laws

When considering contracts or wrong doing having substantive effects in more than one legal jurisdiction, it is necessary to determine three issues:

1. Which courts have jurisdiction on the matter? This is determined separately for each potential jurisdiction by applying the rules of that jurisdiction, and might be more than one, leading to the phenomenon of "forum shopping".

2. What system of law is to be applied in deciding the case? Again this is determined according to the rules of the court accepting jurisdiction in which the proceedings are brought. It need not be the same as the jurisdiction in which the particular case is tried. For example, a court in England may have jurisdiction in a matter but decide that, on the facts of the case, French law applies. It could be even more complicated than that, and can be self-referential: for example the English court in this example could further decide that under French law it would be decided that English law applied, so making English law the applicable law, a self-referencing called renvoi (sending back).

3. Are the judgments (say, for the payment of money) of the particular court which decides a matter enforceable in other jurisdictions within which the unsuccessful party has assets and so against which the judgment can be satisfied?

In the case of an alleged breach of contract, the contract can specify which courts have jurisdiction and which system of law applies, but in the case of other wrong doing, or in cases where a contract does not specify these things, there are complex rules to determine this, which as mentioned may be different in different jurisdictions. Within federal jurisdictions the rules are generally so far as relevant consistent between the federal entities (so the rules of conflict according to the legal system of the State of New York would generally be reciprocal with those of the legal system of the State of California, and necessarily so in the case of federal law itself). Within all of the European Union other than Denmark, it is decided in accordance with Council Regulation 44/2001.

Likewise, within the United Kingdom, the conflict rules are so far as relevant the same in the legal systems of England and Wales, Scotland and Northern Ireland, and each recognises and will enforce judgments of the courts of the others, notwithstanding that Scottish civil law is in some respects quite different from the common law in Northern Ireland and England and Wales. (The common law in Northern Ireland is to all intents and purposes the same as that in England and Wales unless a statutory provision has decreed otherwise, as indeed is the common law of the Republic of Ireland: to that extent the basic elements of the law of the Republic are substantially closer to those of England and Wales than is the civil law of Scotland.)

Defamation and freedom of speech

One area of tortious liability which can differ markedly between jurisdictions is that of defamation. Defamation law in the jurisdictions within the United Kingdom is more careful of people's reputation (and therefore more restrictive of the freedom to defame and so freedom of speech) than it is in some other countries, and particularly in the United States.

The wording of the 1st Amendment to the US constitution in the Bill of Rights concerning freedom of speech ("Congress shall make no law ... abridging the freedom of speech, or of the press") is not dissimilar in sentiment to Article 10 of the European Convention on Human Rights ("Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers"), which is a restatement of Article 19 of the Universal Declaration of Human Rights adopted by the UN General Council. No legal jurisdiction regards freedom of speech as entirely unfettered: all jurisdictions have some limitations on, say, incitement to violence or the deliberate dissemination of falsehoods. One key difference between jurisdictions is the extent to which either malice (improper motive) is required, or negligence in failing to take reasonable steps to find out whether an utterance is false before making it, in order for defamation proceedings to succeed.

Unlike some legal jurisdictions, in the UK malice or negligence on the part of the defamer need not be proved by the plaintiff in order to succeed in a claim of defamation: malice or improper motive is relevant only to whether certain defences may be defeated, such as the defence of fair comment (comment on matters of public interest which are reasonable statements of opinion based on stated matters of fact which can be shown to be true) or the qualified privilege attracted by "Reynolds" responsible journalism. In the UK, the plaintiff in the first instance need only prove that something was said or published to third parties by the defendant that is materially adverse to her reputation and so defamed her. After that, it is for the defendant to establish her defences (if she can) and the plaintiff to rebut them if such defences are offered.


On Wednesday an Act of the US Congress entitled the Securing the Protection of our Enduring and Established Constitutional Heritage Act of 2010 (otherwise known as the SPEECH Act) came into law. It provides that "a domestic court shall not recognize or enforce a foreign judgment for defamation" unless the foreign law which was applied in giving judgment provides the same protection of freedom of speech and of the press as does US law, or the defamatory act concerned would also have been found defamatory according to the law of the US State in question (including under the 1st Amendment of the US Constitution).

This legislation of Congress was aimed at the United Kingdom, and Eady J in particular. Mr Justice Eady has become the high priest in English law of those arguing the cause of protecting reputation and privacy above most other considerations. The case which brought him into conflict with the US constitution, via private international law, was Mahfouz v Ehrenfeld. Dr Rachel Ehrenfeld, who is a US citizen and resident in the State of New York, wrote a book entitled "Funding Evil", which makes a number of claims about how international terrorism is funded.

A Mr Mahfouz and two of his sons were alleged in the book to be involved in financing terrorism (a matter which has never been proved in court and indeed, as mentioned below, in other legal proceedings has been accepted as being false), and they sued Ehrenfeld for libel in the High Court of England and Wales. They were resident in Saudi Arabia at the time and Saudi citizens, although they appear also to have acquired Irish citizenship. The book was not explicitly offered for sale by sellers within the United Kingdom, but 23 copies had been purchased by people in England from online booksellers situated in the US and a worldwide audience presumed to include people in England and Wales had visited an ABC news website in the US containing the first chapter of the book which included the allegations. That was sufficient to found jurisdiction within England according to English law. Ehrenfeld, not surprisingly, chose not to appear or defend herself, taking the view that being a US citizen and a resident of the State of New York selling a book marketed in the US, the English High Court could mind its own business.

One can speculate that the English courts had been chosen by Mr Mahfouz notwithstanding that vastly more copies of the book had been disseminated in the United States because, as mentioned, English law gives less scope to defame in public comment than does the 1st Amendment and, as importantly, by placing the burden of proof of the defence of fair comment or responsible journalism on the defendant, allows default judgments to be issued more readily; and also as a matter of course English courts normally award lawyers' fees to the successful party, whereas jurisdictions in the US generally do not. The Mahfouz's lawyers gave as their reasoning for their choice of venue that "they maintain residences, transact business and have reputations to protect in [the jurisdiction of England and Wales]", which is a fair point particularly as they did not appear to have any business or other interests in New York state, but hardly explains why proceedings were not also brought in New York state for an injunction in order to stop the flow at source.

Eady J made a default judgment as (having decided that the English courts had jurisdiction by virtue of the 23 copies finding their way to England) he was more or less obliged to do by way of a declaration of falsity on an undefended suit with a competent set of affidavits on the plaintiff's side, so one cannot necessarily criticise him for that. However, the further remedies he saw fit to impose appear to have been the point at which he overdid it. He awarded each plaintiff £10,000 (the maximum allowed on summary default judgment) and awarded £114,000 costs, when nominal damages and no legal costs may have been the choice of many other judges faced with forum shopping of this kind on events occurring almost entirely in the US. More oddly, he chose to continue an interim injunction prohibiting further copies of the defamatory material reaching England and Wales which, given the international nature of the internet and of online sellers, would have been impossible to comply with unless Ms Ehrenfeld and her publisher (Bonus Books inc) were to have retained the power to terminate or modify any sale agreements with US bookshops (about which no inquiry by the judge appears to have been made), and would have been incapable of complete achievement even if they had, particularly if suppression would have been unconstitutional in the US. Even if the injunction had been capable of being complied with and not unconstitutional, it would simply have been unenforceable in the US and so hypothetical. The correct remedy would have been against any UK importer, but of course there was none.

Yes, apart perhaps from the over-broad (and in effect unenforceable) injunction, Eady J had the power to do what he did (under section 8 of the Defamation Act 1996) but more regard, in determining remedies, to the kind of considerations which would have informed a decision on venue would have result in a more sane set of orders. Indeed, to have given weight to the fact that there were numerous hits on a US news website situated only in the US (ABC News) is I suggest absurd.

The other side of the argument

So far as concerns Mr Mahfouz, it should be noted on a point of fairness that he has succeeded amongst other matters in France in defamation proceedings against a publication entitled "Le Livre Noir de la CIA" which alleged amongst other matters that he was involved in funding terrorism, and has obtained an apology and a financial settlement from the University of Cambridge Press in respect of similar claims made in a book "Alms for Jihad" published in the UK, from the Mail on Sunday in respect an article in that paper, and from Pluto Books in respect of a book they published, which clearly were proper for the jurisdictions of France and of England and Wales respectively.

From his point of view, if your business interests and reputation are being damaged, you take your remedies where you can find them, which is what he has done. It must also be exceedingly tiresome to be subject to claims that you are involved in financing terrorism if in fact you are not, and if your charitable giving is represented as supporting terrorism. He has also donated all or part of his award in these cases to UNICEF.

I am not particularly opposed to the laws of defamation as applying in defamation proceedings; and Dr Ehrenfeld could have opposed England and Wales as the venue at the outset (but probably had good cause not to, as it would have conceded jurisdiction if that opposition had been decided against her by Eady J given his reputation and previous involvement in some of the other cases brought by Mr Mahfouz referred to above, and of course also cost her not insignificant sums of money). However in a world of world-wide electronic communication, some sanity has to prevail in the remedies awarded, particularly on default judgments. It is that point which the SPEECH Act is intended to address, but which one might have hoped with the application of a little more common sense would not have been necessary1.

Forum shopping more generally

Lest anyone think that the UK is particularly blameworthy for exporting its version of defamation law to the world, it should be noted that, leaving defamation out of account, the US, with its litigation friendly culture, is by far the greatest haven of forum shopping, to sometimes remarkable degrees. Interested readers can consider the litigation involving Spamhaus LLC (an anti-spam email organisation), under which an Illinois court took upon itself the right to determine a case involving a company registered under English law with no offices or business activities in any part of Illinois, or indeed in any part of the the US. It became so serious that in a subsequent partly successful appeal the US government put to the court its own view on points of law on domain registration as an interested third party, because if the threatened decision on this had stood (an order of the court requiring ICANN to cancel Spamhaus's internet domain registration), international governments would no longer have accepted the function of ICANN in issuing domain names: that would have been transferred to the International Telecommunications Union, whether the US had liked it or not.

US "fishing expedition" type discovery, coupled with inattention to jurisdictional issues by US courts, has also led to bogus lawsuits being brought in the US for the purpose of acquiring evidence for proceedings elsewhere, so as to require the US Supreme Court to issue guidance on the matter.


1 On another decision of Eady J, this one overturned on appeal, see this article. Eady J's idiosyncratic views on the responsible journalism defence also received an unfavourable review by Lord Hoffman in another case, in paragraph 57 of Lord Hoffman's opinion.