E-commerce Disputes - Where Will They Be Heard? - In Business Summer 2003

01 July 2003

The Brussels Regulation 2000 (which came into force on the 1st May 2002) changed the rules governing where E-Commerce disputes are to be dealt with in the EU.

The most important changes affect ‘consumer contracts’ by the introduction of two new rules:

1. If a consumer wishes to start proceedings, he may choose to do so either in his own jurisdiction or in the jurisdiction of the E-tailer
2. If the E-tailer starts proceedings against a consumer, it may only do so in the consumer’s home jurisdiction

These rules cannot be contracted out of.

It is clear from these rules that if an E-tailer is directing its activities to a particular member state, and enters into a Contract with a consumer in that state, then the E-tailer must be aware that it may have to fight an action in that state. The rules deal with the place in which a dispute will be heard but the question of which laws apply to that dispute remain as complicated as ever. Broadly speaking, an E-tailer should specify in its terms and conditions which law will apply because if there is no choice of law specified, the law of the consumer’s home state will automatically apply.

It is worth bearing in mind, however, that even if an E-tailer specifies that (say) English law applies to the Contract, this can be over-ridden if the consumer was ‘targeted’ by the E-tailer. For this reason it is recommended that E-tailers direct sales at specific markets and avoid using indicators which suggest a wider market, for example, different languages or currencies, unless they are prepared to have the law of that jurisdiction used against them.

As with much of the law relating to E-Commerce, the principles outlined in the rules are largely, as yet, untested in court. It will be interesting to see the practical effects over time.

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