Lex Loci Damni

Lex loci damni — the law of the place where the damage occurs — is the general connecting factor used by Article 4 of Regulation (EC) No 864/2007 (Rome II) to identify which country's law governs a non-contractual obligation such as a tort claim. Article 4(1) provides that 'the law applicable to a non-contractual obligation arising out of a tort/delict shall be the law of the country in which the damage occurs irrespective of the country in which the event giving rise to the damage occurred and irrespective of the country or countries in which the indirect consequences of that event occur.' The rule therefore looks to where the harm itself is suffered, not to where the wrongful act took place or where its knock-on financial consequences happen to be felt.

Rome II builds two further refinements onto that general rule. First, a common-habitual-residence exception displaces the place-of-damage rule where the claimant and defendant both live in the same country: Article 4(2) provides that 'where the person claimed to be liable and the person sustaining damage both have their habitual residence in the same country at the time when the damage occurs, the law of that country shall apply.' Second, an 'escape clause' allows a different law to apply altogether where the case is manifestly more closely connected elsewhere — for example because of a pre-existing contractual relationship between the parties that is closely tied to the wrong in question.

Rome II was retained in UK law after Brexit and continues to govern choice of law in tort for events after 11 January 2009 (the earlier Private International Law (Miscellaneous Provisions) Act 1995 continues to apply to some claims outside Rome II's scope, using the related lex loci delicti rule). The distinction matters in practice in cross-border personal injury and product liability claims, where the place an accident happens or a defective product is sold can differ from where the ultimate financial loss lands.