The Choice of Law Process

• Author: Stephen G.A. Pitel/Nicholas S. Rafferty
• Profession: Faculty of Law, University of Western Ontario/Faculty of Law, University of Calgary
• Pages: 206-223

206

CHAPTER 10

THE CHOICE OF

LAW PROCESS

A. INTRODUCTION

As explained in Chapter 1, the second central question private inter-

national law seeks to answer is what law the court will use to resolve

a dispute. Implicit in this question is that the court does not always

simply use its own law, the law of the forum. This may at f‌irst seem

surprising, since we are so familiar w ith courts resolving cases accord-

ing to the law of the forum, and indeed t his is what happens in the vast

majority of cases. But sometimes the court resolves a dispute using the

law of some other legal system. The choice of law process explains how

the court determines what legal system applies to a particular dispute.

B.THE RATIONALE FOR CHOICE OF LAW

A preliminary question is why a court would be willing to resolve a dispute

using a foreign law. Laws are in essence highly territorial, and so it might

seem problematic for a court in Ontario to resolve a di spute using German

law rather than Ontario law. Some might even consider the application of

German law to violate Ontario’s sovereignty. Throughout the history of

the conf‌lict of laws, the leading preoccupation of its scholars has been the

issue of choice of law, and over time three leading theories emerged to at-

tempt to explain why the court would resolve a dispute using foreign law.

The Choice of Law Proce ss 207

The f‌irst theory is the theory of comity. It posits that the courts

of one country apply the laws of another country as a courtesy to that

country and in the hope that its courts will reciprocate. In a sense,

resolving all disputes using the law of the forum would be discourte-

ous or rude.1 There are signif‌icant f‌laws in this theory. The common

law cases rarely analyze the extent to which the foreign legal system

does or might reciprocate,2 casting doubt on the reciprocity aspect. In

addition, courts have resolved disputes by applying the foreign law of

an unfriendly or enemy country, for example in times of war,3 casting

doubt on the courtesy aspect.

In recent years Canadian appellate court s have placed considerable

emphasis on notions of comity.4 But it is important to be clear that in

doing so they are not using comity in the sense described above, and

are not aff‌irming the concept as a theory which would explain the use

of foreign law to resolve disputes. Rather, the courts are using com-

ity in the way it was subsequently def‌ined in Hilton v. Guyot, where

the United States Supreme Court stated “[c]omity, in the legal sense, is

neither a matter of absolute obligation, on the one hand, nor of mere

courtesy and good will, upon the other.”5

The second theory is the theory of vested rights. It asserts that a

person, by acting in a particular country, acquires rights under the law

of that country. These rights must then be treated as having vested in

the person, so that all other countries must give effect to them. Univer-

sal application of the law of the forum would deny these vested rights.6

The vested rights theory was widely adopted by common law courts in

1Leading advo cates of this theory a re Ulrich Huber, “Of the Conf‌lict of Divers e

Laws in Diver se Governments (de Conf‌lictu Legum) (1689)” in Ernest G. Loren-

zen, Selected Articles on the Conf‌lict of Laws (New Have n: Yale University Press,

1947) at 164; Melville M. Bigelow, Story’s Commentaries on th e Conf‌lict of Laws,

8th ed. (Boston: Lit tle, Brown, 1883) at 33–34.

2John Collier, Conf‌lict of Laws, 3d ed. (C ambridge: Cambridge Universit y Press,

2001) at 379.

3Sir Otto Kah n-Freund, “General Problems of Pr ivate International La w” (1974)

143 Rec. des Cours 139 at 464. See als o Perry Dane, “Vested Rights, ‘Vested-

ness,’ and Choice of Law” (1987) 96 Yale L.J. 1191 at 1213–14.

4As a leading e xample see Morguard Investments Ltd . v. De Savoye, [1990] 3 S.C.R.

1077 a t 1095– 96.

5159 U.S. 113 at 163–64 (1875).

6Albert Venn Dicey, A Digest of the Law of England with refere nce to the Conf‌lict of

Laws (London: Stevens & Sons, 1896) at 22; Joseph Beale, A Selec tion of Cases

on the Conf‌lict of Laws, vol. 3 (Cambridge: Har vard University Press, 1902) at

517. See also Geoffrey Chevalier Cheshire, Private Inte rnational Law (Ox ford :

Clarendon Pre ss, 1935) at 4 –6.