Choice of Law - Choice-of-law Stage

Choice-of-law Stage

The "traditional approach" looks to territorial factors, e.g. the domicile or nationality of the parties, where the components comprising each cause of action occurred, where any relevant assets, whether movable or immovable, are located, etc., and chooses the law or laws that have the greatest connection to the cause(s) of action. Even though this is a very flexible system, there has been some reluctance to apply it and various "escape devices" have developed, which allow courts to apply their local laws (the lex fori) even though the disputed events took place in a different jurisdiction. The parties themselves may plead the case either to avoid invoking a foreign law or agree to the choice of law, assuming that the judge will not of his or her own motion go behind the pleadings. Their motive will be pragmatic. Full-scale conflict cases take longer and cost more to litigate. However, the courts in some states are predisposed to prefer the lex fori wherever possible. This may reflect the belief that the interests of justice will be better served if the judges apply the law with which they are most familiar, or it may reflect a more general parochialism in systems not used to considering extraterritorial principles of law. One of the most common judicial strategies is to skew the characterization process. By determining that a claim is one involving a contract instead of tort, or a question of family law instead of a testamentary issue, the Court can change the choice of law rules. For example, if an employee is hired by an employer in State A, is injured due to the employer's negligence in State B, and files a lawsuit to recover for the injury in State A, the court in State A might look to the employment contract to see if it contained a clause that governed the employer's duty of care with respect to the employee. If so, the court may be able characterize the claim as a breach of the contract, instead of a tort, and apply the law of the State A either because it was the place where the contract was made (the lex loci contractus) or, if it were the place where the wage or salary was to be paid, where the contract was intended to be performed (the lex loci solutionis).

In this context, it is noted that, since the 1960s, the courts in the United States began developing a number of new approaches, as well as new escape devices. This reflects the number of different laws that might be relevant in any given case before an American court. There is significant interstate trade and social mobility, and with the laws of each state of the Union representing a possible opportunity for conflict, it was necessary to produce a coherent system that could be applied in the courts of all fifty states.