Concurrent Claims

From Max-EuP 2012

by Ulrich Magnus

1. Subject and aim

The notion of concurrent claims is not very clear. It is also a concept which defies concise designation in English. In this entry, the term ‘concurrent claims’ will be used in the sense of the right to assert claims which exist alongside one another (in German: Anspruchskonkurrenz; in French: cumul; in Dutch: samenloop). In general, the term concurrent claims designates a situation where a creditor has two or more claims against a debtor, which are linked in a certain way so that they can influence one another. Their relationship with each other is a kind of competition. There are many different situations where such a relationship of concurrent claims can occur. A creditor may have a right to request something from the debtor based on several legal grounds. For example, if a seller has knowingly delivered defective goods and thereby injured the buyer’s health, the buyer may theoretically—and often practically—have a right to claim damages under both contract law as well as the law of torts/delict. Similarly, if a driver collides with a pedestrian, the latter may have a damages claim under the law of torts/delict, or strict liability. In the same vein, if someone is not entitled to an object in his possession, the true owner may have a claim for restoration based on principles of property law (property rights, protection of), unjustified enrichment or even torts/delict.

The situation of concurrent claims is only slightly different where the law provides for several distinct remedies within one and the same special area of the law, eg under the law of contract or the law of torts/delict. An example is the case where the law entitles the buyer of defective goods either to specific performance, termination of a contract, or price reduction, and/or damages. A very similar scenario is present when the victim of an unlawful act can request either reparation in kind or monetary compensation. The relationship between these different possible remedies has to be resolved. It is clear that the creditor cannot exercise all remedies at the same time. However, is the creditor free to choose among them? Must the creditor observe a certain order of remedies? Is the creditor bound once he has made a choice? Is a cumulation perhaps possible under certain circumstances? Further, special questions arise when statutory remedies, eg damages claims, coincide with contractual claims agreed upon in advance, eg based on a penalty clause.

Another case falling under the heading of concurrent claims is where the creditor has claims arising from a single event against two or more debtors and the claims are linked to each other in a certain way. A common example here would be a claim against a tortfeasor existing alongside a direct claim against the tortfeasor’s insurer.

For all these cases—and many more which are similar—every legal system must determine the relationship between the different claims. Obviously, the determination depends to a large extent on what, precisely, is to be understood by the term ‘claim’. Moreover, any decision on the relationship between concurrent claims has consequences for further questions: Which prescription period applies when different periods relate to the different, though concurrent, claims? Does the expiration of the period for one claim affect the others? Which consequences follow if one of the claims has been assigned to another person? If one of the debtors has been released from his obligation? If liability has been excluded for one of the claims? And so the questions continue.

The characteristics transforming several claims into concurrent claims resist abstract description or systematization. Nonetheless, it typically holds true that where two or more claims arise from a single event, or aim at the protection of one individual interest (even if they are directed against several debtors), a mutually interdependent relationship exists between the claims which requires them to be ranked in a certain way.

Finally, it has to be noted that the problem of concurrent claims is by no means a question only of substantive law since it is also encountered in procedural law with at least the same practical importance. However, in the procedural context, concurrent claims have both a significance and consequences that differ from those under substantive law. Here, the key questions are, whether and when several claims can be combined in one lawsuit, whether one court has jurisdiction—domestically or internationally—to hear all claims and whether a decision on one claim has a res judicata effect on a concurrent claim. Can, for example, the buyer of defective goods claim damages in tort after a contractual claim has been rejected? Or vice versa? Equally, the question can arise whether and, if so, which private law claims can be brought in a possible adhesion procedure to a criminal proceedings.

The rules on concurrent claims aim at solving all of these questions by finding solutions that do justice to all interests involved. Theoretically, the possible solutions include the following: the creditor can accumulate the several claims (cumulative concurrence); he can choose among the several claims, sometimes only under certain conditions, eg in a certain order (alternative concurrence); or he can avail himself of only one of the different claims and the others are excluded (consumption or statutory concurrence). These different solutions can, however, only serve as a starting point since no single concept can accommodate all the divergent situations occurring in legal practice.

2. Tendencies of legal development

None of the great European codifications of the 19th century contains a full and systematic regulation of the problems concerning concurrent claims. Neither the Austrian Civil Code of 1811 (Allgemeines Bürgerliches Gesetzbuch (ABGB)) nor the French Code civil of 1804 even define the basic term ‘claim’. It is only the German Civil Code of 1900 (Bürgerliches Gesetzbuch (BGB)) that (quite abstractly) defines the term ‘claim’ (Anspruch) as ‘the right to request an act or omission from another (person)’ (§ 194(1) BGB). Under the influence of the German pandectist scholar Bernhard Windscheid, one of the fathers of the BGB, the German codification declined to adopt the view of Roman law that had identified the ‘claim’ mainly with the right to sue in court. The BGB instead regards the claim as an institution of substantive law. The right to request something from the other party exists irrespective of whether proceedings are instituted in court. This right to request relates to, and is based upon, a certain set of facts, eg a breach of contract or the commission of a tort. Today, it appears to be widely accepted that where claims arise on differing bases (eg in contract and tort), there are several claims—which can have, in principle, their own fate—even if these claims have a single aim (eg damages). Typically, the courts rather than the codifications regulate the relationship between concurrent claims. Their solutions, however, are often the subject of considerable dispute.

For the practically particularly important relationship between concurrent tort and contract claims French law, on the one hand, and English and German law on the other, follow fundamentally different conceptions. For while French law has essentially embraced the concept of consumption, English and German law generally follow the concept of alternative concurrence.

In France, the doctrine of non-cumul has been long established (eg Cour de Cassation, Cass. civ., 11 January 1922, DP 1922, 1, 16; Cass. civ., 24 May 2006, Bull. civ. II, nº136). According to this doctrine, contractual claims exclude any parallel delictual claim. Originally, this was also true for cases of product liability. The buyer who is at the end of a sales’ chain and gets injured by a defective product could only avail himself of a contractual damages claim because he had acquired the defective product by way of contract. In theory, that approach would have excluded any claim against the manufacturer. French law, however, granted (and still grants) the final buyer a direct—contractual—claim against both the manufacturer and first seller of the product (the so-called action directe). Exceptions where tort claims were nonetheless admissible were cases where the breach of contract constituted a crime or where the debtor had acted fraudulently (with faute dolosive). France had to change this state of its law by implementing the Product Liability Directive (Dir 85/374) because this European directive based product liability claims against the manufacturer exclusively on tort. Although the period specified for implementation was three years, France faced great difficulties and ultimately needed 13 years to implement the directive. And even thereafter, the European Court of Justice (ECJ) granted judgment against France several times because the implementation failed adequately to conform to the directive. Today, Art 1386-18 Code civil sets aside the principle of non-cumul, but only as far as the scope of application of the Product Liability Directive is concerned. Apart from this, French law still strictly adheres to the doctrine of non-cumul. The primary reasons given for this doctrine are that contractual liability is more specific and that contractual limitations of liability would become illusory if a creditor could nevertheless rely on the law of delict; exclusion of liability under the law of delict, after all, is rarely possible. It has to be noted, however, that under French sales law, professional sellers cannot contract out of their statutory liability for defective goods either.

England and Germany, in contrast, generally allow contractual claims and claims under the law of torts/delict side by side. The creditor can rely on both (even though receiving compensation only once), or he may freely choose among them and rely on the one that is more favourable to him. Both legal systems favour the creditor whose debtor has committed a breach of contract as well as a tort/delict. Nonetheless, both legal systems are confronted with the question of whether (and, if so, to what extent) contractual clauses excluding liability affect concurrent claims in tort/delict. Generally, this is regarded as a matter of interpretation. In particular, the objective of the exclusion clause must be determined, and it has to be assessed whether it is supposed to relate only to the specific contractual duties, or also the general duties established under tort/delict.

With respect to the relationship between different contractual remedies, the Consumer Sales Directive (Dir 1999/44) (sale of consumer goods) has strongly influenced the development of the law in Europe. The directive abolished the solution recognized under Roman law, which had been the central basis of the continental sales laws up to that point. According to the Roman solution, the buyer of defective goods was entitled to terminate the contract (actio redhibitoria; termination of a contract) or to reduce the price (actio quanti minoris; price reduction). The buyer could freely choose between these options. Since the implementation of the directive, however, the buyer is only entitled to repair or replacement. Only where both of these remedies are impossible, disproportionate or ineffective, is the buyer entitled to terminate the contract or reduce the price; termination is not available if the defect is of minor significance. By primarily requesting a type of specific performance, the Consumer Sales Directive has even forced the common law significantly to modify its rules on specific performance, at least for consumer sales; for normally it is only prepared to grant that remedy where damages do not provide an adequate compensation, eg because the object of the sale is of a unique character. Contrary to the free choice between the different remedies, previously available, or, as in England, the priority of the damages claim, European law now provides a strict order of remedies with regard to the sale of defective consumer goods. However, since the Consumer Sales Directive does not regulate damages claims, this new approach is less rigid than it appears at first glance. The directive certainly does not prohibit the alternative concurrence between a damages claim and a claim for supplementary performance, or the right to terminate the contract.

3. Structures of regulation

Apart from these recent developments for consumer sales on a European level, the structures of regulation differ widely in Europe with respect to the relationship of concurrent claims. As has been pointed out, the relationship between concurrent contract claims and claims in tort/delict is regulated partly in the sense that the contract claim enjoys priority and partly in the sense that both claims can be pursued alternatively.

With respect to the relationship between concurrent claims based on unjustified enrichment and tort/delict, the solution is similar. Here again, there is a marked difference between French law, on the one hand, and English and German law on the other. The French view attributes a subsidiary role to claims based on unjustified enrichment. Effectively, these claims can apply only if no other claims, particularly none under the law of delict, are available. If other claims exist, they prevail; claims based on unjustified enrichment are excluded by way of consumption. By contrast, English and German law allow for alternative concurrence between claims in unjustified enrichment and in tort/ delict. If the requirements of both claims are met, the creditor can pursue either of them, even though the final aim of both claims—restitution or compensation for damages—can be achieved only once. If the aim of the concurrent claims is not fully identical in the legal proceedings, the creditor must opt for one of them. The alternative claim can be raised by way of subsidiary pleading in case the ‘first’ claim fails.

The legal systems in Europe follow a rather uniform view regarding the problem of different prescription periods applying to the concurrent claims. Irrespective of the different attitudes towards the relationship between concurrent claims, each claim is governed by its own period of prescription. In countries that adhere to the principle of alternative concurrence, this is a considerable advantage for creditors because they can rely on the claim the prescription period of which has not yet lapsed.

Those European legal systems which allow for alternative concurrence have to deal with the problem that each claim can be separately assigned, waived, restricted or excluded. The crucial question is whether this has any impact on the other, concurrent claims. The French approach avoids this problem because, by giving contract claims a strict preference, it excludes the scenario of competing claims. English and German law solve the problem mainly by looking at purposes of the concurrent claims as well as of the legal doctrine involved (assignment, release etc). Thus, for example, the buyer of defective goods cannot assign a contractual damages claim and retain the corresponding claim in tort/delict, thereby effectively doubling damages. On the other hand, it may correspond to the parties’ intention, and may therefore be permissible, that the contractual claim is waived or excluded while the concurrent claim in tort/delict is preserved. Equally, the relationship between concurrent statutory claims and claims agreed upon by the parties, especially arising from penalty clauses, depends on the construction of the agreement and the statutory provision as well as their aims and purposes.

In a similar fashion, the relationship between concurrent remedies available within one and the same area of the law, eg contract law, has to be determined according to the specific content, aims and purposes of the different remedies. Generally, remedies can be cumulated insofar as this is not inconsistent with their scope and aim of protection. A creditor is thus allowed to claim damages in addition to specific performance, termination of contract, or price reduction as far as his loss has not yet been covered by those other remedies. Likewise, a creditor can generally claim damages for pain and suffering even if only one of the concurrent claims provides for this. Conversely, incompatible remedies can never be cumulated. For instance, specific performance and termination of contract necessarily exclude each other.

In the context of civil proceedings, the notion of ‘claim’ is partly used in a different way. The procedural notion of ‘claim’—which is particularly relevant for any res judicata effect of a judgment—often extends to the objective of the claim including its factual basis. It thus conceives all concurrent claims available under substantive law as one single procedural claim. For such a procedural notion of a claim, it is of no relevance that the concurrent claims arise from, eg contract and tort/delict. However, the law of the European Union appears to differentiate between the different substantive bases of a claim also for procedural purposes, as can be gathered from the fact that jurisdiction rules vary, eg for contract claims and for those in tort/delict (Art 5 nos 1 and 3 Brussels I Regulation; see also Art 6 nos 2 and 4).

4. Unification projects

There are no international unification projects specifically concerning the relationship and hierarchy between claims of different origin, or between different remedies within one single complex of norms. However, a few provisions regulating the relationship between concurrent claims can be found in certain international instruments.

The UN Convention on Contracts for the International Sale of Goods (CISG) (sale of goods, international (uniform law)) is an example of a uniform law convention that contains some hints as to the relationship between sales claims and other claims and between the different contractual claims. The CISG excludes from its scope of application all claims the buyer might have because the goods have caused death or personal injury to any person (Art 5). The Convention does not regard these claims as contractual but rather as claims in tort/delict, even if they have arisen within a contractual context. In so doing the CISG is following the prevailing international opinion that loss caused by products should primarily be dealt with by the law of tort/delict (product liability). Since it is self-evident that the CISG does not regulate matters outside of its scope of application, the characterization of a matter as being based on contract or tort/delict remains the task of the applicable national law. However, the CISG thus indirectly determines that tort claims prevail over possible contractual claims as far as product liability is concerned. The EU Products Liability Directive pursues the same approach and grants damages for loss caused by a product irrespective of whether the claimant acquired the product by way of contract (Art 13).

The Draft Common Frame of Reference (DCFR) (European private law) provides, as a general rule, that tort claims do not affect concurrent claims based on other grounds, eg contract (Art VI.-1:103(d)). The DCFR, thus, does not follow the French doctrine of non-cumul but adheres to the model of alternative concurrence.

Uniform law instruments furthermore contain rules concerning the relationship between concurrent claims arising under contract law. An example is again provided by the CISG. The remedies of specific performance, termination of contract, price reduction and damages are available by way of alternative concurrence (Arts 45, 46(1), 61, 62 CISG). Generally, the creditor can use only one of these remedies at a time. However, damages are available in addition to the other remedies to the extent that they leave some loss uncompensated. In principle, the creditor can freely choose among the remedies. However, specific performance in the form of replacement and termination of contract can only be granted if the breach of contract is fundamental.

The CISG’s solution for the relationship between the various remedies has also been the model for the UNIDROIT Principles of International Commercial Contracts (PICC) (Art 7.4.1) and for the Principles of European Contract Law (PECL) (Art 8:101, 8:102). The DCFR has adopted the same solution (Arts III.-3:102, II.-3:303, III.-509(3), III.-3:601(3), IV.A.-4:201).

Literature

Apostolos Georgiades, Die Anspruchskonkurrenz im Zivilrecht und Zivilprozessrecht (1968); Peter Schlechtriem, Vertragsordnung und außervertragliche Haftung. Eine rechtsvergleichende Untersuchung zur Konkurrenz von Ansprüchen aus Vertrag und Delikt (1972); Tony Weir, ‘Complex Liabilities’ in IECL XI (1983) ch 12; York G von Amsberg, Anspruchskonkurrenz, Cumul und Samenloop (1994); Reinhard Zimmermann, The Law of Obligations (1996); Frauke Wernecke, Die Einheitlichkeit des europäischen und des nationalen Begriffs vom Streitgegenstand (2003); Karl Riesenhuber, Europäisches Vertragsrecht (2nd edn, 2006) paras 746 ff, 882 ff; WV Rogers, Winfield & Jolowicz on Tort (17th edn, 2006) paras 1–5 ff.

Retrieved from Concurrent Claims – Max-EuP 2012 on 22 May 2022.

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