Legitimate Expectations and Reasonable Reliance in EU Private International Law

This post was contributed by Antonio Mariconda, who is a postdoctoral researcher at the University of Naples Federico II.

In cross-border legal relationships, it is not uncommon that individuals’ expectations about the legal treatment of their situations are not matched by reality. This has to do with the fact that parties to cross-border situations are often confronted with foreign laws, judicial decisions and public documents, with which they are unfamiliar. The issue is particularly significant in private international law, where the determination of jurisdiction, the identification of the applicable law, and the recognition and enforcement of foreign judgments and public documents frequently rely on circumstances the existence of which may be wrongly perceived by the individuals concerned. For instance, jurisdiction may be based on the defendant’s domicile, yet a party may reasonably expect that the defendant is domiciled elsewhere based on certain factual circumstances. The possibility that the solution imposed by private international law rules may come as a surprise to those concerned does not entail, however, that every system of private international law must necessarily avoid such mismatch between expectations and reality. The weight attached to the parties’ expectations is a matter of legislative choice and therefore varies from one legal system to another.

It is against this background that the book examines whether, and to what extent, EU private international law gives relevance to parties’ expectations. For this purpose, it analyses how the rules governing jurisdiction, applicable law, and the recognition and enforcement of foreign judgments and public documents have been formulated and interpreted, and it identifies the circumstances in which expectations and reliance are considered legitimate and therefore worthy of legal protection.

The book builds on the research undertaken for the author’s PhD thesis, Reasonable Reliance and EU Private International Law, completed under the supervision of Professor Giovanni Zarra. The book was recently published by Edizioni Scientifiche Italiane.

The book is structured as follows. It first develops a conceptual framework by distinguishing predictability, legitimate expectations, and reasonable reliance, and by clarifying the relationship between these concepts within the general theory of private international law (Chapter I). Building on this framework, it then examines the extent to which legitimate expectations and reasonable reliance are reflected in EU private international law. It does so by analysing EU primary law (Chapter II) and then relevant instruments of EU secondary legislation governing jurisdiction, applicable law, and the recognition and enforcement of foreign judgments and public documents (Chapter III and IV).

Untangling Predictability, Legitimate Expectations and Reasonable Reliance in Private International Law Theory

A preliminary step of the analysis consists in clarifying the conceptual vocabulary through which individual representations of legal reality can be understood. Although scholarship frequently refers to notions such as predictability, legitimate expectations, and reasonable reliance, these concepts are rarely defined consistently and are often used interchangeably, despite referring to different legal phenomena. It is therefore necessary to determine what these concepts mean and how they relate to one another (Chapter I).

In this respect, an examination of the historical development of the general theory of private international law reveals three distinct concepts. The first, that is post-normative predictability, concerns legal certainty from a systemic perspective. It refers to the idea that, based on the private international law rules, it should be possible to determine, with a sufficient degree of certainty, the competent court, the applicable law, and the conditions governing the recognition and enforcement of foreign judgments and public documents. In other words, post-normative predictability concerns the objective foreseeability of the legal solution produced by private international law rules. As such, it falls outside the scope of the analysis, which is concerned not with the objective certainty of the legal solution, but with individuals’ subjective representations of legal and factual reality. The second, that is legitimate expectations, concerns the solution that a reasonable person would anticipate before the applicable rules are applied. It therefore exists independently of the positive rule itself. Legitimate expectations must be assessed in the light of the factual and legal circumstances of the cross-border relationship. The third, that is reasonable reliance, also concerns a subjective representation of reality, but differs from legitimate expectations in that it presupposes that a legal appearance has been created by another’s conduct and acted upon. Its protection is rooted in the principle of good faith.

This threefold distinction provides the conceptual framework for the rest of the book and allows to assess the role of each concept in EU private international law. In this vein, the analysis proceeds inductively, asking whether, and to what extent, the positive rules of EU private international law recognise and protect these different forms of individual representation. Rather than assuming that the protection of expectations or reliance is an inherent aim of private international law, it seeks to establish whether such protection genuinely emerges from positive law.

Tracing Legitimate Expectations and Reasonable Reliance in EU Primary Law

The analysis of positive law begins with EU primary law, comprising the Treaty on European Union and the Treaty on the Functioning of the European Union, the general principles of EU law, and the fundamental rights protected by the European Convention on Human Rights (ECHR) and the Charter of Fundamental Rights of the European Union (Charter), as interpreted by the European Court of Human Rights (ECtHR) and the Court of Justice of the European Union (CJEU) (Chapter II). Primary law is examined first because it forms part of the “system” of EU private international law: although it does not itself lay down rules on jurisdiction, applicable law, or the recognition and enforcement of foreign judgments and public documents, it defines the limits within which secondary legislation can operate.

The analysis shows that EU primary law already provides important guidance on the role of legitimate expectations and reasonable reliance, although the two concepts perform different functions.

The case law of the ECtHR and of the CJEU related to private international law shows that legitimate expectations operate as a threshold of protection for several fundamental rights, including the right to private and family life (Art. 8 ECHR; Art. 7 Charter), the protection of property (Art. 1 Protocol 1 ECHR; Art. 17 Charter), and the right to a fair trial (Art. 6 ECHR; Art. 47 Charter). This means that, for example, the refusal to recognise a foreign status or judgement does not, in itself, amount to a violation of a fundamental right. A violation arises only where that refusal frustrates an expectation which, in the light of the circumstances of the case, qualifies as legitimate. Legitimate expectations therefore operate as a criterion for assessing the compatibility of non-recognition with fundamental rights.

By contrast, reasonable reliance is recognised as a general principle of EU law flowing from the principle of legal certainty. As developed in the CJEU’s case law, this principle protects only reliance generated by public authorities. It requires the protection of individuals who have reasonably relied on the conduct of EU or national institutions or authorities acting within the scope of EU law, but it does not extend, as a matter of EU primary law, to reliance generated in a private party by the conduct of another private party. EU primary law therefore confines the principle of reasonable reliance to its public-law dimension. It is for secondary legislation and its interpretation to determine whether comparable protection should also be afforded to reliance arising in relationships between private parties.

The analysis therefore shows that EU primary law fixes two important points. First, the protection of legitimate expectations sets the threshold for determining when a refusal to recognise a foreign status or judgement amounts to an interference with fundamental rights such as private and family life, the protection of property, or the right to a fair trial. Second, reliance is protected as a general principle of EU law only where it has been induced by public authorities. Beyond these requirements, it remains for the EU legislature to decide whether legitimate expectations and reasonable reliance should receive broader protection through secondary legislation.

Tracing Legitimate Expectations and Reasonable Reliance in EU Secondary Law

The analysis turns then to EU secondary legislation, in particular EU private international law regulations (Chapters III and IV). A cross-cutting analysis of the rationale underlying these rules and of their interpretation by the CJEU shows that legitimate expectations are never protected as such (Chapter III). Their protection is either incidental, where the legal solution merely happens to coincide with the parties’ expectations, or instrumental, where protecting those expectations serves a distinct objective pursued by EU private international law, such as proximity, post-normative predictability, or the effective protection of fundamental rights. Legitimate expectations therefore operate as vectors of principles: they are protected not for their own sake, but because they give practical effect to values already recognised by the EU legal order. Consequently, an expectation is regarded as legitimate, and therefore protected, only where it satisfies two cumulative requirements: it corresponds to what a reasonable person would have expected in the circumstances, and it contributes to the protection of an interest recognised and protected by EU law.

The same cross-cutting analysis of EU private international law rules reveals a different pattern in relation to reasonable reliance (Chapter IV). While the general principle of reasonable reliance discussed above protects only reliance generated by public authorities, EU private international law also protects, in appropriate circumstances, reliance generated by one private party’s conduct in another private party. This protection stems from the combined operation of three general principles: good faith, which requires parties to respect the expectations generated by their own conducts in other parties; legal certainty, which aims to protect security of legal transactions; and the principle of reasonable reliance recognised in EU primary law, which safeguards reliance induced by public authorities. Taken together, these principles explain why the protection of reliance constitutes a structural feature of EU private international law rather than an exceptional one. They also explain why reliance may deserve protection even where no provision of secondary legislation expressly provides for it, allowing the CJEU to recognise and protect reasonable reliance through the interpretation of EU private international law rules.

Conclusion: the role of Legitimate Expectations and Reasonable Reliance in EU Private International Law

The analysis undertaken in the book shows that legitimate expectations and reasonable reliance perform distinct functions in EU private international law.

As regards legitimate expectations, the analysis demonstrates that they operate as vectors of principles. They become worthy of protection only where they contribute to the realisation of an interest recognised by EU law, such as proximity, post-normative predictability or the protection of fundamental rights. This conclusion has important theoretical and practical implications. From a theoretical perspective, legitimate expectations become a heuristic device through which the values and principles underlying an evolving system of EU private international law can be identified. Whenever an expectation is protected, it reveals the underlying interest that EU private international law regards as worthy of protection and that ultimately justifies the legal solution adopted. From a practical perspective, the function of legitimate expectations as vectors of principles allows them to ensure the full realisation of the objectives underlying EU private international law rules, even in the absence of an express legislative reference to legitimate expectations.

As for reasonable reliance, its protection reflects the operation of general principles that permeate EU private international law, notably good faith, legal certainty, and the principle of reasonable reliance recognised in EU primary law. These principles explain why reliance may deserve protection even in the absence of an express legislative provision, while also explaining why such protection is never absolute. Their operation must constantly be balanced against competing principles, particularly post-normative predictability. Accordingly, whether reliance is ultimately worthy of protection depends on the balance struck between these competing principles, as reflected in the rules of EU private international law and in their interpretation by the CJEU.