(1)If—
(a)the law of a country or territory other than the United Kingdom or any part of the United Kingdom is chosen by the parties to be applicable to a consumer contract, but
(b)the consumer contract has a close connection with the United Kingdom,
this Part applies despite that choice.
(2)For cases where the law applicable has not been chosen ..., see Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations as that Regulation has effect as assimilated direct legislation (including that Regulation as applied by regulation 5 of the Law Applicable to Contractual Obligations (England and Wales and Northern Ireland) Regulations 2009 and regulation 4 of the Law Applicable to Contractual Obligations (Scotland) Regulations 2009), unless the case is one in respect of which Regulation (EC) No. 593/2008 has effect by virtue of Article 66 of the EU withdrawal agreement, in which case see that Regulation as it has effect by virtue of that Article.
Cases considering section 74 5
[2024] EWCA Civ 630 · 10 June 2024Interprets
Section 74 governs contracts applying foreign law where there is a close connection with the United Kingdom. The court treated the statutory close-connection question as distinct from the closest-connection test. (see paras [41], [92]-[103])
Section 74(1) applies the consumer-protection provisions despite a foreign-law choice where the contract has a close connection with the United Kingdom. The connection is assessed between contract and United Kingdom at conclusion; residence is relevant but not decisive, and no close connection existed here. (see paras [92]-[102])
Section 74(2) directs attention to the Rome I Regulation where the applicable law has not been chosen. The court treated the resulting closest-connection analysis as a useful comparison, but not as the statutory test under section 74(1). (see paras [41], [51] and [103])
[2022] EWCA Civ 1297 · 6 October 2022
Part 2 applies despite a foreign choice of law if, but only if, the consumer contract has a close connection with the United Kingdom (see paras [25]; [86]; [139]).
[2023] EWHC 1964 (Comm) · 28 July 2023Interprets
Interprets close connection as requiring an assessment of all circumstances, including connections with other countries. UK residence alone did not establish a close connection where the guarantee was overwhelmingly connected with Hong Kong. (see paras [87]-[91], [100]-[128])
Applies the close-connection requirement and concludes that the guarantee’s UK connection was not close within the statutory meaning. The Act therefore did not apply despite the Hong Kong choice-of-law clause. (see paras [113]-[129])
Uses the provision as a link to the Rome I analysis. The court considered that, absent a choice-of-law clause, Rome I would have led to Hong Kong law. (see paras [93]-[99], [117]-[123])
What each judgment says about section 74 is in the case-law panel in the full Act.
345.The parties to a contract may agree that it is to be governed by the law of a particular country. This might be because the trader is based in a country other than the UK. This section provides that the consumer may not be deprived of the protection of this Part, where a contract has a close connection with the UK, even if the contract states that the law of a non-EEA State applies (the EEA is the EU Member States plus Iceland, Liechtenstein and Norway).
346.The Rome I Regulation (Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations), governs which law applies to a consumer contract. See paragraph 27 above for more information on the Rome I Regulation.
347.Section 74 is based on regulation 9 of the UTCCRs, which implements Article 6(2) of the UTCCD; and sections 26 and 27 of the UCTA.