Characterization, in conflict of laws, is the second stage of the procedure to resolve a lawsuit that involves foreign law. The process is described in English law as Characterisation, or classification within the English judgments of the European Court of Justice. It is alternatively known as qualification in French law.

It is used to determine the correct choice of law rules based on the circumstances of the case, primarily relating to matters of property. This is to reconcile differences between laws of different legal jurisdictions. The objective of characterization is to determine the nature of the action brought by the defendant in order to determine what relevant rules of applicable law apply. This may result in applying laws which differ from the lex fori. Additional factors make this determination not necessarily a simple process as the incidental question and renvoi can make determining the initial point of reference difficult. The leading authority in England and Wales is Macmillan Inc v Bishopsgate Investment Trust plc (number 3) .

Overview.

Characterization is one of the key elements in demarcating the choice of law and jurisdiction issues. The first stage is for the court to determine if it has jurisdiction, if appropriate, to avoid forum shopping. Once the forum court decides that it has jurisdiction to hear the case, it must characterize or classify the causes of action, this relates to choice of law matters. That is regarded as the most important and difficult problem in conflict of laws as trade and travel between states has become the norm. The effects of broken promises, defective goods, traffic accidents and marital squabbles are no longer confined to the sovereign territory of one particular state or nation. This is especially complicated because domestic laws usually operate to satisfy domestic interest. Various causes in actions and their respective remedies differ depending on the state. This derives from historical and political circumstances. The addition of the Rome 1 and Rome 2 Regulations to the European Union conflict of laws regime is designed to determine the choice of law which applies to situations where commercial or civil matters of broken promises, defective goods, traffic accidents, etcetera. with a party which is domiciled in a Member State.

The role of characterization within an international private law adjudication might be highlighted if understood within the simplest example of the sale of a bicycle by A to B. The transaction has both contractual and proprietary elements. Different jurisdictions will characterize the matter in different ways depending on their own laws. As is crucial within the international private law context, it is the responsibility of the adjudicating court to determine the proper law and subsequently apply it.