A Dutch view on discovery: short and sweet.

• Author: Tzankova, Ianika

THE United States is internationally known as a jurisdiction with broad discovery rules that pose extensive costs on defendants. (1) Like many other continental European jurisdictions, the Netherlands does not have U.S. style discovery. Nevertheless, there are more fact-finding options available under Dutch law during and before civil proceedings than one would expect at first glance. Those options are available even when the proceedings have been or will be commenced before a foreign (non-Dutch) court. A complicating factor, however, is the fact that the available options are spread out in statutory regimes of varying nature or have been developed in the case law of the Dutch Supreme Court, the highest civil court in the Netherlands, with its seat in The Hague. The result is a patchwork of fact-finding options.

The most-used "evidentiary patches" will be briefly discussed below, including their potential cross-border implications. We will discuss the relevant provisions relating to the production of documents, the pre-trial hearing of witnesses, and the Dutch so-called "inquiry proceedings," which are widely used in shareholder disputes. Those fact-finding options could be a useful tool for companies that are involved in commercial disputes and want to strengthen their settlement negotiation position, but don't want to get involved in lengthy and costly discovery proceedings. The fact-finding instruments discussed below can also be used as part of a sophisticated commercial dispute-resolution strategy.

Before we zoom into three fact-finding mechanisms, a brief overview of some relevant features of the Dutch legal system will follow.

1. General

   The Netherlands is a civil-law jurisdiction, which means that there are no jury trials, no contingency fees and no punitive damages. The Dutch judiciary is known for its competent and independent approach, a combination of common-law pragmatism with German "Grundlichkeit". Moreover, the Dutch judiciary is internationally oriented and has vast experience with complex high-profile litigation and international disputes. It is accustomed to handling disputes with cross-border implications and involving foreign parties. Although the language of the court is Dutch, the judiciary doesn't feel uncomfortable when parties submit or present documents written in English. The internationalization of the Dutch judicial system was the subject of the Dutch Supreme Court's annual report for 2009-2010. (2) Also in 2011, the President of the Supreme Court expressed in a speech that Dutch judges must take into account the international dimensions of the cases with which they are confronted. (3)

   The Netherlands has cost-shifting rules under which the loser pays the winner's legal fees, but the loser never fully pays the winner's real costs. The legal fees that the losing party must pay are capped and are related to the amount in dispute and the number of motions or pleadings that parties filed, rather than to the winner's actual expenditures. Furthermore, court fees for individuals and for companies differ. For example, if an amount of EUR 1,5 million is in dispute, District Court fees would be EUR 3,829 for companies and EUR 1,519 for individuals. Court of Appeal fees would be EUR 5,114 for companies and EUR 1,601 for individuals. Supreme Court fees would be EUR 6,396 for companies and EUR 1,920 for individuals. (4) The winning party will receive a cost recovery dependent on the number of procedural acts, be it motions or hearings, it performed before the court. Depending on the number of motions the parties filed, the winning party before the District Court or the Court of Appeal will receive a in a case with a value of EUR 1,5 million a cost recovery of EUR 3,211 per motion or a hearing attendance. (5) The rules in the Supreme Court are slightly different: if the ruling is quashed, the party that appealed the ruling will receive EUR 2,600. If the ruling is confirmed, the opposing party will receive EUR 2,200.

   The order in which evidence is assembled and in which the case is argued is different from that in most common-law jurisdictions. In most cases, the parties first argue their positions in court, whereupon the court decides which issues need to be sustained further by evidence. (6)

   The general rule is that evidence may be presented in any form. Even evidence that has been unlawfully obtained may be admissible as evidence in civil proceedings. The court has discretionary power to evaluate the evidence presented at the time it renders its decision. (7)

2. Collective Action

   Under Dutch law, a foundation or association established for the purpose of protecting the interests of a certain group can institute an action in court for the protection of the group's interests, if those interests are of a similar nature ("305a-entity"). (8) This entity could be an existing organization or a special-purpose vehicle ("SPV"). The organization must establish that the legal interests of the persons for whose benefit the action is brought are sufficiently protected. This is a fairly new requirement that was recently introduced to the existing provisions. (9)

   Usually, the 305a-entity will seek a declaratory judgment that the defendant(s) acted wrongfully against the members of the group that the entity represents. Current statutory provisions assume that, if the action is successful, individual members will still need to litigate causation and damages (as a follow-on action), unless the dispute is settled. Legislative proposals under consideration would allow the 305a-entity to sue for damages on behalf of the group, so that causation and damages could be determined in the collective action itself. If the action is not successful, the group member is not be bound by the outcome and is free to start an individual action. The ruling in a collective action doesn't have res judicata effect.

   Practice has shown that defendants are often prepared to settle with group members when liability has been established in the 305a-action. To meet this need, Dutch law provides for a collective...