The Netherlands
| Author | Daan Lunsingh Scheurleer,Ianika Tzankova |
| Date | 01 March 2009 |
| DOI | 10.1177/0002716208328389 |
| Published date | 01 March 2009 |
| Subject Matter | Articles |
available in other EU countries, the Netherlands has
innovative legislation under which settlements of mass
damage claims may be certified by a court and so
become binding on all members of the group, unless
they opt out.
Keywords: collective/class settlement; collective/class
action; collective redress; opt out; civil
law; law of civil procedure; representative
organizations; loser pays rule
The
Netherlands
1. Introduction
The Netherlands has two main collective
redress regimes: the Dutch Act on Collective
By
Settlements of 2005 (WCAM)1 and the collec-
IANIKA TZANKOVA
tive action of Rule 3:305a-c of the Dutch Civil
and
Code (DCC). Under the WCAM, parties that
DAAN
have agreed to settle a mass damage claim may
LUNSINGH SCHEURLEER
request the Amsterdam Court of Appeal to cer-
tify the settlement, as a result of which it
becomes binding on the group of similarly situ-
ated claimants described in the agreement,
unless they opt out. This act places the
Netherlands in the forefront of developments
on mass disputes, since it is so far the only
European country with such legislation.
The WCAM has already delivered two court-
approved collective settlements: the DES hor-
mone settlement was approved in June 20062
and the Dexia-settlement in January 2007 with
regard to investment products, where more
than three hundred thousand claimants3 were
involved. The submission for certification of a
third settlement with regards to the Shell recat-
egorization case, involving approximately five
Ianika Tzankova is a professor of comparative mass lit-
igation at Tilburg University and an attorney at law at
Nauta Dutilh.
Daan Lunsingh Scheurleer is an attorney at law at
Nauta Dutilh.
DOI: 10.1177/0002716208328389
ANNALS, AAPSS, 622, March 2009
149
150
THE ANNALS OF THE AMERICAN ACADEMY
hundred thousand shareholders, was made in April 2007. This settlement has
potentially groundbreaking cross-border ramifications. It aims at achieving a
worldwide settlement with the exception of U.S. shareholders.4 Finally, on
February 1, 2008, Vedior announced its intention to file a request for the certifi-
cation of a collective settlement with the Dutch Shareholders Association (VEB).
The request has since then been filed, as has the request in the Vie d’Or case,
which will be discussed below.5 There are expectations that at least some mass dis-
putes with regard to unit-linked insurances, involving 6 million Dutch households
and several insurers and banks, will ultimately be resolved under the WCAM in
the years to come.
2. Background Information on the Dutch Legal System
The Dutch civil litigation system belongs to the “civil law” family. Historically
and as regards its content, Dutch procedural law belongs to the French subfam-
ily.6 From the introduction in 1838 of its own legislation, including the current
Dutch Code of Civil Procedure (DCCP), Dutch procedural law has, however,
undergone further independent development and so has gradually taken on a
character of its own.7 Judges are appointed and not elected (no jury), and there
are no punitive damages. Parties are, however, entitled to statutory interest on
damages, on late payment of a principal amount, from the date on which the
wrongdoing took place. This provides an incentive for parties to settle a claim.8
There is no U.S.- or English-style discovery in the Netherlands, so there are
limited possibilities to obtain documents, but one may obtain information
through various court orders. The parties may voluntarily produce any docu-
ments on which they rely in their briefs. At any stage, the court can order the par-
ties to provide information or to produce documents. If a party refuses to comply
with such an order, the court may “draw any conclusions it deems appropriate,”
taking into account that such a refusal is justified provided it is based on a valid
reason. “Contempt of court” is not known under Dutch civil law. Pursuant to
Section 162 DCCP, the court can order any party at any stage of the proceedings
to provide access to any records or documents that party is obliged to draw up
and keep. If a party fails to comply with such an order, the court is free to reverse
the burden of proof. Where either party shows a legitimate interest, the court can
also order the other party to produce specific documents pertaining to the parties’
legal relationship under Section 843a DCCP. The courts have not been generous
in issuing such orders.
Witnesses are heard before a single judge. Although the lawyers are allowed
to ask questions, the overall “direction” is with the judge: there is no U.S.-style
cross-examination. They may be heard on the initiative of either party before or
after the proceedings are commenced. They may also be heard to comply with an
obligation under an interim judgment to substantiate certain allegations.
THE NETHERLANDS
151
3. Fees and Other Cost Issues
The costs of a Dutch civil action, including a collective action, are primar-
ily lawyers’ and experts’ fees. The prevailing party will usually be entitled to
compensation for such fees based on a schedule reflecting the amount of the
claim and the actions required to arrive at a judgment (i.e., number of briefs,
court appearances). The compensation will not cover the total lawyers’ fees
incurred, but only a very small portion of them: the loser pays, but not much.
Court fees will also be awarded and depend on the amount involved. They are
capped at €5,916 (court of appeal). The winning party is entitled to recover
legal expenses incurred in the pretrial phase if they are reasonable.9 The
Netherlands has no requirement that laywers’ fees in collective actions be
approved by the court.
It is becoming increasingly common for collective actions to be financed by
organizations or special purpose vehicles that collect an advance financial contri-
bution from the individual group members and/or may be entitled to a contin-
gency fee depending on the result. In the Dexia case about one hundred
thousand claimants who supported the action paid €45 to a foundation, and this
funding was used to start collective actions.10 However, this method obviously
causes logistical problems connected with collecting the contributions and mak-
ing initial contact with the group members. Also, the donation is voluntary, which
leaves open the possibility for free riders. A clear trend is that the media, partic-
ularly consumer-oriented television programs,11 are playing an increasing role in
the initial phase in which contact is made between group members and lawyers
and other legal service providers. The Dutch Consumers’ Association and the
Dutch Shareholders’ Association (VEB) can be seen as “professional funders” of
collective actions, but their possibilities are limited as they have to finance actions
from membership fees and donations.
Although some mass disaster accident claims in the Netherlands have been
funded largely through legal aid and legal insurance, this involvement was on an
ad hoc basis. It is not possible to speak of a conscious policy development in this
field. Some authors propose a more structured and centralized way of financing
collective actions through legal aid and legal insurance, as the latter is increasing
in popularity in the Netherlands in combination with some sort of contingency
fees.12 To date, contingency fee arrangements are prohibited for members of the
Dutch Bar,13 since they are considered unethical. Accordingly, entrepreneurs fill
the gap, for example, where a company or a foundation makes a contingency fee
arrangement with individual plaintiffs and instructs lawyers on a lodestar basis.
The above-mentioned funding solutions are not optimal from a plaintiff’s point
of view, but there is still resistance to introducing “no cure, no pay”...
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