Class-Actions In The Netherlands: How To Initiate Proceedings

Sometimes companies or even governments make decisions which cause disadvantages for a great deal of individuals. It is then often faster to start a class-action instead of filing hundreds of individual claims before court. In this article you will read how you can bring your claim before court.

Class-actions in the Netherlands: new law

The Netherlands has proven itself as being the leading country regarding class-actions in the European Union. Since implementation of the new law regarding class-actions on January 1^st 2020, class-actions became even more popular.

Claiming damages and liability during class actions

Class-actions in the Netherlands becoming more popular had everything to do with the new possibility of seeking damage compensation. Up until implementation of the 'Wet afwikkeling massaschade in collectieve actie' (hereinafter: WAMCA) it was not possible to claim compensation, you could for example only request a declaratory decision, requesting damages was not possible.

Declaratory decision by class actions in the Netherlands

A declaratory decision is a verdict in which the judge will either decide the opposing party is liable for your damage or not. During these kind of procedures the victim only gets a decision regarding the liability, not regarding the amount of money to be claimed. After getting a declaratory decision, the height of your claim needs to be calculated. This means that a debate about the height of your claim will take place in a new proceeding. With the new law, the WAMCA, getting a declaratory decision and claiming damages is possible in the same class action in the Netherlands.

Starting a class action in the Netherlands

In order to start a class-action in the Netherlands a foundation or association needs to be set-up. Its sole purpose is the representation of the interests of the individual claimants. This foundation or association is often referred to as the '305a-organisation' or 'claim organisation'. This organisation will be the claimant during the proceedings.

Special purpose vehicle as a representative

The '305a-organisation' is a so called 'special purpose vehicle'. Since the '305a-organisation' needs to represent the interests of the individual claimants, it cannot have monetary objections. This organisation needs to have a:

• Board of directors
  • This usually consists of claimants who take the initiative to start the proceedings. They will lead the organisation.
• Supervisory board
  • The people taking place in this board make sure the organisation fulfils its obligations towards the individual claimants.

Next step in class actions in the Netherlands

After the 305a-organisation is established, it is important to determine what defines as the damaging event. The damaging event which is relevant in a legal point of view, might be different than seems obvious. The damaging event is the decision or action that caused the damage to occur. For example when children's toys with poisonous paint are sold in March 2015 and children get sick in October 2022, the damaging event took place in March 2015.

When did the damaging event take place?

If the damaging event occurred after the 15^thof November 2016, the new law applies. If the damaging event took place before the 15^th of November 2016 the 'old' class-action laws apply. There is one exemption; if a proceeding was started before January 1^st 2020, the old law also applies. Proceedings started after January 1^st 2020 regarding damaging events that occurred after the 15^th of November 2016, are governed by the new law.

As explained before, in procedures where the 'old' law applies, there is no possibility to claim damages in the same procedure in which liability is claimed. However, if the WAMCA applies to class actions in Netherlands financial claims can be brought in the same procedure as the claim regarding the decision on liability.

Admissibility of claims before court

On the basis of article 3:305a DCC (old) the admissibility criteria for a class actions in Netherland are slightly different than the criteria under the WAMCA applicable on procedures initiated as of the 1^st of January 2020 regarding damaging events after the 15^th of November 2016.

Similarity of claims

The first admissibility criterion under the old law is the similarity of claims. This means that the interests that the '305a-organisation' tries to bundle, need to be similar enough in order to be seen as one big claim. Under the old regime this rarely leads to non-admissibility.

However, on the basis of the WAMCA the similarity criterion needs to be tested by the court on more elements. Because liability claims and compensation claims are brought before court in one procedure in cases where the WAMCA applies.

Scope and goals of the class action mentioned in theStatuten

The second criterion is the same for both regimes. The second criterion relates to a specific section in the organisation's Statuten, the articles of association. The Statuten, are a legal document that outlines the rules, regulations, and internal workings of an organisation. This document is crucial for the governance and management of the entity. The Statuten must outline the purpose of the class-action and the interests overseen by the '305a-organisation.' In other words, the Statuten should define the scope and goals of the class-action.

Representativeness

The third criterion set by the old-regime is different than the one set by the WAMCA. Whereas the old-regime embodies the criterion of safeguarding interests, the WAMCA refers to representativeness. Under the old-regime two questions arise:

1. Do the individuals behind the class-action benefit from the class action?
2. Does the claiming organisation possess enough knowledge and skills to conduct proceedings?

The representativeness of the '305a-organisation' must be tested in order for the class action to be admissible under the WAMCA. The organisation needs to be representative enough. This is determined on the basis of the amount of claimants represented by the organisation.

Also, the group which the organisation represents cannot be changed after the initiating summons.

Enlightened admissibility-regime

When the claim of the '305a-organisation' embodies an idealistic goal and the organisation has only a very limited financial interest, the so called 'enlightened admissibility-regime' can be applied. According to this regime the organisation does not have to meet all admissibility criteria.

Preliminary examination

Finally, before a claim is admissible before court it must be apparent that the claim is not prima facie unfounded. Before a legal claim is accepted or considered valid by the court, it must be evident that the claim is not obviously or on the surface unfounded. The term "prima facie" is a Latin expression that translates to "at first glance" or "on its face." This assessment involves a preliminary examination to determine if there is a reasonable basis for the claim. The court aims to ensure that the legal action is not frivolous or without any reasonable grounds.

Only when the claim is not prima facie and all admissibility criteria as mentioned above are fulfilled, there will be a further debate about the merits of the case.

Legal help for class actions in the Netherlands

Did you suffer any damages by a failure of a company or the government? Do you think there might be more people who suffered and want to claim financial compensation? A class action in the Netherlands might make your case more feasible and getting a lawyer more affordable.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.