On 16 November 2016 the Minister of Security and Justice has submitted the bill introducing a collective damages action to the lower house of Dutch Parliament. Under the current collective litigation regime, no monetary damages can be sought on a collective basis. The essence of the bill is that this restriction will be removed, so that a group action for monetary damages is possible. At the same time, the bar is raised for collective claims in order to achieve a fair and balanced system, which provides a higher level of finality for defendants.
The general outlines of the bill are as follows:
1. The aim of the bill is to increase the attractivity of reaching a settlement by (i) improving the quality of collective action organizations, (ii) co-ordination of collective proceedings and (iii) by realizing more finality.
2. There will be one statutory regime for collective actions, regardless of whether these are used to claim monetary damages or not.
3. The requirements that collective action organizations have to meet in order to have their collective claims admitted are tightened as far as governance, funding and representativity are concerned.
4. There must be a sufficient connection between the collective claim and the jurisdiction of The Netherlands.
5. All collective claims must be submitted to the Amsterdam District Court and be entered into a central register for collective actions.
6. If there are more collective action organizations wishing to bring an action for the same event(s) on similar points of law and of fact, the court will select from this group the most suitable organization as Exclusive Representative for all injured parties.
7. The non-selected representatives remain parties in the proceedings.
8. After the appointment of the Exclusive Representative members of the group for whose benefit the action has been brought can withdraw from this group by opting out. The action will then go forward on the merits. Those who opt out must pursue their claim individually.
9. The court judgment is binding on all injured parties who have not opted out.
With this bill, the Dutch legislator has tried to strike a proper balance between the parties for whose benefit the collective action is brought on the one hand and the defendants on the other. The stricter requirements for admissibility that are to be applied by the court at the start of the proceedings have also been introduced with the aim of protecting the parties whose interests are to be represented. This will probably lead to a further professionalization of foundations and associations that wish to bring collective actions. Please find the hyperlink to both the bill and the explanatory memorandum in the first sentence of this update.