Recently, the Dutch Supreme Court handed down three judgments that provide additional guidance as to when a collective action may be used, for what and with what effect.

The first case makes clear that a collective actions tolls the statute of limitations, not only for the vehicle (an association or foundation) that acts as plaintiff, but also for the members of the group that it represents. This is the case even, if the claim in the collective action is for a declaratory judgment, whilst the claims for which the statute of limitations should be tolled would be for damages. The tolling effect for the members of the group applies also if the collective action leads to a collective settlement and some members elect to opt out of the collective settlement (Supreme Court 9 October 2015, ECLI:NL:HR:2015:3018, X v. Dexia). So, a collective action has, in principle, the effect that it tolls the statute of limitations of individual claims. That will make it attractive for individuals to wait and see what the result of the collective action is, before they file their individual claims. That may streamline litigation for defendants as well.

The second case concerns a Ponzi scheme and sheds further light of the scope of the decisions that may be given in a collective action. The defendant contended that, in taking part in the Ponzi scheme, the members of the group for which the collective action was started, acted carelessly and were culpably negligent. The defendant took the position that this should be taken into account in the collective action and not be deferred to litigation on individual claims for damages. The Supreme Court disagreed. It found that the court, in the context of a collective action, should abstract from specific circumstances on the part of individual members of the group when it deals with a claim for a declaratory judgment that the defendant committed a wrongful act. Another solution would, in the Supreme Court's view, unacceptably limit the application of the collective action (Supreme Court 27 November 2015, ECLI:NL:HR:2015:3399, ABN AMRO v. Stichting Belangenbehartiging Gedupeerde Beleggers). So, as a rule, in a collective action, the court must only deal with issues that apply generally to the group as whole, not with issues that concern individual group members. Those issues are reserved for individual (damages) litigation.

The third case regards the scope of the collective action in cases against the government and draws the line between civil litigation and administrative proceedings. As a rule, a collective action is not admissible if it only concerns interests that may also be raised by the members of the group in administrative proceedings (Supreme Court 3 June 2016, ECLI:NL:HR:2016:1049, Universiteit Leiden e.a. v. Stichting Collectieve Actie Universiteiten). The Supreme Court does not say this with so many words, but the rationale of this rule probably is that issues that belong to the domain of public law should be dealt with in administrative proceedings and not in a collective action before the civil courts. Administrative proceedings are easily accessible, because they are low cost and do not require representation by counsel. That may mitigate the need for collective redress.

An important restriction of the collective action is that it may not be used for monetary damage claims. In practice, that obviously is a drawback. However, this is about to change. The government intends to amend the law and to enable monetary damage claims in collective actions. A legislative proposal is expected to be filed with parliament later this year.