Disputes relating to competition law are largely played out before the competition authorities and administrative courts. However, companies also often find themselves discussing matters relating to competition law in civil courts. Examples would be a disagreement about a distribution relationship or a dispute about licences (an overview of civil case law with respect to competition law can be found in the Kroniek civiele rechtspraak mededingingsrecht 2015). The cartel damages cases currently under way in the Netherlands (we have previously reported on these proceedings here, here and here) are further excellent examples of cases with significant competition aspects disputed before civil courts.
Through the introduction of two recent bills, the Netherlands will become even more attractive for cartel damages claims. A new American bill is also likely to have a substantial impact on cartel damages cases in the Netherlands.
Class action bill
Class actions, where a foundation or association can institute an action to protect the interests of other persons to the extent that it promotes such interests, have been around in the Netherlands since the 1990s. Regular use has been made of such class actions in recent years, among others in proceedings regarding the right of women to stand as candidates in elections and proceedings regarding security leases.
So far, a class action has never been used to recover damages resulting from a cartel. There is a simple reason for this: at present, a class action cannot be used to claim damages. The current legal provision (Article 3:305a of the Dutch Civil Code) explicitly states that the object of a claim in a class action may not be to seek monetary compensation. This makes the class action less attractive for cases concerning cartel damages, in which the amount of damages plays an important role, and, in some cases, may even lie at the heart of the dispute.
A recent bill is intended to do away with this restriction for class actions. The bill abolishes the legal ban on claiming damages. However, the bill does contain a number of safeguards designed to prevent the abuse of class actions. These safeguards include, for example, the requirement for a “close connection to the Netherlands”. It remains to be seen how such requirements will crystallise into the final law and in practice, but the class action bill potentially offers an attractive new option for claiming damages in cases involving cartels. Meanwhile, there is little movement in the development of collective redress mechanisms at European level. With the introduction of the bill, the Netherlands will therefore be able to further extend its leading position in this area.
Netherlands Commercial Court
Disputes relating to competition law (such as proceedings concerning distribution agreements or actions for damages resulting from cartels) are more often than not international matters. When proceedings are initiated before the Dutch civil courts relating to such matters, it is often the case that both claimants and defendants are international companies. Even when companies have a branch in the Netherlands, discussions about the case often take place with the involvement of the legal department at the foreign head office.
This can lead to some rather awkward situations in practice. Documents relating to the case are translated into English and then back into Dutch after consulting the client; courtroom interpreters must provide a translation of the arguments; and judgments are quickly translated so as to inform the clients as early as possible. For these reasons, parties regularly opt to fight such cases in other countries or to take them to arbitration (where parties are free to conduct the proceedings in English). All this while the Dutch judicial system is well-suited to handle international disputes (judges have plenty of experience with international disputes and it is much less expensive than bringing an action abroad).
A recent bill intends to further strengthen the position of the Netherlands as a forum for settling international disputes. At the initiative of the judiciary, a proposal has been made to establish the Netherlands Commercial Court. The intention is for the Netherlands Commercial Court to resolve major commercial disputes efficiently through judges specialising in this type of dispute. An important factor here is that it will be possible to conduct the proceedings in English, if the parties opt to do so.
Under the current proposal, the Netherlands Commercial Court will be a new international commercial division of Amsterdam District Court and Amsterdam Court of Appeal. A national pool of judges, who have the necessary knowledge of and experience with international commercial disputes, will be created to handle the proceedings as efficiently as possible.
This proposal offers some practical advantages for competition matters. Firstly, the translation issues alluded to above can be resolved if the parties opt to conduct the proceedings in English. Secondly, the bill satisfies the need for a judiciary specialising in competition law. A survey by the Dutch Council for the Judiciary revealed that competition law is one of the areas where there is a need for cases to be handled by specialised judges. The Netherlands Commercial Court bill would appear to offer the necessary freedom in the composition of the pool of judges. This means that there is room for assigning competition specialists to cases touching on competition law.
The consultations about the bill are now complete. The intention is for the bill to be passed shortly and the Netherlands Commercial Court to start up on 1 January 2018. We will keep you informed about any developments.
Developments in the United States
Independent of the developments in the Netherlands, a bill in the United States could have a major influence on Dutch practice regarding cartel damages. On 9 March 2017, the House of Representatives passed a bill reforming the American class action system. The reforms introduce far stricter rules for this type of action. For example, the bill stipulates that all injured parties in the class action must have suffered equal injury: “each class member has suffered the same type and scope of injury”. It appears that claimants in many cartel damages cases will be unable to fulfil this requirement.
If the bill is passed, bringing an action in the United States will suddenly become much less attractive. Combined with the bills introduced in the Netherlands, this might give a substantial boost to parties seeking to efficiently claim damages in the Netherlands.