On 15 July 2009 the Amsterdam Court of Appeal approved and declared binding the global collective settlement in the Vedior case, resolving a threatened securities action in connection with Randstad's public takeover bid for Vedior. This update is of interest to anyone involved in strategic decisions on the resolution of cross-border mass claims against European companies.
Globalisation and related factors are causing a continued increase in the incidence of mass damage, i.e. damage of a similar nature suffered by a large number of individuals. As a result, class action-type litigation has become a much debated topic across Europe, resulting in several legislative initiatives at the level of both the European Commission and individual EU member states. The enactment in 2005 of the Dutch Act on Collective Settlements of Mass Claims (Wet collectieve afwikkeling massaschade, the "WCAM") was a major milestone, making the Netherlands the first, and thus far the only, European country with legislation enabling a binding collective settlement of mass disputes. Recent case law shows that the WCAM is an effective instrument for settling mass disputes, even where the relevant mass dispute is a cross-border one.
Under the WCAM, parties that have agreed to settle a mass damage claim may request the Amsterdam Court of Appeal to declare the settlement binding on the group of similarly situated claimants described in the agreement, unless they opt out. To date, the WCAM has produced five court-approved collective settlements in a wide variety of disputes, ranging from product liability to securities fraud. NautaDutilh is, or has been, involved in four out of these five settlements. The following brief description of the settlements shows not only that thousands of ongoing or potential proceedings can be settled in one go, but also that the WCAM can serve as an effective tool for reaching a global settlement.
The pioneering settlement under the WCAM ended the DES hormone dispute in the Netherlands. The settlement, which was approved and declared binding in June 2006, entitled around 34,000 claimants to a share in a € 35 million settlement fund. By April 2008, around 6,000 DES users had filed requests for payment. The settlement also aims to compensate future claimants. 22 interested parties objected to certification of the settlement, mainly because the settlement excluded some groups. The opt-out rates in this case are not publicly available, but it is estimated that only a handful of claimants opted out. NautaDutilh's lawyers represented manufacturers of DES.
In January 2007, the Amsterdam Court of Appeal approved and declared binding a € 1 billion collective settlement in the Dexia investment products case. The case involved over 300,000 claimants, of whom less than 10% opted out. NautaDutilh represented Dexia Bank Nederland in the litigation, the negotiations leading up to the settlement and the approval process.
In April 2009, a € 45 million settlement was approved and declared binding following litigation in which around 11,000 former policy holders of the bankrupt life insurance company Vie d'Or brought a claim against the former insurance industry regulator for alleged failure to take adequate enforcement action, and against the actuarial advisor and the auditors for alleged professional malpractice.
In a landmark decision rendered in May 2009, the Amsterdam Court of Appeal approved and declared binding the US$ 352.6 million Shell settlement. The settlement compensates investors who suffered losses due to a sudden decrease in the value of Shell securities following disclosure and restatement of allegedly incorrect prior reporting by the company of its proven oil and gas reserves between April 1999 and March 2004. The settlement agreement was entered into on behalf of investors residing in 100 jurisdictions, except for those residing in the US and those who purchased their Shell stock on US stock exchanges. Court approval of the settlement was requested by Shell, the Shell Reserves Compensation Foundation (stichting), the Dutch Shareholders' Association and the Dutch pension funds ABP and Zorg en Welzijn. For the first time, the court explicitly took jurisdiction over shareholders residing outside the Netherlands and declared the settlement binding on such shareholders as well as on those residing in the Netherlands. The court also confirmed that a Dutch foundation can act on behalf of non-Dutch injured parties. NautaDutilh represented the two pension funds.
The most recent approval is that of the € 4.25 million Vedior settlement on 15 July 2009. The settlement relates to damage allegedly suffered by investors who sold their Vedior stock, which was listed on Euronext Amsterdam, at a moment when rumours were spreading that Vedior was about to be acquired. As a result of those rumours, the share price suddenly rose. Later the same day, on 30 November 2007, Vedior and Randstad announced their merger talks. Like the Shell settlement, the Vedior settlement includes both Dutch and foreign investors. Unlike the Shell settlement, however, the Vedior settlement also includes US residents, giving it a truly global scope. NautaDutilh represented Randstad.
Collective settlements under Dutch law: a new strategic option for European companies?
In any litigation, and particularly in disputes regarding mass claims, there are times when various settlement options have to be considered. The Shell and Vedior cases have made clear that collective settlements under the WCAM can be used for claimants residing worldwide. Moreover, the availability of a forum in Europe dealing with mass dispute settlements may be a relevant factor for courts elsewhere in deciding whether to take jurisdiction over European claimants and whether to include them in a certified class. This means that European companies dealing with a global mass claim now have a new and viable strategic option that will enable them to achieve a worldwide resolution of the dispute and also to improve their position in class actions elsewhere.