Bringing a claim - initial considerations

Key issues to consider

What key issues should a party consider before bringing a claim?

Although the costs of civil litigation in the Netherlands are generally lower than, for example, in the US and the UK, they can still be significant. The party found to be in the wrong is usually ordered to pay the costs to the prevailing party, including the court registry fee and experts’ and attorneys’ fees. It is important to note that the attorneys’ fees in civil cases are calculated on the basis of a court-approved scale of costs and not the actual costs. This usually leads to a remuneration that only covers a small amount of the actual attorneys’ fees incurred.

Another relevant consideration relates to the scope of Dutch discovery, which is narrower than what is available in the US and UK. As a result, Dutch proceedings are generally less costly and time consuming, but parties might have more difficulty in obtaining additional evidence from their counterparty.

Establishing jurisdiction

How is jurisdiction established?

Whether a Dutch court has jurisdiction has to be established (i) by European regulations, (ii) by international conventions or treaties and (iii) by Dutch rules of international private law.

The most important EU regulation is the Regulation (EU) No. 1215/2012 on jurisdiction and the recognition of judgments in civil and commercial matters (EEX recast). The EEX recast applies if the defendant is domiciled in a EU member state or if one of the exclusive jurisdiction clauses applies. In the EEX recast (and the CCP), the key principle is that the defendant must be brought before the court of the jurisdiction where the defendant lives or is situated. The CCP and EEX recast have alternative competence rules if, for instance, parties have agreed upon a contractual choice of forum.

The European Court of Justice (ECJ) has ruled that (i) parties do not have the possibility to argue that under the EEX a court lacks jurisdiction because a court in another jurisdiction would be more convenient or appropriate (Owusu v Jackson) and (ii) an antisuit injunction is an inadmissible interference with the jurisdiction of the court that is targeted by such injunction (Turner v Grovit).

Preclusion

Res judicata: is preclusion applicable, and if so how?

Preclusion is applicable in the Netherlands. The preclusive effect of a judgment concerns the binding effect of judicial findings contained in judgments in other proceedings. New actions between the same parties regarding the same claim are not prevented as such, but the preclusive effect may lead to a dismissal of the claim.

Applicability of foreign laws

In what circumstances will the courts apply foreign laws to determine issues being litigated before them?

The most important regulations that govern the applicable law for EU members are Rome I (Regulation (EC) No. 593/2008) with respect to agreements and Rome II (Regulation (EC) No. 864/2007) with respect to extra-contractual liability. In international commercial contract cases, the applicable law and competent courts are usually decided by the choice of law and forum choice provisions in the relevant agreement. This can result in Dutch courts having to apply foreign law. Dutch courts can request information on applicable foreign laws from the competent authority in the country concerned. Further, parties must provide the Dutch courts with information regarding the contents and implications of the foreign law and may use all means to do this (parties will usually submit written legal opinions). Foreign law will only apply to the merits of the case. Procedural issues are governed by Dutch law.

Initial steps

What initial steps should a claimant consider to ensure that any eventual judgment is satisfied? Can a defendant take steps to make themselves ‘judgment proof’?

To safeguard successful enforcement of a court decision, a claimant may apply for an order authorising a prejudgment attachment on the defendant’s assets (see question 9). Furthermore, a claimant can - under certain circumstances - claim security for costs (see question 28).

Freezing assets

When is it appropriate for a claimant to consider obtaining an order freezing a defendant’s assets? What are the preconditions and other considerations?

Parties may request the president of the competent court to give permission for a prejudgment attachment, garnishment, or arrest of assets of a defendant located in the Netherlands. Usually, obtaining leave in the Netherlands is relatively easy. In most cases ‘ex parte’ proceedings are followed, meaning that the counterparty will not be heard by the judge before the leave is granted. The request of attachment contains, amongst others, the nature of the attachment (third-party attachment, etc), the legal basis and the extent of the claim. The president of the district court will apply a rather marginal test of the request of attachment.

After the leave for attachment is granted, the claimant is obliged to initiate proceedings against the defendant within a certain period of time (if proceedings have not already been initiated). If the claimant does not timely initiate the proceedings, the prejudgment attachment will be lifted automatically.

The prejudgment attachment prohibits the debtor or defendant from alienating the attached property. Furthermore, an attachment usually exerts substantial pressure on the defendant (which may be conducive to settlement talks).

Pre-action conduct requirements

Are there requirements for pre-action conduct and what are the consequences of non-compliance?

In the Netherlands there are no formal pre-action protocols that set out the steps parties must take before commencing civil proceedings (such as in the UK, for example). As a result, there is no ‘letter before action’ that needs to be send before starting proceedings. However, rules of conduct for a Dutch lawyer may imply that, under certain circumstances, a prior notice is sent to prevent unnecessary proceedings and enforcement.

Other interim relief

What other forms of interim relief can be sought?

The following provisional measures are regularly requested in summary proceedings:

  • an order obliging the defendant to resume performance of a continuing contractual obligation;
  • advance payments (provided that the claim is undisputed or at least easy to establish);
  • an injunction against infringement of an intellectual property right; and
  • seizure of evidence.
Alternative dispute resolution

Does the court require or expect parties to engage in ADR at the pre-action stage or later in the case? What are the consequences of failing to engage in ADR at these stages?

During proceedings, Dutch courts often actively encourage mediation, as litigation is considered to be a last resort. Parties are free, however, to engage in such mediation. There are no legal consequences for failing to engage in mediation.

If parties have agreed to arbitration in a contract, the route to the court is not per se closed. A court will only declare a case inadmissible if one of the parties files a motion for inadmissibility due to the arbitration clause.

Claims against natural persons versus corporations

Are there different considerations for claims against natural persons as opposed to corporations?

A party that wishes to bring a claim against a natural person as opposed to a corporation has to consider that corporations are obliged to pay a higher amount of court fees. Further, natural persons tend to enjoy additional protection in certain areas such as employment and consumer law (they have, for instance, the right to appear in the competent court in the district where they are living).

Class actions

Are any of the considerations different for class actions, multi-party or group litigations?

Dutch law provides for a mechanism that facilitates the implementation of collective settlements. Parties to a settlement agreement may request the court of appeal to declare the settlement agreement binding on all persons to whom it applies according to its terms (the interested persons). The settlement agreement must be concluded between (one or more) potentially liable persons and (one or more) foundations or associations that promote the interests of the interested persons. The court may refuse to declare the settlement agreement binding if, for instance, the amount of settlement relief is unreasonable or the petitioners are jointly and insufficiently representative of (the interests of) the interested persons. If the court declares the settlement agreement binding, all persons are bound by its terms, except for persons who have submitted an ‘opt-out’ notice.

Dutch law also provides for a collective action to protect the common or similar interests of parties whose rights or interests are affected. A collective action can only be instituted by an association or foundation whose articles of association promote the interests that the collective action aims to protect. Currently, only a ‘declaratory’ judgment as to the liability of the defendant can be obtained. Monetary claims or claims for damages can only be brought by individual parties, but new legislation is pending that will make it possible for an association or foundation to claim damages.

Third-party funding

What restrictions are there on third parties funding the costs of the litigation or agreeing to pay adverse costs?

Third-party funding is allowed in the Netherlands. Especially in mass claims, third parties fund on a regular basis. There are no restrictions on third parties agreeing to pay adverse costs.