In short

The Dutch Supreme Court emphasized on 2 June 2017 that the threshold for accepting liability of a supervisory authority is high (ECLI:NL:HR:2017:987). In its judgment, the Supreme Court also ruled that the State does not have a strengthened obligation to furnish facts in cases of liability of supervisory authorities. It depends on the circumstances of the case whether the State has such an obligation.

Background of the case

An employee of the aluminium production company Zalco was diagnosed with lung cancer caused by being exposed to asbestos during work activities. Zalco had made an advance payment in order to compensate for the damage of the employee. Afterwards Zalco was declared bankrupt and it was no longer able to fully compensate the employee. The employee subsequently held the Dutch State liable, arguing that the Labour Inspectorate had not sufficiently supervised compliance with the relevant regulations.

Standard for liability of a supervisory authority

According to the Supreme Court, the Labour Inspectorate has discretionary power when it comes to the performance of its duties and the use of its competences. A judge can review only cautiously whether the Labour Inspectorate was reasonable in developing its policy regarding supervision and inspection or its action in a specific case. The Supreme Court has used similar reasoning before in other cases where it had to rule on the liability of a supervisory authority (e.g. DNB/Vie d’Or, ECLI:NL:HR:2006:AW2077 and Band/AFM, ECLI:NL:HR:2014:3349).

If the Labour Inspectorate had no specific indication that the regulations had been violated by the employer, liability can only exist in exceptional circumstances, according to the Supreme Court. From this reasoning, it follows that the threshold for this type of ‘general’ supervisory authority liability is high.

This type of supervisory authority liability should be distinguished from ‘specific’ liability. In concrete situations, liability of the supervisory authority can exist if the Labour Inspectorate could foresee that an employee would suffer damage and that it was reasonable to expect the Labour Inspectorate to have acted in order to prevent this damage from occurring. Liability can exist particularly if the Labour Inspectorate had sufficiently serious and specific indications of the existence of violations that put the employee at risk of suffering damage and the damage and risk were also sufficiently severe due to their nature and size.

No strengthened obligation to furnish facts

Under Dutch law, the party arguing that another party is liable for damages is under an obligation to furnish facts that justify the acceptance of liability and also bears the burden of proof of those facts. However, there are some exceptions to this general rule. The employee in the present case had argued before the Supreme Court that the State has a strengthened obligation to furnish facts with regard to the sufficiency of the supervision, since most information about the supervision was at the disposal of the State. According to the employee, liability should be accepted if the State failed to meet this obligation.

The Supreme Court ruled that in general the State does not have a strengthened obligation to furnish facts. It depends on the specifics of the case and the arguments put forward by the claimant whether and to what extent the State has to substantiate its defence against the alleged failure to sufficiently supervise.