The Ministry of Finance requested the Molengraaf Institute for Private Law of the University of Utrecht to investigate the issue of whether different national liability regimes could give rise to additional risks for the Netherlands Authority on the Financial Markets (Autoriteit Financiële Markten, AFM) and DNB and cause negative consequences to the financial sector in the Netherlands.
According to the report (in Dutch), the liability of financial regulators is limited in all countries investigated. In New York State, USA and in Germany, financial regulators enjoy full immunity. The investigators argue that the most important reason for introducing immunity for financial regulators in the country in question was case law. In none of the countries in question was the limitation of liability introduced as a consequence of international liability risk.
Regulators in the Netherlands are only liable if it is certain that they caused damage to another as a result of an attributable wrongful act. The investigators consider it unlikely that Dutch regulators could be summoned to appear before a foreign court. In legal proceedings with an international element, Dutch courts have exclusive jurisdiction. It is possible that claims by injured parties from outside the Netherlands are brought before Dutch courts, although under Dutch law the liability of regulators is not readily assumed. In addition, Dutch regulators are only held liable when branch offices of Dutch financial institutions are involved and not in each case that has an international dimension.
This investigation supplements the 2006 Van Dam report (in Dutch), which investigated the risk of liability for all Dutch regulators at the request of the Ministry of Justice. The report concluded that Dutch liability law provides a positive incentive to regulators and is not a negative element.