In the United States, class actions seem to be a go-to instrument for cartel follow-on litigation. In the United Kingdom, the (certification) criteria for collective proceedings were recently clarified in the judgment of the Supreme Court in the Merricks vs. Mastercard proceedings. What about the use of class actions for cartel follow-on litigation in the Netherlands, now that the recent Collective Damages in Class Actions Act (Dutch acronym WAMCA) has taken effect?
Cartel follow-on litigation in the Netherlands
The Netherlands is seen as an attractive jurisdiction for follow-on proceedings. Cartel follow-on proceedings are typically conducted by use of the assignment model (cessiemodel). There are only few examples where a class action in relation to antitrust infringements was brought (under the particular provision of Article 3:305a Dutch Civil Code, DCC).
Assignment model v. Article 3:305a DCC (pre-WAMCA)
When using the assignment model, a litigation funder incorporates a “special purpose vehicle” (SPV), for example a foundation or a private limited company, to which injured parties can subsequently assign their claims. The SPV can bring the actual (bundled) claims against one or more of the cartelists in fairly standard proceedings before the competent court. The assignment documentation is commonly tested extensively.
A class action under Article 3:305a DCC (pre-WAMCA) works differently. This provision allows an interest organization – if admissibility requirements are met – to request declaratory relief in a class action. However, it limits the possibilities for funders/funding arrangements and it explicitly rules out the possibility to claim monetary damages. Mere declaratory relief does in practice not provide much (additional) value, since proceedings tend to follow a decision by which the European Commission has already established the infringement.
Will the WAMCA increase the use of Article 3:305a DCC in cartel follow-on proceedings?
As per 1 January 2020, the WAMCA has widened the scope of Article 3:305a DCC and enables interest organizations to claim monetary damages in a class action. The WAMCA also enhances admissibility requirements for interest organizations and introduces a lead claimant system in case multiple interest organizations bring collective claims. Please see our earlier news item for more general information on the WAMCA.
Although the WAMCA facilitates claims for monetary compensation, funders and/or interest organizations may be reluctant to use Article 3:305a DCC for cartel follow-on proceedings because of strict(er) admissibility requirements (limited case law regarding cartel follow-on proceedings under Article 3:305a DCC (pre-WAMCA) already suggested a relatively high bar for admissibility). In addition, the WAMCA introduces a lead claimant system for a potential multiplicity of claimants, but the WAMCA is not specifically tailored for a potential multiplicity of cartel infringers as defendants.
Over twenty class actions have been registered in the Dutch central class action register since 1 January 2020. None of these specifically relates to antitrust infringements. Going forward, people in the field do not necessarily expect players to shift to using WAMCA proceedings as cartel follow-on, also given the widespread use of the assignment model.