Court procedurei Overview of court procedure
The DCCP contains most civil procedure rules, although several important procedural rules have been developed or further defined in case law. The courts' procedural regulations set out rules and guidelines of a more practical nature (e.g., rules for filing submissions, deadlines and extensions).
A Dutch court may only base its decision on facts or rights that are undisputed by the parties, or that are proven during the proceedings. Statements made by a party that are not sufficiently disputed by the other party will be considered as undisputed facts. In general, the burden of proof will be on the party that invokes the legal consequences of the facts or rights alleged by it. Evidence may be presented by all possible means and the court is generally free to assess the evidence introduced by the parties.
Historically, civil proceedings in the Netherlands have been focused on documentary evidence rather than on the presenting of evidence during a hearing and witness examinations before the court. Today, there is still no discovery or disclosure phase at the onset of litigation; however, there is an increased emphasis on early case management by the court. In addition, the use of motions to seize evidence and motions for disclosure has proliferated.
Moreover, pretrial witness and expert hearings have always been important tools for gathering evidence. A party may request that the court hold a preliminary witness hearing concerning certain matters if proceedings on the merits have not yet been initiated, or if such proceedings are already pending. The reason for a preliminary witness hearing may be to preserve the testimony of a witness who might be unavailable at a later point; to preserve the quality of a testimony (memories tend to fade); or to probe the chances of a particular cause of action. Generally, a person who has been called as a witness must testify. The court itself will examine the witnesses. Parties as well as counsel may pose questions after the court has examined the witnesses, but there is no system of cross-examination. The procedure for expert hearings is similar.ii Procedures and time framesStandard procedure
Under Dutch law, the standard procedure to initiate a claim is by serving a writ of summons on the opposing party. Once the writ has been served, it is sent to the court. The writ contains information about the parties; the claim and its legal grounds; evidence supporting the legal grounds, including witness evidence; the basis for the court's jurisdiction; and a rebuttal of any known defences against the claim. Subsequently, the court sets a time limit (usually six weeks) for the defendant to submit a statement of defence, including all defences, motions and counterclaims. After the statement of defence (or after the statement of defence in counterclaim, if a counterclaim is filed), the court usually orders the personal appearance of the parties in an attempt to gather more information or to reach a settlement. The court may also provide the parties, upon request, with the opportunity to plead the case during such hearing. Setting hearing dates usually takes at least several months after the last submission for a case on the merits, but hearing dates can be set more efficiently by reserving dates in advance (active and early case management). In a standard procedure, the hearing is followed by a final judgment or an interim judgment. An interim judgment may deal with a part of the claim or instruct a party to prove certain points and produce certain evidence. It generally takes between three and six months for the final judgment to be rendered. To reduce delays caused by a lack of capacity to hold hearings, new legislation entered into force on 1 January 2021 allowing courts to provide flexible assistance to one another when faced with the temporary inability to hold a hearing.
The completion of proceedings on the merits in a district court usually takes a year, but could take substantially longer depending on the procedural complexities, such as the number of submissions, motions and time limit extensions. The losing party will be ordered to reimburse the winning party for its court costs and legal fees. The order for reimbursement is not for actual costs, but for a fixed amount dependent only on the interest at stake and the complexity of the litigation. The fixed amount is usually a low percentage of the actual costs incurred by the winning party.Appeal
A party can lodge an appeal against a final judgment within three months of the date the judgment is issued (four weeks for summary judgment proceedings). The court of appeal may assess a case based on both the facts and the applicable law. Appeals to the Supreme Court can be brought within three months of the judgment on appeal. A Supreme Court appeal may only be based on the misapplication of the law or for non-compliance with essential procedural requirements. An appeal suspends the enforceability of the challenged judgment unless the judgment was declared provisionally enforceable.Motion practice
Certain motions are expressly mentioned in the DCCP, such as motions to dismiss for lack of jurisdiction, motions to produce evidence, motions for security and motions to summon a third party to appear in proceedings (e.g., for indemnification). Parties may also lodge motions that have no specific basis in the DCCP. There are no general motions to dismiss a case for not stating sufficient facts to support the legal grounds, or for not meeting the statute of limitations or on any summary judgment basis. However, the court may decide, on its own initiative or at a party's request, to deal with certain issues first in the interests of procedural efficiency (e.g., it deals first with the defence that the claim is time-barred). Motions can be made by parties in the writ of summons or in a written statement, depending on the stage of the proceedings. Motions usually suspend a case on the merits.Urgent or interim relief
A plaintiff may seek provisional measures against another party and do so by filing a claim with the summary proceedings section of the district court. The plaintiff has to demonstrate an urgent interest in obtaining such provisional measure. Designated procedural rules ensure that proceedings can quickly lead to a decision. Summary proceedings may be initiated regardless of whether proceedings on the merits have been or will be opened. The court hearing the main proceedings is not prejudiced by the summary judgment. Summary proceedings are initiated by serving a writ of summons. A hearing, normally supported by written briefs, can take place within a few days or a few weeks after service of the writ. The decision of the court is normally rendered one to two weeks after the hearing. As a result, the entire proceedings normally take only a few weeks. In exceptional circumstances, a decision may be obtained within a few days or even within a few hours.
Summary proceedings can be used in support of a wide variety of provisional measures. They are often used to order a party to act or stop acting in a certain way (usually reinforced by penalties), for example, to obtain an order forcing the defendant to resume performance of a contractual obligation or to obtain an injunction against the infringement of an intellectual property right. Summary proceedings may also be used to obtain payment when the obligation to pay is not in dispute (but the debtor simply cannot pay), or there is no reasonable defence against the claim for payment (there should be a high probability that the claim would be awarded in a case on the merits). Summary proceedings are popular and widely used, as they enable parties to quickly resolve their disputes. All injunctions are normally immediately enforceable, notwithstanding an appeal.Pre-judgment attachments
Pre-judgment attachments are an effective means to secure and preserve assets until the final resolution of a dispute. It prevents the debtor from frustrating recovery and ensures that, at the end of the proceedings, the attached assets are available to secure payment. Having substantial assets frozen may sometimes offer enough commercial leverage to settle the dispute. A pre-judgment attachment is made by first requesting the district court, ex parte, to grant leave for the pre-judgment attachment. This usually means that the claimant has to set out the reasons supporting the claim in a draft writ of summons. Any party who appears to have a justified claim may request a pre-judgment attachment and, in practice, this is nearly always granted. A debtor can object to an attachment in summary proceedings or in proceedings on the merits. If the attachment appears unjustified or the debtor provides sufficient security for the claim, the court will typically lift the attachment. The fact that assets are successfully located and frozen in the Netherlands may create jurisdiction for the district court in the location of the assets (unless there are other means to secure an enforceable title). A pre-judgment attachment on intellectual property rights is possible in cases of alleged infringement of intellectual property rights in order to preserve relevant evidence.
After assets are frozen, the party who has successfully done so must start litigation or arbitration proceedings on the merits within the period ordered by the court, unless court proceedings have been already initiated. If the claim is eventually rejected, the party who sought the attachment is liable for any damage caused by the attachment. However, if the claimant succeeds and obtains a final and enforceable judgment, then the pre-judgment attachment becomes an executory attachment, allowing the plaintiff to execute its claim against the assets of the defendant.
As of January 2017, a European cross-border pre-judgment attachment can also be used, based on the European account preservation order (EAPO).2 An EAPO can be executed within the EU without any special procedure or declaration of enforceability.Inquiry proceedings
Inquiry proceedings are an effective, quick and relatively inexpensive tool for shareholders to address perceived mismanagement in a Dutch company. Proceedings are frequently looked to by shareholder activists who seek to influence the policy of a listed company. It is also typically the venue where takeover battles are adjudicated. The right of inquiry entitles shareholders (provided they meet statutory threshold requirements) to request the Enterprise Chamber of the Amsterdam Court of Appeal to investigate the affairs of a Dutch company. The Court will order an investigation if there are well-founded reasons to doubt the correctness of the policy or course of action of a company. The Enterprise Chamber can also order immediate temporary measures (e.g., a prohibition on taking certain actions, the suspension of directors, the appointment of a temporary director or supervisory director with exceptional powers, suspension of a corporate resolution, suspension of voting powers, change of authorities of the company's bodies or transfer of shares). Immediate relief requests are popular and may be very effective, and the Court often handles them before the inquiry request itself. If the Court has ordered an investigation and the investigators' report has been made, shareholders can request the Enterprise Chamber to determine that mismanagement has taken place and request definitive measures (e.g., dismissal of directors, suspension or annulment of a corporate resolution). The Enterprise Chamber does not deal with the liability of directors against the company or against shareholders. If mismanagement is established, shareholders usually file a civil liability claim in the district court to seek to obtain damages.iii Class actions
The Netherlands is a well-known venue for class actions, which under Dutch law are more properly referenced as collective actions. Collective redress is increasingly used in various fields of law, such as consumer law, data protection law and competition law. Recent years have also seen an increase in collective actions related to climate change: they have nearly doubled since 2018 and pose a growing risk to businesses and governments.
In the first successful climate change case of Urgenda in 2019, the government was ordered to reduce emissions to protect the life and well-being of citizens in the Netherlands on the basis of human rights law.3 More recently, Milieudefensie (a Dutch environmental organisation), six other environmental organisations and 17,000 individual plaintiffs successfully brought a collective action against Royal Dutch Shell. In May 2021, the district court of The Hague ruled that Shell must reduce its CO2 emissions by 45 per cent by 2030.4
The Netherlands has proved to be an attractive jurisdiction in offering opportunities for collective actions, and that appeal has grown further by the introduction of the WAMCA on 1 January 2020, reshaping the Dutch collective actions regime by allowing monetary damages to be claimed in a collective action, while offering broader access to collective relief coupled with safeguards to prevent excesses and to facilitate finality.
The Act on collective action (WCA)7, introduced in 1994, allows non-profit organisations that meet certain criteria to file collective actions for injunctive or declaratory relief, but not for damages. The WAMCA8 is applicable to collective actions for all types of claims filed after 1 January 2020 in relation to events that occurred on or after 15 November 2016. The WAMCA introduces the possibility to claim damages in a collective action.
Before a claimant can start a collective action under the WAMCA, it has to make a reasonable attempt to settle the case with the other party. In the case of a settlement, parties may jointly request the Amsterdam Court of Appeal to declare the settlement binding. If a settlement is not reached, the claimant may file a writ of summons.
The WAMCA makes an express distinction between the preliminary admissibility phase and a substantive phase. A substantive hearing of the collective action will only take place after the court has assessed the preliminary issues, including that the claimant meets the admissibility requirements under the WAMCA; the collective action is more efficient and effective than bringing an individual claim; and it is not summarily apparent that the collective action is without merit. In addition, if more than one claim organisation has standing, the court appoints one claim organisation to act as principal in the proceedings as the 'exclusive representative'. As soon as the exclusive representative has been appointed, group members may opt out of the proceedings.
The court will stay the proceedings to give the exclusive representative and defendant the opportunity to settle the matter. If the parties reach a settlement, they are obliged to submit the settlement agreement to the court to have it declared binding. The judgment can be declared binding for Dutch residents, unless they opt out, and for non-Dutch residents, if they opt in. In addition to the opt-in requirement, non-Dutch residents should have a substantive connection to the Dutch jurisdiction to be part of the proceedings.
If no settlement is reached, the proceedings will move to the merits.
Collective actions can be filed by a foundation or association to protect similar interests of parties provided that it advances those interests in accordance with its articles of association. The WAMCA sets eligibility requirements for the claim organisations filing collective actions; for example, transparency regarding their funding, but also regarding the governance and representativeness of a claim organisation. This aims to further increase the efficiency and effectiveness of collective actions.
In collective action proceedings, the common basis for jurisdiction is typically the domicile of the defendant, or the place where the harmful event occurred. The Netherlands is a relatively liberal jurisdiction for allowing international collective actions in Dutch courts. Typically, a Dutch (holding) company as co-defendant is sufficient to create jurisdiction, as is illustrated by the Petrobas and Steinhoff cases.9 That the Netherlands is frequently used as a venue is further illustrated by the more recent Car Claim, LIBOR and Facebook judgments.10 These cases, too, illustrate how the Netherlands can be used as a venue for cross-border class actions by including Dutch companies as defendants or co-defendants. This is significant, as many multinationals use Dutch companies as holding or finance companies within their group, thus creating potential class action jurisdiction in the Netherlands.
The Collective Redress Directive (CRD)11 has entered into force and Member States must implement it in national legislation by 25 June 2023. On 1 May 2021, the Dutch legislator published an Implementation Act of the CRD for consultation. It is expected that the CRD will not substantially change the current legal system of the Netherlands, or its leading role as a venue for class actions, because the scope of the CRD is limited to consumers and to infringements of directives and regulations listed in Annex I of the CRD, whereas under the WAMCA a collective action can be initiated for any type of legal infringement.Collective settlements
In addition to collective actions, the Netherlands also offers a mechanism for settling collective cases if needed on a global scale. Collective settlements are settlements between a claim organisation representing interested parties, and the party that allegedly caused damage who agrees to compensate the class. Prior court litigation is not a prerequisite for such a settlement. At the joint request of the parties to a settlement agreement, the Amsterdam Court of Appeal can declare the settlement binding on all interested parties, unless they have opted out. The opt-out period is determined by the court, but is at least three months. The court will test, among other things, the reasonableness of the settlement; whether the claim organisation adequately represents the interested parties; and if the interested parties were properly notified and thus have had an opportunity to object and to opt out. Case law shows that in recent years the courts have thereby given increasing weight to the rules in the Claim Code, which is a code of conduct for claim organisations.
Collective settlements have mainly been used for securities and misrepresentation cases involving international investors. Well-known examples are Shell, Converium and Ageas.12 In Shell, the Amsterdam Court of Appeal took a rather broad approach in interpreting its jurisdiction by ruling that the settlement may also include foreign claimants, thereby allowing it to serve as a mechanism to resolve claims worldwide (together with a (preceding) US class action settlement). In Converium, this reach was further expanded, as there was even less connection with the Netherlands. In Ageas, a €1.3 billion settlement was reached with various claim organisations that represented former Fortis shareholders over losses incurred during the financial crisis.iv Representation in proceedings
Representation by a lawyer admitted to the Dutch Bar Association is mandatory in Dutch civil litigation procedures. Parties to litigation before the cantonal division of the district court and defendants in summary proceedings are exempt from mandatory representation. The same rules apply to both natural and legal persons.v Service out of the jurisdiction
The EU Service Regulation applies in the Netherlands.13 To serve a legal document on someone in another EU Member State, the sender submits the document to the Dutch transmitting agency. The agency will send the document to the receiving agency of the EU Member State. The receiving agency will, in turn, serve the document on the recipient. Furthermore, the Netherlands is a party to the Hague Service Convention, which applies to the service of judicial and extrajudicial documents in civil or commercial matters.14 Under this Convention, the sender can submit a legal document to the competent Dutch authority, which will then forward the document to the designated central authority in the other contracting state. The central authority ensures that the document is served on the recipient. Regarding the service of documents in EU Member States, the EU Regulation prevails over the Hague Service Convention. If neither the EU Service Regulation nor the Hague Service Convention applies, common service rules of the DCCP provide, for the most part, the same procedure as found under the Convention.vi Enforcement of foreign judgments
Foreign judgments can be enforced in the Netherlands after being declared enforceable by a Dutch court in an exequatur procedure. However, no enforcement order is required for the enforcement of decisions concerning civil and commercial matters originating from EU Member States.15 If an enforcement order is required to enforce a foreign judgment, the Dutch court may recognise and essentially copy the foreign judgment, without reviewing it on the merits, if four conditions are met:
- the foreign court's jurisdiction was based on internationally and generally accepted grounds;
- due process was observed in the foreign proceedings;
- recognition does not violate Dutch public policy; and
- the judgment is not inconsistent with any other judgment capable of recognition in the Netherlands.16
Ground (c) of this test has increasingly become a ground for litigation on refusal of recognition and enforcement, particularly where the circumstances surrounding a foreign court's judgment are suspicious.17vii Assistance to foreign courts
Courts within the EU can either request to take evidence directly in the Netherlands or request that a Dutch district court takes that evidence.18 In the latter case, a foreign court can approach the competent Dutch court directly. Another basis for assisting foreign courts is the Hague Evidence Convention, which provides that foreign judicial authorities may request the competent Dutch authority to obtain evidence or to perform some other judicial act.19 It also allows for the taking of evidence by foreign diplomatic or consular officials in the Netherlands. Requests for the purpose of obtaining pretrial discovery for use in proceedings in common law countries will be denied, however, as the Netherlands has declared, on the basis of Article 23 of the Hague Convention, that it will not execute letters of request issued for that purpose.viii Access to court files
Dutch law does not allow for public access to court files. Court sessions are open to the public (apart from cases regarding family law or minors). Exceptional circumstances may lead to closed hearings – for example, for reasons of public policy or state security. A copy of a court decision (where the operative part has been declared in public) can be requested from the court, irrespective of whether the proceedings have ended or are ongoing. Many court decisions are published on the website of the judiciary,20 where party names are anonymised if they involve natural persons.ix Litigation funding
In principle, third-party litigation funding is allowed under Dutch law. In recent years, there has been an increase in the use of third-party funding in Dutch collective actions. The Dutch Claim Code stipulates some principles regarding litigation funding. The Collective Damages Act imposes stricter financial requirements on the representative organisation filing a collective action to safeguard the interests of the injured parties and the responsible (defendant) parties. The representative organisation must not only be able to prove that it has sufficient means to bear the costs of initiating proceedings, but that it also has sufficient control over the collective action. The third-party funder must not have a decisive influence over the claims. Individual board members, as well as their lawyers and other service providers, should function independently from the external funders. Furthermore, board members of the representative organisation may not have a profit motive in the collective action that is realised through the organisation. Courts may examine whether the interests of the represented group may be adversely affected by the use of third-party financing.
Discussions on the proper reimbursement of litigation funders are particularly prevalent in mass claim settlements. For instance, in the Converium case,21 the Amsterdam Court of Appeal held that lawyers' fees amounting to 20 per cent of the total amount of the settlement were not unreasonable, also taking into account the standards developed in US case law on what is common and reasonable. According to professional rules of conduct, Dutch lawyers may not agree to a no-win, no-fee arrangement or similar arrangements.