The Dutch Litigation Invitation
When thinking of the Dutch, we often picture tulips, windmills, wooden shoes, bikes, endless canals, the occasional payment misunderstanding when “going Dutch” and perhaps the legal use of a certain popular addictive substance. However, the Dutch are also known for their devotion to remaining an important player in the field of international business, something which is rooted in their past. It was the Dutch who established the first multinational stock company, invented and started to trade gin, brought tulips back from Turkey to claim as their own and created one of the leading beer brands in the world that still satisfies a global thirst. International business means international disputes, and new commercial opportunities are presenting themselves in this field due to the ongoing globalisation of civil justice. With various new initiatives, the Dutch welcome international disputes before their courts as a new and not-so-European business model arises.
Following a recent legislative proposal, the Netherlands Commercial Court (NCC) is expected to be established in Amsterdam this year. The NCC will deal with complex international commercial disputes based on forum consensus. The NCC promises specialised judges, effective and shorter proceedings and “paperless litigation” in the English language. The Dutch Civil Procedural Code (DCPC) ensures a solid base for civil due process. Based on the DCPC, parties have the legal duty to tell the truth and are obliged to present all relevant evidence. However, the DCPC does not include discovery proceedings, therefore limiting procedural abuse and generally saving time and money. Based on the DCPC, parties are able to make procedural agreements for tailor-made litigation proceedings and also evidence in German or French does not require translation. NCC judgements can be enforced throughout Europe with the Brussels Recast Regulation. Meanwhile, preliminary seizing proceedings are widely available in the Netherlands and similar cross-border seizing possibilities are expected soon within the European Union. The NCC will be a new and appealing alternative to costly arbitration proceedings for parties involved in an international commercial dispute.
Another interesting legislative proposal involves far-reaching additions to the current Dutch legislation on collective actions and collective mass settlements. The current Dutch class action system has gained international popularity during the recent years in connection with the United States Supreme Court ruling “Morrison vs. National Australia Bank”, which limits foreign investors in the initiation of collective actions in the USA. The current Dutch class action system allows specially established foundations or associations to seek declaratory relief on behalf of a group of injured parties. The outcome of this collective action will be relevant in the individual claim proceedings of these injured parties. The collective action often results in a collective mass settlement, which is based on a specific regulation. The Fortis mass settlement in 2016 of USD 1.3 billion gained worldwide attention. The collective mass settlement must be approved by the Amsterdam Court of Appeal and then becomes binding for all injured parties unless they choose to opt out. Therefore, the reach of the mass settlement can extend further than just the parties involved in the litigation. It is also argued that an approved Dutch mass settlement can be upheld against foreign injured parties that do not opt out after notification through the Brussels Recast Regulation. The new legislative proposal grants collective representatives the right to also claim collective damages on behalf of a defined class. The individual claimants falling within that definition are automatically included in the class unless they opt out, similar to the outcome of a collective mass settlement. Of course, the class action must have a connection to the jurisdiction of the Netherlands, including a majority of victims of the class residing in the Netherlands, the defendant having a residence in the Netherlands or depending on the events on which the claim is based. Therefore, it is expected that when the proposal is passed, Dutch collective actions will gain even more popularity among foreign plaintiffs.
The NCC initiative and the proposed additions to the Dutch collective action open the door for international legal processionals to invest in cross-border alliances to ensure optimal litigation services for international clients.
It also shows that the Dutch are not afraid to introduce new initiatives in order to be a compelling forum for international disputes by combining the commercial “U.S. style” litigation approach with civil procedural law principles.
The Netherlands is open for business.