The Dutch class action system is one of the most advanced class action systems outside of the United States, but did not allow for court sanctioned damage awards on a collective basis outside of a voluntary collective settlement. WAMCA introduces the possibility of claiming damages on a collective basis. Claim organisations are given a strong tool to push for a settlement or damage award in collective proceedings.
WAMCA will apply to class actions started on or after 1 January 2020 with respect to events that have occurred on or after 15 November 2016. Claims must have a sufficiently strong connection with the Netherlands for the Dutch courts to accept jurisdiction. This connection is deemed sufficient if (i) the majority of the claimants is based in the Netherlands, (ii) the defendant is domiciled in the Netherlands, or (iii) the events that are the subject of the claim took place in the Netherlands.
Under WAMCA the outcome of class action proceeding will be binding on all persons that belong to the class and reside in the Netherlands unless they opt out. The WAMCA offers an opt in regime for non-residents by default, but courts may deviate and apply an opt out regime to non-residents as well.
Admissibility of claims
Class action proceedings may be brought only if it can be reasonably expected that the class action is more effective and efficient than individual court proceedings. In order to prevent claimant organisations from bringing frivolous claims, courts can award higher cost orders against organisations bringing claims that are evidently without merit.
WAMCA sets admissibility criteria claim for organisations with respect to their governance, financing and expertise. Claimant organisations must, among others, have a supervisory body and a decision-making mechanism that allows class members to influence important decisions. Information on governance of the organisation must be publically available on a website. The organisation must have sufficient financial means to litigate whilst maintaining appropriate decision making freedom in relation to any third party litigation funders. Importantly, the organisation must have enough relevant litigation experience and expertise. There will not be a limited government kept list of claimant organisations like in many other European jurisdictions.
Exclusive representative
The new legislation introduces a system of an exclusive representative which resembles that of a lead plaintiff in the US. If multiple claim organisations file a claim in respect of the same events, the court will appoint one or more claimant organisation(s) as principal claimant(s) and include all claims in one court case. The system of an exclusive representative for the entire class aims to streamline proceedings. It is also expected to make it easier for parties to reach a settlement.
Future outlook
The Netherlands has a notable track record as a venue for class action litigation. Several hundred collective proceedings have been conducted over the past 25 years and various collective settlements have been declared binding on an opt-out basis under the Class Action (Financial Settlement) Act. WAMCA is an important development in the European landscape of class actions and is expected to further increase the importance of class actions as a litigation instrument in the Netherlands.
Allen & Overy’s tier 1 litigation practice has vast experience in advising on class actions. Over the past 25 years we have advised many clients in numerous class actions on investor claims, miss-selling claims, (consumer) products, financial products, director’s liability and more. Brechje van der Velden was a member of the experts committee that advised the Ministry of Safety and Justice on the WAMCA in 2016.
