A class action allows a large group of similarly situated individuals - known as the class - to pool together and to commence proceedings to seek compensation for damages suffered. By its very nature, a class action reduces the costs of litigation, such as court expenses and attorney fees, and lessens the financial burden for each class member involved in the legal action.

In effect, a class action is filed when a class of individuals has suffered similar harm or financial loss, such as shareholder losses, damages resulting from competition law infringements, injuries suffered as a result of medical malpractice or negligence, or damages suffered in bankruptcy. Both injured consumers and professional parties, including pension funds and other institutional investors, can jointly pursue a class action.

In the Netherlands a class action can be brought against different types of defendants in a number of different ways, for example through consolidation of claims into a single lawsuit (based on assignment, power of attorney or mandate) or together with a representative entity with full legal capacity as defined in Section 3:305a of the Dutch Civil Code. The legal remedies for securing a collective settlement of mass claims with a representative entity have been significantly expanded with the entry into force of the Dutch Act on Collective Settlement of Mass Damages (Wet afwikkeling massaschade in collectieve actie (WAMCA)) on 1 January 2020, which resembles US class action proceedings. More information about the WAMCA and the legal remedies available under Section 3:305a of the Dutch Civil Code since 1 January 2020, is provided below.

In addition, the Collective Settlement of Mass Damages Act (Wet collectieve afwikkeling massaschade (WCAM)), which has been in effect since 2005, grants the Amsterdam Court of Appeal the authority to declare collective settlement agreements binding on all parties - i.e. defendants, representative entities, and other injured parties - involved in a class action. More information about the Collective Settlement of Mass Damages Act is available here.

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Class Actions in the Netherlands
FAQ

Initiating a class action

What is the purpose of a class action?

The purpose of a class action is to pool the claims of similarly situated individuals into one action to seek compensation for suffered damages in an efficient and cost-effective manner.

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Who can start a class action?

A representative entity with full legal capacity to represent the interests of injured parties can commence a class action in the Netherlands. Representative entities are Dutch foundations or associations that have full legal capacity to fairly and adequately represent and protect the interests of a class of similarly situated individuals. The representative entities are not motivated by profit or monetary considerations.

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What types of damages are recoverable in class action?

A class action can be brought to seek collective recovery of all types of damages, such as shareholder losses, damages resulting from competition law infringements, injuries suffered as a result of medical malpractice or negligence, or damages suffered in bankruptcy. Both consumers and professional entities can collectively pursue a class action lawsuit.

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What information should be provided on the representative entity's website?

The representative entity must have a publicly accessible website where the following information is available to its constituency:

  1. The articles of incorporation of the legal entity (i.e. the association or foundation);
  2. The governance structure of the legal entity;
  3. The most recently adopted annual report of the supervisory body on its supervision over the past year;
  4. The most recently adopted report of the board of directors;
  5. The remuneration of directors and members of the supervisory body;
  6. The objectives and practices of the legal entity;
  7. An overview of the state of affairs in pending actions;
  8. Where applicable, information on the calculation of the contribution sought from the individuals whose interests are protected by the action; and
  9. An overview of how the individuals whose interests are protected by the action may join or terminate their affiliation with the legal entity.
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Notice of Liability and Invitation to Negotiate an Amicable Settlement

Can the representative entity serve a writ of summons without prior notice?

No, the representative entity is not permitted to serve a writ of summons without prior notice. After all, the representative entity must have attempted to settle the claim (usually the payment of damages) through an amicable settlement with the other party. Thus, in this context, a notice of liability is first sent to the other party in which, in addition to holding the other party liable, an invitation is extended to reach an amicable settlement. A period of two weeks is sufficient for the offer to reach an amicable settlement. This step is an important component of the standing requirements, which is referred to as ‘admissibility requirements’ in the new legislation. If this requirement is not satisfied, the representative entity may be declared inadmissible.

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Writ of Summons and the Central Register for Collective Claims

What are the requirements for issuing a writ of summons?

The law imposes various requirements in respect of the writ of summons. As such, the writ of summons must include:  

a. A description of the event or events to which the class action pertains;
b. A description of the individuals whose interests the class action seeks to protect;
c. A description of the similarity of the claims of the individuals whose interests the representative entity seeks to represent and the extent of similarity of the legal and factual issues in the case;
d. A description of how the representative entity meets the admissibility requirements imposed on it; and
e. A statement regarding the obligation of the plaintiff to file a notice of the class action in the Central Register for Collective Claims.

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What is the role of the Central Register for Collective Claims?

The Central Register for Collective Claims gives access to a range of information on all the class actions instituted in the Netherlands. The Central Register for Collective Claims serves as a source of information for injured parties, representative entities and interested parties. It includes entries about the appointment of an exclusive representative entity in pending class actions, as well as copies of writs of summons issued, approved class action settlement agreements, and the final judgments on the settlement of class actions.

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When should a class action be filed in the Central Register for Collective Claims?

The writ of summons and the notice thereof must be filed with the court clerk’s office and in the Central Register for Collective Claims, respectively, within two days of the writ of summons’ date of service on the defendant. A copy of the writ of summons will be attached to the entry in the register. There are also guidelines for filing a writ of summons with the Central Register for Collective Claims.

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Deadline for Responding to the Writ of Summons

What is the response deadline and when does it start?

The response deadline is the period prior to which additional class action claims can be filed. The deadline starts as of the date of filing the notice of writ of summons in the Central Register for Collective Claims and the period lasts three months.

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Who has legal standing to file subsequent class actions?

Other legal entities that meet the admissibility requirements may file a class action for the same events to which the original class action relates. This class action will be brought before the same court as the first class action. If the class action is brought before a court that has no jurisdiction to hear the case, the court will refer the case to another court after the deadline has passed.

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Do subsequent class actions have to be identical?

Subsequent class actions must be based on the same events and involve similar factual and legal issues as the first class action. This does not mean that the class action must be exactly the same. Class actions may be based on various legal grounds.

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What is the purpose of filing a class action in the Central Register for Collective Claims?

Subsequent class actions do not need to be filed separately as they are treated jointly as one case after entry in the Central Register for Collective Claims. However, it is recommended to do so as it increases the transparency of the class actions filed for other representative entities and injured parties.

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Can the response deadline be extended?

The court may extend the response deadline by up to three months if a subsequent class action is initiated and the court deems that the period of three months is not sufficient. The court has sole discretion in granting the extension and will base its decision on the factual and legal complexity of the case.

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What is the further procedure for multiple class actions?

Multiple class actions are treated jointly as one case. The court docket date stated in the writ of summons is four weeks after expiry of the deadline. If the deadline has been extended, the court docket date is four weeks after expiry of the extension. The court determines whether all plaintiffs meet the admissibility requirements and which plaintiff has standing to serve as the exclusive representative entity. Where appropriate, the court may appoint several plaintiffs as representative entities. The court then determines whether there are grounds for the class action to be referred to another court.

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The Admissibility Phase

What is assessed during the admissibility phase?

The admissibility phase precedes the merit review phase of the class action. Various requirements are assessed during the admissibility phase. The court determines whether it has jurisdiction, reviews the law applicable to the class action, the standing of the representative entity, the merits of the class action, the designation of an exclusive representative entity, the exact size of the represented class and the claim and, lastly, whether the nature of the class action justifies the case being brought before another court.

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How is the representative entity assessed?

The representative entity must meet a number of criteria to qualify as such. If it does not, the court will declare the representative entity inadmissible. The representative entity must fulfill the following criteria:

  • The entity is a foundation or association with full legal capacity;
  • It promotes and protects the interests of the class represented, and demonstrates this in its articles of incorporation;
  • The interests of those represented are adequately protected. This is the case if the representative entity is sufficiently representative and represents a sufficiently large group of injured parties;
  • The entity has a supervisory body;
  • It has an appropriate and effective mechanism for constituency involvement in decision-making;
  • It has sufficient financial resources to conduct the proceedings and sufficient independent control of the legal action;
  • It has a publicly accessible Internet page with specific information about its governance structure and practices;
  • It has made sufficient efforts to achieve the claim’s object in negotiations with the other party. A period of two weeks after the defendant has received a request for consultation stating the object of the claim is in any event sufficient for this purpose; and
  • It has sufficient experience and expertise with regard to initiating the class action and moving it forward.

A court may, in its discretion, make an exception and declare a representative entity admissible, without the requirements being satisfied, if the action is brought for an idealistic purpose and a very limited financial interest or if the nature of the class action or the constituency whose interests are protected by the action so warrants. The court has this discretion only if the class action does not seek monetary damages.

The class action must have a sufficiently close connection to the Netherlands (this is referred to as the scope rule). This is generally deemed to be the case if:

  • The majority of the injured parties have their habitual residence in the Netherlands; and/or
  • The defendant is domiciled in the Netherlands and additional circumstances suggest a sufficiently close connection to the Netherlands; and/or
  • The event or events to which the action relates took place in the Netherlands. 
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How is the class action assessed?

The class action will move forward when the court has decided that:

  • Each case has questions of law or fact in common;
  • There is a sufficient number of persons whose interests the action seeks to protect;
  • These persons have a sufficiently large (financial) interest; and
  • The class action is not, after summary inquiry, without merit at the time the proceedings are initiated. In exceptional cases, this review may lead to the dismissal of a class action before it is assessed on its merits.
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What is a frivolous claim?

A frivolous claim refers to a bad-faith lawsuit that asserts a frivolous defense, has no legal merits or is patently unfounded and therefore should not be brought before the court. The criteria for bringing a class action constitute control mechanisms that are designed to prevent frivolous actions that have no legal basis or merit. Whether an action is frivolous depends strongly on the circumstances of the case.

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The Exclusive Representative Entity

What is an exclusive representative entity?

The exclusive representative entity is the coordinator of the proceedings. This entity institutes and conducts the litigation on behalf of the class members, and serves as the contact point for the defendant. The court appoints the most adequate representative entity to be to exclusive representative entity.

The exclusive representative entity conducts the proceedings on behalf of all members of a class certified by the court and as representative of the representative entities that have not been appointed as exclusive representative entities. The appointment of an exclusive representative entity by the court is not subject to any legal remedy.

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What circumstances does the court consider when appointing an exclusive representative entity?

The court takes the following circumstances into account when appointing an exclusive representative entity:

  • The size of the group of individuals on whose behalf the plaintiff acts;
  • The size of the financial interest represented by this group;
  • Other work that the plaintiff performs for the individuals that it represents in or out of court;
  • Previous work carried out by the plaintiff or class actions brought by the plaintiff.
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Are representative entities that are not appointed as exclusive representative parties to the proceedings?

Representative entities that are not appointed as exclusive representative entities remain parties to the proceedings. They may assist or guide the exclusive representative entity as necessary.

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Who conducts the litigation and the procedural acts?

In principle, the exclusive representative entity conducts the litigation and the procedural acts. The court may decide that plaintiffs that are not appointed as the exclusive representative entity may conduct procedural acts and litigation on behalf of the class.

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Can multiple parties be appointed as exclusive representative entities?

If the nature of the class action, the interests represented therein or the interests of the plaintiffs they are representing so warrant, the court may decide to appoint multiple exclusive representative entities

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What if I do not agree with the appointment of the exclusive representative entity?

The appointment of an exclusive representative entity by the court is not subject to legal remedy.

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How should the persons whose interests are represented be notified of the appointment of an exclusive representative entity?

Upon appointment, the exclusive representative entity will provide notice by ordinary mail to all known persons whose interests it will represent in this class action and inform them of it appointment, the class action, and the class of persons it will exclusively represent in this class action. The court may order that the notice be delivered by means other than ordinary mail. The exclusive representative entity must also announce the appointment in one or more newspapers to be determined by the court. Further, the judgment in which the court appoints the exclusive representative entity will be available for inspection at the court clerk’s office and the judgment will be filed in the Central Register for Collective Claims.

For injured parties belonging to the certified class who do not have a domicile or habitual residence in the Netherlands and do not fall within the scope of binding international or EU rules prescribing a method of announcement, the court will order the manner in which the announcement is to be made public. The court may also order that the announcement be made in a language other than Dutch.

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The Opt-Out Options

When do individuals whose interests are represented have the option to opt out?

In essence, a class action is a proceeding that is instituted for the entire class of persons whose interests are represented by the exclusive representative entity. The judgment in that proceeding is therefore binding on all such individuals. This far-reaching binding of injured parties requires that they have an option to opt out if they wish to do so.

Injured parties may exercise their first opt-out option subsequent to the appointment of the exclusive representative entity. In this case, the court will establish an opt-out timeframe of at least one month during which the injured parties must notify the court clerk’s office in writing of their wish to opt out of the class action and thus do not want to be bound by the judgment entered in the proceedings.

A second option for injured parties to opt out of the proceedings is after a collective settlement has been reached. The rationale behind this second opt-out option is that, unlike a court judgment, an approved collective settlement may deviate from the law, including mandatory law. In that context, the legislature deems it desirable for injured parties to be given a second chance to opt out of a class action after the court has approved the settlement agreement.

If the injured parties fail to exercise either opt-out option, they will be bound by the collective settlement. 

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Is an injured party bound by the judgment entered in the class action if they were not aware of their damages?

Injured parties who could not have been aware of their damages at the time the appointment of the exclusive representative entity was announced will not be bound by the collective settlement agreement if, after becoming aware of their damages, they notify the defendant in writing that they wish to exercise their opt-out option. In case of a collective settlement agreement, the injured party must also notify this in writing to the individual named in the agreement. The defendant may set a deadline of at least six months within which the injured party must have given notice that they do not wish to be bound by the agreement.

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What happens if a large number of class members choose to opt out?

If the number of class members who have opted out of the class action is too large to justify further proceedings, the court may decide to discontinue the class action. 

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Can individuals who choose to opt out initiate separate litigation?

No collective litigation may be initiated for individuals who have provided an opt-out notice in a timely manner, if that litigation is based on similar factual and legal issues regarding the same event or events. The class action with the exclusive representative entity will take precedence over such other litigation.

Individuals who have exercised their opt-out option must in principle bring individual litigation. However, the law provides that an individual litigation based on similar factual and legal issues regarding the same event or events will be stayed at the request of the most diligent party pending the judgment in the class action.

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What rights do foreign class members have?

Class members who do not have a domicile or habitual residence in the Netherlands are not automatically bound by the judgment entered in the proceedings. Such injured parties are subject to an opt-in option. Foreign class members can choose whether to join the Dutch class action. The time and manner of providing the opt-in notice are subject to the same regime as the opt-out system. This means that the court will also determine the timeframe within which foreign class members may notify the court that they agree to the representation of their interests in the class action. As with the opt-out option, the timeframe for the opt-in option is also at least one month. However, in exceptional cases and at the request of the most diligent party, the court may decide that an opt-out system, rather than an opt-in system, applies to foreign class members.

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The Settlement Period

When does the settlement period start?

After appointing an exclusive representative entity, the court sets a deadline for negotiations on a settlement agreement. In that case, the court has made a judgment on the admissibility (standing) of the representative(s) but has not yet reviewed the merits of the class action. Thus, an attempt will first be made to reach a settlement.

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What is the court's role in reaching the settlement?

The court will set a deadline for negotiations on a settlement agreement. The length of this deadline will be determined in large part by the views and positions of the parties.

If the class action is brought for the purpose of seeking monetary damages, the court may, before deciding on the extent of damages to be awarded, order the exclusive representative entity and the defendant to submit a proposal for a collective settlement. The court sets the deadline for submission of a proposal. Compliance of the parties with an order to submit a proposal is mandatory. If a party fails to comply, the court may draw such adverse inferences as it deems appropriate.

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What happens if no settlement is reached?

If no settlement is reached, the case will be litigated in accordance with Dutch (procedural) law. However, the exclusive representative entity will be given the opportunity to expand the grounds of the claim while the defendant is given the opportunity to expand the grounds of its defense, insofar as the defendant has exercised its option to limit its defense to the admissibility of the plaintiffs in the first instance.

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What happens when a settlement is reached?

When the parties reach a settlement, the draft settlement agreement must be submitted to the court for approval. This draft must meet the settlement requirements set forth in the Collective Settlement of Mass Damages Act (WCAM).

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The Merits of the Class Action

What takes place during the review of the merits of the class action?

During this review, the court will consider whether to award the collective claim. The establishment of liability and the amount of damages are elements that will be considered. In determining the collective damages, the court may use a compensation schedule with different amounts of damages for each class. The review of the merits of the class action follows the procedural rules of the regular summons proceedings.

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Are judgments binding on all class members whose interests are represented?

Yes, where the court's judgment is declared irrevocable or provisionally enforceable, it is binding on all Dutch injured parties who belong to the certified class, whose interests are represented in the class action and who have not exercised their opt-out option. The judgments for foreign class members who do not have a domicile or habitual residence in the Netherlands are binding if they have voluntarily opted in to the class action.

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The Role of Wijn & Stael

Are you considering filing a class action in the Netherlands? At Wijn & Stael, we have extensive experience in holding (listed) corporations, such as pharmaceutical companies and telecom service providers, financial institutions, as well as regulators such as the Dutch Central Bank and other entities accountable for the harm they cause. Our attorneys have successfully taken on many of such defendants and succeeded in securing our clients the outcome they seek. Feel free to call one of our experts for a no-obligation case consultation.

What is the purpose of a class action?

The purpose of a class action is to pool the claims of similarly situated individuals into one action to seek compensation for suffered damages in an efficient and cost-effective manner.

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Who can start a class action?

A representative entity with full legal capacity to represent the interests of injured parties can commence a class action in the Netherlands. Representative entities are Dutch foundations or associations that have full legal capacity to fairly and adequately represent and protect the interests of a class of similarly situated individuals. The representative entities are not motivated by profit or monetary considerations.

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What types of damages are recoverable in class action?

A class action can be brought to seek collective recovery of all types of damages, such as shareholder losses, damages resulting from competition law infringements, injuries suffered as a result of medical malpractice or negligence, or damages suffered in bankruptcy. Both consumers and professional entities can collectively pursue a class action lawsuit.

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What information should be provided on the representative entity's website?

The representative entity must have a publicly accessible website where the following information is available to its constituency:

  1. The articles of incorporation of the legal entity (i.e. the association or foundation);
  2. The governance structure of the legal entity;
  3. The most recently adopted annual report of the supervisory body on its supervision over the past year;
  4. The most recently adopted report of the board of directors;
  5. The remuneration of directors and members of the supervisory body;
  6. The objectives and practices of the legal entity;
  7. An overview of the state of affairs in pending actions;
  8. Where applicable, information on the calculation of the contribution sought from the individuals whose interests are protected by the action; and
  9. An overview of how the individuals whose interests are protected by the action may join or terminate their affiliation with the legal entity.
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