The Wait Is Over: Collective Actions For Damages Are Here

Author:Ms Carlijn Van Rest and Bas Keizers
Profession:Hogan Lovells
 
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On 19 March 2019, the Dutch Senate finally approved legislation introducing collective damages actions in the Netherlands (the "Legislation"). This introduces the option to claim monetary damages in a "US style" class action

Collective Action For Damages

When the Legislation will enter into force has not yet been determined. Its scope has, however: it will apply to harmful events which took place on or after 15 November 2016.

The key features of the Legislation are:

An option to claim monetary damages in a collective action on an opt-out basis. The Legislation lifts the current prohibition on representative organisations claiming monetary damages in a collective action. The proposed action can either result in a judgment in which the court will award damages or in a collective settlement held to be binding by the court. The Dutch legislator chose an opt-out mechanism, inter alia, because this will create closure for the defendant - preventing new collective actions being brought on the same facts and about the same legal issues once a collective action has finished. Initially, the legislator had international ambitions; the draft legislation did not limit the size of the (opt-out) class. Provided the scope rule (see below) was met, the class could include international class members. But after some heavy criticism, the Dutch legislator decided on an amendment to limit the class to Dutch class members only, giving foreign class members the opportunity to opt in. No rule without an exception: upon request by one of the parties, the court may also apply the opt-out regime to those foreign class members who are "easily identifiable". An "exclusive representative" can be appointed if there is more than one collective action organisation seeking to bring an action for the same circumstance(s), on similar points of law and fact. This compares with a "lead plaintiff" in the USA. The exclusive representative will litigate on behalf of all collective action organisations involved in the procedure. This means it will be important for the organisations to coordinate with each other. After the appointment of the exclusive representative, class members can opt out. Once the exclusive representative is appointed, the court will set a period for the parties to try to negotiate a settlement agreement. If a settlement agreement is reached and declared binding, there's a second opt-out opportunity for class members. If no settlement agreement is reached...

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