American ‘damages class action’
procedure, and in particular the
way it operates in practice. The
WCAM is however different from
its American counterpart in one
essential area, in that it requires
the parties to have reached an
agreement for the benefit of a
group of injured parties on the
manner of settling the
compensation, whereupon they
may jointly approach the court
with a request to declare the agreement to be binding.
By contrast, a ‘damages class action’ procedure
involves a representative injured party asking the court
to order the other party to pay compensation for the
loss sustained by a group (the ‘class’).
WHAT CASES HAVE BEEN THE MOST SIGNIFICANT CLASS
SETTLEMENTS IN THE NETHERLANDS SO FAR AND WHY?
The Dutch Collective Settlement Act has been drafted in
order to provide for the collective redress of mass
personal injury allegedly caused by diëthylstilbestrol
(DES), a drug that was prescribed on a large scale to
pregnant woman between 1947 and 1976. The Act has
been used four more times since the implementation.
Other cases in which the Act was used are: Dexia
(regarding financial damage allegedly caused by failure
to warn about the risks of certain securities lease
products), Vie d’Or (regarding financial damage
allegedly suffered by life insurance policy holders as a
consequence of the bankruptcy of a life insurance
company), Shell (regarding financial damage allegedly
suffered by shareholders as a consequence of Shell
misrepresenting its oil and gas reserves on its books)
and Vedior (regarding financial damage allegedly
caused by insider trading).
WHY WAS THE MORRISON RULING SO SIGNIFICANT? TO
WHAT EXTENT DID IT LEAVE A GAP IN THE MARKET FOR A
NEW JURISDICTION FOR THE PURSUIT OF COLLECTIVE
ACTIONS AND CLASS SETTLEMENTS?
In the Morrison case the U.S. Supreme Court ‘blocked’
the security class actions by non-US investors related to
securities in companies not listed in the U.S. and traded
outside the U.S., the so called “foreign-cubed-cases”. In
these kind of situations where a US court believes it
lacks jurisdiction injured parties may want to seek
recourse overseas, for example by initiating collective
or class actions in Europe in addition to the action(s) in
the U.S. The Dutch legal system provides claimants with
several possibilities to bring a collective action against
the allegedly liable party(ies), provided that the Dutch
court can base its jurisdiction on either the Brussel I
Regulation and the Lugano Convention or Dutch
international private law rules. In addition, claimants
may have recourse to the Amsterdam Court of Appeal
for a class settlement with a copy
of the Converium decision in their
pocket. Also, in view of the likely
recognition by other European
Courts, the collective action and
settlement may prove to be a
valuable alternative for certain U.S.
class actions and class settlements
recognition of which is uncertain in
other European countries.
WHAT ARE THE RECENT DEVELOP-
MENTS IN DUTCH LEGISLATION ON CLASS SETTLEMENTS?
In a letter to the parliament of 1 December 2010, the
Minister of Justice expressed his explicit intention to
open up and improve the Act for international collective
settlements of mass damage claims. In order to –
amongst others – increase the effectivety of the Act in
cases regarding international collective settlements,
the Minister of Justice prepared some technical
improvements to the Act which were submitted to
the parliament as legislative proposal at the beginning
of 2011. ■
Loyens & Loeff is an independent full-service law firm
specialising in providing legal and tax advice to
companies, financial organisations and governments.
The intensive cooperation between attorneys, tax
lawyers and civil law notaries places us in a unique
position in our home market, the Benelux.
Internationally, Loyens & Loeff is well-known for its
strength in tax, corporate law, financial and capital
markets, cross-border financing, private equity, real
estate, energy, European law, regulatory law, VAT,
employment law and litigation.
The litigation department of Loyens & Loeff has
been involved in numerous substantial mass damage
claims, including the actions arising from Madoff,
Icesave, KPNQwest and several anti-trust cases
relating to the so-called air cargo cartel.
Loyens & Loeff
Fred. Roeskestraat 100
1076 ED Amsterdam
T: + 31 20 578 57 85
F: + 31 20 578 58 00