A. Availability of civil claims
1. Scope for civil claims in the Netherlands
Civil claims can be brought against any “undertaking” (defined as a natural or legal person carrying on some commercial or economic activity) under Articles 101/102 TFEU and under Articles 6 and 24 of the Dutch Competition Act. Civil claims must be brought in the civil courts. A regulatory finding of infringement is not a precondition to a civil action in the Netherlands. It is also possible to bring an action for damages against a statutory director (based on tort) in cases where that director is “seriously to blame” for the anti-competitive behavior. An action can equally be brought against any other employee, but the employee will be able to recover from his employer any damages that he is forced to pay out, unless he acted with willful intent or gross negligence. To date, no such claims have been brought in the context of competition law and so it is not clear if they would be upheld and/or if an employee complicit in cartel activity would be prohibited from recovering from his employer.
2. Applicable limitation periods
The limitation period for bringing a damages claim based on competition law in the civil courts is five years from the day following that on which the claimant and the person liable for it (whichever is the later) becomes aware of the damage. The period is capped at 20 years from the date on which the damage was inflicted. There is, to date, not much case law in the context of competition litigation as to when awareness might arise – it is very much a subjective question. In 2007, a court in Rotterdam found that on the date a certain complaint was filed with the competition authorities, the claimant was already aware of the damages caused by the infringement and of the person liable for it. However, this does not establish authority for attributing knowledge to a claimant as at the date some third party makes a complaint or the competition authorities instigate an investigation independently. Claims for annulment of a contract based on competition law are subject to a limitation period of three years from the date on which the claimant became aware of the violation of competition law or should reasonably have become aware of the violation.
Decisions of a lower court are subject to appeal to one of the courts of appeal. This is an appeal de novo. The appellant may appeal both on issues of fact and on issues of law. If a Dutch court of appeal finds merit in one or more of the grounds of appeal of the appellant, it must redecide the case in its entirety so as to form its own view on the outcome. A further appeal from the Court of Appeal lies to the Dutch Supreme Court. Appeals to the Supreme Court are limited to issues of law or complaints that the judgment of the Court of Appeal lacks proper reasoning.
4. Class actions for infringement of competition law and/or damages available in the Netherlands
A form of class action exists in the Netherlands. An association (vereniging) or foundation (stichting) may start a collective action provided that: (i) the action serves to represent the similar interests of others; and (ii) it represents those interests pursuant to its articles of association. Both requirements are easy to satisfy. Articles of association of associations or foundations may in general be amended easily. As an alternative, an association or foundation may be established specifically to conduct the action. This happens frequently. Currently, there is a legislative proposal being considered by the Dutch Parliament that, if adopted, will introduce an additional requirement so that the court may refuse to admit an action if it considers that those whose interests the action should serve will not benefit from it. A range of remedies may be requested in a collective action. This includes an injunctive relief and a declaration that the defendant acted wrongfully against the members of the group that the association or the foundation represents. However, there is one important qualification to the remedies available: a claim for monetary damages may not be brought in a collective action. In Vie d’Or, the Supreme Court interpreted this exception so as to include a declaratory judgment establishing causation or guidelines for establishing the amount of damages. In the same case, the Supreme Court found that the exception does not stand in the way of a claim for compensation of the costs associated with establishing liability or damages. This means that in a private enforcement action, the association or foundation may claim compensation for the cost of an economic report establishing the amount of damages that results from anti-competitive behavior. The result of the exception that prevents a claim for monetary damages is that a collective action may establish that an infringement has occurred and may identify those affected, but it may be necessary to follow that collective action with individual claims for damages suffered. Although those individual claims may be combined in one action, this is likely to be a burdensome and costly process for the claimant and for the defendants. There is also a statutory mechanism by which multiple damages claims can be settled collectively. Such mechanism circumvents a host of individual damages actions by securing settlement between the defendant and an association or a foundation that represents the interests of each of the individual claimants. The association or the foundation must be representative of the individual claimants. If a settlement is reached, the parties may file an application with the Amsterdam Court of Appeal in order to have the settlement declared universally binding. If the court of appeal issues such a declaration, the settlement becomes binding upon all members of the group that are entitled to compensation under the settlement, unless group members elect to opt out within a specified period of time. In determining to approve any settlement deal, the court of appeal must assess whether the settlement is reasonable, taking into account the nature of the damage, the amount of damages and the ease and expediency of obtaining compensation. If group members opt out, such members are free to start or continue an individual action.
B. Conduct of proceedings and costs
5. Burden of proof
The claimant bears the burden of proof in: (i) determining whether there has been an infringement; and (ii) in demonstrating causation and loss. In cases where a prior decision of the Dutch Competition Authority, the ACM, or the European Commission has already established a competition law infringement, the court will accept that an infringement has occurred and will require the claimant to prove only the causation and the loss. Actions can be brought in the Netherlands based on a finding of infringement by other national competition authorities. However, it is a matter for the court as to the evidential weight to be afforded to such findings and such findings will not necessarily be afforded the same significance as a finding by the ACM or the European Commission. An appeal of a decision of the European Commission (or, as the case may be, the ACM) does not always stay national damages proceedings. Notwithstanding the undesirable possibility of a revoked competition decision on the one hand and the award of damages in a (national) judgment on the other hand, the alleged infringers still have to demonstrate that: (i) they have appealed the decision timely; (ii) there are reasonable doubts concerning the validity of the decision; and (iii) the defense in appeal will affect the validity of the decision. Based on these points, the national court will decide whether or not to stay the proceedings until a decision on appeal is rendered. There is no defined standard of proof, but the claimant must show a causal link between the infringement and any loss suffered and the court must give “understandable” reasoning as to why it accepts that the causal link has been demonstrated. The court must be persuaded that “but for” the defendant’s actions, the claimant would not have suffered the loss identified and that the claimant is therefore entitled to be restored to the financial position that the claimant would have been in if the infringement had not occurred. Note, the Dutch courts may reverse the burden of proving causation if the defendant infringed a rule that is aimed at preventing the damage that occurred. For example, a breach of traffic rules might be expected to result in an accident and so the court may consider it reasonable to reverse the burden of proof in those circumstances so that the defendant must prove his breach did not in fact cause any accident. It is not clear to what extent the rule permitting reversal of the burden of proof may be applied in competition cases. The burden of proof in establishing that an agreement merits exemption under Article 101(3) TFEU or Article 6(3) of the Dutch Competition Act rests on the (alleged) infringer. With regard to the passing-on defense, it remains unclear whether the claimant or the defendant will bear the burden of establishing that passing-on has occurred in any particular case. However, it is noted that the EU directive on quantifying damages stipulates that the burden of proof rests on the defendant.
6. Joint and several liability of cartel participants
Joint and several liability for infringers exists in certain limited circumstances, namely “alternative causation” or “group liability”. “Alternative causation” exists when it is unclear which act caused the damage, but may have been caused by either one of two or more separate acts. “Group liability” arises when the infringers acted as a group, which is likely the case if the infringers acted as a cartel for example. Where infringers are jointly and severally liable for damage and one defendant pays more to the claimant than the part of the debt that is attributable to him, such defendant may seek to recover any overpayment from the other infringers to the extent that he can show such overpayment is attributable to them. In other words, internally, each cartel member should contribute to the extent that the claimant’s damage is attributable to it. In circumstances where only one or some cartelists are sued in any particular claim, it is open to those named as defendants to seek to join others to the claim on the basis of joint and several liability or to seek a contribution to any damages award or settlement after the fact . Note that, if a defendant opts not to join others to proceedings and instead seek a contribution later, it is open to those from which he seeks a contribution to criticize the defense of the claim or terms of settlement in order to argue that any share should properly be reduced. As yet there are no decided cases on contribution between cartelists or guidance on how a Dutch court might apportion liability in the context of competition infringements.
7. Documents and evidence that can be used by claimants (for example, investigation evidence) and legal privilege
Parties are under an obligation to each other and to the court to state their case truthfully. This entails the disclosure of all documents in their control that are relevant to the case, regardless of whether these documents adversely affect their own or the other party’s case or which support the other party’s case. If the parties fail to do so, the court may draw the inferences it deems appropriate. The principal exception to disclosure is that privileged documents do not need to be disclosed. There is no obligation upon the ACM to disclose investigation evidence to third parties in order to assist private enforcement action, although a court order may be obtained requiring such disclosure. The ACM has stated that it would resist disclosing such material, particularly in the case of an infringing party who has been granted leniency in an investigation, in order to maintain the effectiveness of its investigations.
8. Pre-action disclosure
Pre-action disclosure is available via a number of routes. A prospective claimant may ask for a preliminary hearing of witnesses. This allows him to hear witness evidence from any person (not only those connected to the potential defendant) in court prior to starting proceedings. The process may be used simply to allow the claimant to assess whether the claimant has a case. A preliminary hearing of witnesses may only be refused in exceptional cases, for example when there is a clear case of misuse of the procedure. In addition, the claimant may require any party to submit a copy of documents that are relevant to his case. This entitlement is, restricted in various ways. It can only relate to a well-defined category of documents as specified by the claimant. Further, the claimant must demonstrate a legitimate interest in production of the documents and such legitimate interest must be connected to a legal relationship (usually contract or tort) to which the claimant is a party. Documents that are subject to privilege cannot be procured in this fashion. Discovery of documents in this way is not permitted if the evidence can be obtained in a different fashion, for example by hearing witnesses. There is a legislative proposal pending before Parliament currently that, if adopted, will broaden the scope of pre-action disclosure.
9. Average length of time from issue of claim to judgment in the Netherlands
A claim in the civil courts typically takes between one to two years to reach a final judgment in the first instance, depending on the complexity of the case. An appeal will take about the same length of time. An appeal to the Supreme Court will add another year or two to the duration of the proceedings, such that a case may last three to six years.
10. Average cost from issue of claim to judgment in the Netherlands
The cost of litigation varies widely, depending on the complexity of the case. The potential range of costs for first instance proceeding is likely between EUR300,000 – EUR700,000 The Netherlands applies a mitigated “loser pays” rule. This means that the loser must reimburse the costs incurred by the winner but recovery is capped at a certain level depending on the number of briefs and hearings and the value of the case. In practice, this means that only part of the actual cost can be recovered by the winner – generally recovery is around 20% of costs actually incurred.
11. Third-party/alternative funding
There is no rule preventing alternative funding of litigation other than the bar rules that forbid fee arrangements that are entirely contingent on the outcome of the case. There is no prospect that this prohibition will be removed: the current Minister of Justice intends to include it in an act of Parliament so as to give the prohibition even more solid status. Associations or foundations often fund litigation raising monies from the beneficiaries from the action. Individuals pay a small contribution in order to finance a collective action in their interest.
12. Alternative methods of dispute resolution
Alternative means of dispute resolution are available. Claims can be resolved by mediation or arbitration. The Netherlands has a well-established mediation institute, the Nederlands Mediation Instituut, and an equally well established arbitration institute, the Nederlands Arbitrage Instituut.
13. Availability of damages and quantification
Claimants may seek compensatory damages, including loss of profit and interest, for breach of competition law in accordance with the judgments of the Court of Justice of the European Union in Courage v Crehan and Manfredi. Claimants may also claim statutory interest on damages awarded to them. Generally, the statutory interest will start to run from the date when the damages were suffered rather than from the judgment date. To date no final awards of damages have been made in the Netherlands. However, the ordinary rule is that damages awarded are designed to compensate the claimant so as to restore it to the position that it would have been in, had the breach not been committed. In the alternative, if claimed, the court may set the damages at the amount of profit that the defendant gained from the infringement. Quantification of loss in the competition context is easier said than done as damages actually suffered can be difficult to calculate. An assessment of damages may involve starting with the relevant market as it existed at the time of the alleged infringement. For this purpose, it will be necessary to reconstruct the most likely market conditions assuming no infringement of Article 101 or 102 TFEU or the Dutch equivalent. This may require economic expertise and the courts may appoint experts to advise them on the calculation of damages. Parties are able to nominate or comment upon the appointment of such experts and are expected to bear the costs of any appointment. Ordinarily, fines imposed by the competition authorities are not taken into account by the court in determining damages to be awarded in civil claims. It remains to be seen whether fines might be subtracted from profit in cases where this is taken as the basis for setting damages. The passing-on defense is accepted in the Netherlands after the Court of Appeals considered such a defense is in line with the intentions of the EU legislator with respect of quantifying damages suffered as a result of competition infringement.
14. Punitive and exemplary damages
Punitive or exemplary damages are not generally available in the Netherlands.
15. Availability of interim or final injunctions in respect of an alleged competition law infringement
Interim injunctions preventing the defendant from continuing to infringe competition rules pending full trial of the issues may be sought from the civil courts. The claimant must demonstrate summarily that an infringement has occurred. The court may refer the matter to ordinary proceedings, if the matter is not suitable for a judgment on a summary basis. This might be the case, for example, if the taking of evidence is required in order to establish whether an infringement has occurred. The judges in summary proceedings have a wide margin of appreciation in this respect and in practice, cases are not often referred for a full hearing. In determining whether to grant an interim injunction or not, the court must weigh the interests of the claimant and the interests of the defendant taking into account: (i) the likelihood that the claimant will have its case upheld in the proceedings on the merits; (ii) the damages likely to be suffered by the claimant if the injunction is not given; and (iii) the damages likely to be suffered by the defendant if the injunction is given. Further, the ability of a claimant or defendant to pay damages awarded on final judgment may also be taken into account– but the applicant will not be required to offer a cross undertaking to pay damages suffered if it does not succeed on the claim.
D. Emerging Trends
The Netherlands is a jurisdiction that is favored by claimants bringing civil claims in the EU. The reasons for this are that: (i) litigation is relatively cheap in the Netherlands; (ii) disclosure is available; and (iii) it is possible to bring collective actions and achieve settlement on a collective basis. There are currently a number of follow-on actions pending before the Dutch courts, inter alia in relation to the paraffin waxes cartel, the airfreight cartel, the sodium chlorate cartel and the elevator cartel. Several defendants in these cases are not established in the Netherlands, however Dutch courts have accepted jurisdiction where one of the defendants (the so called anchor defendant) is based in the Netherlands and the other claims are closely connected. This close connection requirement is not fulfilled when the Commission decision distinguishes several nationally operating cartels instead of one cartel that affects several member states. Many of these actions have been brought by ‘professional claimants,’ such as Cartel Damages Claims and others, that have a business model based upon bundling up claims and seeking very high damages on the basis of decisions by the European Commission and/or national competition authorities that an infringement has occurred. However, to date, no final award of damages has yet been awarded in the Netherlands. [wpdm_package id=’4322′]