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16 March 2021
On 1 January 2020 the Act on Redress of Mass Damages in Collective Action (WAMCA) entered into force. The WAMCA builds on the well-established Dutch collective redress mechanisms that have been in effect since 1994. A comparison of the innovations of the WAMCA compared with the previous Dutch collective redress mechanisms shows that, among other things, the WAMCA has:
One year after the WAMCA's introduction, this article discusses:
So far, 23 claims in 21 collective procedures have been registered under the WAMCA. These procedures can be divided approximately into three areas:
These areas seem to form part of a wider trend seen in recent years in collective procedures within Europe, the United Kingdom and the United States.
The WAMCA prescribes that a representative submit a full copy of the writ of summons both to the court and the central register for collective actions within two days after the writ has been served on the defendants, on penalty of inadmissibility.
In a 2020 WAMCA proceeding, the Amsterdam District Court did not sanction the late (ie, not within the two-day period) submission of the writ to the court with inadmissibility.(1) Taking a practical view, the court held that the representative had submitted the writ to the register in a timely manner. Therefore, other representatives could take notice of the writ, so that their interests were not harmed. Defendants were also not limited in (preparing) their defences as they had been served with the writ directly. Hence, the court let this (administrative) omission slide.
When submitting the copy writ to the register, it is the representative's responsibility to anonymise that copy in accordance with the General Data Protection Regulation.(2) Party names may not be anonymised even if one of the parties concerns a natural person. The main rationale for this lies in the informative purpose of the register. It aims to announce collective procedures to aggrieved parties and other representative entities, which could then possibly file a similar claim within three months(3) after the registration of the first writ.
In the aforementioned WAMCA procedure, the representative entity failed to publish the defendants' identities in its submission of the copy writ to the register. Although the law does not (explicitly) penalise such an omission with inadmissibility, the informative purpose of the register was not duly fulfilled. However, the court did not penalise this rule violation. Another example of a less formalistic approach.
Other representatives have a period of three months after the copy writ has been published in the register to serve their own writ to the defendant(s) in similar procedures. Within one month of publication, they can apply to the court for an extension of the three-month period.
The legislature has not provided any rules on what substantive grounds such extension requests can be granted. However, the court dealt with this question in one of WAMCA's 2020 procedures.(4) The court held that:
the WAMCA itself does not contain a standard against which such requests (…) should be assessed. Article 1018d paragraph 2 [Dutch Code of Civil Procedure (DCCP)] only provides that the court can extend the term (by a maximum of three months).
Taking into account (brief) parliamentary history, the court considered two possible grounds for extension. Extension may be granted due to:
Other opportunities for the court to establish clear guidelines under the WAMCA are the questions of whether:
These questions have come up in one of the pending WAMCA procedures and will most likely be dealt with later in 2021.
In principle, any third party that has an interest can claim to join (or intervene in) the proceedings (pursuant to Article 217 of the DCCP). The WAMCA explicitly states that Title 2 of the First Book of the DCCP, which also includes Article 217 of the DCCP, is applicable unless the WAMCA states otherwise (Article 1018b, Paragraph 2 of the DCCP).
On 3 March 2021(5) the Amsterdam Court assessed (on the premise that the WAMCA would apply) whether a third party could join as a party in the claimant's proceedings. Although the WAMCA does not openly exclude the possibility for third parties to join the proceedings on the claimant's side, the court considered that there should be no room for this legal concept under the WAMCA. The court stated that the WAMCA has a closed system for admission, and that the only way a party can participate as a claimant (on the claimant's side) is to file its own writ of summons within three months (except where this period has been extended) after the registration of the writ of the first claimant in the register (Article 1018d of the DCCP).
In collective summary proceedings, most of the procedural rules under the WAMCA (Title 14a of the DCCP) do not apply.(6) For instance, it is not required that the writ of summons be submitted to the register (Article 1018c (2) of the DCCP). The summary proceedings will also not be stayed for a period of three months, awaiting the possible filing of similar claims (Article 1018c (3) of the DCCP). This makes the WAMCA a fast and effective mechanism for dealing with such cases. So far, at least 12 summary proceedings have been filed under the WAMCA. These proceedings have been concluded without many practical hurdles.
However, the simplified procedural rules still require that representatives address the requirements of Article 1018c (1) of the DCCP. The writ of summons must state:
In a 2020 case before the Noord-Nederland District Court,(7) the representative (briefly) addressed the aforementioned requirements for the first time at the hearing. The court gave short shrift with this state of affairs and declared that the representative was inadmissible. The court considered that the representative should "have submitted all this in the writ of summons and that it cannot first be fixed in court".
The WAMCA provides an exception to the strict admissibility criteria for representatives that institute idealistic procedures with small financial interest (Article 3:305a (6) of the DCC and Article 1018c (5) of the DCCP). In the majority of current WAMCA procedures, representatives have requested the court to apply such an exception. Such a request must be included in the writ, on the penalty of inadmissibility. Procedures with an idealistic intent generally concern injunction and prohibition claims and requests for declaratory judgments (the latter cannot be instituted in preliminary relief proceedings due to its constitutive effect).
The wording of Article 3:305a (6) of the DCC and 1018c (5) of the DCCP appears to be inconsistent. Where Article 3:305a (6) of the DCC prescribes a less strict admissibility regime for representative entities with idealistic intent, Article 1018c (5) of the DCCP appears to set aside the entire regime of Article 3:305a of the DCC. The court first dealt with this inconsistency on 28 October 2020. The court's interlocutory judgment clearly reflects the practical and pragmatic way in which case law gives substance to the ambiguities and imperfections of WAMCA legislation.
After the court extensively considered the legislation and the legislative history and pinpointed the unclarified issues, it decided to prioritise Article 3:305a (6) of the DCC and interpret Article 1018c (5) of the DCCP accordingly. This thorough approach allows early case law to form a solid basis for further WAMCA procedures.
It can be argued that any other outcome would have been hardly imaginable. After all, the purpose of the WAMCA is to ensure that representatives within the meaning of Article 3:305a (1) of the DCC offer sufficient safeguards for their constituency. To almost entirely eliminate the admissibility requirements of Article 3:305a of the DCC would not reflect this purpose.
With numerous procedures pending, the new WAMCA legislation is currently in full swing. As the WAMCA was only implemented on 1 January 2020, most of these procedures are still in their early stages. It often takes several years to conclude such actions. Therefore, the first year under the WAMCA has mainly provided insights into various procedural aspects that play a role in the first stages of WAMCA procedures.
Intentionally or unintentionally, the legislature has left numerous practical issues connected to the application of the WAMCA to the judiciary. This provides a welcome opportunity for courts to tailor the WAMCA to fit day-to-day practice. The first teething troubles of the WAMCA legislation are resolved by courts in a pragmatic manner. Interim judgments in WAMCA procedures so far demonstrate that, from the start, courts consciously and actively decide on how to apply the WAMCA. This provides confidence for the future, where other (complex) legal issues will no doubt be discussed.
There seems to be a tendency to apply leniency regarding numerous less stringent admissibility requirements for representative entities. There is reason to agree with the fact that courts are not too formalistic when it regards subordinate requirements (eg, the submission of the writ to the court within two days after the service thereof), and that violations thereof are not harshly penalised with inadmissibility. Ultimately, what matters overall is that representatives sufficiently safeguard the interests of those on behalf of whom they initiate proceedings. A specific purpose for which the WAMCA has established clear rules; strict if necessary, practical if possible.
Judicial law making regarding the WAMCA may also have a (limited) downside, as it could lead to more appeal procedures in the first few years. As WAMCA procedures may already take several years from start to finish, due to their size and complexity, any undue delay of the proceedings should be avoided as much as possible.
For further information on this topic please contact Jeffrey Kleywegt or Robert van Vugt at AKD by telephone (+31 88 253 5000) or email (email@example.com or firstname.lastname@example.org). The AKD website can be accessed at www.akd.nl.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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