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Overview of the WAMCA
The WAMCA enables collective actions for damages on an "opt-out" basis.
Jurisdiction and scope
Under the WAMCA , collective actions for damages can be brought before any District Court in the Netherlands. The normal Dutch rules on local jurisdiction and venue apply.
In terms of international jurisdiction, the rules of the Brussels I Regulation (Recast) apply. In addition to the requirements set by that Regulation, the WAMCA includes a "scope rule". A collective action under Dutch law can only be brought if it has a sufficiently close connection to the Dutch jurisdiction. Such a connection is generally deemed to exist if any one of the following three conditions can be met:
(i) The representative entity is able to show that the majority of the individuals on behalf of whom the collective claim is brought (the "class"), reside in the Netherlands; or
(ii) The defendant resides in the Netherlands; or
(iii) The event or events on which the collective action is based, took place in the Netherlands. However, the mere fact that the defendant resides in the Netherlands may not be sufficient if there is no other circumstance that connects the case to the Dutch jurisdiction.
The WAMCA does not distinguish between types of actions. A collective action can be brought on behalf of both consumers and businesses and can be based on any type of legal infringement that affects a class. Provided that the representative entity can show a sufficiently close connection with the Netherlands, the class could consist of individuals or legal entities residing anywhere in the world.
The WAMCA limits the "opt-out" action to class members who are domiciled in the Netherlands. Class members who are domiciled elsewhere are allowed to join the action by "opting in" (cf. similar legislation in the UK, France and Belgium). By way of exception, in cases in which foreign class members are relatively easily identifiable the court may order that the "opt-out class" does extend to those class members
Standing to bring a collective action
The WAMCA includes provisions that are intended to introduce checks and balances to prevent unmeritorious litigation.
Representative bodies have to meet certain criteria before they can bring a collective action. Those criteria include:
(a) Not-for-profit: the representative entity must be not-for-profit; the direct or indirect objective of its founders and their successors must not be to make a profit "through the representative entity";
(b) Criteria regarding the governance and funding: the entity must be able to show that it has both the experience and the expertise to bring collective actions, it must have a proper governance structure (in most cases including a supervisory board), it must involve members of the class in the decision-making process, it must have sufficient financial means to fund a collective action and it must be transparent about salaries paid to its officers and contributions claimed from class members (if any).
(c) Reasonable attempt to settle: under the existing article 3:305a DCC, a collective action cannot proceed unless the representative entity has made a reasonable attempt to settle the case. In this context, the law also provides that a letter that gives the defendant two weeks to respond will suffice.
(d) A claimant must be sufficiently representative. Representative entities must demonstrate that they initiate a collective action for a sufficient number of members of the affected "class".
An exception is possible for certain collective actions for which it is neither necessary nor reasonable to impose the stricter admissibility requirements, see Section 3:305a (6) DCC. This applies in particular where the claim has an idealistic purpose and a very minor financial interest, or if the nature of the claim opposes this.
The admissibility of the collective action
The collective action commences through the submission of a statement of claim, which includes the facts on which the claim is based, the class of persons whose interests it seeks to protect and the factual and legal issues that are common to all class members. The court then reviews whether the representative entity meets the relevant criteria and whether the action is fit to be dealt with through collective action proceedings. If the action does not raise sufficient issues of fact or law that are common to a 'class', or the court considers the proposed 'class' to be too small or the financial interests that are at stake to be too insignificant, the court can decide not to let the collective action proceed.
The appointment of an "Exclusive Representative"
Within two days after the filing of the action, the representative entity needs to enter the matter in a Central registry of collective actions with a brief summary of the statement of claim. The entry in the registry triggers a three-month period, during which other representative entities can file alternative (competing) collective actions that are based on the same event or events. If more than one collective action based on the same event(s) is entered into the registry, the court will appoint an "Exclusive Representative" to represent the interests of the class. In some cases, there can be more than one "Exclusive Representative". Although the other entity or entities remain parties to the proceedings, the court will decide whether to allow each entity to file their own briefs. The court also decides on the precise scope of the action and the proper definition of the "class" (which is to be "narrowly described").
The court's decision on the appointment of the "Exclusive Representative(s)", on the scope of the action and on the definition of the "class" must be notified to all members of the "class". In the notice, class members will be given the opportunity to "opt-out" of the collective action by giving notice to the court registrar. The minimum opt-out period is one month. Notice will be given by post to those parties known to the court and the notice will also be published in one or more national daily newspapers. Depending on the nature of the case, the court may order that notice be given in other ways and/or in other languages. At the end of the opt-out period, the case largely proceeds like a traditional Dutch court case, with most of the arguments being submitted by way of written briefs and one or more informal oral hearings. Members of the "class" who decide to opt out cannot benefit from any future collective action in relation to similar factual and legal questions regarding the same events.
As a general rule, a court decision granting or dismissing the collective action is binding on all members of the class who reside in the Netherlands and did not use their right to "opt-out" of the action. The same applies to members residing abroad who joined the collective action by opting in. The decision is subject to appeal to an appellate court and, ultimately, to the Dutch Supreme Court.
Second "opt-out" opportunity in case of a collective settlement
The WAMCA introduces a second opportunity to opt-out in case of a collective settlement. If in the course of the proceedings the Exclusive Representative and the defendant(s) reach such a settlement, the court will review it and, if the court approves the settlement, determine a second opt-out period of (again) at least a month. Class members who decide to opt out of the collective settlement will have to pursue their actions individually by initiating legal action within six months after they have exercised their right to opt out.
The transitional provision
The new Dutch collective action regime only applies to actions that relate to 'events' that occurred on or after 15 November 2016 (the day the draft proposal was submitted to the House of Representatives).
The entire procedure does not apply in preliminary relief proceedings, but representative entities in preliminary relief proceedings must also meet the admissibility requirements of Article 3:305a (1) to (3) (or (6)) DCC. See Section 1018b in conjunction with Section 1018c (1) of the Dutch Code of Civil Procedure.