1. General description
The individual claimants mandate a legal entity, often a stichting (foundation). Hereafter for the sake of readability only 'stichting' is mentioned, instead of 'stichting or other legal entity'. Alternatively, the claimants can transfer their claims to the stichting, which thereafter can claim in its own right. The claimants contract with the stichting that they will receive the award minus a share for the stichting. The claimants usually also pay a relatively small fee or 'contribution': the aggregate of all contributions is (with a sufficient number of claimants) sufficient to cover the costs (in particular lawyer fees).
This mechanism is based on the common rules regarding mandate and transfer, hence it is applicable to all kinds of claims.
Standing derives from the standing of the claimants represented, which means that (a) the claimant itself must previously have had standing as being directly harmed, and (b) the claimant must be properly represented, i.e. the entity must have a valid mandate to act in the name of the claimant, or the claim must have been transferred to the entity. Furthermore, the defendant may request a detailed specification of the individuals represented or the individuals whose claims are being claimed in the procedure (HR 27 November 2009, LJN BH2162 (VEB/World Online)).
b. Opt-in; opt- out procedure
The procedure is a normal court procedure hence only applies to those who have joined the proceedings (through mandate). However, the judgment may have a 'soft' form of res judicata (see above, HR 27 November 2009, LJN BH2162 (VEB/World Online)).
c. Competent court
The competence of the court is determined by the normal rules regarding competence for the specific case and/or claims. Usually the competence is based on the location of defendant, as that court is competent for all claims regarding the defendant, regardless of the specific situation of claimants (who may be located all over the world). However, it is also possible to base competence on the existence of damage in The Netherlands.
d. Participation of foreign plaintiffs
Foreign plaintiffs can participate on the same basis as Dutch plaintiffs. In specific cases rules of Private International Law may stand in the way of competence of the court, if the 'foreign' claim can only be brought before a non-Dutch court. This may apply in particular where the defendant is not located in The Netherlands.
e. Certification criteria
There is no formal certification. In view of abuses by fraudulent claimstichtingen there is a code of conduct, which however is not binding.
f. Main procedural rules
The applicable rules are the general rules of civil procedure. Regarding representation, the stichting may start the procedure in its own name as formal plaintiff, and does not have to stipulate that it represents the material plaintiffs. If it is questioned whether the plaintiff is entitled to claim the requested award, the formal plaintiff must stipulate that it is mandated and if required offer proof of its mandate (HR 26 November 2004, LJN AP9665, NJ 2005/41, HR 26 February 2010, LJN BK4995, NJ 2011/474). The procedure can, and often is, combined with a collective action on the basis of art. 3:305a BW (e.g. HR 2 December 1994, NJ 1996/246, also HR 2009 VEB/World Online).
g. Res judicata effect
The judgment has res judicata effect only between the parties in the procedure (and/or the claims adjudicated therein). Furthermore the Hoge Raad has judged that a declaration of law in such a procedure may serve as starting point in similar procedures started by other victims (HR 27 November 2009, LJN BH2162 (VEB/World Online), r.o. 4.8.2): this has for other victims practically the same effect as res judicata. Hence a collective action may be useful as a step towards an individual award of damages.
h. Evidence/ discovery
No particular evidence/discovery applies. The general discovery mechanism is art. 834a Rv, which allows any party to request (a copy of) materials to which it has a legitimate interest. This article has found wide application.
i. Multi-stage process
In itself, the procedure is a single process, as the civil procedure is in general. The court may decide to adjudicate part of the dispute first.
4. Available remedies
All kinds of remedies are available. The usual remedy consists of (material) damages, often combined with a declaratory judgment.
5. Costs & funding
If, following the collective action, victims have to start subsequent individual actions to establish causation, liability and damages, they have to fully bear their own costs except where compensation is obtained under the general rules.
No particular forms of litigation funding exist.
6. Number of claims
A claimstichting to reach an award or settlement seems to be used fairly often when events arise giving rise to mass claims, in the order of some 10-40 per year (based on news reports). However, such a claimstichting does not always start a civil procedure. Furthermore there is no centralised register or account of such stichtingen, hence it is hard to give exact figures. A procedure of such a stichting is not easily searched for in case law databases as no particular legal rules apply. One reason why the stichting is not used more often is that there has to be a significant number of claimants to make it feasible (given the start-up costs), and the stichting or at least the harmful event has to become sufficiently known in order for individual claimants to look for a (or the specific) stichting for making goods their claims. However, the existence of such stichtingen seems to have become common knowledge, and in almost every case of mass damage (with relatively small groups) there appear to be plans for starting such a stichting. E.g. events such as fraudulent investment funds, alleged faults of youth protection services, bankrupt banks.
7. Particularities/ Problems if this mechanism is used in cross- border cases
No particular problems exist in cross-border cases, since in essence the procedure is formally only about individual claims (albeit these are adjudicated collectively). If a particular claim leads to problems of competence, this can be treated apart from other claims.
The system has met two criticisms. First of all, the system is cumbersome insofar as the stichting has (if asked for proof) to provide the identity of all specific claimants and claims in order to prove its mandate and/or the transfer of valid claims. This is an administrative hassle, while individuals also fear being subjected to undue pressure if their identities are known. Secondly, claimstichtingen are not supervised and may therefore attract unscrupulous individuals who use the stichting primarily as a means to collect money, while reaching suboptimal results and not providing proper services (cf. Van Boom 2009, par. 3.5).
A weakness (but not a critique per se) is the possibility of free riders: a positive judgment reached by the claimstichting may be used by non-participating claimants in order to start their own procedure and/or reach favourable settlement with the defendant. Although the judgment does not have formal res judicata for non-participants, it will in fact serve as a material guidepost for new procedures regarding the same event. See HR 27 November 2009, LJN BH2162 (VEB/World Online), where the Hoge Raad also mentioned that the judgment regarding unlawful behaviour may serve as starting point in other procedures, albeit the defendant may offer further counter-arguments. Cf. B.T.M. van der Wiel, 'Derdenwerking van rechterlijke uitspraken', Nederlands Juristenblad 2011/671, p. 792-796.
BIICL has recently worked with the German public body, the Gesellschaft fur internationale Zusammenarbeit (GIZ) on a collective redress project....