1. General description
Collective Settlement procedures (also called WCAM after the applicable law), have been adopted in 2005 with the Wet collectieve afwikkeling van massaschades (WCAM, Dutch Act on Collective Settlements, Law of 23 June 2005, Stb. 340). See articles 7:907-910 BW (Burgerlijk Wetboek=Dutch Civil Code), articles 1013-1018a BRv (Wetboek van Burgerlijke Rechtsvordering=Dutch Code of Civil Procedure). The articles in the Dutch Civil Code describe the material requirements and steps outside the court procedure that parties have to take for a collective settlement. The articles in the Dutch Code of Civil Procedure describe the particular procedural rules that apply for making a collective settlement binding on all interested parties (except those that opt-out). The articles have been modified by the WCAM II, involving minor improvements (Act of 26 June 2013), Staatsblad 2013, 255, entered into force 1 July 2013, Staatsblad 2013, 256).
The above-mentioned provisions apply to all kinds of harmful events leading to a group of individuals being harmed. Furthermore, an agreement on the basis of WCAM is also possible with an insolvent party (art. 110 (3) Faillissementswet (Dutch Insolvency Act)).
The party or parties compensating the damage and an organisation representing the victims will draft a settlement agreement. All the contracting parties then have to approach the court to make it binding for all victims (art. 1013(1) BRv). The representative organisation has to have full legal capacity to act in court, and the interest of the group that the organization is seeking to protect must be covered by its articles of association. The compensating party (also) must have sufficient legal capacity according to Dutch law.
b. Opt-in; opt- out procedure
The settlement has to specify for which claimants the settlement holds and the grounds for the claim (art. 7:907 (2) a-c BW). After court approval the settlement obtains binding effect on all victims included in the terms of the settlement, except for the individuals who have declared their wish to opt-out of the settlement. The opt-out declaration has to be made within the appointed time set by the court (art. 7:908(2) BW and art. 1017(3) BRv). The settlement itself does not constitute an admission of fault. The individuals who have opted-out are not bound at all, and the judge who decides on their case is free to deviate from the settlement (Aandelenlease cases, HR 5 June 2009, LJN BH2815, BH2811, BH2822, Nederlandse Jurisprudentie 2012/182-184).
c. Competent Court
The Amsterdam Court of Appeal is the only competent court for a WCAM action (art. 1013(3) BRv).
d. Participation of foreign plaintiffs
Presuming jurisdiction of the Dutch Court, a foreign representative organisation can participate, so long as it has full legal capacity to act in court. Every victim who is included in one of the categories of the settlement and does not opt-out in time is bound by that settlement, including foreign parties (see e.g. Hof Amsterdam 12 November 2010, NJ 2010/683, LJN: BO3908 (Converium)). Note that these are not directly plaintiffs in the procedure, but rather through a representative body. Moreover, the representative organisations are not plaintiffs in the Dutch terminology, but applicants in the application proceedings.
e. Certification criteria
The request will be denied if the representative organisations together are not sufficiently representative of the whole group (art. 7:907(3)f BW). Hence, it is unnecessary for each individual organisation to be representative. Furthermore, the Court checks materially whether the agreement protects the interests of the persons concerned (art. 7:907 (3) e BW). There are no other formal certification requirements. Soft law exists in the form of a non- binding 'Claimcode': http://www.consumentenbond.nl/over/wie_zijn_we/claimcode/
f. Main procedural rules
Before starting proceedings, parties have to come to a settlement agreement.
Where parties do not manage to come to an agreement, one or more of the parties may request that the competent court holds a pre-trial meeting (art. 1018a BRv).
The proceedings are started with a petition to the Amsterdam Court of Appeal to make the settlement binding (art. 1013 BRv). The persons on whose behalf the settlement was concluded are sent notice to appear, and a notice will be published in one or more newspapers (art. 1013(5) BRv). It is possible for a foundation or association that promotes the interests of the group of claimants covered by the settlement to enter the proceedings and plead against making the settlement binding (art. 1014 BRv). Any other ongoing proceedings regarding claims covered by the settlement are suspended during the proceedings (art. 1015 BRv). The court may order expert advice (art. 1016 BRv). The court can further hold intermediate sessions to discuss the way in which the trial is to be conducted (art. 1013 (8) BRv). The decision should among other things, state whether the agreement is declared binding, and if so, the period during which an opt-out declaration must be made and the way in which it should be made, the period during, and the manner in which, a claim for compensation under the settlement can be made (art. 1017 BRv). The court can suggest modifications to the agreement (art. 7:907 (4) BW). Appeal in cassation is open only to the original petitioning parties together and only if the court has rejected the request to make the agreement binding (art. 1018 (1) BRv).
g. Res judicata effect
The settlement obtains binding effect on all victims included in the terms of the settlement, except for the individuals who have declared their wish to opt-out of the settlement. The opt-out declaration has to be made within the appointed time set by the court (art. 7:908(2) BW and art. 1017(3) BRv). The settlement itself does not constitute an admission of fault. The individuals who have opted-out are not bound at all, and the judge who decides on their case is free to deviate from the settlement (Aandelenlease cases, HR 5 June 2009).
h. Evidence/ discovery
The court may order expert advice on relevant points (art. 1016 BRv). Other evidentiary rules for petition proceedings do apply in principle, but in general no further evidence will be required considering the nature of the proceedings (determining whether the settlement may be declared binding, which does not involve a full decision on the actual facts of the case). The court does check whether the amount of compensation is reasonable considering, inter alia, the extent of the damage and other factors. Evidence may only be necessary where another representative body contests the settlement (art. 1014 BRv).
i. Single or Multi stage process
There is a single-stage process. However, the court can hold intermediate sessions to discuss the way in which the trial is to be conducted (art. 1013 (8) BRv). Furthermore, parties may request a pre-trial meeting (art. 1018a BRv, see 3.f above).
4. Available remedies
The remedies are the ones that may be part of a settlement agreement. These include, primarily, monetary damages (see art. 7:907(1) BW), but may include also other obligations that require specific performance, as these are considered to be compensation of damage in kind ('schadevergoeding in natura', art. 6:103 BW). It also may involve other kinds of consequences, such as declaring contracts null and void. See art. 7:907 (7) BW. Dutch law does allow penalty clauses to aid in enforcement of the obligations of the agreement. Furthermore, the agreement may include an admission of fault. It is not possible to obtain the remedies that only a court can provide (such as declaratory judgment, injunction, 'dwangsom' (non-compliance penalty set by the court)), although the contractual obligations may amount to the same. Default on the agreement has to be addressed by normal rules of contract.
5. Money judgments
Under the WCAM a fixed amount is set from which all victims have to be paid. If the compensation is monetary and the total allotted sum does not suffice to pay all victims, the individual amounts of compensation will be reduced from the moment the deficiency becomes apparent.
6. Costs & funding
In this particular case, the court may declare that the costs of the WCAM-procedure are to be paid by one or more of the petitioners (art. 1016 lid 2 Rv).
No particular funding is available. Each party bears their own costs.
7. Number of claims
The procedure has been used six times since its inception, which amounts to roughly once or twice per year. The reason appears to be that there are not very many claims that could fall under the WCAM (as they should involve a significant number of individuals), while those that could, may often be settled with a common settlement agreement without recourse to the specific WCAM procedure (in particular where there are not too many individuals involved). Furthermore, the WCAM only applies where a settlement has been reached with a representative party, and this is a further barrier.
8. Particularities/ Problems
The WCAM procedure is available in cross-border cases, as long as the representative organisations are also sufficiently representative for foreign claimants. Cf. Rechtbank 's-Gravenhage 30 January 2013, ECLI:NL:RBDHA:2013:BY9850 (Shell), Hof Amsterdam 12 November 2010, NJ 2010/683, LJN: BO3908 (Converium). If a settlement has already been reached under a foreign legal regime (such as a U.S. class action), the claims under that settlement cannot be included in the WCAM as it can only cover outstanding claims on which a court procedure could be started with possible success. The WCAM can also be used in cases where only a minority of claimants are Dutch and where the liable party has no ties to The Netherlands, as long as the Court of Appeal is competent to decide all claims under the settlement (Converium). Foreign individuals in such a case must be notified of the proceedings, given the requirements of art. 6 ECHR (Converium case). In itself this makes the WCAM proceedings a useful instrument in reaching binding settlements in cross-border cases.
With respect to cross-border cases, the versatility of WCAM has been criticised as it means that a Dutch court can bind a large number of parties without their explicit consent, except if the parties enter the proceedings or, within the appointed period, send an opt-out declaration (Hof Amsterdam 12 November 2010, NJ 2010/683, LJN: BO3908 (Converium)). This appears to apply even where the national system of the claimant and/or liable party does not allow for a loss of claim without an individual court procedure.
WCAM negotiations and procedures are started by representative organisations. In the literature it is suggested that some Claimstichtingen may actually not provide proper service for their clients, even if they are representative (see further II. 3.8)
BIICL has recently worked with the German public body, the Gesellschaft fur internationale Zusammenarbeit (GIZ) on a collective redress project....