Member News

Act introducing a collective damages action will come into force and effect on January 1st, 2020

The new act introducing a collective damages action on an opt-out basis for persons domiciled in the Netherlands will come in to force and effect on January 1st, 2020.

As we reported in our newsletter of February 6th, 2019, no monetary damages could be sought on a collective basis under the old collective action regime. The essence of the new Act on the Resolution of Mass Claims in a Collective Action, also known by its Dutch acronym “WAMCA”, is that this restriction is removed, so that a group action for monetary damages is possible. At the same time, the bar for collective claims is raised in order to achieve a fair and balanced system, which provides a higher level of finality for defendants. Under the new regime, finality is also increased by making a court ruling awarding or denying the collective relief sought binding on the individual members of the group, whereas under the old regime, there was no such binding effect. The WAMCA will apply to collective actions filed after January 1st, 2020  and must relate to an event or events which occurred on or after 15 November 2016. Below are the main changes at a glance; for a description click here.

Old system WAMCA
No monetary damages Monetary damages
No preliminary certification phase Preliminary certification phase
No formal restrictions on claims funding Claim funding structure is part of certification test: no direct or indirect profit allowed
No motion to dismiss available Motion to dismiss available
No effective consolidation of multiple class actions; parallel class actions possible Consolidation of multiple class actions; no parallel class actions possible; opt outs cannot form an opt out class
Judgment does not bind class members / no res judicata Judgment binds class members / res judicata (except early opt out)
Free riders benefit from interrupting effect of collective proceedings and even claim letter Opt outs do not benefit from interrupting effect
Class can be global – Opt out system for residents in NL
– Non-residents must opt-in
Settlement: no automatic binding of class members: requires separate proceedings Settlement: subject to 2nd opt-out of settlement, all who have not opted out earlier and all opt-ins are bound to settlement which is approved by the court

With the WAMCA, the Dutch legislator seeks to strike a proper balance between the parties for whose benefit the collective action is brought on the one hand and the defendants on the other. The stricter requirements for admissibility that are to be applied by the court at the start of the proceedings have also been introduced with the aim of protecting the parties whose interests are to be represented. This will probably lead to a further professionalisation of foundations and associations that wish to bring collective actions.

Compliments of NautaDutilh, a Member of the EACCNY