The Netherlands will get a collective action for monetary damages, not dissimilar to a US-style class action. The government placed a bill to that effect before Parliament on 15 November 2016. However, the Netherlands are keen to avoid what is widely seen, at least in this country, as the downside of class action litigation: blackmail settlements, because of the reputational risk and prohibitive cost of defense that a class action involves, and plaintiff’s lawyers receiving the bulk of the proceeds, whereas little money goes to the aggrieved parties.

Therefore, the collective action may only be brought by a claim foundation (or association) that complies with stringent criteria. The claim foundation must be sufficiently representative, taking into account the support it has from aggrieved parties and the amount of claims that it represents. In addition, it must have a supervisory body, a mechanism to insure the involvement of the aggrieved parties that it represents, sufficient means to bear the cost of litigation, a website, open for inspection by the public, that provides relevant information and sufficient experience and expertise in relation to the claims that it brings.

In addition, the directors that were involved in the incorporation of the claim foundation and their successors may not pursue a profit through the claim foundation.

The jurisdiction of the Dutch courts in collective actions is no different from their jurisdiction in other cases. However, the government wants to prevent an indue influx of cases in collective actions that have insufficient nexus with the Netherlands. For that reason, there will be a ‘scope rule’ in addition to the rules on jurisdiction. The scope rule provides that a class action is inadmissable if the claims have insufficient nexus with the Netherlands.

Sufficient nexus with the Netherlands exists if the majority of the aggrieved parties to whose protection the claims are brought have their residence in the Netherlands, the defendant has its domicile in the Netherlands or the event or events that gave rise to the claims occurred in the Netherlands.

The courts in Amsterdam will have exclusive jurisdiction (in international cases, provided that the Dutch courts have international jurisdiction). However, they may refer the case to another court if there is a strong connection with the region of that court. An example of such a strong connection are damages caused by earthquakes as a result of the extraction of natural gas in Groningen, a province in the north of the Netherlands.

Within two days of filing a collective action, the claim foundation must register the collective action with a public register. This will enable other claim foundations to file a collective action as well. To that end, there will be a suspension of three to six months after the filing of the first collective action. If more than one collective action is filed in relation to the same event or events, the court will elect a lead plaintiff from the claim foundations that made a filing. This system should prevent a race to the court house. The court should elect the most suitable claim foundation, taking into account the number of aggrieved parties that it represents, their financial interests and the efforts that the claim foundation made in relation to the claim and its previous experience. The lead plaintiff will represent all aggrieved parties within the class, but the other claim foundations remain parties to proceedings as well. They may, however, only make filings to the extent that the court allows it.

Within a period set by the court, aggrieved parties have the opportunity to opt out. This period must be at least one month after appointment of the lead plaintiff. Aggrieved parties that fail to opt out will be bound by the judgment in the collective action.

After appointment of the lead plaintiff, the court will set a term in which the parties may attempt to reach a settlement. If a settlement is reached, it must be submitted to the court for approval. If the court approved the settlement, it binds all the aggrieved parties in the class that did not opt-out. There will be no second opportunity for an opt-out at this stage.

If no settlement is reached, the collective action will proceed. The court may order the parties to submit a proposal for claims settlement. The court may use these proposals to settle the claims, but it is not bound by the proposals. The court should fix the damages in the most appropriate fashion. This may include damage scheduling, that is: defining categories of aggrieved parties and the damages that the members of each category will receive. Subsequently, the class must be notified of the court’s judgment in the most appropriate fashion. This notice should make clear how aggrieved parties may get payment of the compensation to which they are entitled pursuant to the judgment.

Parliament will read the bill within the next months. Whether the Second Chamber of Parliament will be able to complete its reading before the elections in March 2017 remains to be seen. If the bill becomes law, the collective action for monetary damages is likely to become a potent instrument for the settlement of mass claims. It will co-exist with the collective settlement procedure pursuant to the Act on the collective settlement of mass claims (Wcam). The latter procedure applies to settlements that have been made voluntarily before the procedure starts.