This country-specific Q&A provides an overview of Litigation that may occur in The Netherlands.
This Q&A is part of the global guide to Litigation. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/litigation-second-edition/
Published June 2019
What are the main methods of resolving commercial disputes in your jurisdiction?
The main methods of resolving commercial disputes in the Netherlands are state court litigation and arbitration. Other forms of ADR, such as mediation and adjudication (expert determination or binding advice), are available. It is not uncommon for parties to resolve commercial disputes in out-of-court settlements.
What are the main procedural rules governing commercial litigation?
The main procedural rules governing commercial litigation in the Netherlands are laid down in the Dutch Code of Civil Procedure (‘DCCP’). The DCCP is complemented by rules or procedure issued by the courts. These regulations contain practice rules and more practical guidance on the conduct of litigation.
As of 1 January 2019, commercial disputes may be brought before the Netherlands Commercial Court (‘NCC’). The NCC operates under Dutch procedural law complemented by the NCC Rules of Procedure. An English version of the NCC Rules of Procedure can be found at: https://www.rechtspraak.nl/SiteCollectionDocuments/ncc-procesreglement-en.pdf
What is the structure and organisation of local courts dealing with commercial claims? What is the final court of appeal?
In first instance, civil disputes are brought before one of eleven district courts (rechtbanken). The district courts have a sub-district law sector which has exclusive jurisdiction over small claims (< € 25,000) and matters regarding employment contracts, tenancy, agency agreements, sale agreements with consumers and lease-purchase agreements (section 93 DCCP). Appeals against judgments from a district court (including subdistrict sector) are made to one of the four courts of appeal (gerechtshoven).
The Enterprise Chamber of the Amsterdam Court of Appeal is the court of first instance for disputes involving mismanagement and related corporate issues.
The Supreme Court (Hoge Raad) is the final court of appeal. The Supreme Court is a cassation court, which only deals with matters of law.
International commercial disputes may be brought before the Netherlands Commercial Court. The NCC is a specialised court (chambers in the Amsterdam District Court and the Amsterdam Court of Appeal) designed to meet the need for efficient dispute resolution of international commercial matters. The entire proceedings are conducted in English (including the judgment).
How long does it typically take from commencing proceedings to get to trial?
Dutch courts generally order a personal appearance after the first round of written submissions (writ of summons and statement of defence). A personal appearance is held to attempt an out-of-court settlement and/or to obtain additional information. In straightforward cases, a personal appearance takes place within six to twelve months after proceedings are commenced. In more complex cases and/or when parties submit incidental motions, the timing may be different.
Are hearings held in public and are documents filed at court available to the public? Are there any exceptions?
In principle, court hearings are held in public. Only under special circumstances the court may decide to conduct court hearings behind closed doors (for instance in case of: the interest of public policy or public morality, state security, privacy, and the interest of minors). A party may also request a closed hearing when confidential business trade information is to be discussed.
Court records, exhibits and other documents belonging to the case file are not disclosed to third parties (journalists sometimes inspect the docket register of summary proceedings).
What, if any, are the relevant limitation periods in your jurisdiction?
Unless otherwise provided by law, a claim becomes time-barred after 20 years (section 3:306 Dutch Civil Code (‘DCC’)). The DCC provides several different limitation periods:
- The right to claim specific performance of a contractual obligation to do or to give something becomes time-barred five years after the claim became due and exigible (section 3:307 DCC) (two years in consumer sale, section 7:23 DCC);
- The right to claim damages or a contractual penalty becomes time-barred five years from the day after the injured person became aware of the damage inflicted and the identity (and liability) of the person liable (section 3:310 DCC);
- The right to nullify an agreement in case of deception or error becomes time-barred three years after discovery thereof (section 3:52 DCC).
- The right to demand the annulment of a resolution of a constituent body of a legal entity becomes time-barred after one year following the publication or notification thereof (section 2:15 subsection 5 DCC).
What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
In principle, there are no pre-action conduct requirements in the Netherlands, although a notice of default will often be required in order to enforce one’s rights. Pre-trial correspondence is required in cases of mismanagement brought before the Enterprise Chamber (Ondernemingskamer) (section 2:349 DCC) and collective actions (section 3:305a DCC).
How are commercial proceedings commenced? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
Commercial proceedings are initiated by a writ of summons (statement of claim), which is served on the defendant by a bailiff upon the claimant’s instructions.
The summons contain a statement of the facts, the claim(s) and the legal basis for the claim(s), the defenses of the defendant which are known to the claimant and a list of the relevant evidence on which the claimant intends to rely.
The claimant must file the summons with the court registrar after they are served.
How does the court determine whether it has jurisdiction over a claim?
Dutch courts have international jurisdiction if there are legal provisions to this effect or if the parties have selected a Dutch court as the forum for hearing any disputes arising between them. Brussels I Recast (EU Regulation) contains the most important set of rules regarding international jurisdiction. If no international treaty (including Brussels I Recast) applies, the national rules laid down in the DCCP determine whether the Dutch courts have international jurisdiction and accordingly, whether a defendant can be made subject to a lawsuit in the Netherlands. These rules are very similar to the international jurisdiction rules of Brussels I Recast.
The rules of international jurisdiction have, in contrast to the rules on conflict of laws, a public policy nature. This means not only that the court must ex officio determine whether it has international jurisdiction, but also that the court must conduct its assessment regardless of whether it relies on facts other than those on which the parties based their claim or defense.
In order to avoid that the Dutch court will accept jurisdiction on the basis of a tacit choice of forum, the defendant can lodge a motion to dismiss for lack of jurisdiction. This motion must be lodged prior to the statement of defence on the merits or ultimately together with the statement of defence.
How does the court determine what law will apply to the claims?
Dutch courts are obliged to apply the rules on conflict of laws ex officio. This means that in a cross-border matter it will have to apply the rules on conflict of laws, even though the parties have been silent about the question of applicable law.
In contractual and tort matters, Dutch courts are bound to apply the Rome I and Rome II Regulations. If the case at hand falls outside the scope of Rome I and no other convention applies, the provisions of the Rome I Regulation are declared analogously applicable by Dutch domestic rules on conflict of laws. The same goes for the Rome II Regulation.
In what circumstances, if any, can claims be disposed of without a full trial?
It is not possible to apply for a substantive (partial) ruling prior to the actual proceedings. It is, however, possible to request the court, via an appearance of the parties (which can be ordered at every stage of the proceedings, sections 87 and 88 DCCP) or by a procedural motion, to first render a decision regarding preliminary issues such as the period of prescription, the competence of the court or applicable law. This may result into a premature end of the proceedings or the continuing of subproceedings.
In principle, the scope of the dispute is determined by the parties. However, there is an increasing degree of case management by judges, on the grounds of efficiency and to explore whether, e.g. with the aid of an out-of-court settlement, the parties can be dissuaded from continuing legal proceedings.
Furthermore, the court may dismiss claims, without a full trial, if it appears that the statement of claim discloses no reasonable grounds for bringing the claim (gebrek aan belang, section 3:303 DCC) or is an abuse of procedural law (misbruik van procesrecht, section 3:13 DCC). In some circumstances, the court can give a default judgment when a defendant does not appear for defence in the proceedings (verstekvonnis, section 139 DCCP).
What, if any, are the main types of interim remedies available in your jurisdiction?
An interim relief judge may order any type of interim relief a party requires in urgent matters (section 254 DCCP). Interim relief may be requested pending proceedings on the merits or before such proceedings are initiated. Although interim relief is of a provisional nature, proceedings on the merits may not be necessary after a decision in preliminary relief proceedings has been rendered.
Examples of interim remedies are:
- protective measures, such as prejudgment attachment
- orders to do or abstain from doing something at a penalty
- exhibition of documents
In case of prejudgment attachment, proceedings on the merits must be initiated within two weeks after the attachment was made, if no such proceedings were already pending.
After a claim has been commenced, what written documents must (or can) the parties submit and what is the usual timetable?
After the writ if summons is registered with the court registrar, and (if required) a lawyer has presented itself to the court as the defendant’s counsel, the defendant is granted a period of six weeks to submit a statement of defence. Extensions of six weeks may be granted with the other party’s consent or by the court for compelling reasons.
The statement of defence may include a counterclaim. If a personal appearance is ordered, a statement of defence in counterclaim may be submitted two weeks prior to the appearance.
Incidental motions, often with regard to procedural issues, may also be raised in de statement of defence, prior to all other (substantive) defences. Examples are inspection of documents or copies thereof, third-party (impleader) claims, requests for joinder and intervention and the provision of security for litigation costs. Some motions, e.g. a motion contesting jurisdiction, may be raised in a separate submission, instead of in the statement of defence. The court may decide that the incidental motion is dealt with prior to handling the case on the merits. This is assessed in accordance with the nature and the contents of the claim, the interests of the parties and the interest of an efficient litigation process. In principle, the claimant is granted a two week period to submit a written reply to an incidental motion. Two week extensions may be granted with the other party’s consent or by the court for compelling reasons.
Particularly in complex disputes, the court may decide on further written submissions instead of or after a personal appearance. In that case, the claimant is granted a six week period to file a statement of reply (section 132 DCCP). Extensions of six weeks may be granted with the other party’s consent or by the court for compelling reasons. The defendant is subsequently allowed to submit a statement of rejoinder (section 132 DCCP). The same timetable applies.
To the extent the court deems this necessary, the court may allow the parties to file further submissions (section 132 subsection 3 and section 19 DCCP).
What, if any, are the rules for disclosure of documents? Are there any exceptions (e.g. on grounds of privilege, confidentiality or public interest)?
There are no discovery or disclosure procedures comparable to common law systems in the Dutch judicial systems. There are, however, instruments available for obtaining information / documents from third parties.
Interested parties may request inspection of (or copies or extracts from) documents, including electronic documents, from those who have these documents at their disposal. This action may be instituted in summary proceedings or as an interim action in ongoing proceedings. A request can be granted provided (i) the requesting party has a legitimate interest in obtaining the information; (ii) the existence of the requested specific documents has been established to a sufficient extent (in order to prevent fishing expeditions); and (iii) the records concern a legal relationship to which the requesting party is a party.
The rules on disclosure acknowledge professional privilege. A request for inspection of documents may also be refused on the ground of serious reasons which could result in a privilege based on a statutory duty of confidentiality. A request may further be refused if the proper administration of justice is also guaranteed without the requested information.
How is witness evidence dealt with in commercial litigation in your jurisdiction (and in particular, do witnesses give oral and/or written evidence and what, if any, are the rules on cross-examination)? Are depositions permitted?
Witness evidence is fairly common in commercial litigation, although documentary evidence is often (far) more reliable. Most of the time, witness statements are given orally. An (oral) witness testimony of a party testifying on its own behalf is only accorded very limited evidentiary force; it needs to be substantiated with supplementary evidence.
Practice is likely to change, proposals for modernisation of law of evidence aim to provide for evidence, bundled together, prior to trial. Courts already allow a witness to submit a written statement.
Cross-examination does not exist in Dutch litigation. The court is in charge of the examination of the witness. In practice, the court usually allows the parties and is obligated (upon request) to allow their counsel to put additional questions directly to the witness, subject to the condition that the questions are limited to the evidential issue upon which the witness is examined.
Witnesses may refuse to testify in court on personal grounds as well as for factual reasons (section 165 DCCP), e.g. in cases where their testimony could entail prosecution for a criminal offence or disclose technical or trade secrets.
Depositions are not admitted in Dutch commercial litigation.
Is expert evidence permitted and how is it dealt with? Is the expert appointed by the court or the parties and what duties do they owe?
In the Dutch jurisdiction expert evidence is permitted and widely used. For example, parties often engage experts to calculate damages. Expert evidence may be furnished by submitting written expert evidence by one of the litigants or by having an expert examined as a witness. There are no specific rules regarding concurrent expert evidence. Parties are free to instruct their own party-appointed expert and they usually affect the expert’s report. The opposing party may produce their own party-appointed expert report to contest the findings of the other expert.
The court may, at the request of the parties or ex officio, order an (independent) expert to provide an expert report or to be heard. A court appointed expert has the duty to fulfil his appointment impartially and to the best of his abilities. He must allow parties to comment on the draft report and to make requests. The comments and requests have to be included in the report. The report needs to be reasoned. Parties have the duty to cooperate with the investigation of the expert.
The court is free to weigh the expert report(s). It is our experience that Dutch courts rely heavily on expert reports (also partisan expert reports), especially when they concern issues that require specific knowledge which a court lacks (e.g. technical features of certain products, complex financial products or business practices in certain industries).
Can final and interim decisions be appealed? If so, to which court(s) and within what timescale?
Almost all final decisions of the district court can be appealed at the court of cppeal. An appeal must be lodged within three months from the day the decision was rendered (section 339 subsection 1 DCCP). Shorter appeal periods exist for certain cases; for instance a four week appeal period applies for interim relief judgments (section 339 subsection 2 DCCP).
Objections against interim decisions that do not contain final decisions must be included in the appeal against the final judgment, unless the court grants permission to lodge an interim appeal against the interim judgment.
Appeal in cassation can be lodged with the Supreme Court against most decisions of the court of appeals. Decisions of the Enterprise Chamber can only be appealed with the Supreme Court. Appeal in cassation must also be filed within three months from the day the decision was rendered (section 402 DCCP).
What are the rules governing enforcement of foreign judgments in your jurisdiction?
In civil and commercial matters, the recognition and enforcement of judgments from EU Member States (except for Denmark) is laid down by Brussels I Recast and some other EU regulations. Brussels I Recast provides for enforcement without any special procedure being required.
If there is a convention pursuant to which the foreign decision qualifies for enforcement in the Netherlands, permission of the court must be obtained first. Upon request for an exequatur the court does not investigate the case itself, but verifies whether all formalities – including, but not limited to, the review criteria of the applicable convention regulations – have been observed. The exequatur proceedings may be overruled by special convention or statutory regulations.
If there is no convention pursuant to which the foreign decision qualifies for enforcement in the Netherlands, a foreign judgment cannot be enforced in the Netherlands, even if the decision is susceptible of being recognised in the Netherlands. New proceedings have to be initiated before a Dutch court in order to obtain powers to enforce in the Netherlands. In practice, the case will not be reviewed on the merits again. If the foreign decision meets four recognition requirements established in Dutch case law, the Dutch courts will generally follow the foreign decision.
Can the costs of litigation (e.g. court costs, as well as the parties’ costs of instructing lawyers, experts and other professionals) be recovered from the other side?
The losing party is usually ordered to cover the litigation costs of the prevailing party. This includes court registration fees, witness and expert fees and legal fees. Legal fees are based on fixed amounts for certain standard activities (such as submitting a written statement, attending an oral hearing or imposing a prejudgment attachment), but are also contingent on the value of the claim. The actual costs and lawyer’s fees are seldom covered by the amount awarded. Recovery of the remaining costs from the losing party is only possible in case of a frivolous suit and – under certain conditions – in cases concerning intellectual property, where the prevailing party can be awarded full costs, including lawyer’s fees.
What, if any, are the collective redress (e.g. class action) mechanisms in your jurisdiction?
Dutch procedural law allows two options for collective redress actions.
Injured parties can bundle their claims by giving one person (which can also be an ad hoc foundation or association, also called claimstichting) a power of attorney to act on behalf of all of them; alternatively, they can initiate a collective action based on section 3:305a DCC.
The section 3:305a DCC route enables a foundation or association with full legal capacity (a claim vehicle) to institute an action aimed at protecting similar interests of other individual persons to the extent that the promotion of these interests is set down in its articles of association. The interests of those – both Dutch and foreign – individuals should be of such a nature that they are capable of being bundled, thus expediting the efficient and effective legal protection of the interested parties.
Until recent, section 3:305a DCC only allowed for a declaratory judgment that the defendant has breached his duties or committed a wrongful act against the injured parties. In 2019, a new bill was adopted which introduces the possibility for damages to be claimed in this kind of collective action. The new legislation, which is expected to enter into force on 1 July 2019, further includes (i) the introduction of stricter admissibility requirements for representative entities (e.g. governance, funding and representation requirements); (ii) the appointment of an exclusive representative for all claimants (in case of various representative parties); (iii) a binding judgement on all Dutch residents in a class, with the exception of those having opted out. The opposite goes for non-Dutch residents: those persons can voluntarily consent to their interests having been represented by the class action (i.e. opt in). Alternatively, the court can order that the opt out system applies to a precisely specified group of non-Dutch residents anyhow.
Dutch law also provides for court certification of damages in mass claim settlements (the Collective Mass Claims Settlement Act, ‘WCAM’). The core of the WCAM is contained in sections 7:907 – 910 DCC and sections 1013-1018 DCCP. The WCAM makes it possible for collective interest groups to have an agreement that was concluded with another party (the party causing the loss), declared generally binding at the Amsterdam Court of Appeal in cases of large-scale loss. This (published) generally binding declaration consequently binds the entire group of injured parties, both in the Netherlands and abroad, and accordingly enables a settlement with an undetermined number of injured parties. WCAM proceedings can be and have been used for global settlements with relatively little connection to the Netherlands. The Dutch WCAM proceedings are currently the only European collective settlement that provide for a so-called opt-out option. This gives individual injured parties the option to withdraw (by written declaration, within a certain period) from the order declaring a collective agreement binding.
The possibility to claim damages in collective action, is likely to put increased pressure to settlement claims. It is expected to have a significant impact on the litigation climate in the Netherlands (and possibly the rest of Europe).
What, if any, are the mechanism for joining third parties to ongoing proceedings and/or consolidating two sets of proceedings in your jurisdiction?
By impleader a third party can be involuntarily summoned by one of the parties in a separate third-party proceedings which is dealt with concurrently with the ongoing proceedings.
A third party who has an interest in the ongoing proceedings may apply for permission to join the lawsuit or to intervene in it. In a joinder, the interested third party supports the position of one of the parties. In the case of an intervention, the interested third party takes up its own position in respect of both the claimant and the defendant.
Proceedings between the same parties can be joined (consolidated) if they are about the same subject matter. The same applies in the event of a close connection between proceedings, whether or not the same parties are involved. For consolidation, the proceedings need to be pending before the same court. If different courts are involved, the case may be referred to the other court. Such request for reference may be succeeded by a request for consolidation.
Are third parties allowed to fund litigation? If so, are there any restrictions on this and can third party funders be made liable for the costs incurred by the other side?
Litigation funding by third parties is permitted in the Netherlands, whereas litigation funding by law firms is not. Common law obstacles such as ‘maintenance’ and ‘champerty’ do not arise. Third-party litigation funding is gaining in popularity in the Netherlands. Litigation funding is becoming increasingly common in multi-claimant disputes, such as class actions, cartel damages claims and securities litigation, commercial claims and bankruptcy claims from receivers.
In the Netherlands, third party-funding is in essence not regulated as of yet. In view of increasing collective or multi-claimant disputes, instigated with use of funding, it may be expected the courts will look at and demand transparency as to, among other things, the nature of the underlying funding relationship and the amount of profit the funder stands to make. Therefore, the way in which a litigation is funded, may affect whether the claim is admissible or whether a settlement is enforceable.
There is no legal statute that would require the third-party funders to reimburse the other party in case the funded party loses the trial. However, the funding agreement typically obliges the funder to cover the party’s litigation costs to the extent that the court has imposed them upon that party (including fixed amounts for lawyers' fees; bailiff fees; court fees; costs of expert witnesses; and possible orders for costs). The actual costs and attorney fees incurred by the prevailing party are seldom covered by the amount awarded, and recovery of the remaining costs of the losing party is not usually possible.
What is the main advantage and the main disadvantage of litigating international commercial disputes in your jurisdiction?
The Dutch jurisdiction is an attractive location to litigate, due to various reasons:
- The Netherlands is the seat of many multinational corporations and a main port of entrance to continental Europe. Simply due to domicile or residence by the defendant, collective action plaintiff parties can often create jurisdiction for the Dutch courts (e.g., see Regulation (EU) No 1215/2012, Article 4).
- International benchmark studies show that the Dutch judiciary is generally considered professional, predictable, honest, efficient and fast, making it an attractive venue for both plaintiff and defendant.
- Litigation in the Netherlands is relatively inexpensive, due in part to low rates of compensation for the costs of litigation the losing party must pay in procedures.
- The Dutch legislator deliberately promotes the Netherlands as a forum for resolving international disputes. A recent example is the start of the NCC (The Netherlands Commercial Court) early 2019. The NCC consists of specialised judges and the proceedings, with a quick throughput time, are conducted in English. Both the NCC District Court and Court of Appeal are set up in Amsterdam.
What is the most likely growth area for disputes in your jurisdiction for the next 5 years?
Legal developments have encouraged law firms and litigation funders to become more adapt at gathering and funding groups of claimants. Also in light of the adopted bill regarding redress of mass damages in a collective action, we expect this practice to increase, in a rather exponential way, in particular for investor related disputes, securities litigation and cartel follow-on damages. The NCC expects to play a role in class actions, facilitating both in-court and out-of-court settlements.
Will be the impact of technology on commercial litigation in your jurisdiction in the next 5 years?
A digital litigation pilot for claim procedures, introduced in 2017, appeared not successful. It is expected that digital litigation will be introduced (in a simplified form) shortly. Besides, digital litigation has been implemented for litigation at the Supreme Court and the NCC successfully. eNCC, an electronic communication system, allows Dutch counsel to initiate actions, check the status and scheduled next steps, and submit and download documents. This gives the NCC the tools to communicate eﬀectively and provide swift and firm guidance throughout the process.
More general, technology is likely to have a lasting impact on various aspects of commercial litigation in the next years. Sophisticated intelligent research tools allow analysing of vast quantities of data in a timely and cost-efficient manner. We expect that automated processes will enhance lawyers to focus on clients’ specific needs, adding value to available technology.