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AMS O 97704 / 1
Collective redress in Europe: Collective redress in Europe: where nowwhere now??
BIICL, London, 15 November BIICL, London, 15 November 20072007
Professor Ianika TzankovaAmsterdam / Tilburg
AMS O 97704 / 1
Threats and opportunities of
US-style class action litigationThe US-European interaction
US class actions: uncertainty
• US courts may grant/deny certification;• Multinationals have to struggle on multiple fronts: in US and in Europe;• Plaintiffs are not necessarily better off
AMS O 97704 / 1
Opportunities
• (opt out) Collective settlement
• Creates certainty/finality (“global (EU) peace”) for defendants
• Allows a tailor made settlement for plaintiffs/expeditious recovery
AMS O 97704 / 1
Collective redress in Europe: Collective redress in Europe: where nowwhere now??
BIICL, London, 15 November 2007BIICL, London, 15 November 2007
Stijn FrankenAmsterdam
AMS O 97704 / 1
How do Dutch “class actions” work?
Who can file?
• Foundation or association
• Acting for the interest of other persons
• In accordance with the objects as described in the articles of association
• Organization can be generic investor’s or consumer’s organization or special purpose vehicle
AMS O 97704 / 1
• No individual lead plaintiff acting for the class
• Foundation / organization brings claim in its own name
• Representative collective action rather than US styled class action
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Other requirements
• Preliminary settlement talks
• Claim must seek to serve the protection of similar interests of other persons
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What claims?
• Performance of contract• Dissolution of contract by the court• Claim arising from undue payment• Performance of obligation to undo • Injunctive relief • Opposition against split-off of legal entity
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No claim for damages in money!
Instead:claim for a declaratory judgment that defendant acted wrongfully against class members
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Scope of the judgment
• Only binding between the plaintiff’s organization and the defendant, not binding on the class members themselves
• Thus: individual class members can still sue
• Settlement requires active adherence by individual class members (opt-in)
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Collective Settlement of Mass Claims Act 2005 (CSMCA)
Origin:
• Dutch DES hormone case• Inspired by US practice of global settlement
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Objectives of CSMCA
• Providing general statutory framework for…….
• …..court certification of collective settlement agreement for mass claims, resulting in……
• ….. The agreement being binding on all class members…
• … unless opt-out option is exercised
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3 cases currently pending:
• DES-hormone• Dexia Bank Nederland re securities leasing
(investment product enabling retail investors to buy listed stock with borrowed money)
• Shell reserves recategorization settlement
CSMCA in action
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Settlement agreement
• Between plaintiff’s organization and defendant
• Agreement should describe:– class and subclasses– number of class members– amounts of compensation– eligibility for compensation– Method of determining compensation amount– Method of obtaining payment
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Requirements for court certification
• Compensation amount should be reasonable
• Defendant’s obligations must be sufficiently guaranteed
• Sufficient representation of the class by plaintiff’s organization
• Number of class members must be sufficient to warrant certification
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Reasonable compensation
Court to take into account:• Nature, cause and amount of loss• Simplicity and expediency of the
payment method• Asset base of defendant• Nature of the legal relationship
between defendant and class members
• Availability of insurance
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Certification procedure
• Joint request• Exclusive jurisdiction Amsterdam court
of appeal• 1st notification• Individual class members and other
organizations can file objections• Hearing• Court order on certification• 2nd notification
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Opt-out period
• Class members: at least 3 months upon court order becoming final
• Defendant: no longer than six months after expiry of class member’s opt-out period
• Defendant opt-out only if stipulated in agreement
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Effects of certification
Class members become:• Parties to the settlement
agreement• Entitled to receive payment of
compensation amount
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Issues
• Tension with article 6 ECHR and article 1, 1st protocol ECHR
• Extraterritorial effect
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What’s in it for…..
• Defendants: welcome tool to reach opt-out settlement, avoiding protracted litigation
• Plaintiffs: collective tool to obtain monetary damages in an indirect way