Class Actions

Companies and financial institutions are increasingly finding themselves the target of mass claims by foundations purporting to represent large groups of interested parties. Claims like these can have a huge impact on the operations and reputation of such entities.

“The dynamics of mass claims proceedings are unique,” says Albert Knigge, a lawyer and partner who specialises in handling mass claims, the collective settlement of mass claims, and cartel damages cases. Compared with other countries, the Netherlands is very permissive in allowing such claims, and occupies an exceptional position in Europe. New regulations are being prepared which will further broaden the possibilities for submitting mass claims. In addition, under the Dutch Mass Claim Settlement Act, a settlement in the Netherlands can be declared binding for every interested party that a claims foundation purports to represent. Knigge notes that “this is unique in Europe and means that many claims cases against national and international companies are dealt with here."

As a result, the handling of mass claims requires extensive expertise and insight into the strategic context. “The law is such that anyone can actually set up a claims foundation and submit a claim, even if, for example, the founder has not suffered damage and merely sees a mass claim as an interesting investment." says Knigge.

Therefore, Knigge advises companies faced with such a lawsuit to thoroughly assess the actual risks of the claim first (including reputational risks), to weigh up the strategic options and then to set a course of action. Claims foundations are also subject to legal restrictions, so there are often very good reasons to assess and address the formal aspects of the mass claim first. “This is not intended to frustrate the legal system, but actually to facilitate it and prevent mass claims from being brought on spurious grounds. Relevant questions in this context are: Does the claims foundation actually have legal standing or is it motivated by financial gain for its affiliated commercial parties? How is the claim financed and how are the interests of the rightful parties being safeguarded? And, is the case really suitable to be taken as a collective action? The answer to the last question is often no, when each interested party’s position is too different,” explains Knigge. These are all points that previous rulings often all too easily ignored, but now – rightly – seem to be taken into account more.

Knigge says "The Dutch legal system can offer adequate solutions for mass claims, but only if the system is employed correctly and the necessary safeguards– which are also aimed at protecting the interests of the company against which the claim has been brought – are complied with."

  • Houthoff is representing a major Brazilian oil company in its defence in a securities class action submitted by a mass claim vehicle. The vehicle allegedly represents a worldwide class of securities holders (excluding US investors) who claim they suffered financial loss because of alleged fraud between 2004 and 2014.

  • Houthoff is defending a leading commodity trader in class action litigation in the Netherlands against more than 100,000 claimants in the Ivory Coast. The team successfully defended the company at the Amsterdam District Court. It will continue to defend the company in the appeal. Houthoff successfully defended the company in another class action submitted by a different mass claim vehicle at the Amsterdam District Court and the Amsterdam Court of Appeal.

  • Houthoff is defending a major European truck manufacturer against several cartel damages mass claims submitted by claim vehicles allegedly representing haulier companies.

  • Houthoff is representing an insurance company in Dutch class actions relating to millions of unit-linked insurance policies. The claimants are seeking compensation for alleged mis-selling. The outcome of this case will be relevant for all large insurance companies in the Netherlands that have provided unit-linked insurance policies.

  • Houthoff is representing a Finnish water chemistry company in its defence against cartel damages claims submitted in follow-on proceedings by claim vehicle CDC. They are claiming for damage allegedly caused by the sodium chlorate cartel.

  • Houthoff is defending a Luxembourg air cargo carrier in several proceedings against an accumulated number of cartel damages claims submitted by several claim vehicles arising from the alleged air cargo cartel.

  • Houthoff is advising a Japanese bank on its defence against announced class actions for damages as a follow-on to several alleged cartels regarding InterBank Offering Rates.

  • Houthoff represented the trustees of a Dutch retail bank in a EUR 5.7 billion bankruptcy in class settlement negotiations with a number of representatives of a class of 570,000 members. This led to a court-certified class settlement of several hundred million euros. 

  • Houthoff was the coordinating defence counsel in a product liability case about diseases caused by Polyurethane (PUR). The case concerned a class action against the industry in a bet-the-industry-issue. Litigation has successfully been avoided. All of the major global chemical companies were involved in this case (Huntsman, Dow, Bayer, BASF).

  • Houthoff represented a former CFO of a Belgian bank/insurance company in his defence against several prospectus claims, including a mass claim brought by the Dutch Shareholders Association (VEB).

Publications

Albert Knigge

Key Contact

Amsterdam
Advocaat | Managing Partner
+31 20 605 65 62
+31 6 5184 5323