Jurisdiction partially accepted
Since the (former and current) members of the Board of Directors and the CFOs reside abroad, the Court of Appeal had to establish its international jurisdiction. With regard to the board members, the Court based its jurisdiction primarily on the close connection between the claims against Airbus (anchor defendant) and the directors (Article 8(1) Brussels I Recast (Regulation (EU) 1215/2012) and Article 7(1) Dutch Code of Civil Procedure). The claims were based on the same situation, both in fact and in law. After all, the overarching question underlying the alleged liability was whether Airbus’s financial publications were misleading. Since the grounds on which the claims were based differed, the Court had to determine whether the directors could have reasonably foreseen that they could be sued in the Netherlands. According to the Court, this requirement was met because Airbus is established in the Netherlands and publishes the, for this case relevant, financial reports in the Netherlands. Secondly, the Court assumed jurisdiction because the place where the damage-causing event (the alleged breach of disclosure obligations) occurred is in the Netherlands (Article 7(2) Brussels I Recast (Handlungsort) and Article 6(e) Dutch Code of Civil Procedure).
However, the Court did not assume jurisdiction with regard to the claims against the CFOs, because they could not have foreseen that they would be summoned in Dutch proceedings (Article 8(1) Brussels I Recast). The CFOs do not have a corporate relationship with Airbus and are not ultimately responsible for financial reporting and financial policy in the sense of company law. The Court also took into account that the CFOs are not Dutch nationals and actually work from France and Germany. These reasons also led to the rejection of Article 7(2) of Brussels I-bis as a ground for jurisdiction.
The foundation lacks standing
SILC was held to lack standing on the basis that it did not meet the requirement that the interests of those represented are sufficiently safeguarded (Article 3:305a(1) Dutch Civil Code). This requirement means, among other things, that the claim organisation had to have sufficient control over the claim (Article 3:305a(2)(c) Dutch Civil Code). In this context, the Claim Code 2019, a governance code for claim organisations involved in class actions, was also relevant. Principle II of the Claim Code states that a claim organisation and the entities directly or indirectly affiliated with it must not operate for profit. According to the Court of Appeal, SILC did not comply with this principle.
SILC had outsourced almost all of its activities to DRRT, a German-American law firm and litigation funder, and Dutch company Rightshare. DRRT conducted preliminary research, pre-financed the proceedings and, like Rightshare, was involved in book building. SILC, DRRT and Rightshare entered into a funding agreement with Therium, a litigation funder. In the event of a successful outcome, Therium would receive a fee of up to €35 million, consisting of the funding costs (plus a surcharge), the as yet uninvoiced fees of DRRT and Rightshare (plus a surcharge) and the costs incurred by them, or 25% of the total amount awarded to the Airbus investors. This fee would have to be shared with DRRT and Rightshare.
A claim organisation may outsource its actual activities, but SILC’s way of doing so was in violation of the Claim Code, according to the Court. Due to their financial interest in the outcome of the proceedings, DRRT and Rightshare were to be regarded as profit-making legal entities that are indirectly (via a contractual relationship) linked to SILC. In addition, DRRT and Therium had stipulated information and consultation rights that could have had a far-reaching influence on SILC’s decision-making regarding the proceedings and any settlement. Given the actual involvement of DRRT and Rightshare in the class action and their financial interest in it, SILC did not have sufficient control over the claim. The Court therefore found that there was insufficient guarantee that the interests of the investors would be given priority. The Court added that SILC had not provided for a participation scheme that would enable investors to counterbalance the influence of Therium, DRRT and Rightshare.
Summoning officers in addition to the company
It is striking that SILC involved not only Airbus itself, but also its (former and current) officers in the class action, even though there was no reason to fear Airbus’s insolvency. SILC claimed to have a sufficient interest to do so for the sake of establishing the truth and obtaining evidence that the officers might submit for their defence. The Court did not consider this to be an abuse of procedural law. However, in a mass damages case involving more than 100 institutional investors against ING Group and its officers (also initiated by DRRT), the Amsterdam District Court (in Dutch) expressed its dissatisfaction with the fact that the officers had been summoned. The District Court dismissed the claims and imposed a higher cost order, because it regarded the summoning of the officers as an improper means of enforcing a settlement. Suing the officers would have made sense only if ING had been found liable and had not offered any recourse for the damage (which was only a theoretical possibility). According to the District Court, this way of litigating placed an unnecessary burden on the officers and the judiciary.
And now?
SILC has been told by two courts that the structure it set up with DRRT and Rightshare amounts to entrepreneurial lawyering. Other mass claims against Airbus have not yet yielded any results for investors. On the initiative of litigation funder Woodsford, Airbus Investors Recovery Foundation (AIRS) and Airbus Investors Recovery Limited (AIRL) were established. AIRS’ class action was declared inadmissible by The Hague District Court (in Dutch) because it failed to comply with the representativeness requirement. AIRS has withdrawn its appeal. AIRL’s claims, based on assignment for the benefit of foreign investors in particular, were rejected by the Amsterdam District Court (in Dutch) in 2023 on substantive grounds. The appeal proceedings no longer appear to be pending in this case either.
Houthoff Class Action Survey & Morais Leitão & Houthoff Class Actions seminar
Five years after our first Class Action Survey in 2019, we published an extensive update in 2024 in partnership with 11 leading law firms, covering key trends in 12 jurisdictions. As we begin 2026, we are expanding the survey further, introducing a concise executive version and extending its scope to 16 jurisdictions and law firms.
We will share these updates, including emerging trends and recent developments, in stages leading up to the Morais Leitão & Houthoff Class Actions Seminar on 13 February in Lisbon, hosted at the offices of Morais Leitão. The seminar will present the full set of insights and is tailored for legal counsels and board members of corporations that could potentially be targeted by class actions. Participation is by invitation only. To secure your invitation, please contact Isabella Wijnberg.