General climate
Describe the nature and extent of securities litigation in your jurisdiction.
In the Netherlands, securities litigation usually pertains to civil disputes between investors and issuers or vendors of securities. These proceedings occur frequently in the Netherlands and often involve non-Dutch parties. This is because:
- The cost of litigation in the Netherlands (court fees and attorney fees) is signifcantly lower than in other jurisdictions, especially compared to common law jurisdictions.
- Parties have the option to conduct the entire course of proceedings in English before the Netherlands Commercial Court if they wish to do so.
- Dutch courts are relatively lenient in assuming international jurisdiction regarding non-Dutch defendants.
- Dutch law provides for a class action procedure, in which not only liability can be established or injunctive measures can be obtained, but also redress measures
(damages). Damages claims are decided on a class wide basis (damage scheduling), not for each class member individually. - Dutch law also provides for a class settlement procedure in which parties that have reached an out-of-court settlement can jointly petition the court to declare
their settlement generally binding on each party that falls within the scope of the settlement agreement, which (depending on the settlement scope) could potentially also include parties that are domiciled in the United States or the Cayman Islands.
Securities litigation in the Netherlands can also involve administrative proceedings between the financial supervisory authorities and supervised entities on, for example, disclosure of inside information.
Courts and time frames
What experience do the courts in your jurisdiction have with securities litigation? Are there specialist courts for securities disputes? What is the typical time frame for securities litigation in your jurisdiction?
In administrative disputes between a financial supervisory authority (ie, the Dutch Authority for the 7inancial Markets or the Dutch Central Bank) and, for example, the issuer of securities, the district court of Rotterdam is the competent court in the first instance. The Trade and Industry Appeals Tribunal is the competent court in the second instance.
Regarding civil disputes, there is no formally designated specialist court that deals with all securities disputes in the Netherlands. Nonetheless, Dutch courts are experienced in securities litigation, in particular the Amsterdam District Court, which provides parties with the option to conduct the entire proceedings in English. Aside from regular courts, the 7inancial Services Complaints Institute, which is an independent dispute committee, deals with disputes between small and medium enterprises (or consumers) and financial institutions (eg, banks, insurance companies, etc) pertaining to financial products and financial services.
As to time frames, usually securities litigation in the Netherlands pertains to complex and international disputes in which a collective claimant initiates class action proceedings against multiple defendants (often Dutch and non-Dutch) for the benefit of a large class (often consisting of Dutch and non-Dutch members). The duration of these proceedings depends on how the court stages proceedings (eg, international jurisdiction, admissibility, applicable law, merits), whether each stage will have an oral hearing, and whether the court will allow for interim appeals (the latter is usually denied, however). Typically, on average, international securities disputes that are litigated in class action proceedings will take around five years to complete in the court of first instance.
