1. AMS O 97704 / 1 Collective redress in Europe: where now ? BIICL, London, 15 November 2007 Professor Ianika Tzankova Amsterdam / Tilburg

2. AMS O 97704 / 1 Threats and opportunities of US-style class action litigation The 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

3. 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

4. AMS O 97704 / 1 Collective redress in Europe: where now ? BIICL, London, 15 November 2007 Stijn Franken Amsterdam

5. 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

6. 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

7. AMS O 97704 / 1 Other requirements Preliminary settlement talks Claim must seek to serve the protection of similar interests of other persons

8. AMS O 97704 / 1 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

9. AMS O 97704 / 1 No claim for damages in money! Instead: claim for a declaratory judgment that defendant acted wrongfully against class members

10. AMS O 97704 / 1 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)

11. AMS O 97704 / 1 Collective Settlement of Mass Claims Act 2005 (CSMCA) Origin: Dutch DES hormone case Inspired by US practice of global settlement

12. AMS O 97704 / 1 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

13. AMS O 97704 / 1 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

14. AMS O 97704 / 1 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

15. AMS O 97704 / 1 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

16. AMS O 97704 / 1 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

17. AMS O 97704 / 1 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

18. AMS O 97704 / 1 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

19. AMS O 97704 / 1 Effects of certification Class members become: Parties to the settlement agreement Entitled to receive payment of compensation amount

20. AMS O 97704 / 1 Issues Tension with article 6 ECHR and article 1, 1st protocol ECHR Extraterritorial effect

21. AMS O 97704 / 1 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