Clifford Chance

Dutch District Court Approves Another Public Interest Class Action: Implications for the Legal Landscape

The Netherlands continues to affirm its status as a premier jurisdiction for class actions in Europe, with recent developments underscoring the emerging trend of public interest class actions.

Following the 2020 reform of the Dutch class action regime, there are currently 80 active class actions registered in the central public register, spanning various areas of law. Class actions in the Netherlands are generally categorised into two types: (i) group actions, mostly damages class actions and (ii) public interest actions. Group actions typically involve a group of individuals collectively represented by a representative organisation, commonly seen in securities, privacy, and antitrust matters. Conversely, public interest class actions are initiated by public interest organisations, frequently non-governmental organisations ("NGOs"), representing a more diffuse and undefined group. These actions often target the Dutch State ("State") and are predominantly focused on public interest related matters, environmental issues and ESG-matters more broadly.

Recent ESG Public Interest Class Action Against the Dutch State

An illustrative example of a public interest class action is the case initiated by Greenpeace and eight individuals from Bonaire, a Caribbean island which is part of the Kingdom of the Netherlands, against the State at The District Court of The Hague ("Court"). The claimants contend that the State is violating its duty of care towards the population of Bonaire by (a) failing to implement adequate measures to protect them from the current and anticipated impacts of climate change, and (b) insufficiently limiting emissions from Dutch territory in accordance with the European Convention on Human Rights and commitments under the Paris Agreement to strive to limit the temperature increase to 1.5°C above pre-industrial levels.

Beyond seeking a declaratory judgment that the State has violated and continues to violate the fundamental rights of Bonaire's inhabitants under Articles 2, 8 and 14 European Convention on Human Rights and Article 27 International Covenant on Civil and Political Rights, the claimants request the Court to order the State to implement various climate adaptation and mitigation measures concerning Bonaire.

Navigating the WAMCA Regime: Key Phases

Pursuant to the Act on Redress of Mass Damages in a Class Action (Wet afwikkeling massaschade in collectieve actie, "WAMCA"), the Court must address several preliminary procedural matters before evaluating the merits of the case. The WAMCA regime involves four phases:

(i) Filing: During the filing phase, a representative entity (a claim vehicle or public interest group, like an NGO) registers the class action in a central public register where all pending class actions are recorded. Other representative entities may file their own claims related to the same events and similar facts and legal points. The different proceedings will then be consolidated.

(ii) Certification: The court assesses whether the representative entity satisfies all standing requirements. Among other considerations, the court verifies whether the claim vehicle or public interest group meets the representativeness requirement. The court will appoint an exclusive representative entity if multiple class actions for the same event or events have been filed in the central register and when the various representative entities have standing.

(iii) Settlement: During the settlement phase, parties can negotiate a settlement agreement. If they reach one, it is submitted for court approval.

(iv) Merits: If no settlement is reached, the process proceeds to the merits phase, where the court will render a judgment on the merits. Notably, a Dutch district court has recently rendered the first final judgment in a damages class action under the WAMCA, dismissing the damages claim.

The Crucial Representativeness Requirement in the Certification Phase: Origins and Recent Developments

In the recent judgment in Greenpeace's public interest class action, the Court, as part of the certification phase, assessed whether Greenpeace, as the representative entity representing the public interests of individuals from Bonaire, is "sufficiently representative" in light of the WAMCA requirements.

The Dutch legislator intended this requirement to prevent representative entities from filing class actions without the support of those they represent. Case law indicates that in group actions the court examines whether the representative entity has accurately described the group it represents. The represented individuals must constitute a sufficiently large portion of the total affected. The claim must be substantial compared to all affected parties' claims and supported by the affected parties.

However, lower case law indicates that the representativeness requirement is applied less stringently in public interest actions or group actions with an societal purpose or minimal financial interest. The public interest advanced in public interest actions pertains to a large, diffuse and unspecified group of individuals. This contrasts with group actions, which can generally be directly traced back to a more specifically defined group of individuals.

Greenpeace is Admissible in its Public Interest Class Action-claim

In the recent judgment, the Court ruled that Greenpeace is an adequate representative for the interests it claims to represent (the State had not disputed this). The Court considers that Greenpeace is a permanent representative of environmental interests, closely connected with the Dutch legal sphere, and has no commercial self-interest. Dutch courts and the government recognise Greenpeace as a representative of climate-related interests. NGOs, including Greenpeace, hold a special position in advocating for public interests, supported by additional rights under the Aarhus Convention.

Regarding the individual claimants, the Court finds their claims to be inadmissible, as they do not have a direct personal interest that Greenpeace does not already represent.

Public Debate Intensifies Over Scrutiny of Representativity in Public Interest Actions

This judgment comes at a time when there is ongoing political debate in the Netherlands regarding the extent to which courts should assess whether public interest groups are sufficiently representative in pursuing public interest actions. This debate is particularly relevant given the numerous cases filed under the WAMCA against the State, some of which involve politically sensitive issues such as Dutch refugee policies, arms export policies and environmental policy.

In 2023, a majority of the Dutch House of Representatives, including members of the current Dutch coalition government, raised concerns that courts do not thoroughly assess the representativeness requirement. They argued that under the WAMCA regime public interest groups advocating for ideological interests could initiate class actions with significant public consequences, despite potential issues around inadequate representativity. The majority of the House of Representatives requested the Minister to explore additional requirements for assessing representativity in public interest class actions.

This development has been incorporated into the evaluation of the WAMCA, which is expected to be completed the first quarter of next year.