Since the Belgian and Dutch legal systems are relatively similar, one would expect similar levels of antitrust litigation. However, this is not the case, particularly as regards follow-on claims. This article, available here, tries to find explanations for this divergence.
It argues that the boom in follow-on damages actions in the Netherlands can be explained by the receptive attitude of Dutch judges and lawyers to follow-on damages actions, in line with their receptive approach to complex litigation. Belgian courts, by contrast, have been less receptive to follow-on actions, probably because Belgian judges have a higher caseload than Dutch judges do. This represents something of a paradox: the Belgian courts are more accessible and attract more regular, run-of-the mill litigation but, precisely because of this, they are less receptive to new types of litigation such as follow-on damages actions, regardless of the benefits that these actions may bring to the economy.
Section 2 presents data on private antitrust enforcement in Belgium and the Netherlands.
The paper looks at all judgments in Belgium and the Netherlands between 2012 and 2015 in which either the claimant or the defendant invoked antitrust law (i.e. Articles 101 and 102 TFEU, or their domestic equivalent). This sample includes: (i) actions seeking injunctive relief and damages; (ii) actions seeking a declaration of liability, which is sometimes sought as a preliminary step before claiming damages; (iii) cases where the claimant or defendant invoked the nullity of a contract or contractual clause for breach of competition law.
During this period, the author identified 35 cases in Belgium and 80 cases in the Netherlands. Given that the Netherlands is 1.6 times more populous than Belgium, and not all competition cases in Belgium are published, the difference is not as large as it seems. On equal populations, Belgium would be expected to have 56 cases.
The most significant difference concerns the uses to which antitrust is put in each jurisdiction. In Belgium, damages actions are rare, accounting for only 17% of all cases, while damages actions are the most common type of antitrust litigation in the Netherlands, accounting for 30% of all cases. The difference is even more striking if one looks at follow-on claims. In Belgium, only three such claims were made during the period under analysis – and the European Commission was the claimant in one case, and the Belgian state in another. By contrast, since 2010 there has been a veritable flurry of damages actions in the Netherlands, with 11 out of 24 damages claims being follow-on claims. In addition to those cases, several other follow-on damages actions have been brought before the Dutch courts since 2015.
Section 3 seeks to explain the striking difference in the number of follow-on damages actions in these two jurisdictions.
It begins by looking into why so many follow-on claims have been brought in the Netherlands.
At first sight, these differences are surprising. Both countries have similar tort and procedural rules, and civil and commercial litigation is more frequent in Belgium than in the Netherlands. However, it is important to realise that follow-on damages actions are particularly prone to forum shopping (i.e. claimants bringing a follow-on damages action often have a choice between several jurisdictions to bring their action). This results from a combination of European rules on international jurisdiction and the fact that cartels triggering follow-on damages actions often involve companies from different EU Member States.
In effect, the author considers that that the boom in follow-on damages actions in the Netherlands can be traced back to the receptive attitude of Dutch judges and lawyers to follow-on damages actions. Dutch courts have readily assumed jurisdiction over follow-on damages actions in actions against non-Dutch defendants, particularly by applying the rules in the Brussels Regulations on anchor defendants to allow Dutch subsidiaries of European Commission infringement decision addressees to be sued in the Netherlands as if they were liable. Examples of this take many forms, including cases where none of the Dutch defendants was an addressee of an infringement decision. This is not what happens in Belgium, where courts have strictly adhered to the principle of the separation of legal entities within a corporate group, and have refused to bring cases against local subsidiaries of companies found to have infringed competition law.
Dutch courts have also applied lenient rules regarding proof of causation of loss, to the benefit of claimants. This again contrasts with Belgian courts, which have applied the rules on the burden of proof more strictly. For example, as regards bid-rigging the Dutch courts have found that a defendant is in the best position to clarify whether a cartel had an impact on the price of the contract(s) regarding which overcharges are claimed. Absent such evidence, the courts can assume that a contract and its price were affected by the cartel. Belgian courts have found instead that not all bid-rigging cartels lead to price increases; and that, if there are market players who are not part of the cartel, the cartel’s pricing practices will be subject to competitive constraints. As a result, claimants in Belgium must prove, for each individual contract, that the cartel led to higher prices.
The large number of past decisions in which Dutch courts accepted jurisdiction over follow-on damages claims, and the lenient rules applied by them as regards proof of loss, provide relative certainty to claimants that the Dutch courts will also accept jurisdiction over their action and that this action has good odds of being successfully. This, in turn, creates incentives to bring further follow-on damages claims in the Netherlands.
The large number of damages actions has also led to the development of a claimants’ bar for antitrust actions and the proliferation of litigation funders. The surge in follow-on actions has resulted in more lawyers getting involved in antitrust damages actions. This has led to specialisation and to professionals that actively try to attract new cases to their portfolio. This developing litigation industry is in turn instrumental in bringing more damages actions before the Dutch courts, creating a virtuous circle for the Netherlands as forum for follow-on damages actions. In addition, litigation funders also play an increasingly important role. They set up claim vehicles that collect claims from cartel victims and then bring these claims to the court in a bundle.
This section also argues that the Netherlands is actively engaged in attracting complex economic litigation, including antitrust litigation.
It is clear that Dutch courts and policymakers are keen to attract complex, international litigation to the Netherlands. Such litigation is lucrative because it generates revenues for lawyers and other service providers, outweighing the costs of adjudication. It also gives the Dutch courts prestige and the opportunity to shape the law.
A good example of this is the Dutch judiciary’s initiative to create a court aimed at attracting complex international disputes that will operate in English – the Netherlands Commercial Court –, alongside a specialised appeal jurisdiction. The tribunal was established with the explicit aim of strengthening the position of Dutch courts vis-à-vis international arbitration venues and foreign courts. It will be entirely self-funded through filing fees, and the economic benefits are estimated at EUR 60 to 75 million per year. Another example of Dutch courts and policymakers competing for certain types of cases is the Dutch mass claims settlement process. Going further back, similar attempts to attract complex international economic litigation can be found in the Hague Court’s attempt to extend its jurisdiction to hear patent infringement claims in the 1990s, which was eventually curtailed by the European Court of Justice. The author notes that Belgium also sought to create a court along these lines – as, I should point out, did the French. The author thinks that an important difference as regards Belgium is that the initiative to create such a court did not come from the judiciary but from the government – and was immediately met with scepticism by the judiciary.
Other factors that may contribute to the attractiveness of Dutch courts include the popularity of the Netherlands as country of incorporation for companies, and the speed and efficiency of Dutch judicial procedures.
Finally, the paper seeks to understand why Belgium does not try to attract follow-on competition claims.
Belgian courts have been clearly less receptive to follow-on claims, as well as to other types of complex economic litigation. The author thinks that this is probably because Belgian judges have a higher caseload than Dutch judges, despite Belgium having the same number of judges and judiciary budget per capita as the Netherlands.
However, civil and commercial litigation is far more frequent in Belgium. In 2014, the Dutch courts of first instance attracted one civil or commercial case per 100 inhabitants, while Belgian courts attracted 6.7 cases per 100 inhabitants. In absolute numbers, the contrast is just as striking: 2014 saw 168,127 new civil and commercial cases filed in the Netherlands, while Belgium had a staggering 752,769 cases. As a result, Belgian judges have no spare capacity, let alone incentives, to attract follow-on damages actions.
The author concludes that, while the Damages Directive will narrow the gap between the Belgian and Dutch regimes governing competition damages claims, it is unlikely to affect the main determinants of whether such claims will be brought in the Netherlands or Belgium. I agree, and I feel that the author’s explanation of why the Netherlands became a favoured destination for follow on damages claims is persuasive.
I would have liked the author to provide an explanation of why the Dutch judiciary is so keen to promote complex economic litigation, including competition damages. I am not convinced that it is just because judges are not as busy as their Belgian counterparts are. However, I acknowledge that a full explanation would likely require an in-depth study of judicial incentives in the Netherlands (including, perhaps, looking into relationships within the legal community more widely), which would add to an already very insightful piece.
This, in turn, links to what I felt was a normative position by the author that could have been argued more expressly – namely, that attracting complex economic litigation is beneficial. Developing such an industry can be important for the economic development of a country, and it is common for countries with service-intensive industries to have large and dynamic legal sectors. However, it may well be that the social benefits of attracting complex (international) economic litigation are smaller than having a judiciary devoted to dealing with run-of-the-mill domestic litigation. This latter approach may benefit society at large, beyond the limited universe of the legal industry and associated economic activities that benefit from attracting complex (international) economic litigation. In effect, one particular side effect of attracting sophisticated cases to your jurisdictions may well be that access to justice becomes more expensive for all cases. I have no idea whether this is the case, but one would assume that Belgian costs of going to court are much lower than in the Netherlands, given the disparity in cases filed in each jurisdiction. If this is the case, just asserting – as the author does – that attracting complex economic litigation pays for itself because it attracts more money to the economy than what a judge spends addressing these cases misses the point, since those benefits will go to a particular (and narrow) segment of the population. In other words, such an approach ignores potentially detrimental impacts on the population at large. Of course, such costs can be outweighed by the benefits– through using the added economic output brought by this type of litigation to address these costs or making access to justice cheaper, or taxation, for example.
The paragraph above should not be understood as expressing a position against a policy of trying to attract complex economic litigation. For personal and professional reasons, I find such venues to be very interesting (and appealing), and I do think that having a sophisticated legal centre devoted to complex economic litigation can benefit local economies in myriad ways. My only point here is that I think the author’s analysis is incomplete in this respect, and that the paper could have benefitted from a deeper discussion of its implicit assumption that attracting complex economic litigation is necessarily good for society.