Costs of litigation in The Netherlands [NCC]
Costs of legal proceedings before the NCC
Fees for the Netherlands Commercial Court
Court fees for cases brought before the Netherlands Commercial Court (NCC) and the Netherlands Commercial Court of Appeal (NCCA) are proposed to be € 15,000 and EUR 20,000 respectively. Although higher than ordinary Dutch legal proceedings, this is a cost-effective alternative in comparison to having cases heard by international commercial courts in other countries where fees may be much higher. The benefit for the parties is clear as this results in less costs for the business overall.
Furthermore, there are plans to allow for the mitigation of costs in certain cases when it is demonstrated that the party cannot bear these costs. This provides an attractive option for small companies or start-ups, where the cost of commencing proceedings would be reduced.
The Dutch government predicts that the NCC will hear up to 100 cases a year. However due to the practicality and long term cost-effectiveness of having proceedings in the English language, this number is likely to be much higher.
Fees of Dutch Litigation Attorneys
Only lawyers who are registered at the Dutch bar are allowed to conduct cases in The Netherlands. There is no scale fee for commercial litigation. Dutch litigation lawyers generally bill based on hourly rates in commercial litigation. It is possible to enter into a conditional fee agreement, but not for the entire sum of the fees.
The court has discretion to order that costs are payable by one party to another. It can also determine the amount of the costs and decide when they are to be paid. This is only a fixed amount, and usually this is only a fraction of the lawyer’s actual fees.
Commercial litigation in The Netherlands is usually funded by the litigating parties, often on the basis of an advance payment and subsequent calculations of fees and costs. Under Dutch law there is no regulation to prohibit third parties from funding litigation.
Who pays in Dutch litigation proceedings?
Under Dutch law, the general rule is that the loser pays all (article 237 (1) Code of Civil Procedure). This is justified on the grounds of procedural risk and policy. All costs incurred by the winning party are compensated provided they are reasonable. With regard to lawyer’s fees, the ‘scheme of liquidated costs’ applies; this entails that only specific acts and services of the attorney will be compensated for. Other additional costs will not be compensated by the losing party.
Both the cost of witnesses and expert opinions are borne by the losing party.
Where the parties settle the dispute, the division of costs is not usually revealed. Parties may apportion the costs based on their chances of winning or losing, or they may agree that each party bears its own costs.
The general rule that ‘the loser pays all’ is not without exceptions. Article 327 of the Dutch Code of Civil Procedure states that the court may “compensate” the costs in full or in part in certain situations (especially in the context of family proceedings). In these cases, each party bears its own costs. The court may also order each party to bear its own costs if each party has both won and lost elements of the case.
