4.1. General information
All rules concerning commercial private law are codified in the Dutch Civil Code (“Burgerlijk Wetboek”), whereas rules concerning procedures, courts, competency, and the likes are dealt with in the Civil Process Code (“Wetboek van Burgerlijke Rechtsvordering”).
Entering into legal proceedings is possible without a prior formal warning to the debtor. However, all courts demand evidence that there have been pre-court efforts to try to get payment and/or to come to an amicable settlement. During these pre-court efforts, an announcement to start legal proceedings is common and should be done.
4.2. Legal systems
The Dutch judicial organisation recognises several kinds of courts, whereas competency is related to the amount or the level of each claim.
The systems include the following courts:
- County court, one judge tribunal (“kantongerecht”)
- Tribunal or district court (“rechtbank”)
- Court of appeal (“gerechtshof”)
- Supreme Court (“Hoge Raad”)
For collections, it should be noted that for disputed civil claims up to EUR 25,000, Dutch legal collectors can handle the legal proceedings themselves in front of the county court. Beyond this amount, the district court is deemed competent, and the law prescribes an obligatory legal representative or lawyer. We manage these procedures through our LDC network, whereas our legal team will monitor the lawyers involved.
4.3. Required documents
In order to apply a legal dunning procedure or file a petition for bankruptcy, we need copies of the contracts, invoices, and a clear statement of account.
In the case of a regular lawsuit procedure that is normally related to disputed cases, copies of the complete contractual documentation or proof of the trading relationship have to be supplied, such as:
- Written agreements
- Order confirmations
- Purchase conditions
- Delivery notes
- Other relevant information or evidence to rebut the dispute
- Information about witnesses (names, places of residence)
- A description of the dispute
- Counterarguments from you as the creditor regarding the dispute
In case of dispute, all the notes of the conversations between you and your debtor via letter and email that may assist our lawyers should be kept.
Every document supporting the claim or the argument to be defended has to be submitted to the court with a writ of summons, the same as with the names and places of residence of the witnesses.
4.4. Legal dunning procedures
The Netherlands does not have legal dunning procedures, but, if the debt is undisputed, it is possible to use very specific legal action in order to press the debtor to pay on a short-term basis.
The most effective and least costly procedure is filing a petition for bankruptcy. For this procedure, we need to hand over the file to one of our LDCs, as it must be done by a lawyer. The petition is designed to put so much pressure on the debtor that if there are any monies, they will be paid with preference to you - the creditor who filed the petition.
As an alternative, it might be possible to agree on a payment plan, as this is also a very efficient action. We usually know within a month whether any monies can be collected.
Legal proceedings in the Netherlands are always related to disputed matters. For legal proceedings, written approval from you will be sufficient, so a formal power of attorney is not necessary.
Before starting legal action, our collectors investigate the debtor’s financial situation. If it’s considered that there are assets that can be taken for enforcement once a verdict has been received, the file will be handed over to one of our legal collectors.
The legal collector will then study the case, contact you, and give advice on how to act further from a legal point of view. If the documents are missing or additional evidence needs to be supplied, the legal collector will ask you to supply relevant information.
Our legal collectors can handle the proceedings for claims up to EUR 25,000, and for larger claims, the fully documented files will be sent to the LDCs in our network in the Netherlands.
Once the legal collector or the LDC completes a summons, the debtor will be notified by the bailiff (obligatory) and be immediately presented to the court. In proceedings before the county court, the debtor can defend themselves, whereas in proceedings before the district court and beyond, the debtor must be represented by a lawyer.
Once a writ of defence has been presented, it is usual practice for the court to direct a personal appearance of all the parties and their legal representatives to gather further information about the facts and to try to come to an agreement between them.
If no settlements can be concluded, the proceedings will continue, usually with further written documents, witness statements, appointments of experts and the likes, until the court has a clear view of all the details and can reach a final judgment.
Appealing the judgment (the threshold is EUR 1,750) is possible. That will trigger a second verdict by the court of second instance (local court to district court, district court to court of appeal).
In the case of the third instance, the review will be restricted to a check on whether or not the statutes were applied correctly. Any later amendment of facts or proof is not permissible.
4.7. Expected time frame
The average duration of a regular lawsuit is dependent on which incidents might occur and can vary from about eight months - when there are no specific hearings - up to a minimum of 18 months, depending on the complexity and the hearings of all the witnesses and experts.
The availability of the judge and lawyers on all sides also has influence on the time frame.
The time frame for the outcome of filing a petition for bankruptcy is approximately eight weeks.
4.8. Costs and interest in the legal phase
The costs of the legal proceedings are related to the amountof the outstanding debt and are determined by the court. They also follow a complex legislative tariff table using a wide range of calculations.
The losing party will be liable for the court costs and a legislative fee for procedural assistance according to the tariff table. The fee is related to the amount of legal handling in the proceedings and does not take into account the real legal fees. The way the legislative fee is calculated makes it difficult to predict the total costs, besides the complexity of the case, the number of court appearances, the eventual hearing of the witnesses, and the appointments of the experts.
Whenever legal action is necessary, cost estimations will be provided on a case-bycase basis.
The difference between the legislative fee determined by the court and the legal fees for the LDCs and/or our legal collectors will be collected from your account and cannot be recovered from the debtor.
The cost of filing a petition for bankruptcy is approximately EUR 1,350.
Any interest calculated from the date of the writ of summons, court costs, and legal fees can all be claimed as part of the outstanding monies during the legal proceedings.
In all cases, the losing party has to bear the costs of the legal proceedings. If the claim is granted partly, the court can decide that both parties have to bear the costs in proportion to their prevailing or failing in the case.
In the case of a legal settlement, it’s common that the parties bear their own costs (e.g. lawyers’ and court fees) of the proceedings.
(End of chapter 4 - Legal collections)