They are called claim foundations, the representatives of groups of citizens who suffer damage from large companies and who individually have no chance of obtaining their rights. Peter Goes opposes the stamp.
Collective legal actions, in which foundations litigate on behalf of a group of citizens who have suffered damage, regularly make the news. Recent examples are the cases against Chemours and Tata Steel. In our country, various foundations have been trying for some time through collective actions to persuade major car manufacturers to take their responsibility and finally compensate countless affected diesel drivers. They have suffered damage due to the tampering software with which manufacturers have equipped cars.
Deep pockets
In reporting on collective actions, there is often uncertainty about the role and functioning of the relevant foundations. Misunderstandings also arise that do not contribute to their reputation and effectiveness. The latter depends on the extent to which the foundations are used by victims, in other words: the number of people who register. It is important to understand how these foundations work and why they are so crucial for people trying to take on large, powerful corporations with infinitely deep pockets.
Collective actions offer an ideal solution in cases where the damage to the individual is great, but the perpetrator is large and powerful. But also in cases where the personal damage is relatively small, so it is not worthwhile to file an individual claim because of the costs. Only by acting for the collective does litigation become financially feasible. In addition, in almost all cases there is a legally complex case with many parties and stakeholders. Therefore, forms of individual legal assistance are often not available or sufficient.
Portrayed as money grabbers
Some of the lawyers from the various Zuidas offices that, among other things, assist the car companies causing damage, opt for an uncharming strategy. They portray the representatives of the ‘claim foundations’ as money grabbers. They would walk in on the backs of less fortunate people who have registered with a foundation. That really turned the world upside down, especially considering the bad behavior of the clients of those offices. In most cases, the financial model of interest groups is simple: a litigation financier assumes the litigation risk and pays the costs of the procedure and the necessary investigations.
If there is success, that financier receives a percentage of the proceeds or – and we are now seeing this more and more often – a multiplication of the investment. So the proceeds go not to the representatives of the foundation, as is often wrongly assumed. It is a remarkable accusation from lawyers who can invoice almost unlimited amounts to the party causing the damage they represent, with the aim of preventing them from being forced to compensate victims.
Indispensable
Collective actions have an important social function and are indispensable for access to justice in our legal system. They prevent large and powerful companies from evading their responsibility and liability and make legal proceedings accessible to people who would otherwise go behind the net. Parties such as car manufacturers, tobacco manufacturers and asbestos producers would never have been called to order in our country without this mechanism. As ‘dieselgate’ illustrates, major perpetrators of damage do not tend to take responsibility on their own initiative, even when the facts causing damage are obvious.
Peter Goes is a former lawyer and chairman of the supervisory board of the Diesel Emissions Justice Foundation