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Freshfields TQ

Technology quotient - the ability of an individual, team or organization to harness the power of technology

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Data and tech: collective actions and mass claims across Europe #4 – Focus on the Netherlands

Actions for non-material damages following (alleged) infringements of the General Data Protection Regulation (GDPR) are increasingly being brought before courts across Europe. But legal requirements for the recognition of non-material damages are still to a large extent unclear. 

In our new blog post series, we explain the situation in several countries across Europe (see our introduction). Please find out below about GDPR damages claims in the Netherlands.

The Netherlands is a popular forum for various types of collective actions, based on the WAMCA (Wet Afwikkeling Massaschade in een Collectieve Actie), effective as of 1 January 2020. Various claims on the basis of purported infringements of the GDPR are currently pending in the Netherlands.

The District Court of Amsterdam recently dealt with several questions relating to the viability and admissibility of mass claims for alleged GDPR-infringements under the WAMCA (which were also highlighted in our previous post: A transforming landscape: Collective Actions in Data and Tech).

In its 25 October 2023 decision the Amsterdam District Court declared that the collective claims on an opt-out basis were admissible. Thus, it could be inferred from this decision that GDPR damage claims can actually be made on an opt-out basis. However, the Amsterdam District Court is not explicit in this regard and no consensus on this question has been reached, neither in case law nor in legal literature. We expect this to be a topic of discussion in future appeal-proceedings and these questions are already pending in ongoing cases.

One of the requirements for admissibility under the WAMCA is that the claims by individual class members that are collectively brought in a collective action under the WAMCA need to be sufficiently similar that they can be efficiently and effectively decided together. If the Court needs to weigh individual circumstances to decide on a claim, this claim is not suitable for a collective action. 

In its 25 October 2023 decision the Court determined that non-material damages cannot be awarded in this specific collective action, because the alleged negative consequences for data subjects depend on the individual circumstances of the class members (such as how much time the user spent on an app). It could be envisioned that non-material damages could still be awarded in other cases, for instance in the case of loss of control of the data, if that can sufficiently be demonstrated to be damage (ECJ 14 December 2023, ECLI:EU:C:2023:988, C-456/22 (VX & AT/Gemeinde Ummendorf), par. 22; ECJ 14 December 2023, ECLI:EU:C:2023:986, C-340/21 (VB/Natsionalna agentsia za prihodite), par. 82). Whether or not this ruling will stand on appeal is yet to be determined. Notably, in a verdict dated February 14, 2024, regarding a WAMCA class action that was not in the tech space, the court deemed the assertions for intangible damages admissible on a prima facie basis, despite the typical personal nature of such damages.

In the aforementioned case, the Court scrutinised the funding agreements between the claim vehicles and their litigation funders to ensure the claim vehicles are sufficiently independent from its funder – this is a requirement for admissibility under the WAMCA. Additionally, the Court formulated some principles on the relationship between the funders, their claim vehicles, and the members of the classes. Parties have not been granted the possibility to address these principles and they are worded tentatively by the Court such that they are not definitive in those proceedings. The Court prescribed that in the case of a collective settlement or damages award, the funders’ fee will ultimately be determined by the Court as a percentage of the damages awarded. The funders’ fee should be capped at five times the invested amount, according to the Court, and a fixed funders’ fee may be unacceptable as it is not proportional to the compensation granted.

This cap on the return on investment (of five times the invested amount) may even deter litigation funders from financing collective actions under the WAMCA and search for alternative possibilities, such as collective claims on the basis of the direct assignment of the claims to the claim vehicle. 

The next blog post in our data and tech mass claims series will focus on Belgium.