Category Archives: Liability Netherlands

Employer’s liability and asbestos claims

An employer can be sued in the Netherlands in case an employee has been exposed to asbestos in his working environment. Dutch Class Actions against employers have been enabled by recent legislation.

Dutch Law Firm Employers Liability Asbestos

Asbestos claims and class actions

Dutch Law Firms are up for a new challenge. Dutch Courts have expanded the scope of employer liability with regards to asbestos lawsuits.  Employer liability may therefor rise in the Netherlands for the exposure of employees to asbestos, chemicals or diesel fume. My law firm provides risk advisory services to manage risk and regulatory compliance requirements.

Old buildings and asbestos

Asbestos can still be found in a number of workplaces and several professions in particular have a greater likelihood of exposure. Especially old (office) building and ships very also contain dangerous asbestos. Old office buildings may nor example hold asbestos in roofing, floor tiles, fireproofing material, and pipe or boiler insulation. Contractors should take special care when employees work in old constructions.

Asbestos Legislation and products

Lawyers need to check the relevant legal definition of asbestos, I refer to European Regulation (EC) No 1907/2006 (as amended) and Directive No 2009/148/EC, which define asbestos (for the purposes of the respective Regulation and Directive), as the fibrous silicates, such as Actinolite, CAS No 77536-66-4; Asbestos grunerite (amosite) CAS No 12172-73-5; Anthophyllite, CAS No 77536-67-5; Chrysotile, CAS No 12001-29-5; Crocidolite, CAS No 12001-28-4 and Tremolite, CAS No 77536-68-6.  Under art. 4.37(a) of the Dutch Working Conditions Decree and art. 1(b) of the Product (Asbestos) Decree, asbestos is defined in a similar way.

Conformity Statement

For manufacturers it is prudent and proper risk management to issue conformity statements also contain representations regarding your products compliance with regulations surrounding asbestos content or chemical substance, even if not obliged by law.

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Netherlands Regulation on Asbestos

In the Netherlands, a legal definition of asbestos mirroring the definition under the Regulation and Directive is to be found in the implementing legislation of the aforementioned Directives No 1999/77/EC and 2009/148/EC, the Product (Asbestos) Decree of 17 December 2004  and the Netherlands Working Conditions Decree  respectively. The Dutch Legislation on asbestos is spread out is several statutes. Feel free to consult me or one of our asbestos lawyers in our law firm  if you have any questions.

Working Conditions and Asbestos Fibres

OK, still there? Products containing asbestos (asbesthoudende producten) are defined as “products containing one of the aforementioned fibrous silicates” (art. 4.37(b) of the Working Conditions Decree). Asbestos fibres (asbestvezels) are defined (for the purposes of the Working Conditions Decree) as asbestos particles longer than 5 micrometres, less than 3 micrometres wide and with a length to width ratio of more than 3:1 (art. 4.37(c) of the Working Conditions Decree). The Product (Asbestos) Decree further distinguishes between “serpentine asbestos” (chrysotile) and “amphibole asbestos): actinolite, amosite, anthophylliet. Please call for anny liability issues under Dutch Law you may encounter.

European ban on Asbestos

In the European Union there is a complete ban on asbestos. This ban has been implemented by a succession of European directives dating back to 1983. Directive 83/478/EEC implemented a ban on marketing and use of asbestos fibres; crocidolite, chrysotile, amosite, anthophyllite, actinolite and tremolite, and products containing these substances (subject to certain exceptions for products containing crocidolite) by adding them to the list of “substances and preparations” banned from being placed on the market or used pursuant to Directive 76/769/EEC.

Asbestos Laws in EU Member States

The European rules regarding asbestos are contained in directives which have to be implemented by the Member States in their national legislation. This means that different rules may apply in different Member States. The initial partial ban was extended by successive directives,  including Directive 1999/77/EC, which removed the exceptions for crocidolite with effect from 1 January 2005. Directive 76/769/EEC was replaced by Regulation (EC) No 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) and establishing the European Chemicals Agency (the “Regulation”). The Regulation only applies to products “containing these fibres added intentionally”.

 

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Product liability claims in the Netherlands

The Dutch market is very challenging for new products. Always check the legal framework of the Dutch market. Therefor I will give a brief introduction to Dutch Product Liability.

Dutch law on Product liability

Apart from general negligence claims under Dutch law, a producer could also be exposed to claims made under art. 6:185 of the Dutch Civil Code, the provision for product liability in the Netherlands. Article 6:185 is an implementation of Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products.

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European Product Liability

My comment may also be taken as an indication of the position in other EU Member States, however it is expressly noted that these principles may have been implemented differently in other EU member states. For any claim or defense regarding product liability it is advisable to consult a Dutch attorney timely to discuss risks and caveats under Dutch law.

Procedure on defective product

Under article 6:185 of the Dutch Civil Code, a producer is liable to consumers (both the buyers and third parties) for any loss or damage caused by a defective product if there is damage within the meaning of article 6:185 of the Dutch Civil Code, unless the manufacturer can rely on certain exceptions set out in the same article. A product will be “defective” within the meaning of article 6:185 if it “does not provide the safety which a person is entitled to expect”; relevant considerations include the way the product is presented, reasonable expectations of its use, and the time when it was put into circulation. The burden of proof under Dutch law is on the claimant to prove that the presence of 1) damage, 2) defect, and 3) a causal relationship between the damage and defect of the product.

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Producer and Dutch Liability

Article 6:186(1)(b) Dutch Civil Code provides that a product will be defective if it fails to provide the safety that one might have expected of it, taking all circumstances into consideration. Article 6:185 provides for liability on the part of the “producer”. For the purposes of this article, a producer means a manufacturer of a finished product or component(s) of a product, a producer of raw materials, an “own brander” (anyone who by putting his name, trademark or other distinguishing sign or feature on the product holds himself put as its producer), or an importer into the EU; and, in case a producer cannot be identified: the supplier. Given the extremely broad definition of “producer” for product liability purposes, we are of the view that the Company (or its affiliates) will easily fall under the definition of the Product’s producer.

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Directors liability in the Netherlands

Directors of companies in the Netherlands can be held liable both in civil law and criminal law. Dutch law does not have the concept of disqualification.

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Civil liability pf Director Dutch Company

Each director has a duty towards the company to properly perform the duties assigned to him (section 2:9 Civil Code). That’s the general rule. There is only a failure if it can be established that the director has failed in the performance which could be reasonably expected under the specific circumstances. Failure of a director does not automatically lead to liability. Liability is only incurred in the case of serious culpability (ernstige verwijtbaarheid). Whether serious culpability is involved has to be determined on a case by case basis whereby all relevant circumstances have to be taken into account.

Joint Liability under Dutch Law

All directors are, in principle, jointly and severally liable for inlawful acts. An individual director may be discharged if he can prove that (i) he cannot be held responsible for the failure and (ii) he has not been – actively – negligent in preventing the consequences thereof.

Tort action againt board of Dutch Company

A director may be held liable in tort (onrechtmatige daad – section 6:162 Civil Code)) by a creditor on the grounds that he entered into a transaction on behalf of the legal entity, while at a time he knew or should have reasonably known that the company would not beable to meet the obligations, and would not have sufficient assets from which the debt could be recovered.

Exculpation of Dutch managing Director

It is not sufficient that there was a more than negligible risk that the legal entity would not be able to meet its obligations. The director should have anticipated that the risk would actually materialize. If the managing director has not taken an irresponsible risk when he entered into the transaction, the managing director cannot be held liable if in retrospect it appears that the company nevertheless does not fulfill its obligations and it was foreseeable from the start that the legal entity would not provide for recourse.

A managing director can also be held liable in tort if he has allowed or effectuated that the legal entity does not meet its obligations under an earlier commitment and consequently causes damage to the other party.

Director’s Liability in bankrupcy

Such claim in tort can also be brought by the receiver in bankruptcy, on behalf of the creditors of the company (even though the bankrupt company would not have had a claim against the director).

If the legal entity does not provide sufficient resources to pay all creditors in the case of bankruptcy of the legal entity, the directors shall be jointly and severally liable for the deficit in the bankruptcy if (a) it is apparent that the management has not discharged its duties properly and (b) it is likely that the bankruptcy was caused by the mismanagement of the board. This is referred to as manifestly improper performance of duties (kennelijk onbehoorlijke taakvervulling) (section 2:138/248 Civil Code).

Mismanagement in Dutch Company

Only manifestly improper performance of duties during the three years preceding the bankruptcy is taken into account. Manifestly improper performance of duties means that no reasonably acting entrepreneur would have acted – in equivalent circumstances and with the knowledge the director had (or should have had) at the time – similarly.

If improper performance of duties by the board is established, all managing directors are, in principle, jointly and severally liable. If mismanagement is established, the directors are jointly and severally liable for the entire deficit of the bankrupt estate (although the court can mitigate damages).

Faults in bookkeeping

If the management has failed to keep its books properly (section 2:10 Civil Code) or has failed to publish the annual accounts with the Chamber of Commerce (section 2:394 Civil Code), improper performance is (irrefutably) deemed to have occurred and improper performance is (refutably) presumed to have been an important cause of the bankruptcy. An individual director can exculpate himself if he can prove that other factors were an important cause of the bankruptcy. However, the burden of proof lies with the director.

Similar liability rules apply for supervising directors and factual directors.

Criminal liability of Netherlands Comapny

Under particular circumstances, (factual) directors can be prosecuted (section 51 Dutch Criminal Code). For example, section 1 of the Economic Offences Act lists a number of obligations under Corporate Law, the non-compliance of which constitutes a criminal offence.

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