This article discusses the judgment of the Amsterdam District Court issued on 29 December 2021 that clarifies certain admissibility requirements for representatives claiming damages under the Settling of Large-scale Losses or Damage (Class Actions) Act (WAMCA).
On 29 December 2020, the Amsterdam District Court handed down a judgment providing new insights on admissibility requirements for representatives claiming damages under the Settling of Large-scale Losses or Damage (Class Actions) Act (Wet Afwikkeling Massaschade in Collectieve Actie or “WAMCA“). The WAMCA, which entered into force on 1 January 2020, enables representatives, usually foundations, to claim monetary compensation for damages on behalf of injured parties, in a collective action before any district court in the Netherlands. The Amsterdam District Court has now provided more clarity on the requirement of sufficient representativeness.
There are various admissibility requirements for representatives claiming damages under the WAMCA. For one, the representative must uphold the interests of the injured parties according to its articles of association. Those interests must be ‘adequately safeguarded’. This ‘adequate safeguarding’ means that the representative must be sufficiently representative of the group of injured parties and it must have a proper governance structure. This, inter alia, includes a supervisory board, funding, expertise and a publicly accessible website that provides information on the proceedings. The representative must also demonstrate to have undertaken a reasonable attempt at reaching an amicable settlement.
The proceedings instituted by The Privacy Collective
In the proceedings leading to the 29 December 2021 judgment, The Privacy Collective Foundation (“TPC”) claimed damages totaling 11 billion euros from Oracle and Salesforce for alleged privacy breaches. According to TPC, in the context of a service called Data Management Platform, Oracle and Salesforce collected personal data from internet users without consent, processed it into detailed profiles and sold it to third parties in order to enable them to provide personalized advertisements on websites. In addition, TPC claimed that the privacy of Dutch internet users was violated by a data leak at Oracle. TPC argued that these alleged privacy breaches are contrary to statutes such as the General Data Protection Regulation, the Telecommunications Act and the European Convention on Human Rights. TPC therefore claimed damages amounting to 5 billion euros from Salesforce and 5 billion from Oracle, or in the alternative, 500 euros per Dutch internet user.
However, before the Amsterdam District Court could assess the merits of these claims, TPC’s admissibility as a representative had to be reviewed. In this respect, TPC naturally argued that it satisfied all requirements. In particular, TPC argued that it was sufficiently representative because 75.000 people had clicked a “like” button on its webpage, whilst it had also received support from almost all Dutch privacy focused NGO’s. This, however, proved to be insufficient to persuade the Amsterdam District Court.
The judgment of the Amsterdam District Court
First, the Court recalled that the requirement of representativeness aims to prevent a representative from bringing an action without the support of the injured parties. In that respect, it must be clear from the outset that the representative represents a sufficiently large part of that group of injured parties. What is sufficient differs from case to case and can only be determined in relation to the number of injured parties. This can be evaluated, for example, based on the number of members of the association (in case the representative is an association) or based on the number of injured parties who have actively registered for the claim.
The Court went on to assess whether the “likes” showed sufficient support for TPC’s claims. In this regard, the Court first looked at the information that was provided alongside the like button: support TPC taking two tech companies to court for collecting and selling the data of millions of Dutch citizens without their consent. The Court observed that no information was provided about the nature and purpose of the proceedings. Moreover, Salesforce and Oracle were not mentioned at all. The Court drew the conclusion that a like could therefore not be considered as a show of support for the proceedings, even though TPC claimed that it did provide information about the proceedings on other parts of its website, in newsletters and during conferences. Furthermore, the Court noted that no contact details were registered of the people who clicked the like button. As such, TPC had no way of showing that the people who clicked the like button pertained to the group of parties that allegedly suffered damages. According to the Court, the lack of contact details also prevented TPC from communicating with the supporters of the proceedings, although this is required by law. Finally, the Court held that the fact that TPC received support from privacy focused NGO’s could not replace the support needed from the injured parties themselves.
All in all, the Court declared TPC inadmissible to bring its claims. The information provided alongside the like button was too vague to demonstrate actual support for the proceedings as instituted by TPC. This judgment shows that a representative claiming damages under the WAMCA must be able to substantiate that it enjoys sufficient support, and more importantly, that it enjoys support from the people who it claims to represent. This must be demonstrable and verifiable. Support cannot be shown on an anonymous basis.