As the global securities litigation landscape continues to grow and evolve, so does the litigation vehicle know as a Dutch Foundation. Last year, we witnessed a record number of global opt-in actions filed – nearly a 56% increase from 2015. While there are seemingly limitless factors that institutions should weigh before deciding whether to get active in a particular non-U.S. jurisdiction, Dutch Foundations have proven to be relatively low risk. It is this low risk profile that make Dutch Foundations attractive to investors looking to recover damages for securities traded on foreign exchanges and in global jurisdictions.
Dutch Foundations arise in the Netherlands, and are essentially voluntary vehicles established for the purpose of settling claims across multiple jurisdictions. They are an effective method of addressing jurisdictional confusion in the case of broadly traded securities of Global corporations, particularly in Europe where they often trade across multiple exchanges. Foundations provide a collective forum within which parties can settle on a pan-European basis, with the implication that Netherlands courts have reciprocity across jurisdictions.
The $1.2B Fortis settlement in March of last year is a big win for the Dutch Foundation, particularly because Fortis was a Belgian bank operating across Europe. There are a number of foundations set up in connection with the Volkswagen litigation. Similarly for Petrobras, a Foundation has been established as a means of recovery for investors in Petrobras bonds, many of which were issued by Netherlands entities and which are traded across Europe.
Download FRT’s 2016 Year in Review: Global Opt-In Litigation & Settlements for more details on this trend and others affecting non-U.S. litigation.