The Netherlands - Country Report - Handbook on Third-Party Funding in International Arbitration- Second Edition

TPF is generally allowed in the Netherlands. There is no public data available on the actual use of TPF in the Netherlands , but for class actions it is reported to be a growing field. This has been the case even more so since the introduction of the Act on Redress of Mass Damages in a Collective Action in 2020. This act enables representative organizations – in most cases special claim vehicles – to seek damages on behalf of a group of claimants. Typically, the representative organization is funded by a third party to finance (a major part of) the litigation, in exchange for a certain percentage of the awarded damages in event of success.

Outside the area of class actions, the use of TPF does not yet appear to be widespread in the Netherlands, although case law shows that several types of litigation have already been funded by TPF. Because more and more Funders have entered the Dutch market in recent years , the use of TPF is expected to increase in the Netherlands.

1.2. Is it dominated by local or international Funders? Which Funders are active? Which cases typically get funded?

Both local and international Funders are active on the Dutch TPF market. However, due to the lack of public data, how many local and international Funders are active in the Netherlands is not exactly known.

A wide variety of cases are funded by TPF in the Netherlands. Besides class actions, TPF is also used for other types of cases such as commercial disputes, IP-related cases and legal actions against the Dutch government. In the field of arbitration, we observe a trend in funding mechanisms being increasingly used by investors to enforce ISDS awards against foreign States. As such enforcement proceedings are in most cases highly complicated and therefore very costly, funding mechanisms may offer a solution to investors who wish to avoid the high costs of enforcing an ISDS award against a State.