The Netherlands

Abstract

Abstract This chapter describes and discusses the liability the Dutch Authority for the Financial Markets (Stichting Autoriteit Financiële Markten or the AFM) and the Dutch Central Bank (De Nederlandsche Bank NV or DNB). Before 1 July 2012, there was no statutory provision which specifically addressed the liability of the AFM and DNB. This meant that their liability was governed by the general tort provisions in force at that time, especially Articles 6:162 and 6:163 of the Dutch Civil Code, in line with state liability in the Netherlands generally. In 2006, in the landmark case Vie d’Or, the Dutch Supreme Court held that the financial supervisors were subject to the unwritten standard of care that their conduct ‘must meet the requirements necessary for proper and careful supervision’. Whether or not a financial supervisor had exercised the required level of care depended on all the circumstances of the case, one of them being whether or not it was exercising a discretionary power. If the financial supervisor was exercising a discretionary power (and this was—and still is—usually the case), the courts had to respect that power and could subject the financial supervisor’s conduct only to a marginal review. Since 1 July 2012 the liability of both the AFM and DNB is subject to a statutory limitation. This limitation of liability is laid down in Section 1:25d Wft. It limits the liability of the AFM and DNB to cases in which the loss is to a significant extent due to a failure involving (1) intent (opzet) or (2) gross fault (grove schuld) (a) to perform their statutory duties properly or (b) to exercise their statutory powers properly. This standard is stricter than that which applied before 1 July 2012. The protection of Section 1:25d Wft extends to the activities of DNB as the designated national resolution authority (NRA) for banks within the Single Resolution Mechanism (SRM).