Short Reads

Dutch Supreme Court rules on the importance of the judgment of a disciplinary court for the judgment on civil liability

Dutch Supreme Court rules on the importance of the judgment of a disci

Dutch Supreme Court rules on the importance of the judgment of a disciplinary court for the judgment on civil liability

04.12.2017 NL law

In its decision of 22 September 2017, ECLI:NL:HR:2017:2452 the Dutch Supreme Court ruled that a judgment on civil liability must include sufficiently comprehensible reasons explaining why it differs from a judgment given by a disciplinary court on the same facts.

Background of the case

The plaintiff had a company that imported flowers from Kenya. Since its formation, the company had received advice from the defendants, an accounting firm and the registered accountant for the company. The plaintiff decided to enter into a joint venture with Kenyan partners. Due to financial problems, the plaintiff concluded an acquisition agreement with those partners to acquire their shares in the joint venture. ''X'' approached the plaintiff and his company and said that he could put the plaintiff in touch with potential financiers for the acquisition. The financing, however, was never concluded. Eventually, the plaintiff's company went into liquidation.

Proceedings

The plaintiff filed a complaint with the Accountancy Division of the District Court on the basis that the accountant had never questioned the conduct of X or challenged the proposed arrangement between X and the financiers. This complaint resulted in a warning to the accountant. Subsequently, the plaintiff claimed damages from the defendants, arguing that they had acted wrongfully towards the plaintiff by failing to exercise the duty of care that may be expected from a reasonably competent (firm of) accountant(s), acting reasonably in similar circumstances. According to the plaintiff, the accountant had not sufficiently warned him about X. The District Court rejected plaintiff's claims.

The Court of Appeal confirmed the District Court's verdict. It ruled that the judgment of the Accountancy Division did not automatically mean that the accountant had acted wrongfully and would be liable for the damage. The Court of Appeal concluded that the accountant was not to blame, because of the following circumstances:

  • X directly approached the plaintiff and his company and was not introduced by the accountant;
  • X received a monthly management fee of EUR 10,000 from the plaintiff;
  • no one, not even an experienced businessman like the plaintiff, was ever suspicious of X;
  • apparently, X was convincing and used various tricks to conceal the truth;
  • it was not established that all of the proposed financiers were fictional; and
  • the accountant was not an expert in assessing potential financiers.

Supreme Court judgment

In cassation, the plaintiff complained that the judgment of the Court of Appeal was incomprehensible in the light of the judgment of the Accountancy Division.

Pursuant to its settled case law (ECLI:NL:HR:2015:831 and ECLI:NL:HR:2002:AE1532) the Supreme Court held that if an act violates the standards and rules of the relevant profession, this does not automatically mean that the individual in question is liable under civil law. If the judge makes a decision that differs from the judgment of the disciplinary court, the judgment on civil liability must include sufficiently comprehensible reasons explaining why it differs from a judgment given by a disciplinary court on the same facts.

According to the Supreme Court, the judgment of the Court of Appeal did not follow this approach. The Supreme Court held that determining whether the accountant was liable for the damage in this case depended on whether the accountant should have warned the plaintiff about X. The plaintiff included this in his notice of appeal, but the Court of Appeal did not address this issue. However, the Court of Appeal held that the expenses incurred could have been (partly) prevented had the plaintiff been aware of X's conduct. For this reason, the Supreme Court set aside the decision of the Court of Appeal and referred the case back to the Court of Appeal.

In this case the Supreme Court repeated the rule that a finding by a disciplinary court does not automatically lead to civil liability and that the judgment on civil liability must include sufficiently comprehensible reasons explaining why it differs from a judgment given by a disciplinary court on the same facts.

Related news

02.07.2020 NL law
Aansprakelijkheid van de Staat bij vliegtuigcrash in Faro

Articles - In haar uitspraak van 8 januari 2020 oordeelde Rechtbank Den Haag dat de Nederlandse Staat onrechtmatig heeft gehandeld jegens de slachtoffers en nabestaanden van de vliegramp in Faro (Portugal) in 1992, waarbij een Nederlands toestel was betrokken. De onrechtmatigheid is gelegen in onjuiste dan wel onvolledige informatieverstrekking over de oorzaken van deze vliegramp door de toenmalige Raad voor de Luchtvaart, inmiddels opgegaan in de Onderzoeksraad voor Veiligheid (‘Raad’). 

Read more

22.05.2020 BE law
International Comparative Legal Guide to Restructuring & Insolvency 2020 - Belgium chapter

Articles - The Belgium Chapter of the International Comparative Legal Guide to Restructuring & Insolvency 2020 is online. The publication, authored by Paul Van der Putten and Pieter Wouters, covers common topics in restructuring and insolvency, including issues that arise when a company is in financial difficulties, restructuring options, insolvency procedures, tax, employees, and cross-border issues in 27 jurisdictions. 

Read more

27.05.2020 NL law
Accountants advising in real estate transactions: be aware of penalties in mortgage deeds

Short Reads - The Court of Appeal of Arnhem-Leeuwarden ruled on 3 March 2020 that an accountant did not properly advise her client with respect to a sale of real estate (ECLI:NL:GHARL:2020:1875). In her research concerning the consequences of the sale, the accountant had failed to properly review the contracts between the seller and the financier of the real estate. The accountant had therefore acted unlawfully.

Read more

20.05.2020 NL law
Stibbe in Amsterdam answers questions from consumers, small business foundations and NGOs about the coronavirus [updated]

Inside Stibbe - In a special Q&A (in Dutch), lawyers from our Amsterdam office share their legal expertise and strive to provide answers to questions put to us by consumers, self-employed persons, enterprises large and small, foundations and NGOs as a result of the corona crisis.

Read more

12.05.2020 NL law
Bespiegelingen over bewijs en waarheidsvinding naar aanleiding van een voorval in een politiecel

Articles - In de regel gaat het leggen van bewijsbeslag en het instellen van een exhibitievordering op grond van art. 843a Rv vooraf aan de procedure. In dit artikel gaat Tim de Greve in op het belang van een succesvolle exhibitievordering om zo de focus van het geschil nog meer naar de fase van het onderbouwd stellen en betwisten te brengen.

Read more