June 8th, 2011

Continental European Legislative and Judicial Trends: Statute of Limitation and the Obligation to Complain About Professional Legal Malpractice in the Netherlands

Posted at 1:00 AM ET

David Lewin, Managing Director
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Overview of Legal Malpractice 

Legal malpractice occurs when a lawyer’s misconduct or failure to use adequate level of care, skill or diligence in the performance of duties causes damage to the lawyer’s client. There is an established standard of conduct in the Netherlands by which lawyers must abide. A breach in this established standard of conduct can be defined as legal malpractice. Possible causes for legal malpractice may include failure to file a claim within the statute of limitation period, failure to serve a writ or attachment on a third party, failure to file necessary legal documents or settling a case without a client’s full consent.

This issue of legal malpractice raises a number of questions. Where do clients stand when confronted with such a situation? Is it required that clients are aware that their lawyers have committed legal malpractice in order to complain? Are clients required to have legal knowledge to bring claims against lawyers? What is the statute of limitation for clients to start claims against lawyers? Are clients obligated to voice dissatisfaction to their lawyers?

Statute of Limitation

Numerous legal disputes relating to the statute of limitation concern the reduced limitation period of five years in respect to claim for damages regulated in Article 3:310 of the Dutch Civil Code (DCC) (1). This reduced period of five years begins on the day following the day on which the aggrieved party became aware of the extent of the damage suffered and the identification of the party liable for it. A person wanting to invoke discharge by limitation based on Article 3:310 DCC against an aggrieved party must prove that the aggrieved party was aware of the extent of the damage suffered and the person liable for the damage.

According to settled case law of the Supreme Court, it is not important what the aggrieved party should have known, but rather when the aggrieved party became aware of the extent of the damage suffered. The term “became aware” must be interpreted as a subjective criterion. Therefore, in the event that an aggrieved party disputes awareness of the damage suffered and who is liable, the court may infer from facts and circumstances provided at trial whether the aggrieved party indeed was aware of the extent of the damage suffered. (2)

As a result, the mere suspicion of the existence of damage is insufficient to amount to actual awareness, and aggrieved parties are not required to have absolute certainty that damage caused was due to inadequate or insufficient performance of their lawyers. The moment when one is able to initiate a legal action for compensation may therefore differ from the moment of actual awareness of the damage and the identity of the person liable for the damage. Hence, the limitation period in article 3:310 DCC begins on the day following that day on which the aggrieved party is actually able to bring an action for compensation against the lawyer for the damage suffered. (3)

Obligation to Complain

Under Dutch law, a person receiving inadequate or insufficient performance must complain (”protest”) within a reasonable period (”binnen bekwame tijd”). The obligation to complain is regulated in Article 6:89 DCC and begins the moment the complainant becomes aware or should have been aware of the inadequate or insufficient performance. There is no prescribed form that a complainant must use to protest. It is also not required that the complainant sever further relationship with the counterparty. (4)

Because there is no general consensus or definition by law on what “a reasonable period” entails, the circumstances of each case will determine what may be considered a reasonable period. However, the basic principle under Dutch law is that immediate action is of the essence when it comes to protesting inadequate or insufficient performance. (5)

A complainant will lose all rights relating to an inadequate or insufficient performance by failing to complain within a reasonable period. This severe sanction is justified by the legislature, which makes the point that failure of the complainant to comply with the obligation to complain will, in the interest of the counterparty, put an end to any further discussion of whether the counterparty acted in accordance with the agreement regarding performance. (6)

Conclusion

According to Article 3:310 DCC, clients have a limitation period of five years to initiate legal action for compensation against their lawyers for damages suffered. This period begins on the day following that day on which the client actually becomes aware of the damage and the fact that the lawyer is responsible for it. Clients are not required to know whether their lawyers committed legal malpractice in order to initiate legal action or to complain, nor do they need to have legal knowledge to do so. However, clients do have an obligation to immediately complain to their lawyers in the event that they are dissatisfied with their performance - otherwise clients may risk losing all rights regarding their lawyers’ inadequate performance. 

Notes:

This article is limited to the professional malpractice of lawyers.

1. The regular statute of limitation period for legal claims in the Netherlands is 20 years (Article 3:306 DCC), but considering that different sections of the DCC apply lesser periods for statutes of limitation, it can be said that the 20-year period has become an exception.

2. HR 6 April 2001 (Vellekoop/ Wilton Feijenoord), NJ 2002/383; LJN: AB0900, 

C99/158HR.

3. HR 20 Februari 2004, NJ 2006/113; LJN: AN8903, C02/288HR.

4. HR 11 Juni 2010; NJ 2010/331; LJN: BL8297, 08/04748.

5. Parl. Gesch. Inv. Boek 7, blz. 148.

6. MvA II, Parl. Gesch. Boek 7, p. 151.

 

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