Collective actions and the limits of litigation funding
Investors, a settlement of EUR 3.6 billion and two claim foundations
In 2020 Airbus reaches a settlement of EUR 3.6 billion with French, English and American authorities following a years-long investigation into worldwide corruption and bribery. Stichting Investor Loss Compensation (SILC), incorporated in 2021, brings a collective action on behalf of investors claiming losses caused by incorrect and misleading disclosure by Airbus.
The District Court of The Hague (ECLI:NL:RBDHA:2023:14036) declares that it lacks jurisdiction over the claims against the CFOs and declares SILC inadmissible for the remainder. SILC appeals.
Court of Appeal: entanglement with litigation funders undermines the foundation's control
The court first addresses international jurisdiction. For the (former) directors within the EU, the special jurisdiction rule of Article 8(1) of the Brussels I-bis Regulation applies: the Dutch court has jurisdiction because of the close connection with the claims against Airbus as anchor defendant in Leiden. For the CFOs — who reside outside the EU — that basis is absent. The district court's judgment on this point is upheld.
As to the applicable regime, the court holds that the WAMCA applies. SILC argues that the old collective action law (pre-2020) applies because the loss-causing events date from before 15 November 2016. The court rejects this: Airbus's failure to disclose is a continuing fact that persists beyond that date, so that the WAMCA regime applies with its stricter admissibility requirements.
The core of the judgment is the safeguard requirement of Section 3:305a(2) DCC. The court dissects the structure behind SILC and concludes that control does not sufficiently rest with the foundation.
SILC was incorporated at the instigation of DRRT, a German-American law firm based in the Bahamas, specialising in collective actions. DRRT paid the incorporation costs and pre-financed the proceedings. The day-to-day activities — attracting participants, registering claims, gathering evidence — have been outsourced to DRRT (institutional investors) and Rightshare B.V. (retail investors). SILC has no staff or advisers of its own.
The funding agreement with Therium as external funder reveals a Waterfall clause: in the event of success, DRRT, Rightshare and Therium share in the proceeds, up to a maximum of EUR 35 million. DRRT and Rightshare recover their costs with a mark-up — in effect pre-financing with an expected return. Moreover, they hold a consultation right that enables them to "exert a far-reaching influence" on the litigation strategy and settlement negotiations.
The court characterises DRRT and Rightshare as legal entities directly or indirectly connected to SILC and pursuing profit, contrary to Principle II of the Claims Code 2019. SILC is in fact "a vehicle of DRRT and Rightshare". The structure embodies what the legislature sought to prevent as entrepreneurial lawyering: commercially driven parties using a claim foundation as a front. That entanglement no longer lends itself to remediation.
What does this judgment mean for collective action practice?
The judgment sharpens the limits of litigation funding on three points. First: the control requirement is not a formality. The fact that the board and the supervisory board are formally autonomous is insufficient if the actual activities, funding and strategic decision-making rest with commercially operating third parties. Second: through the safeguard requirement, the Claims Code has an "indirect statutory anchoring" — the court cites the minister. Principle II on connected legal entities pursuing profit is a hard limit, not a best practice. Third: the transitional law of the WAMCA cannot be circumvented by artificially confining the loss-causing events to before 15 November 2016. Where there is a continuing failure to disclose, the moment of the last event governs.
For claim foundations incorporated after this judgment, the message is clear: structure the funding so that the foundation is not merely autonomous on paper, but also in fact has the resources, organisation and control to operate independently of the funder.
Frequently asked questions
What is the safeguard requirement in collective actions?
The safeguard requirement of Section 3:305a(2) DCC means that the interests of the persons on whose behalf the claim foundation acts must be sufficiently safeguarded. The court assesses, among other things, whether the foundation has sufficient funding and control and whether connected parties do not pursue a profit motive that conflicts with the investors' interests.
What is entrepreneurial lawyering?
Entrepreneurial lawyering refers to the situation in which a collective action is driven primarily by the commercial motives of lawyers or litigation funders, rather than by the interests of the aggrieved parties. The legislature sought to counter this phenomenon by introducing the safeguard requirement and the control requirement.
When does the WAMCA apply to a collective action?
The WAMCA applies where the legal claim relates to an event that took place after 15 November 2016. Where there is a series of events occurring both before and after that date, the moment of the last event governs. The WAMCA imposes stricter admissibility requirements than the old regime.
ECLI:NL:GHDHA:2025:2738, The Hague Court of Appeal, 23 December 2025.
Cited case law
Courts of Appeal: ECLI:NL:GHDHA:2025:2738
District Courts: ECLI:NL:RBDHA:2023:14036