10.2.9 Final and overall considerations

What picture emerges from the study conducted on the costs of inquiry proceedings? In my opinion, the Enterprise Chamber has a responsibility to ensure that the costs of the inquiry procedure remain within reasonable limits. This is a responsibility it has to protect the legal person subject to investigation or, as the case may be, another party financing the costs of the inquiry procedure. At present, the Enterprise Chamber is barely fulfilling this task. In par. 10.3, I have formulated several concrete recommendations to the Enterprise Chamber for improvement. If, for example, the Enterprise Chamber were to impose a maximum hourly rate to be charged by the investigator and EC officers, and were to manage the investigation budget and the amount secured for the remuneration of EC officers, it would have more control over the costs of the inquiry procedure. In this way, the Enterprise Chamber can also prevent the costs of inquiry proceedings from rising too high.

More difficult to monitor are the costs of defence, which the investigator and EC officers incur when they are threatened by liability or held liable. In my opinion, these costs are part of the costs of investigation and the remuneration of EC officers respectively. A proper functioning of the right of inquiry will benefit from the reimbursement of reasonable and reasonably incurred costs of defence to the investigator and EC officers, also in bankruptcy situations. In my opinion, this is where the legislator should step in, for example by providing a legal qualification of the defence costs of the investigator and EC officers as estate debt or by introducing an arrangement under which the State bears the defence costs of the investigator and EC officers in bankruptcy situations.

The legislative text is clear on who has to finance the costs of inquiry proceedings: the legal person that is subject to investigation. This is justified because the inquiry is ordered in the interest of that legal person, and this requires at least a preliminary ruling from the Enterprise Chamber that there are well-founded reasons for doubting the correctness of the policy or state of affairs. The fact that the legal person has to finance the costs of the inquiry procedure does not preclude voluntary financing of those costs by another financier. The objectives of an inquiry procedure, namely to remediate and restore healthy relations through measures of a reorganisational nature, to achieve openness, and to establish who is responsible for any mismanagement which may have occurred, as well as the preventive effect of an inquiry, can only be achieved if the financing of the costs of inquiry proceedings is sufficiently guaranteed. Allowing voluntary financing by a party other than the legal person contributes to this cause if the legal person subject to investigation is unable to provide financing.

In my opinion, however, the inability to provide financing on the part of the legal person subject to investigation should not prompt the Enterprise Chamber to oblige someone other than the legal person to finance the costs of the inquiry procedure, as it tends to do in certain cases. Article 2:350, paragraph 3, DCC and Article 2:357, paragraph 4, DCC leave no room for the Enterprise Chamber to do so. In cases where the Enterprise Chamber has in the past required someone other than the legal person to provide financing, it has also applied Article 2:354 DCC on a precautionary basis. The costs of investigation can be recovered under Article 2:354 DCC from the persons responsible for a wrong policy. Only a thorough investigation into the policy and the state of affairs of a legal person justifies recovery of costs by virtue of Article 2:354 DCC. The test applied when granting the request for an inquiry to determine whether there is doubt about the correctness of a policy or state of affairs doesn’t carry enough weight for this purpose.

The fact that someone other than the legal person is prepared to finance the costs of the inquiry procedure is primarily explained by what an investigator or EC officers can achieve in the interest of the legal person. For example, EC officers can put an end to a deadlock in the board of directors, the supervisory board, or the general meeting of a legal person and bring the legal person into calmer waters. The investigator can obtain information that might otherwise not be obtained or would be difficult to obtain. It is also in the financier’s interest that the costs of investigation can be recovered by him on the basis of Article 2:354 DCC. The investigation conducted in the course of the inquiry procedure is therefore potentially free of charge – apart from the legal costs. The report of the investigation and the decisions of the Enterprise Chamber also have probative value in liability proceedings against the officers responsible for the mismanagement. Such liability proceedings are a direct extension of the objectives of the right of inquiry and help make the financing of the costs of inquiry proceedings an attractive investment.