Einde inhoudsopgave
Cross-border Enforcement of Listed Companies' Duties to Inform (IVOR nr. 87) 2012/7.3
7.3 Conditions establishing prospectus liability
mr.drs. T.M.C. Arons, datum 07-05-2012
- Datum
07-05-2012
- Auteur
mr.drs. T.M.C. Arons
- JCDI
JCDI:ADS372048:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Note that in the civil law legal systems (Dutch, French and German), tortious behaviour can be based on either a violation of the general duty to behave properly or a violation of a legal provision. With respect to the later basis, Dutch and German law require relativity, i.e. that the violated legal norm must aim to protect the claimant for his particular loss. French private law does not require relativity between the legal norm and the claimant's harmed interest.
CE the requirements to be established for a damage claim in tort.
This requirement denotes the composite of two elements: a statement of fact and a recommendation to make a decision based thereon. A pure statement of fact will probably not be a sufficient basis to claim damages, because of the requirement of 'reasonable reliance': in the circumstances and in relation to the decision to be made, the recipient reasonably relied on the information. The claimant has to prove that the defendant ought to have foreseen that: (i) this particular claimant would have made a decision of the type in fact made; and (ii) he would make such a decision in relianceon the information or advice provided. Von Bar/Clive (2010), Rule V1-2:207 C and D, pp. 3346-3348.
Von Bar/Clive (2010), Rule V1-2:207 D, p. 3348.
Similar to German prospectus liability rules, the causation requirement includes the liability establishing causation, i.e. the incorrect advice or information was a cause of claimant making the relevant decision, and the liability constituting causation, i.e. the incorrect advice or information was a cause of the losses incurred. Von Bar/Clive (2010), Rule V1-2:207 D, p. 3348.
Section 6:193j(1) DCC.
Section 45(2)(1)and(2) Stock Exchange Act.
In all jurisdictions, the following conditions must be fulfilled for a successful damage claim based on prospectus liability:
tortious behaviour1 on part of the defendant;
accountability: the defendant can be held accountable for his act/omission;
loss incurred by the claimant;
causation between the losses incurred by the claimant and the tort committed.2
These requirements are similar to the elements required to establish liability on the basis of the aforementioned (model) Rule VI-2:207 DCFR:
incorrect advice or information;3
the provider acted negligently4 when he provided the incorrect advice or information in pursuit of a profession or in the course of trade;
loss incurred by the recipient of the information;
causation between the losses incurred by the claimant and the tort committed.5
The rules with respect to the burden of proof differ per jurisdiction. In French law and English law, the general rule applies that it is upon the claimant (investor) to prove the abovementioned facts, in case the defendants challenges their presence. In German law and Dutch law, there are statutory provisions that reverse the burden of proof in regard to some facts.
The Dutch legislator implemented the Unfür Commercial Practices Directive 2005 in the Dutch Civil Code. If the investor claims that the information contained in the prospectus is false or that the prospectus does not contain material information as required by the Prospectus Directive 2003, and thereby the defendant issuer and/or lead manager and/or other sponsoring banks commit an unfür commercial practice, the tortiousness of the behaviour is given, unless the defendants prove the material correctness and completeness of the information provided by them in the prospectus.6 Furthermore, section 6:193j(2) DCC prescribes that defendants are liable for the losses caused by their tortious behaviour, unless they claim and, upon challenge, prove that they cannot be held accountable for the tort committed or that the tort committed is no due to their fault.
In German law, if the investor claims restitution of the purchase price of the securities on the basis of Section 44 of the Stock Exchange Act, he does not have to prove liability constituting (or factual) causation nor liability completing causation. The defendant has to claim and, upon challenge, prove that the investor did not purchase the securities on the basis of the prospectus (liability constituting causation) or that the facts about which false or incomplete information were provided in the prospectus did not contribute to a reduction of the market price of the securities (liability completing causation).7 In subsection 4, I elaborate on the differences between the requirements of causation between the different legal systems.