10.2.7 Recovery of the costs of investigation

Article 2:354 DCC provides a special possibility of recovery for the costs of investigation in inquiry proceedings. This can be a reason for financing the costs of investigation since the ‘investment’ made can be recouped (par. 7.1).

Although the text of Article 2:354 DCC does not speak of ‘liability’, the article does constitute a basis for liability in my opinion. Claims pursuant to Article 2:354 DCC are, in my opinion, also transferable since the law or the nature of law does not oppose transferability (par. 7.3).

The procedure to recover the costs of investigation on the basis of Article 2:354 DCC is referred to as application proceedings (par. 7.4.2). There is no statutory time limit for filing a claim for recovery of the costs of investigation, but the claim can be time-barred. The introduction of a time limit comparable to Article 2:355, paragraph 2, DCC in Article 2:354 DCC could be considered (par. 7.4.3). When dealing with a request for recovery of the costs of investigation, the Enterprise Chamber should always hear or at least summon the applicant and the legal person subject to investigation if someone other than the legal person requests recovery of costs. The parties involved must also be heard or at least summoned (par. 7.4.4). The Enterprise Chamber can not only rule that the applicant is entitled to a right of recovery but can also order the defendant to pay the costs of investigation (par. 7.4.7).

The Enterprise Chamber can only decide on a claim for recovery of the costs of investigation after the investigation report has been deposited. To this end, the costs of investigation must have been established to be able to determine the amount of the claim. Recovery of costs can also be requested as part of a request to establish mismanagement (par. 7.4.5). I do not consider it possible to apply Article 2:354 DCC on a precautionary basis by obliging directors, supervisory directors, or other persons employed by the legal person to finance the costs of investigation at the time an inquiry is ordered. Without a thorough investigation into the policy and state of affairs of the legal person, the Enterprise Chamber should not pre-empt an opinion on Article 2:354 DCC (par. 7.4.6).

With a request pursuant to Article 2:354 DCC, only the costs of investigation as set out in chapter 2 above, plus any VAT charged by the investigator, can be recovered. Under no circumstances will it be possible to recover an amount higher than the established costs of investigation on the basis of Article 2:354 DCC. Furthermore, the remuneration of EC officers does not fall within the scope of Article 2:354 DCC. Recovery of these costs is only possible in liability proceedings under Article 2:9 DCC or Article 6:162 DCC (par. 7.5.1). Statutory interest may also be owed on the costs of investigation (par. 7.5.3).

Article 2:354 DCC contains a special rule which makes it impossible to recover the costs of investigation from directors or supervisory directors by virtue of Article 2:9 DCC or Article 6:162 DCC (in conjunction with Article 6:96, paragraph 2(b), DCC), not even when the entitled applicant fails to submit a request under Article 2:354 DCC. Nor, in my opinion, is a recovery of the costs of investigation possible pursuant to Article 2:138/248 DCC. However, the Enterprise Chamber seems to interpret Article 2:354 DCC in such a way that this section of the law does not derogate from other bases of liability (par. 7.5.2).

Recovery of the costs of investigation can first of all be requested by the legal person. Since Article 2:354 DCC provides a basis for recovering the costs of investigation, it will have to be established in court that the legal person has financed the costs of investigation. However, in principle, the legal person does not have to prove that the costs of investigation were financed by the legal person itself (par. 7.6.2).

If the trustee voluntarily finances the costs of investigation on behalf of the estate, he can recover these costs pursuant to Article 2:354 DCC. The trustee can also act as the legal representative of the bankrupt party in the inquiry proceedings. The trustee who represents the legal person is then entitled to recover the costs of investigation on the basis of Article 2:354 DCC. If the trustee believes there is a reasonable chance that the costs of investigation can be recovered by virtue of Article 2:354 DCC, he should, in my opinion, proceed to do so (par. 7.6.3).

Furthermore, in my opinion, recovery of the costs of investigation should be possible for anyone who has paid (part of) the costs of investigation directly to the investigator – or, in the system I propose, to the Enterprise Chamber. It should then be established in court that the direct financier has financed the costs of investigation. An indirect financier is in principle not entitled to recover the costs of investigation. However, he can agree with the party to whom the claim accrues pursuant to Article 2:354 DCC as security for the fulfilment of his claim on the legal person or direct financier that the legal person or a direct financier shall institute a claim pursuant to Article 2:354 DCC and – if successful – settle the claim of the indirect financier with the funds released by this claim. It is also conceivable that the indirect financier requests recovery of the costs of investigation as assignee or acts as agent or proxy for the direct financier (par. 7.6.4).

In addition to recourse against the applicant (par. 7.7), Article 2:354 DCC provides a basis for recovering the costs of investigation from a director, supervisory director, or another person employed by the legal person. Recourse is also possible against a former director or former supervisory director (par. 7.9.2.2), a de facto director (par. 7.9.2.3), and an indirect director by means of Article 2:11 DCC (par. 7.9.2.4). ‘Another person employed by the legal person’ in Article 2:354 DCC should be understood to mean lower officers (par. 7.9.2.5).

Article 2:354 DCC allows recovery of the costs of investigation from a director or supervisory director if the report of the investigation shows that this person is responsible for a ‘wrong policy’. It is generally assumed that a wrong policy is a lighter qualification or disqualification than mismanagement, but the Enterprise Chamber does not make a consistent normative distinction between the two concepts (par. 7.9.3.2). Recovering the costs of investigation from lower officers is possible if it is established that they are responsible for an unsatisfactory state of affairs of the legal person. Here, too, the Enterprise Chamber does not always make a sharp distinction between a wrong policy and an unsatisfactory state of affairs (par. 7.9.3.3). In order to recover the costs of investigation, there must be individual and concrete evidence of responsibility for a wrong policy or an unsatisfactory state of affairs. The Enterprise Chamber must properly substantiate its opinion in this respect (par. 7.9.3.4). The Enterprise Chamber may also divide the costs of investigation among various persons and provide for the imposition of joint sanctions (par. 7.10). The report of the investigation should always at least provide sufficient grounds for a decision on costs recovery. Nevertheless, in my opinion, the Enterprise Chamber may also use additional evidence when assessing a request to recover the costs of investigation (par. 7.9.3.5).

For liability pursuant to Article 2:354 DCC, there is no requirement of ‘serious blame’ (ernstig verwijt). However, from a legal methodological perspective, this requirement would be logical, since Article 2:354 DCC provides a basis for (directors’ and officers’) liability and lex specialis of Article 2:9 DCC. I would not want to introduce the requirement of serious blame for the liability of other persons employed by the legal person as referred to in Article 2:354 DCC as they do not need to be afforded the same protection as directors (par. 7.9.3.6).