3.1.1 Research issue: predicting directors’ liability on the basis of open norms

Directors’ liability is a special legal domain primarily based on open standards and norms. Arguably, the legal domain is inherently complex and unstructured. To establish a director’s personal liability, Dutch courts require that a director be subject to ‘serious reproach’. The standard of ‘serious reproach’ was developed in case law as a framework to analyse a director’s potential liability to his or her company. As stated in Staleman v. Van de Ven, the standard of ‘serious reproach’ compels courts to consider ‘all relevant circumstances’ in order to do justice to each specific case at issue.1 The criteria of ‘serious reproach’ has been codified in article 2:9 DCC. I understand Staleman v. Van de Ven as instructing courts to conduct a multi-factor analysis when reviewing a specific liability case.

In paragraph 3.2.1, I will distinguish the relevant circumstances into those involving contextual legal case factors and those involving behavioural legal case factors.

The relevant judicial review has become further complicated in recent years. As I will discuss in detail in paragraph 3.2, ‘serious reproach’ seems to have been extended so that it now applies to the analysis of directors’ liability to creditors and shareholders (art. 6:162 DCC, tortious act) and to the estate in the event of bankruptcy (art. 2:138/248 DCC). The literature suggests that ‘serious reproach’ is utilised to advance an integrated approach of reviewing directors’ liability.2 This raises the question of whether such an ‘integrated approach’ invoking the open norm of ‘serious reproach’ will generate legal uncertainty about court decisions. It is therefore a central focus of this research to investigate the meaning and interpretation of ‘serious reproach’. Moreover, within the analytical framework of ‘serious reproach’ involving the legal reasoning based on all relevant circumstances, I will endeavour to determine the contextual and behavioural legal case factors that are most influential when assessing directors’ liability. Finally, I will furthermore investigate how well these legal case factors may predict case outcomes in order to determine the extent of consistency in legal decision-making.