10.2.2 The costs of investigation

The costs of investigation consist of the investigator’s fee (par. 2.4.2) and the investigator’s expenses (par. 2.4.3). The investigator is only entitled to a fee for the task he performs as an investigator. His core task is to conduct an investigation into the policy and the state of affairs of a legal person (par. 2.2). In my opinion, the costs incurred outside this task do not in principle qualify for reimbursement as investigation costs. For example, costs incurred for mediation (par. 2.4.2.2.2) and acting as a binding advisor (par. 2.4.2.2.3) do not in principle qualify for reimbursement as investigation costs, since mediation and the activities of a binding advisor do not contribute to the investigation and are therefore too remote in terms of their relationship with the investigation in any other way. In my opinion, the reimbursement of such costs should be regulated outside the right of inquiry. This is different, for example, in regard to costs incurred by the investigator in assessing whether the costs of investigation can be financed by the legal person subject to investigation (par. 2.4.2.2.1).

The investigator’s fees also include (preparation) costs incurred as a result of activities relating to requests addressed to the Enterprise Chamber or the examining judge (par. 2.4.2.4). After the investigation report has been deposited, the investigator can perform activities for the investigation that also qualify for reimbursement as investigation costs (par. 2.4.2.5). The following expenses are eligible for reimbursement: travel and accommodation expenses, office expenses, costs of engaging third parties, fees for participating in interviews, allowances for witness hearings by the Enterprise Chamber, and costs of defence when the investigator is threatened by liability or held liable (par. 2.4.3).

One of the duties of the Enterprise Chamber is to ensure that the costs of investigation remain within reasonable limits. In my view, the Enterprise Chamber interprets its task too restrictively in this respect. The following matters require improvement in my opinion.

In practice, the Enterprise Chamber will only set the (total) investigation budget. The Enterprise Chamber usually does not decide anything about the investigator’s hourly rate or allowable expenses. In my opinion, it should not be the investigator who determines his own hourly rate: the Enterprise Chamber should impose a maximum hourly rate on the investigator when determining the investigation budget. In doing so, the Enterprise Chamber can seek alignment with the Recofa Guidelines and use a standard basic hourly rate, to be corrected by the experience factor of the investigator. The more experience the investigator has as an investigator in inquiry proceedings, the higher the experience factor and therefore the higher the hourly rate and fee (par. 2.4.2.3). The Enterprise Chamber would also do well to set a standard hourly rate for auxiliary persons engaged by the investigator, to be derived from a standard hourly rate for the investigator (par. 2.4.3.4.2).

A positive development is that in recent years the use of a budget has become standard practice before the Enterprise Chamber budgets the investigation (par. 2.5.2.1). In addition, I believe that if the request for an inquiry is granted, the Enterprise Chamber should provide the investigator with a limited budget for the purpose of drawing up the budget and a plan of action. This would prevent the investigator from incurring unreasonable costs in drawing up the budget and a plan of action. For these costs, the legal person or a direct financier can already provide or must have provided security. Based on the budget, the investigator may then request an increase in the investigation budget, and a debate can take place with the parties about the budget, the plan of action, and the requested budget increase (par. 2.5.2.3.4).

If the investigation budget is insufficient, an increase would be required. An in- crease can only be requested by the investigator, who must submit a specification with an overview of the work done so far and the work expected to be carried out. In my opinion, the point of departure should be that the investigator will request an increase in the investigation budget if it is sufficiently clear to him that the previously established investigation budget is not sufficient. The Enterprise Chamber should also adopt a stricter attitude when it comes to assessing late requests for budget increases (par. 2.6.2). In my view, this also applies to actions contrary to the investigator’s promise to limit the costs of investigation (par. 2.6.4.4). In my opinion, the Enterprise Chamber should hear a wide range of persons when an increase in the investigation budget is requested, consisting of the person requesting the inquiry, the investigator, and the legal person subject to investigation, as well as those persons who, on the basis of the investigator’s preliminary opinion, determine or have determined the policy or the state of affairs of the legal person as a director, a supervisory director or another person employed by the legal person (par. 2.6.3.2). Furthermore, the Enterprise Chamber should order an oral hearing if these parties formulate objections to the request to increase the investigation budget or fail to respond to an invitation to respond to such request in writing (par. 2.6.3.3). In my opinion, the same procedure is appropriate when setting the investigation budget (par. 2.5.2.3.5) and when determining the costs of investigation (par. 2.8.3.3).

If the Enterprise Chamber orders an inquiry or increases the investigation budget, it will almost always order that the legal person must provide security for payment of the investigation costs. The Enterprise Chamber usually leaves it to the legal person to determine the manner in which security is provided. It is also possible for someone other than the legal person to do so voluntarily. In my opinion, it would be more in keeping with the Enterprise Chamber’s task to ensure that the costs of investigation remain within reasonable limits to entrust the management of the investigation budget to the Enterprise Chamber as well. In such a system, the legal person – or a direct financier who voluntarily finances the investigation costs – should be required to deposit the investigation budget as an advance payment at the Registry of the Amsterdam Court of Appeal. Disputes about the security to be provided can thus be avoided, and the legal person or direct financier will then no longer run the risk of the investigator becoming insolvent (par. 2.7.4).

In such a system, the Enterprise Chamber would also have to work with partial assessments of the investigation costs. At present, the Enterprise Chamber will always proceed to determine the costs of investigation after the report of the investigation has been deposited. If the Enterprise Chamber were to proceed with only a provisional (partial) assessment of the costs of investigation, the investigator would be given the opportunity to request an increase in the investigation budget after the report of the investigation was deposited. Unforeseen costs incurred by the investigator following the depositing of the investigation report can then also be reimbursed (par. 2.6.2 and par. 2.8.4).

In conclusion, I would recommend that the investigator should be required to account for the investigation costs in the interim. If the Enterprise Chamber is left to manage the investigation funds and the investigator is required to render account every three months, the Enterprise Chamber can then pay the investigator’s bills each time the investigator renders account. This would also enable better monitoring of the costs of investigation (par. 2.10).