Presentation by Karel Frielink – President (part 2)
Civil Litigation Law should be better
So now I will deal with the subject of this symposium. I begin straight away with a provoking statement: Our Civil Litigation Law should be better. This goes further than it ‘could’ be better. However, we shouldn’t only think about the question of how the law should be improved but also about the question of whether or not judges and advocates (attorneys, lawyers) are operating optimally and whether adjustments to the system can contribute to a better operation and to a better administration of justice. And why do I say this? I say this because we sometimes threaten to lose sight of the fact that the ultimate aim of civil litigation law is to settle disputes between parties. And these parties in particular – those seeking justice – often complain that procedures take such a terribly long time, are not transparent, cost a lot of money and are difficult or unpredictable with regard to the outcome. You will no doubt have sometimes heard this type of complaint from your own clients. Anyway, these complaints must be taken extremely seriously!
No matter how fine our Code of Civil Procedure looks, there are subjects which are certainly eligible for improvement. I will only go slightly deeper into one subject, namely how to arrive at the truth. But what I will say about this touches quite fundamentally on the question of the manner in which the organization of civil litigation is thought about. My ideas were largely formed in commercial litigation. To what extent they could or should also apply elsewhere I leave to others.
I first have to make a more general comment with regard to the concept of arriving at the truth. This comment is associated with the party autonomy in civil procedures and the starting point that the parties determine the boundaries of the litigation. The facts as established in a civil procedure by the court do not necessarily have to correspond with the reality existing beyond this procedure.
See for instance HR 25 November 2005, LJN AU2403, with regard to a servitude (existing not by law but indeed between the Parties) and HR 24 June 2005, NJ 2006, 46, with regard to Van Mierlo vs Dimopoulos (the judgment of the lower court was quashed because the court based its judgment on a notice of default which did form part of the case file, but which had not been invoked by Dimopoulos himself).
If the one party alleges a fact and the other party acknowledges or insufficiently contradicts this fact, this fact will become an established fact in law in connection with this procedure. So arriving at the truth is focused primarily on the question of whether the parties consider a fact as accurate (as true) so that the court in its assessment and decision can take this as a starting point, in principle without having to ask itself whether the ‘fact’ can also be considered as the truth beyond the scope of the procedure.
So when the court in its judgment establishes facts, it does not involve the establishment of facts in an absolute sense, but establishes them in a relative sense. With respect to establishing facts in an absolute sense reference is made here to the every-day truth theory on the basis of which we determine whether something is ‘true’ or ‘not true’, ignoring any possible philosophical debate that could be held in this respect.
So these facts are held as ‘true’ in the dispute that keeps the parties divided. And this is not a pointless but on the contrary a very useful exercise because a sufficiently undisputed factual substrate is necessary to be able to arrive at a decision in that dispute. For that matter, the conclusion should not be drawn from this that the civil court is not interested in the material truth; but the extent of the debate is mainly determined by the parties and it is just the way that the principle of passiveness puts certain restrictions on the court. Despite those restrictions, in a case when it clearly doubts a ‘fact’ alleged but not denied, the court will most probably have to do something about this for instance by formulating an order to produce evidence. As far as I am concerned a court should not have to take too passive an attitude.
Although the law sets several substantive requirements on an initiating application, in practice advocates deal with this quite differently. Section 18c of the Code of Civil Procedure provides that the parties – this therefore applies to the applicant as well as to the defendant – are obliged to put forward the facts relevant to the decision completely, truthfully and at the earliest possible stage. I can’t escape the impression that this requirement is more than incidentally not observed. I pass over the fact that the parties themselves determine the boundaries of the litigation and thereby also the scope of this obligation. In addition, there can be an agreement on evidence between the parties under which, for instance, certain pieces of evidence are not allowed to be used.
With great regularity facts relevant to the decision are put forward which have been already known for a while (or should have been known if the case had been better prepared) only in the Statements of Reply or the Statement of Rejoinder, or even much later. Obviously it is possible that the advocate only heard of these facts at a late stage but I have the impression that not mentioning facts is often also based on tactical considerations. It is possible that in that connection a major starting point of our law of evidence plays a role, in that the one who alleges has (in principle) to furnish evidence (Section 129 of the Code of Civil Procedure).
The tactical idea is then that you do not want to show too much of your own hand and first want to wait to see what kind of facts the counterparty will put forward. It might be that the defendant himself mentions the fact after which it can still be acknowledged by the applicant and then be adopted by the court as an established fact between the parties. This avoids the risk that the applicant alleges a fact which is contested by the defendant with the consequence that the applicant will be given an order to furnish evidence of something of which he is not certain that he will be successful.
And albeit the law also provides that when this obligation is not observed – this obligation to state all the facts relevant to the decision at the earliest possible stage – the court can deduce from this anything that it deems expedient, but in practice this provision is not a great deterrent. It is the most open and therefore in principle most far-reaching sanction because it is fully left up to the court which conclusion is deemed expedient. However, in practice this provision is hardly applied by the court but when applied it is a rather restrained application.
Insofar as this cannot already be considered as arising from Section 18c of the Code of Civil Procedure and proper rules of procedure (Cf HR 19 December 2003, NJ 2005, 181 with annotation by H.J. Snijders in the case of Rabobank Gorinchem), in my opinion this provision ought to be adjusted, so that the applicant should not only give an indication and description of the subject of the claim and of what is being demanded, stating all the facts known to him, but also the defense already put forward by the defendant against the claim and the grounds for it as well as the evidence at the disposal of the applicant and the witnesses he can have examined to substantiate the grounds of the claim thus contested. In that connection see Sections 111, subsection 3, and 128, subsection 5, of the Code of Civil Procedure in the Netherlands, as well as Sections 111, subsection 1 under d, and 117a of the draft for a new Code of Civil Procedure for Surinam. See also Article 43 of the Process Regulations for Civil Cases as applied by the courts in the Caribbean part of the Netherlands.
Aside from this, with regard to the witness examinations I would like to make another observation. These examinations are often quite awkward. This is partly because the court usually takes care of the greater part of the examination, whereas the advocates in particular know exactly (and therefore better) what information they are looking for. In addition, the court summarizing the evidence given has a filtering effect in the sense that nuances are lost or in the end only what the witness has stated later in the examination is recorded, even though he stated something (partly) different earlier in the examination. I am sure you must sometimes have had situations in which a witness stated something that you wanted to hear but that the advocate of the other party asked the witness three times explicitly whether he really can remember that precisely so. The result: the witness understands that he has said something different and indicates that he is nevertheless not very certain of it, and only the latter will in the end be included in the official record. As far as I am concerned an improvement in witness examination should be considered, including a more active role for the advocates and the verbatim account of the entire examination.
I return to arriving at the truth. So in practice it can sometimes take a while before all the facts relevant for the decision are known (and proven). This is completely different for instance in the American system. In that system there are almost unlimited possibilities for replacing facts (largely) beyond the court: (pre-trial) discovery. The advantage for advocates is that they play a more central role in that process and that (most of) the facts are already known to all the parties at an early stage. The disadvantage is that discovery proceedings can take a lot of time, that not all facts are relevant to a decision on the dispute itself and that it usually involves high costs.
It is obvious that the choice whether or not to bring an action also depends on the facts which are at a party’s disposal and the assessment of how these facts can be proven. Because our law only has limited possibilities for discovery, in particular the provisional examination of witnesses, the provisional expert advice and the submission of exhibits procedure of Section 843a of the Code of Civil Procedure, in the Netherlands but also here now and again there is a resort to other procedures to collect facts. For instance the following comes to mind:
- Disciplinary procedures against accountants and physicians.
- The inquiry proceedings at the appeal court which in its present shape has only been in existence in Curacao since 1 January 2012 (in the Netherlands much longer and there the Enterprise Section of Amsterdam Appeal Court has jurisdiction).
- Reporting a criminal case in the hope that a criminal case will be initiated.
- Application for a bankruptcy so that the trustee in bankruptcy can conduct investigations. In that connection it can be interesting to be a member of the creditors’ committee.
- Informing the regulator (Central Bank) about alleged misbehavior for instance of a bank or investment fund.
- If there is an international linking factor, making use of discovery possibilities in another jurisdiction.
With a little bit of luck facts will come up via such procedures which make it easier to take the decision whether or not to bring an action or which can be used in a civil procedure. And even though as a party considering bringing a civil action you don’t have the (complete) file at your disposal in all these procedures, information could come up which makes possible a successful claim for a provisional examination of witnesses or a claim under Section 843a of the Code of Civil Procedure. For instance, during a criminal case the existence of a certain document could show up that subsequently can be retrieved via the procedure of Section 843a of the Code of Civil Procedure.
Obviously all these remain makeshift solutions, not only because as a potential civil party you cannot be a party in all those procedures and because you usually cannot have all the documents at your disposal, but everybody who has to assess a case, sorts out their own selection of facts and documents considered relevant. And with regard to any assessment in those various procedures, they do carry importance in a civil procedure, but they are not directly decisive.
This is obviously different with regard to a foreign discovery procedure, but that one is exclusively focussed on collecting facts (and not on assessment of the facts by the respective foreign court for instance). That according to the Supreme Court disciplinary and criminal procedures each have their own merits and serve in principle not to arrive at the truth in the civil procedure, does not mean that facts which have emerged in such procedures could not be relevant in the civil procedure.
In this connection our litigation law has two provisions that are not provided for in the Netherlands. As appears from Section 141 of the Code of Civil Procedure the court during the course of a lawsuit can order the parties or one of them, when requested or in its official capacity, to submit the books, records and other data carriers which they must maintain, draw up or retain by law. The parties can refuse this if there are serious reasons to do so as well as when it can reasonably be assumed that a proper administration of justice is also guaranteed without providing the information requested. The court decides whether this refusal is justified, failing which it may draw the conclusions from it which it considers expedient. This could potentially be a far-reaching sanction, but the court adopts a restrained position in this respect.
In Section 142 of the Code of Civil Procedure we find an arrangement in case those books, records or other data carriers are in the possession of third parties (see the Court of First Instance of Curacao 14 May 2012, AR 46866 in the case of Bearingpoint vs CX System). The disadvantage of both provisions is that the request can only be submitted during the legal proceedings. The advantage of these provisions is their wide scope, because several restrictions in Section 843a of the Code of Civil Procedure are not applicable here.
For that matter, these provisions are not often invoked in practice. Possibly not every advocate has these Sections in his field of view. The court could inform the parties of this pursuant to Section 118 of the Code of Civil Procedure.
Section 843a of the Code of Civil Procedure was already mentioned earlier (the right of inspection also called the duty to submit exhibits): a party which has a legitimate interest to do so, can claim inspection, copies or extracts of documents or other data carriers specified with sufficient definition with regard to a legal relationship in which he or his predecessors are a party, from those who have these documents or other data carriers at their disposal or in their possession (see in cases where a third party is involved: Amsterdam Appeal Court 25 November 2008, NJF 2009, 31 in the case of Net2Phone vs eBay et al.). The court will determine, if necessary, the manner in which and the conditions under which inspection, copies or extracts will be provided. There is for instance a legitimate interest when the documents asked for or the information derived from them, are used in an action to be brought (for evidence or evidence to the contrary). Considering the interest that in my opinion must be paid to being able to establish the material truth as much as possible, I champion a wider application of this Section.
See for instance T.S. Jansen, Section 843a of the Code of Civil Procedure in the corporate legal practice. Verboden te vissen maar vragen mag (Forbidden to fish but you can ask), Tijdschrift voor de ondernemingsrechtpraktijk 3 (Magazine for corporate legal practice) (2009), p. 89-94 and J.R. Sijmonsma, Het inzagerecht (the right of inspection). Section 843a of the Code of Civil Procedure, Deventer: Kluwer 2010, dissertation, 302 p. (and in particular chapter 8). The Netherlands has a provision which is practically the same.
The advantage of this possibility is that an application can be submitted without a principal action with regard to the dispute pending or being announced (see HR 8 June 2012, LJN BV8510 in the case of Abu Dhabi Islamic Bank vs ABN AMRO Bank). However, the (almost) standard defense that an applicant will be faced with is that he is engaged in a ‘fishing expedition’. The conclusion is then often drawn that the applicant (really) has no case but is looking for information which would indeed provide him with a case. It is a good thing in itself that pure fishing expeditions are countered.
Although I am not a supporter of (pre-trial) discovery proceedings as they exist in America, it does appear to me worthwhile to consider the question of how we could arrange the civil litigation law such that arriving at the truth as a starting point becomes more central and facts relevant to a dispute are available earlier to the parties. In this connection I want to point out, in conclusion, the discussion held in the Netherlands on the core values of the legal profession. The core value of “public responsibility for a proper administration of justice” in particular resulted in heated discussions because this (also) relates to the role of the advocate in civil litigation. In connection with the 35th anniversary of the Curacao Bar I invite you all to consider this role profoundly as well. After all, a ‘proper administration of justice’ requires that an advocate does not exclusively put the interests of his own client first and foremost.
Thank you for your attention!
(7 December 2012)