Home > Topic > Damage and insurance liability > The Dutch Supreme Court on the commencement of the short prescription period: awareness of the possible role of the party responsible for the damage is not (always) sufficient certainty pursuant to Article 3:310 paragraph 1 of the Dutch Civil Code
The Dutch Supreme Court on the commencement of the short prescription period: awareness of the possible role of the party responsible for the damage is not (always) sufficient certainty pursuant to Article 3:310 paragraph 1 of the Dutch Civil Code

The Dutch Supreme Court on the commencement of the short prescription period: awareness of the possible role of the party responsible for the damage is not (always) sufficient certainty pursuant to Article 3:310 paragraph 1 of the Dutch Civil Code

The Supreme Court rendered an opinion in its ruling dated 31 March 2017 (ECLI:NL:HR:2017:552) concerning the moment the short prescription period provided for in Article 3:310 paragraph 1 of the Dutch Civil Code commences. The Supreme Court ruled in particular on the question when an injured party may be considered to have sufficient certainty concerning the party responsible for the damage in order to hold this person liable (and which factual circumstances could exculpate the injured party for not doing so (as yet)).

Contrary to the District Court and the Court of Appeal of The Hague and contrary to the conclusion of Advocate General Keus, which was substantiated comprehensively, the Supreme Court holds that in the present case awareness of the possible role of the party responsible for the damage (in the matter Directorate-General for Public Works and Water Management / the State) in the given circumstances is not considered to be sufficient certainty of the liable party as required by Article 3:310 paragraph 1 of the Dutch Civil Code.

Factual background

The appellant in cassation is catering establishment De Mispelhoef B.V. in Eindhoven (‘Mispelhoef’). In the period from 1996 to 1998, the A2 motorway near Mispelhoef was widened on the instructions of the Directorate-General for Public Works and Water Management. This required changes to the watercourse and discharge of the surrounding ditches, and a drainage culvert was constructed. The De Dommel Water Board granted an exemption to the Directorate-General for Public Works and Water Management for the changes to the watercourse. Later, however, it became clear that the drainage culvert had been constructed without a permit.

During that same period, the Municipality of Eindhoven constructed an industrial estate near Mispelhoef, raised a dike and reconstructed the sewerage system.

Water nuisance started on the Mispelhoef land in 1998 and there was very severe water nuisance from 1999 (until several years thereafter).

On 12 February 2003, Mispelhoef, assisted by a legal assistance provider, held both the Municipality of Eindhoven and the Water Board liable by means of letters for the damage it had sustained and would sustain in the future. Those letters mention, among other things, the closure of water drainage as a result of ‘activities performed on the instructions of the De Dommel Water Board and/or the Directorate-General for Public Works and Water Management’.

Mispelhoef did not hold the Directorate-General for Public Works and Water Management liable at that time.

After it performed an investigation, the Municipality rejected liability in a substantiated manner in 2004. The Water Board contested liability in a substantiated manner in 2006.

Mispelhoef then had its own (further) investigation performed into the cause of the nuisance, according to Mispelhoef in connection with the content of the response from the Water Board. That investigation report, which was issued on 10 October 2008, concluded that the activities performed by the Directorate-General for Public Works and Water Management on the drainage culvert caused a serious disruption to the water drainage.

Mispelhoef then held the State / the Directorate-General for Public Works and Water Management liable on 15 July 2008. In 2010, the Directorate-General for Public Works and Water Management apparently acknowledged its liability for the ‘old’ damage caused by the culvert, but then took the position that Mispelhoef’s claim had prescribed. According to its opposing party, Mispelhoef could and should have held the Directorate-General for Public Works and Water Management liable much sooner, and the prescription period commenced on 12 February 2003 at the latest (the moment at which Mispelhoef mentioned activities performed by the Directorate-General for Public Works and Water Management).

Proceedings before the District Court and the Court of Appeal

Mispelhoef subsequently initiated summons proceedings before the District Court on 30 May 2013 and claimed a declaratory judgment that its claim against the State had not prescribed.

Mispelhoef put forward as key issues in these proceedings that it assumed in 2003 that the Water Board was responsible for water management, that it performed an investigation pursuant to the Water Board’s response to Mispelhoef’s notice of liability and that it had not become clear until that investigation (mid-2008) that the Directorate-General for Public Works and Water Management had worked without an exemption and had caused damage. Mispelhoef also argued that the Directorate-General for Public Works and Water Management was very slow to respond to requests for information within the context of the investigation carried out on Mispelhoef’s behalf.

The District Court of The Hague held that the claims had prescribed and rejected the claim. The District Court considered that the prescription period of five years commenced not later than on 12 February 2003 by considering that it had not been argued or demonstrated that an investigation that had commenced around the time of the notices of liability served on the Municipality and the Water Board (in 2003) would not have led to claims against the State within five years thereafter.

Mispelhoef submitted an appeal against this judgment.

The Court of Appeal of The Hague upheld the judgment of the District Court with respect to the matter of prescription (ECLI:NL:GHDHA:2015:2722). The Court of Appeal considered that the prescription period provided for in Article 3:310 of the Dutch Civil Code commenced on the day Mispelhoef became aware of the damage and of the party liable for it. Mispelhoef was already aware of the damage in 1998-1999, according to the Court of Appeal. The Court of Appeal concluded on the basis of the notices of liabilities from 2003 that Mispelhoef and its legal assistance provider had been aware at that time that the damage could possibly be attributed to ‘the Municipality, the Water Board and/or the Directorate-General for Public Works and Water Management’. According to the Court of Appeal, the prescription period commenced not later than on 13 February 2003. According to the Court of Appeal, the notices of liabilities served on the Municipality and the Water Board need not prevent Mispelhoef from sending a comparable letter to the Directorate-General for Public Works and Water Management without much investigation. The Court of Appeal considered it relevant in this connection that Mispelhoef had professional legal assistance, and the (apparently) slow responses of the Directorate-General for Public Works and Water Management to research questions were, according to the Court of Appeal, all the more reason for Mispelhoef to safeguard its rights by a claim for liability.

Mispelhoef submitted an appeal to the Supreme Court against this ruling.

Conclusion of the Advocate General

Advocate General Keus concludes in his extensively substantiated conclusion to reject the appeal to the Supreme Court. Keus refers to legal certainty and the fairness of the standard formulated by the Supreme Court in its case law (awareness concerns subjective awareness on the part of the injured party, and an injured party may be expected to make some effort to find out who is liable for the damage, inter alia Supreme Court 3 December 2010, NJ 2012, 196). Keus refers to standard case law from the Supreme Court concerning prescription and to publications by Smeehuizen and Du Perron (the latter – who argued in a comment to HR (Supreme Court) 31 October 2003 that in order to avoid commencement of the prescription period an injured party therefore must not ‘pretend ignorance’ – is now one of the justices on the Supreme Court that issued a ruling concerning this Mispelhoef case).

According to Keus, the Court of Appeal did not demonstrate an incorrect interpretation of the law and Mispelhoef did not need to have absolute certainty about the cause on 13 February 2003, but it could have made a connection at that time between the damage and the (three) sufficiently known parties, including the Directorate-General for Public Works and Water Management.

The Supreme Court

The Supreme Court adopts a line of reasoning that differs from the District Court, the Court of Appeal and the Advocate General. The first appeal (on an issue of law) on the part of Mispelhoef against the Court of Appeal’s interpretation of Article 3:310 paragraph 1 of the Dutch Civil Code succeeds.

Contrary to the District Court, the Court of Appeal and the Advocate General, the Supreme Court does not appear to focus on any active attitude that may be expected from an injured party within the context of subjective awareness, the Supreme Court rather attaches value to the (lack of) ‘sufficient certainty’ and to all circumstances that (apparently) withheld Mispelhoef from that sufficient certainty. According to the Supreme Court, the Court of Appeal failed to appreciate the relevance of those circumstances (that withheld Mispelhoef from holding the Directorate-General for Public Works and Water Management liable (at an earlier stage)).

The Supreme Court argues first and foremost that it must concern actually being able to submit a legal claim for compensation (HR (Supreme Court) 24 January 2003, ECLI:NL:HR:2003:AF0694, NJ 2003/300) and first lists once again its case law concerning the commencement of the short prescription period: ‘This will be the case if the injured party has obtained sufficient certainty, which does not have to be absolute certainty, that the damage was caused by failing or incorrect action on the part of the person involved. This does not mean that the start of the prescription period requires that in addition to the facts and circumstances that concern the damage and the person liable for it, the injured party is also actually aware of the legal assessment of those facts and circumstances (HR (Supreme Court) 26 November 2004, ECLI:NL:HR:2004:AR1739, NJ 2006/115). Nor does this mean that it is required that the injured party is always also aware of the (exact) cause of the damage (HR (Supreme Court) 20 February 2004, ECLI:NL:HR:2004:AN8903, NJ 2006/113). The answer to the question at what moment the prescription period commenced depends on all circumstances relevant to the case (HR (Supreme Court) 14 November 2014, ECLI:NL:HR:2014:3240, NJ 2015/207).’

According to the Supreme Court, the ruling of the Court of Appeal should be interpreted to mean that at the moment of the letter dated 12 February 2003, Mispelhoef recognised that the water nuisance may have resulted from activities performed by the Directorate-General for Public Works and Water Management and that on that date Mispelhoef was aware of the possibility of liability on the part of the Directorate-General for Public Works and Water Management.

According to the Supreme Court, Mispelhoef complains correctly that the Court of Appeal incorrectly attached decisive importance to the fact that Mispelhoef was aware of the possibility that the Directorate-General for Public Works and Water Management was liable for the damage and that it could have safeguarded its rights.

The Supreme Court considered – in view of its rulings set out above – that this mere possibility was not sufficient even with professional legal assistance to assume that there was sufficient certainty concerning alleged incorrect actions on the part of the Directorate-General for Public Works and Water Management.

According to the Supreme Court it is relevant in this connection ‘that Mispelhoef argued that it assumed in 2003 that – stated succinctly – the Water Board was responsible for water management, that it had an investigation performed into the cause of the damage pursuant to the response from the Water Board, that it did not become clear until that investigation that the Directorate-General for Public Works and Water Management had not worked in accordance with the exemption granted to it by the Water Board and that the Directorate-General for Public Works and Water Management was responsible for the damage, and that this investigation was delayed in part by the fact that the Directorate-General for Public Works and Water Management was slow to respond to requests for information.’

The relevance of those circumstances put forward were incorrectly ignored by the Court of Appeal according to the Supreme Court. The Supreme Court sets aside the ruling of the Court of Appeal of The Hague and refers the case to the Amsterdam Court of Appeal for further hearing and ruling.

By Niels Dekker

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