Abstract
This chapter investigates the issue of causation, which presents one of the greatest challenges investors face when claiming damages in the context of the provision of investment services. Establishing the required causal link can prove difficult due to the fact that determining whether a particular action or event is the cause of a specific harmful result can often involve a great deal of uncertainty. The chapter analyses why this is particularly true for investment advisory relationships, where the investor’s decision forms an essential link between a firm’s breach of duty and the losses suffered. The chapter focuses on the difficulties investors can encounter in proving the existence of a factual causal link. Firms frequently argue that there is no condicio sine qua non relationship between the breach of duty for which they are held liable and the losses claimed because the client would have made the same investment decision had the firm provided adequate information or recommended a suitable transaction. Investors generally bear the burden to prove the existence of the condicio sine qua non relationship and, in practice, can experience significant difficulties in discharging this burden. Courts in some legal systems have improved the investor’s procedural position by applying several instruments. These instruments and how they alleviate the evidential difficulties are analysed for German, Dutch and English law. Furthermore, the chapter shows that under the complementarity model the MiFID and MiFID II conduct of business rules can in certain cases further strengthen the procedural position of investors in relation to factual causation.
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Notes
- 1.
- 2.
- 3.
- 4.
In detail about these concepts and their development in American securities litigation, see Fox (2005b), p. 507, who refers to Schlick v. Penn-Dixie Cement Corp 507 F.2d 374 (2d Cir. 1974) as the introduction of the concepts of transaction causation and loss causation in case law. See also on these concept Vandendriessche (2015), p. 159; De Jong (2011), p. 355. In the context of Dutch law, see opinion of Advocate General Timmerman HR 27 November 2009, ECLI:NL:HR:2009:BH2162 (WorldOnline), no. 4.7.5.2. In the context of German law, see Klöhn (2014), pp. 679 and 680.
- 5.
- 6.
McGregor (2014), no. 8.005 et seq.; Van Dam (2013), p. 310; Kleinschmidt (2012), p. 156; Spier and Haazen (1998), p. 127. See also the theory advanced by Mill (1882), p. 241, according to whom the “(…) the cause, then, philosophically speaking, is the sum total of the conditions, positive and negative taken together; the whole of contingencies of every description, which being realized, the consequent invariably follows”. See about this philosophical sense of causation and its connection to the requirement of a csqn relationship including further references Honoré (1983), Chapter 7, p. 27.
- 7.
See extensively Honoré (1983), Chapter 7, p. 7.
- 8.
- 9.
- 10.
Including further references: Spier and Haazen (1998), p. 157.
- 11.
See also Kleinschmidt (2012), p. 156, who argues that it is better to speak of scope of liability rather than causation.
- 12.
- 13.
- 14.
- 15.
- 16.
BGH 6 June 2013, IX ZR 204/12, no. 20; BGH 10 July 2012, VI ZR 127/11, no. 12.
- 17.
- 18.
BGH 28 September 2005, VIII ZR 372/04, NJW 2005, 3494; BGH 8 May 2005, VIII ZR 368/03, NJW 2005, 2396; BGH 11 December 1991, VIII ZR 31/91, NJW 1992, 686; BGH 14 January 1991, II ZR 190/89, NJW 1991, 1053. See also Schmidt (2003), pp. 1009 et seq. This general rule is based on “Normentheorie” put forward by Rosenberg (1965).
- 19.
- 20.
- 21.
- 22.
Teichmann (2015), § 823, no. 63, referring to: BGH 5 November 2013, VI ZR 527/12, see in particular no. 13.
- 23.
- 24.
About this in more detail with further references, see Oetker (2016), § 249, no. 499 et seq.
- 25.
- 26.
- 27.
Looschelders (2016), p. 982.
- 28.
- 29.
- 30.
- 31.
- 32.
- 33.
- 34.
Oetker (2016), § 249, no. 121.
- 35.
- 36.
- 37.
The two phases are referred to as: liability constituting causation and liability completing causation (Vandendriessche (2015), p. 160), causation giving rise to the violation of a protected interest and remoteness of damage (Markesinis and Unberath (2002)) and liability establishing causation and liability implementing causation (Magnus (1998), p. 63, who also argues that the distinction is unnecessary and sometimes even impossible to make).
- 38.
Looschelders (2016), p. 971.
- 39.
- 40.
See with further references: Oetker (2016), § 249, no. 106.
- 41.
Oetker (2016), § 249, no. 107.
- 42.
See Assmann (2015), no. 91 et seq.; Klöhn (2014), pp. 679 and 680; Veil (2003), p. 365. In the same vein: Edelmann (2015), no. 113, who focuses on the causal link between failure to provide information and the investment decision. See also in this regard: opinion of Advocate General Timmerman HR 27 November 2009, ECLI:NL:HR:2009:BH2162 (WorldOnline), no. 4.5.2.7.
- 43.
- 44.
See for a recent example of the application of the test to establish factual causation: HR 9 June 2017, ECL:NL:HR:2017:1008, para. 4.3.2, with the Court comparing the actual situation with a hypothetical situation where the tort is eliminated.
- 45.
Rutgers and Krans (2014), no. 4.
- 46.
- 47.
- 48.
See for example: HR 3 February 2012, ECLI:NL:HR:2012:BU4914 (Rabobank Vaart en Vecht v. X), para. 3.7.1.
- 49.
See on this in more detail: Krans (1999), pp. 131 et seq. Although the two phases, therefore, could be distinguished along the lines of establishing liability and determining the scope of the compensation obligation, the distinction seems to be of little relevance in practice. In this respect Klaassen (2017), no. 19.
- 50.
Originally proposed in Dutch scholarship by Köster (1963), p. 14, as a viable alternative to the doctrine of adequate causation for determining the scope of damages to be compensated for. Legal scholarship has formulated a catalogue of factors, which provide guidance on whether attribution of a specific instance of damage, on the facts of a particular case, can be regarded as reasonable. Of particular significance are the guidelines Brunner which have remained relevant up to this day, see Brunner (1981). See on these factors including further references: Klaassen (2017), no. 33 et seq.; Pijls (2017), § 3; Sieburgh (2017), no. 63 et seq.
- 51.
HR 2 October 1998, ECLI:NL:HR:1998:ZC2723 (Necap v. Shellfish), para. 3.10. Klaassen and Sieburgh have argued that this is because the reasonable attribution of damage qualifies as a matter of law instead of as a matter of proof: Klaassen (2017), no. 45; Sieburgh (2017), no. 76 and 82. Asser, conversely, focuses on that the argument put forward by the party held liable that certain damage cannot reasonably be attributed qualifies as a liberating defense Asser (2004), no. 182.
- 52.
- 53.
Scholarship seems divided as to the moment to which foreseeability, in the context of contractual liability, has to be determined. Klaassen has argued that it is the foreseeability at the moment where the event that gives rise to liability takes place: Klaassen (2017), no. 35.1. Krans and Lindenbergh have argued that the focus should be on the foreseeability at the moment parties enter into a contractual relationship: Krans (1999), pp. 138–139; Lindenbergh (2014), no. 24.
- 54.
- 55.
- 56.
- 57.
- 58.
Robson and Swift (2019), pp. 208 et seq.; Walton et al. (2018), no. 5.01; McGregor (2014), no. 8.005; McMeel and Virgo (2014), no. 23.177 et seq. Lord Nicholls clarified the distinction between the two steps in Kuwait Airways Corpn v Iraqi Airways Co (Nos 4 and 5) [2002] UKHL 19, at [69]: “I take as my starting point the commonly accepted approach that the extent of a defendant’s liability for the plaintiff’s loss calls for a twofold inquiry: whether the wrongful conduct causally contributed to the loss and, if it did, what is the extent of the loss for which the defendant ought to be held liable. The first of these inquiries, widely undertaken as a simple “but for” test, is predominantly a factual inquiry”. With regard to the second step, Lord Nicholls considered at [70]: “The second inquiry, although this is not always openly acknowledged by the courts, involves a value judgment (“ought to be held liable”). Written large, the second inquiry concerns the extent of the loss for which the defendant ought fairly or reasonably or justly to be held liable (the epithets are interchangeable)”.
- 59.
Beary v Pall Mall Investments (A Firm) [2005] EWCA Civ 415, as per Dyson LJ at [26] et seq., in particular [38]. See also: Walker and Purves (2014), no. 7.17.
- 60.
Burrows (2004), p. 45. With regard to the remedy of equitable compensation for breach of the duty to take care and skill in equity or fiduciary duty this was decided in Bristol and West Building Society v Mothew [1998] Ch. 1, at 17. See also about that equitable compensation depends on proof of factual causation Harder (2010), p. 76. The general principles to causation also apply to tort of breach of statutory duty, as became clear in Haider Abdullah v Credit Suisse [2017] EWHC 3016, at [201] et seq.; Rubenstein v HSBC Bank [2011] EWHC 2304, at [104] et seq., in particular HHJ Havelock-Allan QC at [116]. That this is indeed the case seems to also follow from Camerata Property Inc v Credit Suisse Securities (Europe) Limited [2012] EWHC 7 (Comm), as per Flaux J at [85]. See also about the applicability of the general principles of causation to tort of breach of statutory duty Buckley (2018), no. 9.60 et seq.; Walker and Purves (2014), no. 7.30. That an action brought under the statutory remedy under FSMA 2000, s. 138D is subject to the same principles when establishing causation as tort of breach of statutory duty follows from the provision in which the remedy is laid down, which states that the action is subject to the defences and other incidents applying to actions for breach of statutory duty.
- 61.
- 62.
See also In re B (Children) [2008] UKHL 35, as per Lord Hoffmann after discussing available authorities at [13] and as per Baroness Hale of Richmond at [62] et seq.
- 63.
- 64.
Zaki & Ors v Credit Suisse (UK) Ltd [2013] EWCA Civ 14, at [103] et seq. See also about this decision Stanton (2017), p. 168.
- 65.
- 66.
See also in this regard BPE Solicitors v Hughes-Holland [2017] UKSC 21, as per Lord Sumption at [20].
- 67.
- 68.
Beatson et al. (2016), p. 574.
- 69.
Jones (2018), no. 2.06.
- 70.
- 71.
- 72.
Jones (2018), no. 2.140.
- 73.
- 74.
Hadley v Baxendale (1854) 9 Exch 341; Overseas Tankship (UK) Ltd v Morts Dock & Engineering Co Ltd (The Wagon Mound) [1961] A.C. 388. See in more detail Beatson et al. (2016), pp. 581 and 582, who also infer this notion from H. Parsons (Livestock) Ltd v Uttley Ingham & Co. Ltd [1978] Q.B. 791, see in particular Lord Denning, at [802], who eloquently puts into words the thoughts many might think when dealing with the issue at hand: “I find it difficult to apply those principles universally to all cases of contract or to all cases of tort: and to draw a distinction between what a man “contemplates” and what he “foresees.” I soon begin to get out of my depth. I cannot swim in this sea of semantic exercises - to say nothing of the different degrees of probability - especially when the cause of action can be laid either in contract or in tort. I am swept under by the conflicting currents”; Jones (2018), no. 2.180; McGregor (2014), no. 22.009; Burrows (2004), p. 92.
- 75.
- 76.
[1949] 2 K.B. 528.
- 77.
- 78.
[2008] UKHL 48. Including further references Harder (2010), pp. 46 and 47.
- 79.
[2010] EWCA Civ 7, at [43]. According to Toulson J, with whom the other judges agreed, the assumption of responsibility rule developed in The Achilleas could nevertheless in some situations replace the standard rule. However, it remains unclear in what situations, and under which conditions, this replacement might take place, see in more detail Beatson et al. (2016), p. 580. The approach taken in Sylvia Shipping Co Ltd v Progress Bulk Carries Ltd [2010] EWHC 542 (Comm), as per Hamblen J at [40], nevertheless, suggests that this replacement can be triggered in exceptional cases where the standard two-limbed test would result in “unquantifiable, unpredictable, uncontrollable or disproportionate liability or where there is clear evidence that such a liability would be contrary to market understanding and expectations”.
- 80.
Law Commission, ‘Fiduciary Duties of Investment Intermediaries’, Law Commission Consultation Paper No. 215, London: 2013, no. 5.44 sub (4), referring to the decision of the House of Lords in Target Holdings Ltd v Rederns [1996] A.C. 421, as per Lord Browne-Wilkinson at [434].
- 81.
Bristol and West Building Society v Mothew [1998] Ch. 1, at 17. See also Harder (2010), pp. 73 et seq.
- 82.
[1999] Lloyd’s Rep PN 406, 510 et seq. See also: McMeel and Virgo (2014), no. 8.10.
- 83.
See in more detail and including further references Harder (2010), pp. 79 et seq.
- 84.
Also referring to Rubenstein, see Haider Abdullah v Credit Suisse [2017] EWHC 3016, at [211].
- 85.
[2011] EWHC, at 57. A similar reasoning was adopted by Flaux J in Camerata Property Inc v Credit Suisse Securities (Europe) Limited [2012] EWHC 7 (Comm), as at [68].
- 86.
[2012] EWCA Civ 1184, at [113] et seq., in particular [124].
- 87.
[2012] EWCA Civ 1184, at [117].
- 88.
[2012] EWCA Civ 1184, at [118].
- 89.
Interestingly, Rix LJ added at [124]: “Where the obligation of a defendant is not merely to avoid injuring his claimant but to protect him from the very kind of misfortune which has come about, it is not helpful to make fine distinctions between foreseeable events which are unusual, most unusual, or of negligible account”.
- 90.
[2012] EWCA Civ 1184, at [123].
- 91.
[1997] A.C. 191.
- 92.
Lord Hobhouse, however, has considered that while the principle is a distinct legal concept, it is analogous to the concept of remoteness, see Platform Home Lonas Ltd v Oyston Shipways Ltd [2000] 2 A.C. 190, at [208], which was followed by Evans LJ in the decision of the Court of Appeal in Cossey v Lonnkvist [2000] Lloyd’s Rep P.N. 885, at [19]. See also Jones (2018), no. 2.183. Lord Hoffmann himself, who had commented in that the principle has nothing to do with causation in Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No. 2) [1997] 1 W.L.R. 1627, at 1639 later appeared to recant his view and considered that it, in fact, did, see Hoffmann (2005), pp. 592 and 596. In more detail including further references Burrows (2004), p. 113. See also the speech delivered by Lord Sumption in BPE Solicitors v Hughes-Holland [2017] UKSC 21, at [20] et seq., where he traces the development of the principle and how issues presented as contingent on remoteness have been reframed in terms of the scope of duty. In this regard see also the previously discussed decision of the Court of Appeal in Rubenstein v HSBC Bank, as per Rix LJ at [113] et seq., who answers the question as to the remoteness of damage by reference to the scope of the duty principle.
- 93.
- 94.
Jones and Dugdale (2010), no. 2.174.
- 95.
[1997] A.C. 191, at 212. In clarifying the applicable principle, Lord Hoffmann cited the example of the mountaineer who turns to a physician who negligently makes the diagnosis that the mountaineer’s knee is fit. The mountaineer, consequently, undertakes an expedition which he would not have if he had learned of the true state of his, in fact, injured knee. During the expedition undertaken, the mountaineer suffers an entirely foreseeable injury which is entirely unrelated to the injured state of the knee. On the basis of the principle applied by the Court of Appeal in SAAMCO, the physician would be held liable for the damages suffered by the mountaineer. Lord Hoffmann, however, rejects this reasoning at 213, as “it [would make] the doctor responsible for consequences which, although in general terms foreseeable, do not appear to have a sufficient causal connection with the subject matter of the duty”.
- 96.
[1997] A.C. 191, at 213.
- 97.
[1997] A.C. 191, at 213.
- 98.
In considerably more detail and including further references Harder (2010), pp. 30 et seq. and 77 et seq. With regard to the principle of the scope of the duty in relation to claims in contract, the decision in Haugesund Kommune v Depfa ACS Bank [2011] EWCA Civ 33 shows that the principle might, nevertheless, be reframed in terms of what responsibility the defendant assumed, as per Rix LJ at [73]. See about this in further detail Powell and Stewart (2017), no. 3.003, footnote 11; McGregor (2014), no. 8.156.
- 99.
BPE Solicitors v Hughes-Holland [2017] UKSC 21, as per Lord Sumption at [53]. See also McGregor (2014), no. 8.03 et seq.
- 100.
In this regard McGregor (2014), no. 8.080, referring to the decision of the Court of Appeal in Roe v Minister of Health 2 Q.B. 66, as per Denning LJ at 85, who seems to refer to the underlying issue when asking the question whether the consequence falls within the risk.
- 101.
- 102.
[2017] UKSC 21.
- 103.
[2017] UKSC 21, at [38] (my italics).
- 104.
[2017] UKSC 21, at [39].
- 105.
[2017] UKSC 21, at [40].
- 106.
[2017] UKSC 21, at [44].
- 107.
Bradley (2016), p. 347.
- 108.
[2017] UKSC 21, at [41].
- 109.
Bradley (2016), p. 347.
- 110.
- 111.
- 112.
- 113.
See in general Kleinschmidt (2012), p. 157.
- 114.
Jones and Dugdale (2010), no. 2.13.
- 115.
- 116.
- 117.
BGH 19 November 2019, XI ZR 575/16, no. 23; BGH 8 April 2014, XI ZR 341/12, no. 20; BGH 26 February 2013, XI ZR 183/11, no. 17; BGH 8 May 2012, XI ZR 262/10, no. 28 et seq.; BGH 12 May 2009, XI ZR 568/07, no. 22; BGH 7 May 2002, XI ZR 197/01, NJW 2002, 2704; BGH 16 November 1993, XI ZR 214/92, NJW 1994, 514. See: Grundmann (2016), no. 49; Rödel (2015), pp. 229 et seq.; Dieckmann (2011), p. 1155. See also BVerfG 8 December 2012, 1 BvR 2514/11, no. 20 et seq., in which the Federal Constitutional Court approved of the application of the presumption in financial litigation.
- 118.
- 119.
- 120.
- 121.
- 122.
BGH 26 February 2013, XI ZR 183/110, no. 18; BGH 8 May 2012, XI ZR 262/10, no. 29. For more detailed information about this issue and with further references, see Oppenheim (2014), p. 455; Spindler (2016), no. 209; Edelmann (2015), no. 109; Rödel (2015), pp. 233 et seq. and 247 et seq.; Dieckmann (2011), pp. 1155 et seq., who views the presumption as an alleviation of the procedural position combining elements of prima facia and a reversal of the burden of proof (p. 1158); Einsele (2008), p. 484.
- 123.
- 124.
- 125.
- 126.
For example: BGH 14 May 1996, XI ZR 188/95, NJW-RR 1996, 948; BGH 16 November 1993, XI ZR 214/92; BGH 7 April 1992, VI ZR 192/91. See also: BGH 13 December 2011, XI ZR 51/10, no. 62, deciding that the presumption can also be applied in relation to “Prospekthaftung im engeren sinn”, which covers situations where there is no contractual relationship between the retail investor-claimant and the financial institution-defendant, showing that the presumption is not restricted to situations where the investor bases a claim for damages on contractual liability.
- 127.
Stoll (1967), pp. 553 and 559, to which the BGH refers in its 1973 decision where it originally developed the presumption (VII ZR 12/73). See also: Nobbe and Zahrte (2014), no. 301; Bassler (2013), p. 546, with further references; Benicke (2006), pp. 848 and 849; Canaris (2004), pp. 4 et seq. The importance of the protective purpose of the rule violated is also apparent in the BGH’s recent judgment in which it decided that the presumption also applies in situations where not one, single plausible investment decision can be identified in the hypothetical situation in which the financial institution complies with the duties imposed on it (BGH 8 May 2012, XI ZR 262/10, no. 36). The BGH decided that especially in situations in which the investor has multiple investment opportunities to choose between, information disclosure and advice are essential in order to safeguard the retail investor’s freedom of choice. According to the BGH, in short, the aim of information disclosure duties in these situations can only be achieved if the uncertainty that is caused by omission of mandatory information or advice is borne by those who are responsible for such an omission.
- 128.
- 129.
BGH 8 May 2012, XI ZR 262/10, no. 36. See also in general: BGH 5 July 1973, VII ZR 12/73, NJW 1973, 1689. See also with further references Benicke (2006), p. 849.
- 130.
Benicke (2006), p. 849.
- 131.
Benicke (2006), p. 849.
- 132.
- 133.
- 134.
- 135.
More in general in this sense Vandendriessche (2015), p. 198.
- 136.
- 137.
Canaris (2004), p. 13.
- 138.
Canaris (2004), p. 14.
- 139.
Canaris (2004), p. 15.
- 140.
- 141.
Canaris (2004), p. 17.
- 142.
Dieckmann (2011), p. 1157.
- 143.
Dieckmann (2011), p. 1157.
- 144.
Dieckmann (2011), p. 1157.
- 145.
- 146.
HR 26 January 1996, ECLI:NL:HR:1996:ZC1976 (Dicky Trading II), para. 3.5.1; HR 16 June 2000, ECLI:NL:HR:AA6233 (Sint Willibrord), para. 3.5.
- 147.
HR 23 November 2012, ECLI:NL:HR:2012:BX7264, para. 3.7.
- 148.
HR 29 November 2002, ECLI:NL:HR:2002:AE7351 (Kastelijn v. Gemeente Achtkarspelen), NJ 2004/305, annotated by W.D.H. Asser, sub 14, who argues that although it does not shift the risks of not being able to establish a csqn relationship on the party held liable, the reversal rule does appear, in practice, to approximate such an exception to the general rule of civil procedure laid down in art. 150 Rv. Recently, the Hoge Raad explicitly held the reversal rule to amount to an exception to this general rule, see HR 2 June 2017, ECLI:NL:HR:2017:1008, para. 3.4.2. See also about the reversal rule Sieburgh (2017), no. 77; Rutgers and Krans (2014), no. 44; Giesen and Maes (2014), p. 222; opinion of Deputy Procurator General C.L. de Vries Lentsch-Kostense HR 8 February 2013, ECLI:NL:PHR:2013:BX7846 (Van Lanschot v. Grove c.s.), para. 48; Schild (2009), p. 256; opinion of Advocate General Verkade for HR 11 July 2008, ECLI:NL:PHR:2008:BC8967.
- 149.
HR 29 November 2002, ECLI:NL:HR:2002:AE7345 (TFS v. NS), para. 3.5.3; HR 29 November 2002, ECLI:NL:HR:2002:AE7351 (Kastelijn v. Gemeente Achtkarspelen), para. 3.6. See recently confirming these conditions: HR 2 June 2017, ECLI:NL:HR:2017:1008, para. 3.4.2.
- 150.
- 151.
HR 23 November 2001, ECLI:NL:HR:2001:AB2737; HR 23 November 2001, ECLI:NL:HR:2001:AD3963. It has been said that the case law of the Hoge Raad shows that it continues to adopt a restrictive approach to the application of the reversal rule, see Asser (2017), no. 302, referring to HR 9 June 2017, ECL:NL:HR:2017:1008.
- 152.
HR 23 November 2001, ECLI:NL:HR:2001:AB2737, para. 3.5.3 and 3.5.4; HR 23 November 2001, ECLI:NL:HR:2001:AD3963, para. 3.5.2 and 3.5.3.
- 153.
HR 23 November 2001, ECLI:NL:HR:2001:AB2737, para. 3.5.5; HR 23 November 2001, ECLI:NL:HR:2001:AD3963, para. 3.5.4.
- 154.
De Bie Leuveling Tjeenk (2014), p. 318; Klaassen (2013), pp. 143 and 168; opinion of Deputy Procurator General C.L. de Vries Lentsch-Kostense for HR 8 February 2013, ECLI:NL:PHR:2013:BX7846 (Van Lanschot v. Grove c.s.), para. 48; opinion of Advocate General Hammerstein for HR 3 February 2012, ECLI:NL:PHR:2012:BU4914 (Rabobank Vaart en Vecht v. X), para. 2.20; Schild (2009), p. 259; Pijls (2009), pp. 173 and 174.
- 155.
Terminology derived from: Schild (2009), p. 263. The reason underlying this terminology is that with regard to proof of causation the instrument leads to a result similar to the reversal rule.
- 156.
HR 27 November 2009, ECLI:NL:HR:2009:BH2162 (WorldOnline), para. 4.11.2.
- 157.
Dexia v. De Treek, para. 5.5.2. This formulation was reiterated (para. 5.5.3), in a slightly different form, with regard to situations where a retail investor’s financial position at the time of entering into the contract could be sufficient to perform the obligations arising out of the contract. Is that the case then a financial institution would have to support its defence with sufficiently concrete evidence to the effect that the retail investor would have entered into the contract had the institution not infringed its duty of care. In the event the institution fails to do so, the Hoge Raad held, it could also be assumed the retail investor would not have entered into the contract had the financial institution complied with its duty of care.
- 158.
This is due to the fact that the Court does not explicate what technique it applies in Dexia v. De Treek. With regard to the characterisation of the instrument employed by the Court: opinion of Deputy Procurator General C.L. de Vries Lentsch-Kostense for HR 8 February 2013, ECLI:NL:PHR:2013:BX7846 (Van Lanschot v. Grove c.s.), para. 49, referring to Schild (2009), p. 263. Others, however, appear to dismiss this notion Klaassen (2013); Asser (2010), p. 87.
- 159.
- 160.
The presumption is generally considered to shift the burden of proof and with it thus the risk of not being able to establish a csqn relationship onto the firm. One could, however, raise the question to what degree this instrument, in practice, leads to a reversal of this risk regarding proof of a csqn relationship, see on this annotation by W.H.D. Asser, NJ 2004/305, sub 14 to HR 29 November 2002, ECLI:NL:HR:2002:AE7351 (Kastelijn v. Gemeente Achtkarspelen).
- 161.
One could, therefore, raise the question: why not stick to what you know and apply the presumption under the classic reversal rule in Dexia v. De Treek and the WorldOnline-cases? The reason probably relates to the Hoge Raad’s decisions in TFS v. NS and Kastelijn v. Achterkarpselen, discussed above, in which the Court restricted the reversal rule’s scope of application. More specifically, not applying the presumption under the classic reversal rule could be due to the Hoge Raad’s reluctance to enter into the discussion whether or not the information disclosure and the know your client-obligation central in Dexia v. De Treek aim to prevent a specific risk with regard to the occurrence of damage as is required for the application of the reversal rule.
- 162.
The restricted interpretation of Dexia v. De Treek and, additionally, WorldOnline, is based on the aim of the decisions to generate as much precedential value as possible in order to resolve similar mass claim damages. See in this regard De Bie Leuveling Tjeenk (2014), p. 319; Klaassen (2013), p. 151.
- 163.
HR 8 February 2013, ECLI:NL:HR:2013:BX7846 (Van Lanschot v. Grove). See also HR 3 February 2012, ECLI:NL:PHR:2012:BU4914 (Rabobank Vaart en Vecht v. X), para. 3.7.1, in which the Court similarly seemed to allow for an alleviation of the investor’s procedural position.
- 164.
Van Lanschot v. Grove, para. 3.7.2.
- 165.
De Bie Leuveling Tjeenk (2014), p. 321.
- 166.
Similarly opinion of Deputy Procurator General C.L. de Vries Lentsch-Kostense HR 8 February 2013, ECLI:NL:PHR:2013:BX7846 (Van Lanschot v. Grove c.s.), para. 51; Schild (2009), p. 263.
- 167.
Dexia v. De Treek, para. 5.4.1–5.4.3.
- 168.
Dexia v. De Treek, para. 5.5.3.
- 169.
For more information about improving the investor’s procedural position with regard to proof of a required csqn relationship, see Wallinga and Pijls (2018), §5. A comparable result has been argued for by means of interpreting MiFID and MiFID II in the light of the right to an effective remedy in combination with the principle of consumer protection contained in art. 47 and 38 of the Nice Charter on Fundamental Rights of the EU, see: Cherednychenko (2014), p. 205.
- 170.
HR 23 May 1997, ECLI:NL:HR:1997:AG7238 (Rabobank/Everaars), no. 3.3; HR 11 July 2003, ECLI:NL:HR:2003:AF7419 (Van Zuylen/Rabobank), no. 3.6.4.
- 171.
- 172.
- 173.
- 174.
Wallinga and Pijls (2018), §5.
- 175.
Art. 11 and 13 UCP Directive.
- 176.
- 177.
In the same vein, see opinion of Advocate General Wissink for HR 24 December 2010, ECLI:NL:PHR:2010:BO1799 (Fortis v. Bourgonje), para. 3.53.
- 178.
HR 31 March 2006, ECLI:NL:HR:2006:AU6092 (Nefalit v. Karamus), para. 3.13.
- 179.
Opinion of Advocate General Hammerstein for HR 14 December 2012, ECLI:NL:PHR:2012:BX8349, para. 2.2.2; HR 24 December 2010, ECLI:NL:PHR:2010:BO1799 (Fortis v. Bourgonje), JOR 2011/54, annotated by A.C.W. Pijls, sub 10; Schild (2009), pp. 259 and 261.
- 180.
Fortis v. Bourgonje, para. 3.10.
- 181.
See on this in general: opinion of Advocate General Spier for HR 21 December 2012, ECLI:NL:PHR:2012:BX7491 (Deloitte v. Hassink), para. 3.10.2.
- 182.
Fortis v. Bourgonje, para. 3.9.
- 183.
Fortis v. Bourgonje, para. 3.8.
- 184.
HR 24 October 1997, ECLI:NL:HR:1997:AM1905 (Baijings v. Mr. H.), para. 5.2.
- 185.
See on the distinction between proportional liability and loss of a chance: Klaassen (2013), pp. 160 and 161; opinion of Advocate General Spier for HR 21 December 2012, ECLI:NL:PHR:2012:BX7491 (Deloitte v. Hassink), para. 3.12.1 et seq., who argues that the two instrument do not appear to differ from each other in practice. In the same vein as Spier: HR 21 December 2012, ECLI:NL:HR:2012:BX7491 (Deloitte v. Hassink), JA 2013/41, annotated by C.H. van Dijk and A.J. Akkermans, sub 13; De Jong and Arons (2013), pp. 376, 377 and 384; HR 24 December 2010, ECLI:NL:HR:2010:BO1799 (Fortis v. Bourgonje), JOR 2011/51, annotated by A.C.W. Pijls, sub 9. See also recently about loss of a chance and how it can be distinguished from proportional liability: Nuninga (2019).
- 186.
HR 16 February 2007, ECLI:NL:HR:2007:AZ0419 (Gebroeders Tuin Beheer), para. 3.3 sub a; HR 19 January 2007, ECLI:NL:HR:2007:AZ65441 (Kranendonk) para. 3.4.3.
- 187.
- 188.
Deloitte v. Hassink, para. 3.5.3.
- 189.
Deloitte v. Hassink, para. 3.7.
- 190.
Zaki & Ors v Credit Suisse (UK) Ltd [2013] EWCA Civ 14, at [103] et seq. See also about this decision Stanton (2017), p. 168.
- 191.
- 192.
Jones and Dugdale (2010), no. 2.07.
- 193.
In re B (Children) [2008] UKHL 35, as per Lord Hoffmann after discussing available authorities at [13] and as per Baroness Hale of Richmond at [62] et seq.; In Re H (Minors) [1996] A.C. 563, as per Lord Nicholls at 586; Miller v Minister of Pensions [1947] 2 All E.R. 372, as per Denning J at 374.
- 194.
Glover (2017), pp. 91 and 92.
- 195.
Glover (2017), p. 96.
- 196.
Walton et al. (2014), no. 5.04.
- 197.
Alleyne and Seager (2015), p. 143.
- 198.
[2010] EWCA Civ 494.
- 199.
[2010] EWCA Civ 494, as per Jacob LJ at [284].
- 200.
In more detail including further references Jones and Dugdale (2010), no. 2.07.
- 201.
Alleyne and Seager (2015), p. 143.
- 202.
In this regard: Jones and Dugdale (2010), no. 2.69; McGregor (2008), p. 5.
- 203.
About this distinction Lord Diplock in Mallett v McMonagle [1970] A.C. 166, at 176. See also McGregor (2008), p. 5.
- 204.
McGregor (2008), p. 5.
- 205.
- 206.
[1911] 2 K.B. 786, at 795.
- 207.
[1911] 2 K.B. 786, at 796.
- 208.
[1995] 1 W.L.R. 1602. See also Neuberger (2008), pp. 206, 207 and 208.
- 209.
[1995] 1 W.L.R. 1602, at 1614.
- 210.
- 211.
In this regard including further references: Jones and Dugdale (2010), no. 2.76; Neuberger (2008), p. 8.
- 212.
- 213.
See more in general Neuberger (2008), p. 10.
- 214.
[2009] EWHC 901 (Comm).
- 215.
[2009] EWHC 901 (Comm), at [159].
- 216.
[2009] EWHC 901 (Comm), at [159]. See also Powell and Stewart (2017), no. 15.085. It is interesting to note that the defendant, Man Financial Limited, had relied on a previous edition of Jackson & Powell on Professional Liability, where it was said that the cases cited therein would present claimants with an insurmountable hurdle for damages in the investment context to be dealt with on the basis of loss of a chance.
- 217.
McGregor (2008), pp. 6 et seq.
- 218.
McGregor (2008), p. 6.
- 219.
McGregor (2008), pp. 6 and 9.
- 220.
Powell and Stewart (2017), no. 15.084.
- 221.
McGregor (2008), p. 6.
- 222.
Walton et al. (2014), no. 5.04.
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Wallinga, M. (2020). Causation. In: EU Investor Protection Regulation and Liability for Investment Losses. Studies in European Economic Law and Regulation, vol 20. Springer, Cham. https://doi.org/10.1007/978-3-030-54001-2_7
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