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After long litigation, a judgement finally comes down in your favour. The other party has to pay your claim. But now, when you want to enforce the judgement, it turns out that the legal entity is empty (and has no assets left). There is nothing to recover from the opposing party, making the judgment basically useless. You then note that another company has been set up by effectively the same people with effectively the same activities. This, of course, feels a bit crooked.

Nevertheless, there is an opportunity to recover the claim if the other party is a shell legal entity. This may be possible through identification. Conjunction means that a new legal entity is established that has actually taken over the full identity of the other legal entity and, in the process, also performs the same acts. Often, the second legal entity is incorporated to disadvantage creditors, as these creditors in principle have no claim against the newly incorporated legal entity. However, it should be noted that identification does not apply to a restart in case of bankruptcy. Indeed, the incorporation of a new legal entity is of course not prohibited in theory, but if this is done to avoid liability, rules exist to protect creditors. With identification, the identity difference is eliminated, which means that the claim that should in principle be recovered from the empty legal entity can now be recovered from the newly created legal entity.

To demonstrate identification, one needs to show that there is interrelatedness. Think of the same industry, the same customers, the same working methods, the same agreements, etc. In addition, the incorporation of the new legal entity is often simultaneous with legal proceedings or just before. Another condition is that the assets and other income of the old legal entity, are now in the newly established legal entity. The so-called Rainbow judgment states that the new legal entity can be held liable for e.g. an unexecuted judgment if the new legal entity is a continuation of the old legal entity and its incorporation is intended to disadvantage creditors. 

However, this sounds easier than it is, because how do you concretely determine whether there is identification (and thus the same identity)?

By doing a lot of research! Although this is easier said than done. By looking at various aspects, you can conclude whether there is intertwining. For example, comparing the websites of the different legal entities, agreements used and what business activities both legal entities conduct. In the Chamber of Commerce, you can further look at the time of incorporation and the annual accounts of both legal entities and compare them. Do all these aspects match fairly identically? Then they can be said to be intertwined. In short, it is important to scrutinise the issue thoroughly. 

All in all, identification is difficult to prove, but certainly not impossible. In this way, the creditor does not have to stand empty-handed if he knocks on the door of an empty BV.

Advice on identification or are you having problems with a non-paying party? Then contact one of our Corporate Law specialists. 

Unfortunately, due to pressures at many (lower) levels of government, it happens more and more often that an administrative body is unable to take a decision on your application within the stipulated period. As a result, you may have to wait a long time for a decision on, for instance, your permit application. What many citizens and companies do not know is that administrative bodies can also suspend the so-called decision deadlines, for instance when the applicant has to provide additional documents for the application. The question is whether an administrative body can do this of its own accord, or whether it needs the applicant's consent to do so. 

The Administrative Law Division of the Council of State ruled on this in its decision of 15 January 2025. The Division ruled that et administrative body can only suspend the decision period if the applicant agrees, this has been confirmed in writing and this has happened before the decision period has expired. This follows from Article 4:15(2) opening words and (a) of the Awb. 

Because the administrative body in this case had not complied with the requirements mentioned above, the condition for suspension of the decision period had not been met, so the decision period continued to run and ultimately the decision period expired without a decision being made. Under the old legislation, this meant that the environmental permit had been granted by operation of law. Under the new legislation, this possibility has lapsed, meaning that an environmental permit cannot be granted merely due to the expiry of the decision period. 

So what can you do against a late decision? When the decision period expires, you can declare the administrative body in default and claim penalty payments. I discussed how this works in my previous blog, in which I also discuss the possibility of sending such a notice of default electronically. 

Do you have questions about the possibility of suspending or extending that deadline or about a notice of default for failure to decide on time? If so, please contact Gerard van der Wende or with Fleur Huisman. 

You can find the link to the ruling here.

Developments in labour law land continue to follow in rapid succession. At the moment, among others, the bill modernising the non-competition clause, the Personnel Retention Act in the event of a crisis and, last but not least, the Clarification of Assessment of Employment Relationships and Legal Presumptions Act (VBAR Act) are still on the shelf. It seems that this push for revision has not come to an end for the time being. Indeed, Minister Van Hijum has announced that a bill will be introduced in 2025 introducing a maximum period of 36 months for temporary work. After this period, the hiring organisation must make the temporary worker an offer of employment with an open-ended employment contract. This aligns with the chain provision for fixed-term employment contracts.  

This intention for a new policy is based on advice from the Landsadvocaat. Briefly, he gave the minister three possible policy variants: 

1.    Setting a hard maximum time limit in law;
2.    Working with an open standard in the law;
3.    A rebuttable presumption of law.

The minister chose option 1, not so much because it was the best option, but the least bad. One of the reasons why option 2 or 3 was not chosen is that in that situation, the employee would still have to go to court.

The underlying objective is to bring Dutch legislation in line with the European Temporary Agency Workers Directive. It has always been the intention that deployment should be temporary, however, Dutch legislation does not sufficiently guarantee this and the courts can hardly act against any abuse. The aim is therefore to ensure legal equality and certainty, while maintaining sufficient flexibility to use temporary workers. 

What does this mean for temporary employment agencies?

Although there is no final bill yet, for now it is especially important to keep monitoring developments closely. A point that comes to mind here is how this will be shaped in the light of Section 9a(2) Waadi. Will the hirer still have to pay a fee to the temporary employment agency when the temporary worker starts working for the hirer, even if the hirer is obliged to make the temporary worker an offer of permanent employment after 36 months?

These are all questions that come to mind, but the cabinet seems determined to go down this road and to ignore criticism from the ABU and NBBU. 

If you would like advice on this, please contact Dennis Oud, Elke Hofman-Bijvank, Tessa Sipkema or Tim van Riel.

Recently, the Central Netherlands District Court again emphasised the weighty interest in the non-competition clause. The subdistrict court ruled that the non-competition clause in the fixed-term employment contract was not legally valid because the employer did not comply with the obligation to state reasons. 

In a fixed-term employment contract, an employer must clearly and specifically substantiate why a non-competition, non-solicitation or anti-harassment clause is necessary because of important business interests. In principle, a general enumeration that may apply to every company is not sufficient for this purpose.  So what, among other things, must the motivation satisfy? The subdistrict court indicated that it must concern:

• the employer's interest in maintaining the clause;
• the clause must be genuinely focused on that employee's job and the work within that job;
• the employer's specific business information, knowledge and experience to be acquired must be stated, which would actually jeopardise the employer's business flow if employee does not comply with the clause.

In this case, the non-competition clause was based on a general enumeration of interests without specific consideration regarding the employee's position and work. The subdistrict court stressed that a concrete link to substantial business interests is needed to justify such a clause. Thus, the employer's business interests must actually be at risk if the ex-employee joins a competitor. Thus, in the present case, the employer had not fulfilled its duty to state reasons, as there was no evidence of an impairment of the employer's commercial business flow. As a result, the clause was null and void. 

So pay close attention to the difference in legal effect. If the clause is well motivated and states the above, but a subdistrict court considers that an employee's interests outweigh the employer's interests in not maintaining the clause, then the clause is voidable (in whole or in part). An employee must appeal to that. If the clause is not properly motivated and therefore does not actually meet the requirements, the clause is void and therefore not legally valid.

For now, the weighty interest only applies in the case of a competition, relationship and/or anti-solicitation clause in a fixed-term employment contract. The government wants to change this. With the bill Modernising the competition clause, the government wants to, among other things:

• limit the duration of the non-competition clause;
• the inclusion of a geographical scope will become mandatory;
• compensation for employees held to the clause; and
• The weighty business and or service interest for the clause must be justified in all employment contracts. This then applies to both fixed-term and open-ended employment contracts. 

These changes aim to improve the balance: employers should protect their business interests, but employees should also have the freedom to pursue their careers. 
This bill is now on the shelf for January 2026, so you still have some time to take a good look at your non-competition, non-solicitation and/or anti-solicitation clause, and, above all, do not forget the weighty business interest. 

If you doubt whether your non-competition, non-solicitation and/or anti-solicitation clause is legally tenable. Please contact Dennis Oud, Tessa Sipkema, Tim van Riel or Elke Hofman-Bijvank. 

You can find the link to the ruling here. 

A new law to simplify and modernise the law of evidence in civil proceedings entered into force on 1 January (Simplification and Modernisation of Evidence Act). The law of evidence is for enabling parties in civil proceedings to substantiate their contentions in writs of summons, defences or other documents. One way to do this is by submitting written documents, expert reports or witness statements. The renewed law of evidence can be explained in several topics. The new law of evidence applies to proceedings commenced after 1 January 2025. But what exactly has changed from 1 January? The main changes will be briefly outlined here. 

Preliminary evidence transactions

The new law makes it possible for parties to request the court to order multiple evidentiary transactions prior to the proceedings (this can be done even before the case is registered on the roll). Previously, a separate request had to be made for each evidence, for example if a party wanted to hear experts or to inspect certain documents. To increase efficiency, article 197 Rv-new ensures that requests can be combined. Thus, if you want to hear an expert and inspect documents, this can be done in one request. 

Right of inspection

The new law clarifies the right of inspection by supplementing the law. Earlier, court intervention was necessary to inspect documents. Parties can now also claim the content of various documents without court intervention. In addition, from 1 January it will be possible to apply the right of inspection when documents are held by third parties who are not parties to the dispute. 

Witness and expert evidence

The limitation of the burden of proof in the case of party witnesses has long been criticised. This mainly relates to the fact that previously, a statement by a party on whom the burden of proof rested could not provide evidence in its favour unless it sought to supplement incomplete evidence. The new law aims to remove this to abolish this restriction. Statements made by a party at the hearing can be entrusted to the judge's free discretion from 1 January.

Role of the judge

In practice, the judge was already quite active in the context of truth-telling. This manifested itself, for example, in the fact that the judge was allowed to discuss possible arguments with the parties during the oral hearing, actively guiding the debate. So this was actually always done, but this active role of the judge is now actually codified. Thus, the law now states that the judge may actively discuss their claim, request or defence with the parties. 

Preservation of evidence and record

Case law had previously shown that it was possible for a party to secure evidence by having the bailiff make a prejudgment attachment of evidence. Earlier, this was only legally regulated for IP cases. Furthermore, it can be requested that the bailiff can draw up an official report to give an objective description of the facts and circumstances found by the bailiff. This is considered an authentic act and therefore has binding evidential value. The court should therefore rely on this official report.

This is a brief summary of the new law change valid in the Netherlands from 1 January 2025 for civil proceedings. If you have a question regarding the law of evidence or would like advice on a (civil) procedure you have, please contact us.

If an administrative body does not comply with the statutory decision period, and thus does not make a decision on time, a citizen or company can object. An appeal for failure to decide on time can then be lodged with the court. The court must then assess whether the administrative body must pay damages to the citizen and, more importantly, also set a deadline for the decision to be made. 

Before such an action for failure to decide on time can be brought, the administrative body must first be given notice of default. This means that the citizen must inform the administrative body that the decision was taken too late and demand that the administrative body still take a decision within a reasonable period (usually two weeks). If the citizen fails to do so, the appeal for failure to decide on time will have no chance of success. 

By law (Section 6:12(2) opening words and under b of the Awb), such a notice of default must, in principle, be sent by post. The question raised in the judgment discussed in this blog is whether it is also sufficient to file the notice of default electronically. 

In its ruling of 18 December 2024, the Division ruled as follows. Although, in principle, a notice of default must be submitted by post, this can also be done electronically, such as by e-mail. Article 2:15 (1) of the Awb does impose the condition that the administrative body must have made this electronic way available. By open up, the Division means that the administrative body must have opened up the electronic way for the application. Therefore, if the electronic way is open to an application, it is also open to a notice of default for not deciding on the application in time. 

What does this mean in practice? If you notice that the administrative body has exceeded the decision period and you want to take action against this, you should know well what steps to take. In principle, you should start by sending a notice of default. Only then can you lodge an appeal for late decisions with the court. 

Do you have questions about a notice of default or an appeal for failure to decide on time? If so, please contact Gerard van der Wende or with Fleur Huisman. 

You can find the link to the ruling here.