NMa: Introduction of 'No Cure-No Pay' Possible in Relation to Injury Claims

In cases involving injury claims, consumers must be able to hire a lawyer on a 'no cure-no pay' basis. This means that they may agree with their lawyer that they will only be required to pay him a fee if he achieves a favourable result. This is not possible at the moment since the Dutch Law Society [Nederlandse Orde van Advocaten (NOVA)] prohibits its members from billing on a 'no cure-no pay' basis. According to the Netherlands Competition Authority (NMa), this prohibition should cease in relation to cases involving injury claims, as it limits personal injury lawyers in their freedom to decide on their own method of billing. They are disadvantaged as a result, compared to other providers on this market who are not lawyers. Billing on a 'no cure-no pay' basis increases the access of less wealthy people to lawyers and therefore to the courts.

The prohibition against billing on a ' no cure-no pay' basis is part of NOVA's code of practice. In the case of personal injury lawyers, NMa is of the view that this prohibition contravenes the Competition Act. NMa will not impose a fine, partly because the Counsel Act [Advocatenwet] will soon be amended in a number of respects. This means that if NOVA were to decide to retain this code of practice, it would have to provide for this in a by-law. The prohibition on cartels would not apply to a by-law such as this.

NMa investigated this case following a complaint by a personal injury lawyer who felt obstructed in his freedom to exercise his profession by NOVA's prohibition. NOVA's rules not only prohibit lawyers from charging clients a fee if they achieve a certain result ('no cure-no pay'). It is also prohibited to agree that the bill will be a proportion of the value of the result achieved thanks to the lawyer ('quota pars litis'). NOVA argues that these rules promote the independence, integrity and partiality of the lawyer. In NMa's opinion, billing on a 'no cure-no pay' basis in the case of personal injury claims does not detract from this. In addition, lawyers are free to offer other methods of billing, which are permitted at present.