NMa Draws up Report on Prohibition of 'No Cure, No Pay'

The Netherlands Competition Authority (NMa) has drawn up a report on the Dutch Bar Association [Nederlandse Orde van Advocaten]. NMa suspects that the rules of the Association which prohibit 'no cure, no pay' are in conflict with European and Dutch competition rules.

Billing on the basis of 'no cure, no pay' means that consumers can hire an advocate with whom they agree that they will only pay a fee if the advocate achieves a certain result. The prohibition on 'no cure, no pay' limits advocates in their freedom to determine their own method of billing. This restricts competition, according to NMa's report.

The Bar Association argues that the prohibition protects the independence, integrity and partiality of the advocate. NMa doubts whether an absolute prohibition on results-based remuneration is necessary to guarantee the objectives of the Bar Association. It does not exclude the possibility that amended regulations will not comply with competition rules. For personal injury cases, in any event, 'no cure, no pay' should be possible, according to NMa. This would increase the access of consumers to advocates and the judiciary.

NMa investigated the case following a repeated complaint from a personal injury advocate. This advocate felt that the opportunities for exercising his profession were obstructed by the prohibition.

NMa draws up a report if it has a reasonable suspicion that the Competition Act has been infringed. In doing so, NMa took cognisance of the evidence and the circumstances of the case and the standpoints, as they were known. The draft report was presented to the European network of competition authorities in accordance with the rules applicable to this. The Bar Association may not respond to the report. After this, NMa will take a final decision on whether an infringement has been committed and, if so, whether NMa will require the Bar Association to amend its regulations.

NMa has taken cognisance of the Cabinet's decision not to allow the Bar Association's proposed experiment with 'no cure, no pay’ in personal injury cases to proceed. The consequences of this circumstance may be raised in the further procedure with NMa.