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Welcome /  Blog /  2017-10-doc8 AB of DigiTrage

2017-10-doc8 AB of DigiTrage

For around a year now, I am chairman of the Advisory Board of DigiTrage (Digital arbitration in debt collecting cases). The organisation (see www.digitrage.nl) will publish an interview with me. See for its questions and my answers below: Can you say something about your background? I have been a lawyer for over 40 years, and a professor of civil law, commercial law and international insolvency law for over 25 years (fulltime, later part time). This was between 1988 – 2008 at the VU University Amsterdam and from 2007 – 2014 (also one day per week) as professor of international insolvency law at the Leiden University. It is not common knowledge, but I was able to really make a living via my principal activity during the past 25 years: (international) commercial-legal advisor, the first 13 years as partner of global services provider Ernst & Young (now: EY). I have also had management positions there between 1995 and 2003, with 5 years at an international board position. Since 2005 I had my own commercial (international) advice, opinion and arbitration practice, mostly focusing on the area of (international) restructuring and insolvency of banks and companies. I retired in March 2014 (in the world of universities they call this: accorded emeritus status) and during 2016 I have ended my commercial advice practice. I have a number of national and international advisory functions and I am still scientifically active. What study have you done and why? Aha, good question to give some background. In a lot of professional areas you can study your whole life. Because of my pre-education (HBS), not all study areas were available to me. In secondary education – we’re talking about the second half of the 60’s! – I was interested in economy and – as we called it then – commercial knowledge. If you go in this direction you quickly end up with a legal study, at the VU in Amsterdam, also practical because it was close to Haarlem, where I lived in those days. So I am master of laws (1974, VU Amsterdam; Dutch law), and next to my commercial-legal advisory function I also completed a notarial study in 1977. And yes, life-long learning: in the beginning of the 80’s I wrote about a then unknown phenomenon, the foundation as legal entity and fiscal rulings and agreements with the tax authorities. For my promotion to doctor in law in 1988 (subject ‘Natural obligations. Civil and fiscal law observations about obligations unenforceable by law’) I dived deep into the foundations of the meaning and justification of legal commitments. Continuously collecting knowledge and developing myself further, those are examples of what I did to prepare for the transfer for what then was called the new Netherlands Civil Code, the international contracts and structures that you are confronted with within Ernst & Young, the ‘Anglicization’ of the advisory practice, the influence of the millennium-bug in 2000 and the euro in 2002 on running contracts, the legal concepts that were created by privatization, the more recent rule machine of financial law, the constantly changing and developing technology, which does not just change the legal subjects, but also has a structural impact on working in a legal practice or for example my knowledge about the international insolvency law. Twenty years ago you could fit this in a matchbox, now I can easily write 2 books about it, in English, with over 1500 pages. Learning, from developments, from others, that’s something you do every day. What functions do you have at the moment, and what is involved in its work/tasks? Recently I have, together with my German colleague Stephan Madaus, presented a large report on ‘Rescue of Business in Insolvency Law’ for European Law Institute (ELI), with over 100 recommendations for EU member states and the European Commission of the EU, to make the process of saving companies in financial trouble significantly more efficient and effective. Since 2016, I have been chairman of CERIL, Conference of European Restructuring and Insolvency Law, an independent European think tank which strives for the improvement of the laws and practices related to restructuring and insolvency in the EU and its member states. I am advisor with ELI for the project ELI-UNIDROIT (The International Institute for the Unification of Private Law, Rome) ‘European Rules of Civil Procedure’, which focuses on the development of a European model for standardized rules of civil procedures. A few functions have been going on for longer: member of the Joint Board of Appeal of the three European supervisors of the financial markets (EBA, ESMA, EIOPA), advisor of the European Commission concerning restructuring and insolvency law and the chairmanship of the SER/Coordination Consultation Selfregulation, Consultation Group Banks and Notaries. Results of these consultations are, among other things, General service conditions Notaries 2014 and the General bank terms and conditions of 2017. But I think the legal world in Holland mostly knows me as the author of 'Insolventierecht' (Insolvency law), a 10 volumes series that has been published since 1999. This month the last part will be released in its 4th edition. In the near future I will start to prepare to write the fifth edition of this series within five or six years, because there is a lot of interest for it in the legal practice and I like doing it. What was the reason that you joined the Advisory Board of DigiTrage? You are asked to contribute to a new form of dispute resolution. This suited my experience and interests. Between 1988 and 2016 I was deputy justice in the Court of Appeal in The Hague and since 1987 I was an arbitrator, and since 2000 chairman, of the Standing Disputes Committee of Achmea related to life and pension insurances. Aside from that I have handled various arbitrations, as an independent arbitrator not connected to an institution. This knowledge can come in handy when helping to develop a relatively young organization like DigiTrage. The Advisory Board supports DigiTrage in realizing what we see as the core values of dispute resolution. And also how these can be guaranteed in this world of growing importance of electronic information and communication. Of course this influences the usual dispute resolution. Doesn’t it? Of course, stable dispute resolution, the way we know it from the past, is under pressure. In various sectors there are already preventive efforts to avoid disputes (via mediation and on-line dispute resolution), in other sectors, threshold-lowering mechanisms are used (a broad pallet of dispute committees). For international financial disputes, the position of London (because of Brexit) comes under pressure. Singapore and Frankfurt are warming up by the sidelines. I would also think of Amsterdam, but when I look at the slow process of establishing a Netherlands Commercial Court (NCC), this seems too ambitious. For international trade disputes, this NCC will go to work in Amsterdam, I believe from 1 January 2018. Aside from a few judicial obstacles, in some international cases the court registration fees in the first instance (€ 15,000; in interim injunction € 7,500) and in appeals (€ 20,000; in interim injunction € 10,000) can have a prohibitive effect. It can also take a while before this Court functions, because parties will have to adopt a forum choice for the NCC in their agreement. Furthermore, this new arrangement does not apply to cases which fall under the authority of the district judge. So he will remain the have jurisdiction for international agency contracts or the rent of expensive machines or ships. In the Netherlands, a slow but sure switch is being made to ‘mandatory digital procedures’. From 1 September 2017, a lawyer litigates for a big number of cases digitally to the courts of Gelderland and Midden-Nederland in redress cases with mandatory legal representation (with an interest of more than € 25,000). This manner of procedure requires, with clients, lawyers and judges, some getting used to, but it has to lead to procedures becoming simpler, quicker, clearer and more accessible. In a digital file it can always be checked what the current status is. All-in-all, it is a significant challenge for judicial professionals. How do you see the future for digital arbitration in general, and DigiTrage especially? DigiTrage belongs, I think, in the category of innovators and early adopters of digital dispute resolution, via a model supported by arbitration, for the big market of relatively smaller, national disputes. This market seems fairly homogenous: a party desires payment of his claim, as a regular creditor. The past few years, the costs of the legal system have risen significantly. Consequently – however difficult - a corporate decision was taken: no litigation, but write off that claim! Of course strategic behavior of opportunistically acting debtors is looming. A debtor assesses the chance that he (she) will not be the target of its creditors. It is crystal clear that waiving of recovery can lead to liquidation problems. A digital arbitration court, which is faster, cheaper and because of her digital nature has a lower threshold than a national court, can then be a solution. For a lot of transactions, the ordering of goods, booking of concerts or bank transfers, online is the standard, so why not resolve a dispute digitally? Parties, or their digitally versed lawyers, then have to make sure however that contracts or general terms and conditions include a DigiTrage-clause.