Professional Liability for Lawyers in the Netherlands
Allowing a final deadline to expire and advising a client to take a settlement without adequately setting out all the potential risks and choices are examples of practices that could expose a lawyer to a liability claim. Time after time, Dutch case-law has confirmed the importance of lawyers providing clear and accurate advice to their clients, avoiding conflicts of interest, and ensuring that they fully understand their clients' needs and objectives.
This article is the first in a series of four, providing practical insight and guidance on the civil professional liability law of attorneys in the Netherlands in 2025. This introductory article focuses on the standard that applies in the case of a lawyer’s professional liability and the legal framework that must be observed. The second article in this four-part series will focus on the possibilities of limiting liability risks. Article three will concentrate on causation between a professional error and damages. The last article of the series will address the procedures of a settlement in a professional liability claim.
"The standard”
The legal relationship between a lawyer and the client is qualified as an agreement to perform services (article 7:400 of the Dutch Civil Code). The content of this agreement is primarily determined by what the lawyer and the client have agreed to in this regard. In addition, it will also be determined by law, the nature of the agreement, custom and the requirements of reasonableness and fairness. For the question of what the nature of this agreement and custom require, the rules of conduct and professional rules also have significance. Furthermore, specific laws will impact the content of this agreement (e.g. the Lawyers Act and the Money Laundering and Terrorist Financing (Prevention) Act).
Pursuant to article 7:401 DCC, a duty of care rests on the contractor. In Dutch case-law, the duty of care that rests on a lawyer has been further elaborated. A lawyer must exercise the care that may be expected of a reasonably competent and reasonably acting professional under the specific circumstances (ECLI:NL:HR:1990:AC1103, paragraph 3.7). Whether a lawyer has acted reasonable, is assessed ex tunc. This means that hindsight knowledge is not taken into account. Moreover, in principle a lawyer has no obligation to investigate the information provided by his client and therefore may rely on the accuracy of this information, except if there are indications to the contrary (ECLI:NL:GHAMS:1996:AB9464, paragraph 4.6 – 4.9). If advice from a lawyer turns out to be incorrect, this alone does not constitute a professional error, but can only lead to liability if the advice would not have been given by a reasonably acting lawyer (ECLI:NL:HR:1991:ZC0226; ECLI:NL:HR:2003:AF1304). The extent of the obligation to inform and warn a client will depend on the circumstances of the case, including the severity and extent of the risk involved, the degree of likelihood that it will materialise, and the extent to which the client has demonstrated that he is already aware of that risk (ECLI:NL:HR:2015:1406).
A lawyer is the expert in the legal relationship with the client. In determining whether a lawyer made a professional error in the course of providing advice, it must be assessed whether, considering all the facts and circumstances of the case, the lawyer could reasonably believe that the risk to the client was not so great that, as a reasonably competent and reasonably acting lawyer, the lawyer did not have to expressly warn against it (ECLI:NL:HR:1965:AB7079).
When performing procedural acts, a lawyer should not expose the client unnecessarily to foreseeable and avoidable risks (ECLI:NL:HR:2015:1406). Based on the advice given, the client must be able to make an informed decision (ECLI:NL:HR:2007:AZ4564). A lawyer exposes the client to unnecessary and foreseeable risks if the lawyer starts proceedings that are obviously without any chance of success. This for example because the claim is time-barred or the legal proceedings were filed against the wrong party. The duty of care, however, does not extend so far that a lawyer at all times has to restrain the client from all high-risk litigation acts (ECLI:NL:HR:2000:AA7040). And, of course, another practice that brings unnecessary risk to a lawyer is submitting a statement by deadline but at the last moment, thus giving rise to a time-limit discussion.
If a lawyer’s assignment is limited, the scope of the lawyer’s duty of care will also be less extensive (ECLI:NL:HR:2020:61). A lawyer’s duty of care, however, may allow the lawyer not to be limited to the explicit scope of instruction (ECLI:NL:RBNNE:2017:4360, paragraph 6.9). If the specific activities involve obvious or unusual risks, a lawyer should inform the client and when possible, offer alternatives. An extenuating circumstance may be a case in which the client is already aware or can be expected to be aware of these risks. An example is in proceedings before the Supreme Court, from which it follows that an attorney's duty of care is affected by the fact that that client already possesses certain information. In this proceeding, it was successfully argued that because the client possessed the expert report establishing that there was a certain degree of soil contamination and thus could have read this, the lawyer did not need to investigate this point further nor draw the client's attention to it. The client was deemed to be already aware of this contamination. Therefore, the lawyer had not breached his duty to properly inform the client by not explicitly pointing this out (ECLI:NL:HR:2017:3260).
An interpretation of "the standard” can be found in a recent judgment of the District Court of Rotterdam (ECLI:NL:RBROT:2022:6772). In this judgment, the District Court provides important guidance for interpreting the general standard of a reasonably acting and reasonably competent lawyer. In this specific matter, the client took the position that the law firm was in breach of obligations under the agreement to perform services for follow-up proceedings for the determination of damages. According to the client, in these follow-up proceedings for the determination of damages the lawyer in question did not sufficiently substantiate certain elements resulting in the District Court and the Court of Appeal rejecting the indirect damages claimed. The District Court of Rotterdam ruled that the law firm was not in breach of obligations under the agreement to perform services and took the following into consideration:
"[...] What is decisive is whether the lawyer's actions were justified 'ex tunc' (i.e. looked at the circumstances at the time). If a procedure has an outcome that is undesirable for the client, this should not (in hindsight) simply be regarded as the inevitable consequence of the lawyer's actions ("hindsight bias"). If a lawyer forgets to file a timely appeal then that is a clear professional misconduct. However, if the issue is the substance of the lawyer's performance, then suboptimal acting is insufficient to assume liability. Clear substandard performance is required. Thus, the standard to be applied is not that of the most astute lawyer who, taking all scenarios into account, provides the best conceivable performance. With respect to the obligation to state the facts, a (former) client will have to present concrete facts and/or circumstances that prove that the lawyer did not act properly. The client's mere assertion that the litigation approach was not good is insufficient to assume professional misconduct." (English translation)
In other words, if legal proceedings have an undesirable outcome for the client, this does not automatically lead to a lawyer's liability. Suboptimal conduct is insufficient for the assumption of liability, which requires clear underperformance. Being the most astute lawyer and delivering the best conceivable performance is not what "the standard” expects of a lawyer.
The engagement letter
The extent of a lawyer's duty of care depends on the assignment given. Based on the DCC, it is not mandatory to prepare a written engagement letter. An agreement to perform services can be established by acceptance of the offer, which may also be verbal. Dutch disciplinary law, however, does require lawyers to prepare a written engagement letter. Before accepting an assignment, the lawyer must ensure that clear agreements are made about, for example, the following:
- the scope of the assignment;
- the persons involved;
- the fee to be paid;
- the charging of expenses; and
- the method of billing.
A violation of disciplinary law can lead to disciplinary action and in certain circumstances civil liability. This matter will be discussed in more detail below.
The influence of disciplinary law on civil liability
As mentioned before, in addition to civil law standards, regulations instituted by the profession streamline the actions of Dutch lawyers as they are subject to the Lawyers Act and its regulations, decrees and guidelines.
Disciplinary culpability, however, does not automatically entail civil liability. The judgment of the disciplinary tribunal on the actions of a professional in civil proceedings may play a role in determining whether the professional is liable, but the conclusion that the professional is liable under civil law for breach of a standard of care cannot simply be drawn from the disciplinary court's opinion that the professional acted contrary to the standards and rules applicable to the professional group in question. This is because different standards are applied in disciplinary proceedings than when civil liability is assessed (ECLI:NL:HR:2003:AF0690; ECLI:NL:HR:2006:AW2080). If the civil court deviates from the judgment of the disciplinary court, the judgment must be motivated in such a way that it is also sufficiently comprehensible in light of the assessment by the disciplinary court (ECLI:NL:HR:2017:2452).
Thus far, this article has dealt only with a lawyer’s duty of care towards the client. To conclude, this article will explore the lawyer’s duty of care towards third parties.
The duty of care towards third parties and/or opposing parties
Above all, a lawyer has a duty of care toward the client. Under Dutch law, however, a lawyer should not completely lose sight of the interests of third parties and opposite parties. ''Third parties'' are not parties to the agreement to perform services.
If the agreement to perform services between a lawyer and the client also served the interests of a third party and that party suffered damages as a result, the incorrect advice towards the client may not only constitute a breach of contract, but also a tort against that third party. In this case, the legitimate interests of such third party must also be accounted for. This, however, should be handled with caution, especially since a lawyer is biased. The interests of third parties will usually not qualify as justified and harming them will not be deemed unacceptable. In a case where a third party was harmed in a transaction, the court ruled that the lawyer had not acted unlawfully towards this third party by not informing him. The duty of confidentiality between the lawyer and his client took precedence (ECLI:NL:RBDOR:2005:AU7291, paragraph 34 – 37). Yet, this bias is not infinite. When considering the interests of third parties, the lawyer must consider whether those interests are cognisable, foreseeable, and justifiable. If so, violation of these interests will be unacceptable.
A special group of ''third parties'' are the opposing parties. A duty of care is not readily assumed in this context, which makes sense given that these interests are often precisely opposed to the interest of the lawyer’s client. Therefore, a high standard is applied when determining if these interests must be taken into account, and whether the procedural acts in question should have been omitted in connection with the interests of the opposing party concerned, in view of the fact they were evidently unfounded (ECLI:NL:GHSHE:2017:419).
When a lawyer foresees that the interests of third parties will be unjustly harmed by his or her actions, the lawyer must make adjustments (e.g. discouraging or warning the client or, in an extreme case, withdrawing) (ECLI:NL:HR:2020:61, paragraph 3.1.3). A lawyer, however, is not obliged to try to stop the client at all costs. Hence, given a lawyer’s duty of confidentiality, he or she is not obliged to notify the other party.
Conclusion
This article focused on the lawyer’s duty of care to the client and third parties. Whether a lawyer breaches this duty of care significantly depends on the circumstances of a particular case. This creates uncertainty, not only for the claimant but also for the lawyer and their professional liability insurers. It is important to consider whether and, if so, to what extent these liability risks can be mitigated in advance. In the next article of his four-part series, this topic will be explored in detail.
For more information on professional liability for Dutch lawyers, contact your CMS client partner or the CMS experts who wrote this article.