In most cases, the disadvantages associated with losing the proceedings will have to be borne by the party to the proceedings. However, it is possible for a party to the proceedings that has been ordered to compensate damage to have a third party partially or completely compensate this damage. This claim could be brought after the proceedings are lost.
Dutch law also offers the possibility to indemnify a third party in a pending lawsuit. These indemnification proceedings are separate proceedings that run in parallel with a main proceedings. A party invokes indemnification in the event of an incidental claim after a summons has been issued.
In these subsequent proceedings, a conditional claim for damages can then be brought against the third party, in the event that the decision on the main claim would be disadvantageous.
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Different forms of indemnity
Depending on the ground for the claim against the third party, a distinction is made between business indemnity, personal or simple indemnity and recourse.
Business indemnity is that the person from whom the defendant obtained the right contested by the plaintiff must guarantee its existence. He must help the defendant defend that right and, if the proceedings are lost, compensate him. An example is that a seller has the duty to guarantee that the buyer is not disturbed in the free disposal of the sold item by third-party claims. If the buyer is sued for eviction or surrender by a third party who claims to be the owner, the buyer will be able to summon the seller to indemnify.
Personal or simple indemnification is when the third party, in order to protect the rights of the accused defendant, has to guarantee a certain fact. Examples are guaranteeing the power of attorney and the capacity of heir.
In other cases, in which the defendant has a right of recourse against a third party because of the loss of the lawsuit, this is referred to as recourse. Sometimes, in addition to those who are called to pay, there are others who are obliged to perform. For example, by paying the debt, the surety has recourse against the main debtor, a joint and several debtor has recourse against the co-debtors and the jointly and severally liable recourse against the co-debtors.
Requirements for adding a third party to the proceedings (impleader)
The motion to implead, i.e. to add a third party to the proceedings, will always cause some delay in the adjudication of the main action. While the plaintiff is usually interested in a speedy hearing of the case, the defendant will generally be the one who wishes to serve the summons in indemnity. Their conflicting interests must be weighed. A number of requirements therefore apply to the admissibility of the motion to implead:
- It is necessary and sufficient for the consent that the loss of the principal object be a condition for allowing the claim of the secured party on the guarantee
- The claim to add a third party to the proceedings may be dismissed if it can be expected to cause an unreasonable delay in the handling of the main case
- The claim to add a third party to the proceedings will not be allowed if the court does not have absolute jurisdiction to hear the matter between the guarantee and the guaranteed
- It is not possible to add a third party to the proceedings for the first time on appeal
Do you have a question about a motion to implead, i.e. to add a third party to the proceedings?
Do you have any questions about whether you can summon a third party to indemnify in the ongoing proceedings, or have you been summoned to indemnify yourself? VIOTTA’s lawyers are pleased to help. Contact us today.
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VIOTTA is a law firm based in Amsterdam, specialising in providing advice in the areas of corporate law, mergers and acquisitions, contract law and corporate & commercial dispute resolution. We advise in transactional matters and litigate in commercial disputes. VIOTTA provides legal advice to its clients on Dutch corporate law matters, such as corporate governance, board structures, directors’ duties and liabilities, joint ventures and other collaborations. VIOTTA advises purchasers, sellers, management and other stakeholders in domestic and cross-border mergers and acquisitions (M&A).