Professional liability and disciplinary law

Professional liability and disciplinary law: the double-edged threat for professionals

A professional who makes a mistake or who is sued by a client or third party typically faces two fronts simultaneously: the civil law front (claim for damages due to professional liability) and the disciplinary front (complaint to the competent disciplinary board). Both procedures have their own standards, rules of evidence, and consequences. A disciplinary decision can constitute civil law evidence, and conversely, a civil law finding can have consequences for the disciplinary position. Acting promptly and with due care is essential in both processes.

Who do we work for?

We assist a wide range of professionals. Our clients include lawyers, notaries, accountants, tax advisors, certified public accountants, real estate agents and appraisers, medical specialists and physicians, paramedics, financial advisors and insurance intermediaries, legal service providers, architects and construction consultants, and interim managers and consultants. We advise both independent practitioners and professionals employed by a firm or company, and also act on behalf of clients who wish to file a claim or complaint against a professional.

Civil professional liability

Professional liability is essentially a form of contractual or extra-contractual liability arising from a breach of the contract for services (Article 7:401 of the Dutch Civil Code) or from a tortious act towards a third party (Article 6:162 of the Dutch Civil Code). The standard is that of the reasonably competent and reasonably acting professional, as defined, inter alia, in the Klein/Reinders Folmer judgment (Supreme Court 1981) for lawyers, with specific elaborations for notaries, accountants, and medical specialists, among others. The assessment requires a thorough analysis of evidence, record-keeping, communication with the client, and the relevant professional standards.

Disciplinary law

Disciplinary law is a separate legal process through which the professional group itself safeguards the quality and integrity of professional practice. For lawyers, disciplinary law is conducted via the Council of Discipline and the highest instance, the Court of Discipline (Article 46 et seq. of the Lawyers Act). For notaries, it is conducted via the Chambers for Notarial Practice and the Amsterdam Court of Appeal (Notarial Profession Act). For accountants, it is conducted via the Accountants Chamber and the Appeals Tribunal for the Business Sector (Accountants Disciplinary Jurisdiction Act). For medical professionals, it is conducted via the Regional Disciplinary Boards and the Central Disciplinary Board (Healthcare Professions Act). Sanctions range from a warning and reprimand to suspension, removal from office, or striking off from the professional register.

Concurrence of civil and disciplinary law

Civil and disciplinary proceedings often run parallel. A disciplinary complaint declared well-founded can constitute evidence in civil proceedings and can even, to a certain extent, be conclusive evidence (depending on the specific ruling and the civil assessment). Conversely, a civil finding of breach of contract or unlawful conduct gives rise to disciplinary prosecution. This interconnectedness makes a coordinated strategy essential. An initial response to a disciplinary complaint can have civil consequences years later, and vice versa.

Professional Liability Insurance (BAVAM)

Virtually every professional is covered against professional liability through a BAVAM policy or similar insurance. The policy typically covers damages up to an insured amount, after deduction of a deductible. It is important that the claim is reported in a timely manner within the policy conditions, often on pain of forfeiture of coverage. The insurer can influence the defense strategy, the choice of lawyer, and the willingness to settle. Conflicts regarding policy coverage, exclusion clauses, or the choice of legal assistance occur regularly.

Our working method

In the event of a professional liability claim or disciplinary complaint, an initial response is rarely the right one. We first assess the claim, the relevant professional standards, the case file, communication with the client, and the insurer's position. Subsequently, we determine whether the most effective course of action lies in a substantive defense, settlement negotiations, mediation, or litigation. At every step, we think ahead: what happens if the disciplinary complaint is deemed well-founded, what are the civil law consequences, how is the damage limited, and how is your reputation protected?

Why MKBjuristen.nl?

MKBjuristen.nl has years of experience in professional liability and disciplinary law for various professional groups. We understand the interplay between civil and disciplinary law, the workings of BAVAM policies, and the psychological procedural dynamics of disciplinary boards. Specialist advice starting from €155 per hour excluding VAT, with clear agreements in advance regarding scope and budget.

Duty to complain and statute of limitations: pay attention to the time limits

Anyone wishing to hold a professional liable must take into account two independent time-limit pitfalls. The duty to complain under Article 6:89 of the Dutch Civil Code stipulates that the creditor must protest within a reasonable time after discovering the defect or after reasonably ought to have discovered it; if he fails to do so, the right to invoke the shortcoming lapses, even if the claim itself has not yet become time-barred. What constitutes “reasonable time” depends on all the circumstances: in case law, periods ranging from a few months to well over three years have been accepted as timely. In addition, the statute of limitations under Article 3:310 of the Dutch Civil Code applies: a claim for damages generally becomes time-barred five years after the injured party became aware of the damage and the liable person, with an absolute period of twenty years following the damage-causing event. For both the professional being sued and the party considering a claim, a timely and careful analysis of these time limits is of great importance. Whether you are assisting an international corporation or the baker on the corner: our lawyers and in-house counsel assess the timeframes before an irreversible step is taken.

Directors' liability within corporate law: no duty to complain

Within corporate law, professional liability often touches upon the liability of the director themselves. If a director is sued by their own company for improper performance of duties, the standard of Article 2:9 of the Dutch Civil Code applies: the director is only internally liable if a serious reproach can be made against them. In its judgment of 26 April 2024 (ECLI:NL:HR:2024:681), the Supreme Court ruled that a director cannot defend themselves against such an internal claim by invoking the duty to complain under Article 6:89 of the Dutch Civil Code. The duties of a director are too comprehensive for this and cannot be reduced to a single concrete, clearly defined performance, and it would be unreasonable to require the company to complain in a timely manner about mismanagement that it was not yet aware of. For directors, supervisory board members, and shareholders facing a liability claim, this means that the defense must focus on the substance of the serious reproach and on the burden of proof, not on formal defenses that do not apply here.

What a disciplinary ruling means for your civil case

A disciplinary complaint declared well-founded does not automatically lead to civil liability: disciplinary law and civil law apply their own standards and rules of evidence. While the Supreme Court has ruled that the civil court may attach significance to a disciplinary judgment, it must provide a reasoned explanation for deviating from it when reaching a different conclusion (see, inter alia, HR 3 April 2015, ECLI:NL:HR:2015:831). Consequently, disciplinary proceedings are often used as a stepping stone to a claim for damages, and conversely, a civil ruling can fuel a disciplinary complaint. Anyone receiving a disciplinary complaint would therefore be wise to consider the civil law consequences from the very first response. Our lawyers and in-house counsel coordinate both processes, ensuring that a defense in one procedure does not undermine your position in the other.