Court in Den Bosch (The Netherlands) rejected in June 2016 a claim from a group of small business owners who lost more than just their premiums. In a case where Rabobank offered these businesses interest swap insurances to protect themselves from an increase in interest, the judge found that participants in the class action had too divers cases to be treated equally in one case.
Since 2005, Rabobank sold around 8.000 interest swap contracts to small business owners. Due to the sharp fall of interest rates, the value of these swaps became negative. This negative value had to be compensated by the client as owner of the swap contract.
As a result of commotion under clients of Rabobank with such an interest swap contract, the bank showed willingness to assist in finding individual solutions for these customers. A source familiar with the situation said ‘When Rabobank customers experience tangible damage caused by the bank, compensation should be paid’.
The verdict clearly shows that class actions are not always advantageous for the participants. Specifically when the main plaintiff is inexperienced and has no further plan of action. A class action can therefore be expensive in fees and disappointing in result.
When you are duped in a bank failure or investment fraud and you are not the only victim, bear in mind that only cases that have similarities can be combined in a class action. Don’t make the mistake many do by joining a claim organisation that sequentially sweep all victims together. Chances of success are limited. Better is to create a no-brainer for a judge in court by preparing a strong case with exact similarities for the victims. This often means a set up of different class actions for different homogeneous groups to maximize the expectation of a positive outcome.