DLA Piper acts for ING Bank in litigation regarding residual debt issues

DLA Piper has successfully acted for ING Bank in litigation proceedings initiated by, among others, Stichting Restschuld Eerlijk Delen — the foundation responsible for splitting the difference of residual debt.

The foundation commenced class action litigation against ING Bank in relation to residual debt issues. Affiliates of the foundation have entered into credit agreements secured by mortgages with ING Bank, among others.

The foundation argued that, because of the declining real-estate market since the economic crisis, the value of numerous mortgaged houses is less than the debt secured by such mortgaged houses. If the house is sold, this results in residual debt. The foundation opined that ING Bank is liable for these residual debts.

In an interim judgment made on 26 February 2014, the district court in Amsterdam ruled in ING Bank’s favour and decided that the foundation is prohibited from bringing forward a class action claim.

ING Bank rejected liability, arguing it was not the cause of the decline in real-estate prices. In order to avoid a class action lawsuit, ING Bank requested a ruling that said the foundation had no cause of action, before bringing forward its material defences against the claim.

According to its articles of association, the foundation’s objective is to ‘resolve macro-economic issues’. Such a broadly defined objective is no valid basis for a class action lawsuit under Dutch law, according to ING Bank.

The team from DLA Piper advising on the matter consisted of Paul Hopman, Léon Korsten, Judith Atema and Ernst Gras.