Abstract
ABSTRACT
This paper compares the business judgment rule as developed in the US (specifically the state of Delaware) and adapted by Germany, with the Netherlands’ regime for directors’ liability. In the Netherlands, judicial review of directors is considered marginal, because courts will only intervene where it is sufficiently clear by objective measures that a director has used their administrative freedom in such a way that it does not deserve to be respected. The burden of proof, which is considered to be high, rests on the plaintiff, pursuant to general procedural law. Regarding the US business judgment rule, the threshold of proof is lower. The rule is both a ‘shield’ for directors (since plaintiffs must initially rebut a presumption in the director’s favor) and a ‘sword’ for plaintiffs (since the burden of proof then moves to the director, who must show the decision made was fair). This paper proposes that the Netherlands make an exception to the general rule that the burden of proof rests upon the plaintiff suing a large company, considering the special responsibility that larger companies, particularly in the finance sector, should have towards society as a whole. This is supported by an analysis of Dutch directors’ internal liability cases, which shows that, had the Delaware business judgment rule been applied, it is the threshold of proof factor that would have prompted a different outcome.