Funding the Dutch Disputes Market

Wouter de Jong recently joined Deminor Litigation Funding as Senior Legal Counsel in its newly opened Utrecht office, where he will focus on commercial litigation funding in the Netherlands, particularly one-to-one B2B disputes, patent litigation and other IP matters. He brings more than 14 years of disputes experience, including eight years as a patent litigator in private practice and six years as Head of Litigation at a major international company. We spoke with Wouter about his move into litigation funding, the opportunity Deminor sees in the Dutch market, and the growing role of funding in complex commercial and IP disputes.

1. You’ve spent years on both sides of disputes, first in private practice and then in-house. What made you want to move into litigation funding, and why Deminor?

I have always been drawn to litigation. For me, it is the litmus test of anything legal. You only really know whether the contract you drafted is effective when it is tested in a dispute and you need to rely on it in court.

I really enjoyed my time in private practice, and I also valued the more strategic perspective that comes from managing litigation in-house. As a funder, I think you need both perspectives: the ability to assess the legal merits of a case, and the commercial judgement to support a company through the litigation process.

When I first spoke with Deminor, I was impressed by the quality of the cases, as well as the entrepreneurial way the team looks at new opportunities. Deminor also has a strong culture, with people who set high standards for themselves and aim to be more than a funder by acting as a true partner in litigation.

Overall, Deminor is clearly one of the leading names in the market, and I also found it impressive that the firm has achieved B Corp certification.

2. Does having that in-house experience change the way you look at funding compared with someone coming straight from private practice?

For me, those different perspectives definitely changed how I look at litigation. In-house, I witnessed first-hand the balancing act that the in-house team and general counsel must go through when deciding whether to pursue a claim.

On the one hand, the company may have been wronged and may have a significant claim with substantial monetary value.

On the other hand, claims can place quite a burden on the in-house team and require substantial investment. Receiving significant invoices from law firms month after month can put real strain on the legal budget, particularly when combined with uncertainty around timing and outcome. That can put the general counsel in a difficult position vis-à-vis management. In addition, more significant litigation can have an impact on a company’s results and share price.

So yes, having seen parts of that and managed litigation with those considerations in mind, I have a clear idea of when funding may not move the dial very much for a company, and when it can be a very helpful way for a company to have its cake and eat it too.

3. Part of your role is to grow awareness of funding for one-to-one B2B disputes in the Netherlands. How familiar are Dutch companies with litigation funding today?

I suppose that differs from company to company. Litigation funding is certainly not as unfamiliar as it was maybe 15 years ago, but it is also not yet part and parcel of every in-house lawyer’s world.

I think there is still a lot to be won there. It is not that every in-house lawyer should have every claim funded all the time, but there is an optimisation to be achieved where companies know that funding is an option and know how to find us when it may be useful.

For one-to-one B2B disputes in particular, that awareness can be important. There may be claims that are legally and commercially strong, but which are not pursued because of cost, risk or internal resource constraints. In those situations, we are more than happy to take a look.

4. When you speak to companies about funding, what are the questions or concerns that come up most often?

There is no single concern that comes up every time, but one point I have noticed is that in-house counsel are not always fully aware of the non-recourse, “no cure, no pay” nature of litigation funding. If the case is unsuccessful, the client does not repay the funding. The downside risk sits with us.

Another important point is that Deminor can support legal teams beyond simply providing capital. In some cases, in-house teams may not have the capacity or specialist litigation experience needed to pursue a complex claim. Deminor can help bridge that gap by acting as a “funder plus”, supporting the legal team with both funding and strategic litigation experience.

That is one of the parts of the business I particularly enjoy.

5. Deminor has just opened a permanent office in Utrecht. What is it about the Netherlands that makes it an interesting market for this kind of work?

The Netherlands has a lot going for it. It is the 18th largest economy in the world, so there is always a significant amount of commercial activity and, inevitably, commercial disputes.

It also has a strong legal system and a bench made up of genuinely impressive people. Dutch proceedings are generally efficient, which makes the Netherlands a strong forum for companies that want their problems resolved.

For litigation funding, that combination is important: a sizeable economy, a reliable legal framework, a strong bench and a court system that can provide meaningful outcomes within a reasonable timeframe.

6. You’re also taking a leading role in Deminor’s IP and patent cases globally. What are you seeing in that space right now, and why is funding becoming more relevant?

It is an area I spent a lot of time on in private practice, and one I am pleased to be getting back into.

The most obvious game changer has been the opening of the Unified Patent Court. It enables patentees to resolve disputes across a much larger territory, and therefore a much larger market, in a single forum.

At the same time, we are also seeing more local enquiries for patent funding than many people might expect. Taken together, this shows that funding is becoming increasingly relevant for IP rights holders. The more options they have to enforce their rights, the better placed they are to monetise their innovations.

7. Are IP cases fundamentally different for a funder to assess from a more traditional commercial dispute? What makes them harder, or more interesting?

The underwriting process can be more time-consuming in IP than in some other areas of litigation.

For example, to form a meaningful view on a patent infringement case, you need to understand the technology behind the patent, how the patent contributes to that technology, and how it protects that contribution. That can take more time than assessing a more traditional commercial dispute.

At the same time, that is also what makes the work interesting. IP cases often involve learning about a wide range of technologies, products and markets, which adds an additional layer to the legal and commercial assessment.