Prospectus Liability and Causation

When establishing causation for claims involving prospectus liability, it is the factual basis of the claim and the corresponding line of argumentation that determines the perspective that should be taken as a starting point. There are basically two factual bases that can be distinguished. For the first factual basis of causation, the reliance of the investor on the prospectus is irrelevant. For the second factual basis, reliance is, however, relevant. In its World Online decision, the Dutch Supreme Court adopted a presumption of reliance for both factual bases of causation. This presumption of reliance is based on art 11(2) of the Prospectus Regulation. In my opinion, this provision does not provide a convincing legal basis for the adoption of such a presumption. At least for retail investors, art 11a(1) of the UCP Directive (read in conjunction with arts 11(1) and 13 of the UCP Directive) provides a substantially more convincing legal basis.