Reformatio in peius: can an appeal leave you worse off?

Can you end up worse off by going on appeal than you were at first instance? This question came sharply into focus in the dispute between De Vrij and SEG; see the background to the case for more details.

Protection of parties to proceedings

The principle of reformatio in peius means that a party who lodges an appeal must not come off worse than if they had not lodged an appeal. This principle is not enshrined in statute, but is firmly established in Dutch legal practice and case law. It is intended to safeguard confidence in procedural law: a party must feel safe in going on appeal without the risk of ‘punishment’ through a worse outcome.

In civil cases, however, this principle does not apply in absolute terms. An exception may arise if the opposing party also lodges a (cross-)appeal, or if the court has the power to take a more far-reaching decision of its own motion. This creates tension between procedural certainty and substantive justice.

SEG’s objection: the Court of Appeal went further than the first instance court

SEG argued in cassation that the Court of Appeal had breached the prohibition on reformatio in peius. The District Court had awarded damages to De Vrij at first instance of €4.75 million, whilst the Court of Appeal awarded a more generous amount on appeal: a total of €5.2 million for lost opportunity for better terms of employment and additional heads of damage.

According to SEG, De Vrij had not himself challenged the District Court’s judgment on this point. The Court of Appeal could not therefore award more than the District Court had done. By making a higher award, SEG contended, the Court of Appeal had expanded the legal dispute and thereby breached the prohibition on reformatio in peius.

Opinion of the Advocate General: no breach

The Advocate General advises rejecting SEG’s position. Whilst De Vrij suggested on appeal that he could accept the District Court’s assessment of damages, he also argued that his original claims should still be granted in full. That dual formulation leaves room for interpretation. Yet the interpretation of procedural documents and arguments is reserved to the trial court. The Court of Appeal was therefore entitled to conclude that De Vrij had sufficiently contested the assessment of damages at first instance.

Moreover, the Court of Appeal remained within the legal basis of the dispute: the breach of the duty to disclose by SEG. The higher award of damages flowed from a different assessment of the extent of that damage, not from a different legal assessment.

Put simply: De Vrij had (conditionally) lodged an appeal against the original judgment, and the Court of Appeal remained within the bounds of the legal dispute. There is therefore no question of reformatio in peius.

Reflection: reformatio in peius in (sports law) proceedings

In civil proceedings, unlike in criminal cases, there is greater scope for a substantive assessment of the legal dispute, particularly when parties lodge cross-appeals. Precisely for this reason, it is important on appeal to remain alert to the precise demarcation of the dispute. Only then can parties prevent an apparently achieved advantage at first instance from being eroded in the appeal proceedings.

Where conflicts of interest are central, attention should be paid not only to the substantive side. The procedural dimension matters equally. Even when the substantive arguments are convincing, procedural missteps or an incorrect assessment of the scope of the appeal can still lead to an unfavourable outcome, and possibly one that is ‘in peius’.

In the next part we will discuss the liability of the agent: how far does his duty of care extend, and under what conditions can he be held liable for damage suffered?