Filing an Appeal: Beware of the Pitfall of Reformatio in Peius

By mr. Vincent Besters

What is reformatio in peius?

Suppose: you are a business owner and you have lost a contractual dispute before the court of first instance. The judge has rejected your damages claim of €150,000 and you have moreover been ordered to pay the legal costs. Disappointed but combative, you are considering filing an appeal. You think: things can only get better from here. But is that truly the case?

In Dutch civil procedural law, the starting point is the principle of reformatio in peius — that is: the worsening of the appellant's position as a result of their own appeal. This principle describes the situation in which a party that lodges an appeal itself ends up in a less favourable position than it was in following the judgment at first instance. It is a phenomenon that is frequently underestimated in practice, sometimes with far-reaching financial consequences for a business.

When can things turn out worse?

The risk of reformatio in peius arises in particular when the opposing party makes use of the possibility of filing a cross-appeal (incidenteel appel). In Dutch civil procedure, the respondent — the party that is challenged on appeal — has the right, in response to the principal appeal, to also raise grounds of appeal against parts of the judgment that it finds unfavourable. This cross-appeal may relate to issues that the appellant had deliberately or inadvertently left undisturbed.

In concrete terms, this means: as a business owner, you file an appeal because your damages claim was rejected. Your opposing party — the contractual counterparty against whom you are litigating — then files a cross-appeal against a consideration of the court of first instance that was somewhat unfavourable to it, for instance regarding the basis for liability or a subsidiary claim. The court of appeal is then competent to rule on the dispute in its entirety, including those aspects. The result may be that not only does your damages claim fail once again, but you also find yourself facing a higher order for legal costs on appeal, a more restricted appellate judgment on other points, or even an entirely revised outcome that leaves you worse off.

Is reformatio in peius absolutely prohibited?

This is where matters become somewhat complicated. In civil procedural law, the principle applies that the appellate court does not in principle go beyond the scope of the legal dispute: it decides only on what the parties put before it. This implies that, in theory, an appellant cannot be made worse off by their own appeal, unless the opposing party files a cross-appeal or raises certain defences that lead the court to a different assessment.

The principle is therefore not absolute. Recent case law confirms this. In the judgment of the Supreme Court of 20 June 2025 (ECLI:NL:HR:2025:1388), the Supreme Court once again confirmed that the boundaries of the legal dispute on appeal are determined by the grounds of appeal and the subsequent defences raised in response, but that the appellate court enjoys considerable discretion in its assessment within those boundaries. This judgment underscores that a party that files an appeal is never entirely shielded from an outcome that is, on balance, less favourable, particularly when the opposing party actively makes use of its procedural options.

What does this mean for you as a business owner?

Before deciding to file an appeal, a thorough strategic analysis is to be preferred over a reflexive response to a disappointing judgment. Critically assess which parts of the judgment the opposing party might also seek to challenge by way of a cross-appeal. Did the court devote a consideration to your own shortcoming that the opposing party may find favourable? Are there ancillary orders or cost awards that the opposing party would have wished to be higher? Those questions are not hypothetical but are of immediate practical relevance.

It is furthermore prudent to make a realistic assessment of the financial exposure of appeal proceedings. Legal fees, court registry fees and the risk of a higher costs order on appeal can mount up considerably in the event of an unsuccessful outcome. Add to this the risk of reformatio in peius by way of a cross-appeal, and the picture becomes clear: an appeal is not a risk-free second chance, but a fully-fledged legal procedure with its own risk profile.

You are therefore well advised to seek proper legal counsel regarding the realistic prospects and the dangers before taking the step of going to the court of appeal.

Do you have questions about agency or contractual liability?

Mr. Vincent Besters advises entrepreneurs on contract law, agency arrangements and liability issues. Feel free to get in touch for an initial consultation.

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