1 Legal framework
1.1 What system of jurisprudence applies in your jurisdiction? What implications does this have for litigation?
Switzerland is a civil law country that follows a civil law legal system. Therefore, the primary source of law is enacted and written law outlining general abstract rules that apply to individual concrete cases.
In contrast to common law states, Switzerland thus applies case law as an auxiliary tool in order to reaffirm the application of the codes and their statutory provisions.
Swiss legal codes can be separated into substantive legal codes and procedural legal codes. Therefore, even procedural matters must be looked up in codes; whereas particular questions on a case-by-case basis may be answered by additionally consulting case law.
1.2 What rules govern litigation in your jurisdiction?
Switzerland is a federal republic of 26 cantons and half-cantons (federal states). Up until 1 January 2011, each canton in Switzerland had its own procedural rules, meaning that 26 different procedural codes applied throughout Switzerland.
However, on 1 January 2011 the Swiss Code of Civil Procedure (SCCP) came into force, providing for a unified federal code for state court litigation at first and second instance in Switzerland.
Nevertheless, as will be shown in this Q&A, some local details at the cantonal level remain. Pursuant to Article 3 of the SCCP, the organisation of the courts and the conciliation authorities falls within the competence of the cantons. Moreover, pursuant to Article 4 of the SCCP, cantonal law still governs the material and functional jurisdiction of the courts, unless the SCCP provides otherwise.
Other Swiss laws also contain rules that impact on litigation, such as:
- the Federal Court Act;
- the Civil Code;
- the Code of Obligations;
- the Debt Enforcement and Bankruptcy Act;
- the Private International Law Act; and
- other international treaties concerning civil procedure.
1.3 Do any special regimes apply to specific claims?
The SCCP distinguishes between two types of procedural regimes:
- procedures following the principles of non ultra petita (Article 58(1) of the SCCP); and
- procedures following an ex officio assessment of the court (Article 58(2) of the SCCP).
In the former case, the court is bound by the prayers for reliefs submitted by the parties and may not award a party anything more or different from what it has requested. Also, the court may not award anything less than what the opposing party has acknowledged. As a result, the parties must present the court with the facts in support of their case and submit the related evidence (principles of production of evidence as reflected in Article 55(1) of the SCCP).
Very rarely do the courts undertake an ex officio investigation in order to establish the facts and collect the evidence (ex officio investigation as reflected in Article 55(2) of the SCCP). This mostly applies to procedures involving parties in need of legal protection, such as:
- disputes under the Equality Act;
- certain disputes concerning the tenancy and lease of residential or business property (eg, in cases of claims relating to the protection against abusive rent or termination); and
- employment disputes with a value of up to CHF 30,000.
In case of an ex officio assessment, the court is not bound by the parties' requests (eg, in child-related matters). Consequently, the court will conduct an ex officio investigation to establish the facts, collect the evidence and ultimately decide the matter.
1.4 Which bilateral and multilateral instruments have relevance to litigation in your jurisdiction?
In addition to the application of various treaties relating to substantive law – such as the United Nations Convention on Contracts for the International Sale of Goods, to which Switzerland is a signatory – the Lugano Convention (ie, the Brussels Convention for the EU member states, which later resulted in the Brussels I Regulation) plays an important role with regard to jurisdiction and the recognition and enforcement of judgments within the European Union (see question 10.2).
Moreover, in the context of mutual legal assistance in civil matters, various Hague Conventions apply, such as:
- the Hague Convention relating to Civil Procedure of 1 March 1954;
- the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters; and
- the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters.
However, these conventions may be replaced or supplemented by bilateral treaties between states.
2 Judicial structure
2.1 What courts exist in your jurisdiction and how are they structured?
As outlined in question 1.2, despite the unification of procedural rules for Switzerland, the organisation of the courts is still governed by cantonal law.
However, following the principle of double instance, federal law requires cantons to provide for a two-instance judiciary system. Hence, throughout Switzerland the court system provides for:
- a first-instance court at the district level (except for commercial courts – see question 2.2);
- a second-instance court of appeal at the cantonal level; and
- the Swiss Federal Tribunal as the third and last court of appeal.
In very limited cases (eg, commercial disputes between corporate entities), a sole cantonal instance – the commercial court – has jurisdiction, with the possibility of an appeal to the Swiss Federal Tribunal.
In addition, courts may be structured into single and collegial courts, depending on the subject matter, the applicable procedure or the amount in dispute.
As a general rule, prior to any court proceedings, the parties must undergo a conciliation procedure.
2.2 What specialist courts or tribunals exist in your jurisdiction?
As a matter of federal law, the cantons must designate a specialist court for disputes relating to certain specialised areas of law, such as:
- disputes over IP rights;
- disputes relating to competition law; or
- claims relating to collective investment schemes.
Moreover, according to Article 6 of the SCCP, the cantons may designate a commercial court as a specialised court that has exclusive jurisdiction in commercial matters. A dispute is considered ‘commercial' if:
- the business activity of at least one party is involved;
- the parties are registered in the Swiss Commercial Registry or in an equivalent foreign registry; and
- the value in dispute is more than CHF 30,000.
If only the defendant is registered in a commercial registry, the plaintiff can opt either to file a claim with the commercial court – provided that the other conditions are met – or to file it with an ordinary district court.
Regardless of the amount in dispute, commercial courts often have jurisdiction on the matters mentioned above, such as disputes relating to IP rights and competition law.
As a specialised court, the commercial court consists of both ordinary judges and commercial judges, who are appointed based on their expertise in the sectors relevant to the subject matter of the case. However, thus far, only four German-speaking cantons have established a commercial court: Zurich, St Gallen, Berne and Aargau. Where a canton has established a commercial court, its jurisdiction is mandatory as long as the requirements are met.
Many cantons have also established specialised courts for landlord/tenant and employment matters. These courts are constituted by and consist of an equal number of representatives from the landlord's and tenant's side and the employer's and employee's side respectively.
3.1 What formalities apply before litigation can be commenced in your jurisdiction?
Prior to any court proceedings, the parties must undergo a conciliation procedure, in which the conciliation authority will informally attempt to reconcile the parties through a non-public, confidential procedure.
If no agreement can be reached, the conciliation authority will grant authorisation to proceed, which is a procedural requirement to commence litigation in court.
However, there are some exceptions: for example, the obligation to pursue a conciliation procedure does not apply to:
- summary proceedings;
- proceedings on civil status, such as divorce proceedings; or
- specific actions arising from the Debt Enforcement and Bankruptcy Act.
Furthermore, a conciliation procedure will not be held where a commercial court has exclusive jurisdiction.
3.2 Do any pre-action protocols or similar rules apply prior to the commencement of litigation? What are the consequences of non-compliance?
No pre-action protocols apply in Switzerland. However, where pre-stage conciliation proceedings are mandatory, the plaintiff must comply and submit the authorisation from the conciliation authority to the court in order to proceed with litigation. In case of non-compliance, the court will not admit the action.
However, where the amount in dispute is more than CHF 100,000, the parties can jointly waive the requirement for conciliation proceedings. Moreover, with the defendant's consent, the plaintiff can file the action directly with the second-instance court of appeal at the cantonal level.
Furthermore, a plaintiff can unilaterally waive this requirement of pre-stage conciliation proceedings if the defendant is domiciled outside Switzerland or if its address is unknown.
3.3 What other factors should a party consider before commencing litigation in your jurisdiction?
This depends on the facts of each individual case. Nevertheless, cost-related issues are always worth considering before commencing litigation, as in Switzerland, the (adapted) English rule applies and the costs are generally charged to the unsuccessful party (see question 11.1). Moreover, if a claim is not admitted by the court or if it is withdrawn, the plaintiff is deemed to be the unsuccessful party.
In addition, following the burden of proof and the principle of substantiation, which requires the parties to present the court with the facts in support of their case and submit the related evidence (see question 1.3), the plaintiff should evaluate whether it has sufficient proof to duly substantiate its claim. According to the general rules of evidence reflected in Article 8 of the Swiss Civil Code, each party bears the burden of proving the existence of an alleged fact from which the party derives rights. If the party's claim fails due to lack of evidence, costs will be incurred by the unsuccessful party.
Furthermore, once the court in charge has served the statement of claim on the defendant, the plaintiff's claim is subject to a res judicata effect if it withdraws the claim before the competent court, provided that the defendant does not agree with the withdrawal.
4 Commencing litigation
4.1 What rules on limitations periods apply in your jurisdiction?
Limitation periods are part of the substantive law and are thus reflected in the Swiss Code of Obligations. They distinguish contractual claims and non-contractual claims such as torts.
The general statutory limitation for contractual claims is 10 years, unless otherwise provided for by law. In case of recurring obligations – such as claims for rent, claims in connection with services rendered by attorneys or claims in connection with work performed by employees – the general statutory limitation is five years.
In case of unlawful, tortious acts, the limitation period is three years from the date on which the person suffering damage became aware of the damage and of the liable person's identity, but in any event 10 years after the date on which the harmful conduct took place or ceased.
Claims based on unjust enrichment also become time-barred three years after the date on which the injured party becomes aware of its claim, but in any event 10 years after the claim first arose.
In case of death or injury, the limitation period for both tortious acts and acts in violation of a contract is three years from the date on which the person suffering damage became aware of the damage and the liable person's identity, but in any event 20 years after the date on which the harmful conduct took place or ceased.
4.2 What rules on jurisdiction and how this is determined apply in your jurisdiction?
Generally, the Swiss Code of Civil Procedure sets out general jurisdictional rules from which the parties may derogate. Derogation may occur either by way of a jurisdictional agreement or by way of the defendant's voluntary appearance in the procedure on the merits before a seized court without objecting to the court's jurisdiction.
A place of jurisdiction is mandatory only if the law expressly provides for it, in which case it is impossible for the parties to derogate from that rule.
In an international context, the Swiss International Private Law Act or the Lugano Convention applies to define national and international jurisdiction.
4.3 Are class actions permitted in your jurisdiction?
Class actions are not available in Switzerland. In principle, the legal effect of an action applies only to the parties of the proceedings and not beyond. Accordingly, individuals who are not a party to the proceedings may not enforce a decision that is based on similar facts or legal grounds that would also apply to their own case. However, parties may refer to such a case under the title of case law in subsequent proceedings.
Still, under current Swiss procedural law, similar instruments to the class action exist, such as group actions for associations and voluntary joinder.
In the former case, associations are allowed to bring group actions in their own name – for example, in case of a violation of members' personality rights – as long as the articles of association authorise the association to do so.
Two or more persons whose rights and duties result from similar circumstances or legal grounds may jointly appear as plaintiffs or be sued as joint defendants if the individual cases are subject to the same type of procedure and the same court has substantive jurisdiction.
If two or more persons are subject to one legal relationship that calls for a single decision with effect for all of them (eg, simple partnership), they must jointly appear as plaintiffs or be sued as joint defendants (mandatory joinder).
4.4 What are the formal requirements for commencing litigation?
Any represented plaintiff must submit a contemporaneous, duly signed power of attorney issued in order for the case to be tried. Furthermore, any submission should be properly substantiated, comprehensible and duly signed. Additionally, the plaintiff must hand in sufficient copies of the submission itself and its attachments (ie, sufficient copies for the court and one copy for each opposing party).
If the formal requirements are not met, the court will grant a grace period to rectify the formal defects. In the event of default, the court will either not admit the submission or dismiss the case.
4.5 What are the procedural and substantive requirements for commencing litigation?
In addition to the authorisation from the conciliation authority, if so required (see question 3.1), the procedural prerequisites are outlined in a non-exhaustive list in Article 59 of the Swiss Code of Civil Procedure. The court will examine ex officio whether these requirements are met. If the prerequisites are not fulfilled, the court will not admit the case.
The plaintiff must always have a legitimate interest for filing its claim. Furthermore, the court will examine:
- the territorial and substantive jurisdiction;
- the party's capacity to be a party to the proceedings; and
- the party's capacity to be sued before the court.
In addition, the court must verify that the claim:
- is not subject to another pending litigation (lis pendens); and
- does not form part of an enforceable judgment (res judicata).
Finally, where applicable, the advance and security for costs must be fully paid.
Substantive requirements refer to the parties' legal standing to act as plaintiff or defendant, respectively, provided that the respective party is the holder of the right in dispute. If these prerequisites are not fulfilled, the case will not be admitted.
4.6 Are interim remedies available in your jurisdiction? If so, how are they obtained?
Interim remedies are available in Switzerland. To obtain interim remedies, the applicant must provide prima facie evidence that:
- it has a right which has been violated or is at risk of being violated;
- such future violation is likely to cause detriment which cannot easily be remedied; and
- a certain urgency exists.
The requested remedies must also be proportionate to the potential or actual violation.
4.7 Under what circumstances must security for costs be provided?
At the request of the defendant, the plaintiff must provide security for costs for the estimated party compensation if:
- it has no permanent residence or registered seat in Switzerland; or
- it appears to be insolvent.
However, this security deposit is prohibited by the Hague Convention relating to Civil Procedure of 1 March 1954for parties that fall within the scope of this convention.
In addition, the court may demand, at its sole discretion, that the plaintiff make an advance payment up to the amount of the expected court costs (see question 11.1).
If the advance for court costs or the security for the defendant's party compensation is not paid, the court will grant a grace period. In case of unused expiry, the court will not admit the claim.
5.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply to certain types of documents?
During the main trial phase, and at the request of a party, the court can order the other party to produce specific documents. In order to prevent fishing expeditions, the requesting party must duly specify the document in the opposing party's possession and explain to the court how it is relevant to the merits of its case.
If the document to be produced contains information or data which could harm the legitimate interests of a party or of other individuals (eg, personal data or business secrets), the court must take the necessary measures to protect such interests. However, it is up to the affected party to conclusively substantiate the interests at risk and the risk itself in order to request protective measures.
Furthermore, the Swiss Code of Civil Procedure provides for ‘precautionary evidence taking' – that is, the pre-trial production of documents and the questioning of witnesses that may be initiated before initiating ordinary proceedings. This is available if:
- the law grants the right to do so; or
- the requesting party credibly demonstrates that the requested evidence is at risk.
In addition, a party can request precautionary evidence taking if it credibly substantiates a legitimate interest that is worthy of protection – that is, if it can credibly demonstrate that:
- certain facts, once proven, give rise to a claim against the opposing party; and
- the evidence it is seeking is fit to prove these facts.
However, due to attorney-client-privilege, any privileged communication or typical work product from an attorney cannot be subject to precautionary evidence taking (see question 5.3).
5.2 What rules on third-party disclosure apply in your jurisdiction?
Third parties have a duty to cooperate in the taking of evidence, including a duty to make a truthful deposition and to produce physical records. However, third parties also benefit from a limited and absolute right to refuse to cooperate.
Thus, third parties may enjoy a limited right to refuse to cooperate if:
- they are subject to professional secrecy (eg, doctors, lawyers or notaries); or
- cooperation would expose that third party or a close family member to criminal prosecution or civil liability.
Moreover, if a third party has a close relationship (eg, spouse or child) to a party in the proceedings, that third party enjoys an absolute right to refuse to cooperate.
If a third party refuses to cooperate without justification, the court may:
- impose a disciplinary fine of up to CHF 1,000;
- order the threat of a criminal sanction pursuant to Article 292 of the Swiss Criminal Code;
- order the use of compulsory measures; or
- charge the third party any costs resulting from its refusal.
Once again, however, privileged correspondence by an attorney need not be released in such case (see question 5.3).
5.3 What rules on privilege apply in your jurisdiction? Does attorney-client privilege extend to in-house counsel?
In addition to professional secrecy (see question 5.2), certain parties may also benefit from legal privileges. However, they may only refuse to cooperate if they can credibly demonstrate that the interest in keeping the secret outweighs the interest in finding the truth (eg, banks with regard to bank secrecy).
If a party refuses to cooperate without valid reason, the court can take this into account when appraising the evidence. Thus, contrary to rules that apply to third parties, a party's non-cooperation is not enforceable.
Also excluded from the duty of disclosure upon court order is correspondence protected by attorney-client privilege. Thus, an attorney, a client or third parties can refuse to disclose privileged correspondence to the court, including letters and emails, and memos or drafts of agreements or settlements (ie, the typical work product of attorneys). However, this protection goes only so far, as it covers correspondence that is specifically conducted in the context of the attorney's activity in legally representing or consulting his or her clients.
According to Swiss law, in-house lawyers are not subject to professional secrecy and thus do not benefit from privilege in this regard. However, this was addressed in the latest revision of the Swiss Code of Civil Procedure (SCCP), completed in 2020. Once the revised SCCP comes into force, in-house counsel may also benefit from privilege, provided that the relevant activity would be considered as attorney-specific activity. It will also be necessary to prove that the in-house counsel's legal team is run by someone who has been admitted to the bar.
5.4 How have technological advances affected the disclosure process in your jurisdiction?
New technologies will play a more important role in litigation, not least due to the current COVID-19 pandemic.
For example, in light of the current pandemic, the Swiss Federal Council enacted temporary provisions in 2020 based on emergency regulations, allowing for the use of video conference for hearings, witness testimonies and expert opinions in certain cases. These provisions are currently in force and will remain so until 31 December 2021.
These new developments are also envisaged and introduced in the latest revision of the SCCP. Accordingly, testimonies and expert opinions may also be conducted via video conference in the future.
However, notwithstanding the above, technological developments in litigation are still very limited. While electronic documents searches are common in international arbitration, these are not widely used in litigation. Nevertheless, procedural means such as the precautionary evidence taking described in question 5.1 may also be requested in order to gain access to a party's computer files.
5.5 What specific considerations should be borne in mind during the disclosure process, for both plaintiff and defendant?
The most common trap for the parties is the risk that their request for disclosure will be perceived as a fishing expedition and will thus be dismissed. Therefore, any party would be well advised to duly substantiate its request and emphasise that the requested evidence is crucial to prove the relevant facts of the case.
As a defendant, the risk of non-cooperation is limited, as it will be taken into consideration only when appraising the evidence. There is a rather limited risk of actual enforcement.
6.1 What types of evidence are permissible in your jurisdiction?
Article 168 of the Swiss Code of Civil Procedure provides for an exhaustive list of admissible evidence, including:
- witness testimony;
- physical records (eg, documents, audio recordings, films, electronic files);
- inspection/site visits;
- expert opinions;
- written statements from official authorities or individuals (the latter applies if an oral witness testimony appears to be unnecessary); and
- questioning and statements of the parties.
6.2 What rules apply to expert evidence in your jurisdiction? What specific considerations should be borne in mind when preparing and presenting expert evidence?
The court can, upon the request of a party or ex officio, appoint one or more experts after having heard the parties.
The court will then instruct the expert and provide him or her with the relevant questionnaire, either in writing or orally at the hearing. In addition, the court will give the parties the opportunity to comment on the questionnaire and to propose that the questions be modified or supplemented.
Having heard the parties, the court will order the expert to submit his or her opinion in person, either in writing or by way of oral presentation. At this stage, the court will give the parties the opportunity to request explanations or raise additional questions.
For the challenge and recusal of experts, the same grounds apply as to judges and judicial officers – that is, the formal standards of independence and impartiality. Therefore, court-ordered expert opinions benefit from higher credibility. In contrast, private expert opinions prepared by a party are not considered as an admissible means of evidence, but rather as mere submissions of the party.
6.3 What other factors should be borne in mind when preparing and presenting evidence in your jurisdiction?
Evidence is required only to prove facts that are legally relevant and disputed. Generally, it is up to the parties to submit or request the production of useful and appropriate evidence to support the relevant facts of their case.
Furthermore, each party is entitled to have the court accept the evidence that it offers if this is presented in the relevant form and within the specified timeframe. Illegally obtained evidence will be considered only if there is an overriding interest in finding the truth. Moreover, for an attorney, the questioning of witnesses is generally not permitted – not even one's own witnesses.
In addition, both parties must consider the time limit for new allegations or evidence (see question 7.5).
Lastly, each party must advance the costs for taking the evidence that it requires.
7 Court proceedings
7.1 What case management powers do the courts have in your jurisdiction?
According to Article 124 of the Swiss Code of Civil Procedure (SCCP), the court directs the proceedings. In order to promote swift and efficient proceedings, the court can issue the necessary procedural orders and/or delegate the management of proceedings to a member of the tribunal.
Furthermore, the court is assisted by law clerks who prepare the case, attend the hearings, draft the summary minutes (no verbal court reporting) and may also have an advisory vote.
Lastly, the administrative office of the court plays an important role in administrative tasks.
7.2 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?
In Switzerland, hearings and any oral presentation of judgments are conducted in public. Judgments are made accessible to the public, but are anonymised before publication. Furthermore, cantonal law determines whether the deliberations are public.
However, proceedings may be held completely or partially in camera when required by the public interest or by the legitimate interests of a party involved which requests confidentiality. Moreover, as a rule, family law proceedings are not conducted in public.
7.3 How is the applicable law determined? What happens in the event of a conflict of laws?
In international proceedings, the applicable law is generally determined by the Private International Law Act (PILA) or by international treaties.
In case of a conflict of law, the PILA sets forth various provisions in each substantive law section providing for conflict of law rules regarding the substantive applicable law. In addition, Articles 13 and following of the PILA impose general conflict of law rules that can be applied in any case and allow for the application of a single law to be determined.
7.4 What rules apply to the joinder of third parties?
In addition to the voluntary or mandatory joinder discussed in question 4.3, Swiss law provides for the following mechanisms.
Any party that claims to have a stronger right in the subject matter of a dispute, to the total or partial exclusion of other parties, may bring a claim directly against the parties in the court at which the dispute is pending at first instance (principal intervention). Once submitted, the court may either suspend the proceedings until the case of the intervenor has been finally concluded or join the two cases.
Furthermore, anyone that shows a credible legal interest in having a pending dispute decided in favour of one of the parties may intervene at any time as an additional (ancillary) party, as long as it submits an intervention application to the court indicating the reasons for intervention and the party in whose favour the intervention is made (ancillary intervention). The court will decide on the application after hearing the parties.
Once approved, the intervenor may carry out any procedural acts in support of the principal party, provided that these are permitted at the relevant stage of the proceedings. For example, the intervenor can make use of any offensive or defensive measures or file appeals. However, the procedural acts of the intervenor must not be contradictory to those of the principal party, as they will not otherwise be taken into consideration.
Finally, a party may notify a third party of the dispute which, in the event of being unsuccessful, may seek recourse against the unsuccessful party (third-party notice or third-party action if the notifying party has already decided to make claims against the notified party in the same proceedings).
7.5 How do the court proceedings unfold in your jurisdiction? What specific considerations should be borne in mind at each stage of the process, for both plaintiff and defendant?
The SCCP provides for three main types of proceedings:
- ordinary proceedings;
- simplified proceedings; and
- summary proceedings.
The SCCP also contains specific provisions applicable to proceedings in matters concerning matrimonial law, child law and family law.
The three main proceedings mainly vary in their evidentiary requirements and procedure. As a consequence, they also differ in duration.
However, each type of proceedings consists of three stages:
- the assertive stage, when the parties plead their case and offer the available evidence;
- the evidentiary stage; and
- the post-hearing stage, when the parties may comment on the result of the evidentiary phase before the judgment is rendered.
In the assertion stage, the plaintiff must bring a duly substantiated claim; while the defendant has the opportunity to duly contest the claim. Otherwise, the allegations made by the plaintiff are deemed proven. The defendant may also have the possibility to file a counterclaim.
Furthermore, both parties must consider the time limit for new allegations or evidence (‘nova'). After the exchange of the second briefs, nova cannot generally be filed later on. Nevertheless, some exceptions apply – for example:
- where new facts and evidence came into existence after the exchange of written submissions or after the last instruction hearing (proper nova); or
- where new (unknown) facts and evidence came to light which already existed before the close of the exchange of written submissions or before the last instruction hearing, but could not have been submitted despite reasonable diligence (improper nova).
Notwithstanding the above, based on the right to be heard, any party may rely on the right of replication –which also permits new allegations or evidence – if:
- this right is timely exercised; and
- the party outlines the reasons for the additional submission.
In case of nova, the requirements for proper or improper nova as described above must be met.
At the evidentiary stage, both parties are entitled to present their evidence, and the court must accept this evidence if it is presented in the relevant form and within the specified timeframe (see question 6.3).
At the post-hearing stage, the parties can make or jointly dispense of oral closing remarks and request written party submissions.
7.6 What is the typical timeframe for the court proceedings?
On average, from issuing a claim until receipt of the judgment after trial takes between 18 and 24 months. The timeframe usually depends on the amount in dispute and the complexity of the case.
8 Judgment and remedies
8.1 What types of judgments, orders and other remedies are available in your jurisdiction?
The court will ordinarily close the proceedings by rendering a decision on the merits or a declaration of non-admissibility.
Court proceedings may also be closed by settlement before the court, or by acceptance or withdrawal of a claim. If the claim is withdrawn, accepted or settled, the court will dismiss the proceedings.
Furthermore, the court may render an interim decision limited to certain issues underlying the claim (eg, the existence or absence of procedural prerequisites or limitation issues due to prescription) if a contrary decision of the appellate court would put an immediate end to the proceedings, thereby allowing for a substantial saving of time and/or cost.
In order to promote the efficient conduct of the proceedings, the court may also issue procedural orders (see question 7.1).
9.1 On what grounds may a judgment be appealed in your jurisdiction?
At the cantonal level, the Swiss Code of Civil Procedure offers three appellate remedies: appeal, complaint and revision. Final cantonal decisions can be challenged by way of a complaint to the Swiss Federal Court (see question 9.2).
Depending on the appellate remedy, the grounds of appeal vary.
At the cantonal level, grounds for an appeal refer to the incorrect application of law or the incorrect establishment of facts.
A complaint at the cantonal level is admissible on the grounds of incorrect application of the law or if the establishment of facts is obviously incorrect (ie, arbitrary). The complaint may also be grounded on undue delay.
Similar to a complaint at the cantonal level, a complaint at the federal level is admissible on the grounds of:
- undue delay;
- denial of justice;
- the incorrect application of the law; or
- the obviously incorrect (ie, arbitrary) establishment of the facts.
However, the establishment of the facts may also be challenged if it is based on a violation of the law and if rectification may be decisive for the outcome of the proceedings.
Lastly, the extraordinary remedy of revision provides for very limited grounds of appeal. A party can apply to the final instance to reopen the proceedings on the basis that significant facts or evidence have been discovered which were not available at the time of the proceedings resulting in the judgment (improper nova). Revision of a decision may also be requested if the decision was unlawfully influenced by a felony or misdemeanour to the detriment of a party. Moreover, revision is the applicable remedy if a settlement or the acceptance or withdrawal of the claim is deemed invalid.
9.2 What is the appeals process? Is the judgment stayed while the appeal is pending?
Based on the principle of double instance, a decision of the court of first instance may be challenged by way of an appeal or a complaint at the second cantonal level. Appeals against final cantonal decisions that fulfil certain requirements may be filed with the Swiss Federal Court.
In principle, an appeal to the appellate cantonal court suspends the legal effect and enforceability of the decision concerned. However, upon request and in exceptional cases, the appellate court may authorise early enforcement if the appeal is without any chance of success.
In contrast, as a rule, a complaint at the cantonal level and a complaint filed with the Swiss Federal Court will not suspend the legal effect and enforceability of the decision concerned. Similar to a complaint, revision likewise does not suspend the legal effect and enforceability of the decision. However, in all three cases the competent court may, upon request, suspend the enforceability.
9.3 What specific considerations should be borne in mind during the appeals process, for both plaintiff and defendant?
First, as outlined in question 9.2, it is important to consider whether:
- the remedies invoked have suspensive effect; and
- the party concerned should request early enforcement suspension of enforcement, respectively.
If enforcement has an international dimension, it is important to request not only suspension of the enforceability of the decision, but also suspension of the decision's binding effect on the parties.
Furthermore, Swiss law prescribes certain deadlines within which an appeal, a complaint or revision must be filed after notification of the court decision. In case of summary proceedings, the deadlines are generally shorter (ie, 10 days). As these are statutory deadlines, they cannot be extended.
Finally, in most appeal proceedings, nova is not permitted.
10.1 How are domestic judgments enforced in your jurisdiction?
At a domestic level in the national context, no prior recognition proceedings are required. Therefore, any decision rendered is enforceable throughout Switzerland pursuant to the applicable provisions of the Swiss Code of Civil Procedure (SCCP) or the Debt Enforcement and Bankruptcy Act (DEBA). While the former applies to non-monetary claims, the latter governs the enforcement of monetary claims providing for debt collection or bankruptcy proceedings or the freezing of assets.
Under the SCCP, any decision that provides for an obligation to act, refrain from acting or endure something may be enforced by the enforcement court by imposing:
- a threat of criminal penalty under Article 292 of the Swiss Criminal Code;
- a disciplinary fine of up to CHF 5,000;
- a disciplinary fine of up to CHF 1,000 for each day of non-compliance; or
- compulsory measures
Given the circumstances, it is also possible to request a third party to fulfil the obligation at the obligated party's cost.
10.2 How are foreign judgments enforced in your jurisdiction?
The recognition and enforcement of foreign decisions in Switzerland are subject to the multilateral or bilateral treaties that are in force between Switzerland and the state in which the decision was issued.
Decisions issued in EU member states, Norway and Iceland are recognised and enforced in Switzerland pursuant to the Lugano Convention, which provides for a relatively swift procedure. The procedure is ex parte, meaning that the opposing party will not be heard in the first instance and can object only in the course of an appeal against the Swiss court's decision to enforce.
In the absence of any treaty, recognition and enforcement proceedings are conducted according to the provisions set out in the Private International Law Act, which provides for an adversarial procedure – that is, the opposing party is a party to the proceedings from the beginning and may directly object to the request for recognition and enforcement.
Under the PILA, a foreign judgment will be recognised in Switzerland if:
- the judicial or administrative authorities of the state in which the decision was rendered had jurisdiction;
- no ordinary appeal can be filed against the judgment or the judgment is final; and
- there are no grounds for refusal as exhaustively listed in the PILA (eg, violation of Switzerland's public order, infringement of essential procedural rights or res judicata).
Upon the declaration of enforceability, the enforcement provisions pursuant to the SCCP or the DEBA will apply, as explained in question 10.1.
10.3 What specific considerations should be borne in mind during the enforcement process, for both plaintiff and defendant?
At a domestic level, the prevailing party can request direct enforcement from the competent court on the merits. This may be useful in order to avoid additional enforcement proceedings. However, the Swiss courts are reluctant to approve direct enforcement, so as to give the opposing party the opportunity to comply with the court's decision on a voluntary basis.
In other cases, the prevailing party must submit a request for enforcement to the enforcement court, resulting in a two-stage procedure – that is, the prevailing party must call the enforcement court on receipt of the decision on the merits from the first court.
In an international context, the prevailing party can either:
- request direct enforcement through a preliminary request for a declaration of enforcement; or
- opt for a two-stage procedure – that is, request a declaration of enforcement of the foreign judgment and, upon approval, request enforcement of the same pursuant to the SCCP or the DEBA.
11 Costs, fees and funding
11.1 What costs and fees are incurred when litigating in your jurisdiction?
Procedural costs include court costs and party costs for the prevailing party.
Procedural costs are set in tariffs according to cantonal law. In financial actions, the procedural costs will depend on the amount in dispute. However, other factors – such as the complexity of the case, the language of the submitted documents, the time spent by the court and the type of procedure – may also be taken into account.
The party costs will not necessarily cover the prevailing party's full legal costs. In addition, while the court costs are determined and allocated ex officio, the party costs may be determined and allocated only upon request.
Furthermore, the plaintiff is also requested to pay an advance on the court costs up to the amount of the expected court costs. Even if the plaintiff ultimately prevails, the advance costs will not be paid back to it. Instead, the advance is offset directly against the court costs that must be borne by the unsuccessful party. As a result, the plaintiff bears the credit risk of the defendant, as the court will allow a winning plaintiff to recover the paid court fees from an unsuccessful defendant.
This is set to change, however, as the corresponding provision has been amended in the revised Swiss Code of Civil Procedure. Thus, advance costs will be refunded to the parties insofar as the decision does not impose costs on them. Consequently, any shortfall will be claimed from the unsuccessful party which is liable to pay the court costs.
For further details on security for costs, see question 4.7.
11.2 Are contingency fees and similar arrangements permitted in your jurisdiction?
Generally, in order to safeguard the independence and impartiality of attorneys, contingency fees are not permitted in Switzerland. However, this ban affects only pure contingency fees (pactum de quota litis) as a replacement for an ordinary fee.
In the meantime, the Swiss Federal Court has approved the so-called pactum de palmario – a success arrangement pursuant to which the client pays a (reduced) ordinary fee, whereas the attorney at the same time gets a share in the potentially positive outcome.
However, this is admissible only if the following conditions are met:
- The (reduced) ordinary fee must not only cover the attorneys' own costs, but also enable a reasonable profit;
- An appropriate balance between the ordinary fee and the success fee is required, with the latter not being higher than the former; and
- The pactum de palmario must be concluded at the beginning of the mandate or once the legal dispute has ended, but not during the ongoing mandate.
11.3 Is third-party funding permitted in your jurisdiction?
Yes, third-party funding is permitted in Switzerland. Moreover, legal protection insurance which covers court costs and attorneys' fees is quite common in Switzerland.
11.4 What other strategies should parties consider to mitigate the costs of litigation?
In financial disputes, a party can file a partial action if the claim is divisible. As a result, the party can request only part of the total amount in dispute, thereby reducing the procedural costs.
Another option is to consider alternative dispute resolution mechanisms such as mediation in order to resolve the dispute amicably.
Finally, to increase the pressure in disputes over a specific debt, a party may initiate a simplified debt enforcement procedure as a precursor to ordinary litigation. This allows the plaintiff to obtain a payment order against the defendant, which results in the debt being registered in the official debt register. While the payment order can easily be objected to and the monetary claim must ultimately be approved in ordinary court proceedings, the register entry remains pending resolution of the matter. Therefore, in the interest of maintaining its credit rating, the defendant will usually have a valid interest in having the debt entry cleared.
12 Trends and predictions
12.1 How would you describe the current litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The Swiss Code of Civil Procedure (SCCP) was recently revised. However, it has not yet been enacted and is thus not expected to come into force within the next 12 months.
Nevertheless, new trends are already apparent. One aim of the revised SCCP is to facilitate access to court by reducing the current advance costs by 50%. In addition, the advance costs will no longer be offset against the court costs that must be borne by the unsuccessful party. Instead, if the prevailing party had paid the advance costs, the court will refund the advance and impose costs on the unsuccessful party (see question 11.1).
Another trend is that conciliation proceedings will be promoted. Therefore, the revised SCCP stipulates that even commercial disputes will be settled under the supervision of the conciliation authority (see question 3.1).
And finally, the use of technical tools for testimonies and expert opinions will be regulated in the new SCCP (see question 5.4).
One controversial topic that remains is how to improve collective law enforcement and class actions. Further developments are awaited in this regard.
13 Tips and traps
13.1 What would be your recommendations to parties facing litigation in your jurisdiction and what potential pitfalls would you highlight?
In light of the costs of litigation, it is worth commencing proceedings only if the claim can be duly substantiated. To make this crucial evaluation, it is important to conduct an early case assessment in respect of all relevant requirements of the law, on the basis of which a well-informed decision can be made.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.