News

It will soon be possible to hold hearings in Swiss civil courts via video or telephone conference – with consequences for data protection.

On October 3, 2024, the Zurich District Court recognized, for the first time, the trustee of a U.S. Chapter 11 bankruptcy proceeding as a foreign bankruptcy administrator in Switzerland, while waiving the auxiliary bankruptcy proceedings. The trustee may now, subject to Swiss law, exercise all powers in Switzerland to which he is entitled under U.S. law, in accordance with Article 174a, Paragraph 4 of the Swiss Private International Law Act (PILA). Notably, this includes the right to obtain information about the debtor’s assets in Switzerland and the right to transfer these assets abroad.

Urs Feller and Marcel Frey analyse a recent Swiss Federal Tribunal ruling that provides helpful guidance for heirs who may want to unlock financial information held by a deceased relative’s bank. They explain what to bear in mind when lodging information claims before court and clarify the several legal basis available to heirs and the extent and scope of these instruments when approaching banks.

In the 2024 edition of the International Comparative Legal Guide to Project Finance, Daniel Hayek and Mark Meili discuss common issues in project finance laws and regulations in Switzerland – including security, bankruptcy, restrictions on investments, insurance and arbitration.

Bernhard Lauterburg and Marcel Frey analyse a recently published decision by the Federal Tribunal dealing with the interpretation of jurisdictional clauses in bilateral investment treaties with China and the appeal means available in instances of expropriation or measures of an equivalent intensity.

Reto Jenny and Marcel Frey discuss the latest Swiss trends in commercial arbitration.
 

In Switzerland, too, corporate bodies are increasingly being pressurised to position themselves - and this is often criticised

Marcel Frey and Bernhard Lauterburg discuss a recent Federal Tribunal decision on the parties' duty of care in arbitration proceedings. The Federal Supreme Court clarified its case law on the extinguishing of grounds to challenge arbitrators. This is the case if the grounds for challenge could have been discovered in good time by applying due diligence and could have been asserted during the arbitration proceedings. This requires the parties to carry out extensive research of publicly available information on the arbitrators.

International civil proceedings can soon be conducted in English in Zurich. (PDF in German)

It gives us great pleasure to congratulate our lawyers Reto M. Jenny and Mike Abegg on the publication of their commentary on Title 9 of the Swiss Code of Civil Procedure (art. 124-149) in the third edition of the Orell Füssli Commentary. The new edition is now available. Well done!

In this article of Getting The Deal Through, Daniel Hayek and Mark Meili outline the statutory framework for joint ventures in Switzerland and discuss current trends in this area.

Daniel Hayek and Mark Meili published the Swiss chapter in the latest edition of The Insolvency Review. In this chapter, the authors give an overview of the distinctive features of Swiss insolvency laws and explain which new duties arise for boards of directors according to the revised Swiss company law.

Even weeks after the new data protection law came into force in Switzerland, many companies still lack orientation. The extensive scope of the GDPR can be confusing when compared to the Swiss Data Protection Act (DPA), but it is worth clarifying this in detail.

The implementation of Swiss data protection law is less complex than the implementation of the GDPR, and the sanctions are also significantly milder than if the GDPR is also applicable, under which the consequences of non-compliance can be significantly more serious. The following overview is intended to provide support in this regard:

Interruption of Limitation Period by Request for Conciliation in "wrong" Currency, ZZZ 62/2023 p. 194 ff.

Under the Swiss Cartel Act, a notification of planned concentrations is required if the relevant turnover thresholds pursuant to article 9(1) of the Cartel Act are met.

This article highlights recent EU cartel policy and enforcement developments. Section II provides an overview of the Commission’s main achievements during 2021–2022, in light of a partly changed enforcement framework. Section III reviews selected cartel policy and enforcement issues. Finally, Section IV provides a summary and a brief outlook.

By Maria Jaspers, Oliver Jany in: JECLAP, Vol.14, Issue 6, p. 372–378, 2023

In numerous sectors, especially in the digital economy, market concentration has steadily increased in recent years and is rarely challenged by competitors. Existing competition laws have also done little to make digital markets more contestable. This article shows that market investigations can enable competition authorities to improve competitive conditions in digital markets. It assesses the use of market investigations in those jurisdictions that provide for them, explains their role in the digital economy, and discusses how market investigations might usefully be designed

Urs Feller and Marcel Frey discuss the new provision on the privilege of inhouse counsel that will come into effect with the amendment of the Swiss Civil Procedure Code. In the article, they analyse the prerequisites that need to exist for inhouse counsel to invoke confidentiality and what effects this may have on compliance.

Guest commentary by Marino Baldi and Felix Schraner. Marino Baldi is Of Counsel at Prager Dreifuss; Felix Schraner is Partner at Ixar Legal AG.

In the 2023 edition of the InDepth Feature: Bankruptcy & Restructuring, Daniel Hayek and Mark Meili provide an overview of the current economic situation in Switzerland and the latest trends in bankruptcy and restructuring. The authors examine how the merger between UBS and Credit Suisse may have prevented a major bankruptcy. Finally, Daniel Hayek and Mark Meili discuss their expectations on how restructuring and bankruptcy activity in Switzerland will unfold for the remainder of the year.

In this article, Marcel Frey discusses the technicalities and hurdles a creditor may experience when enforcing a claim against a Swiss party or against assets located in Switzerland and how best to deal with them.

Switzerland is internationally recognized as a leading hub for successful enterprises in the areas of research, development and technology. Hundreds of thousands of SMEs and group companies contribute to Switzerland topping the WIPO Global Innovation Index as the world’s most innovative country. This success attracts many foreign investors and foreign direct investments currently amount to around 1,216 billion Swiss Francs (as of 2020). The parliament now seeks to regulate foreign direct investments.

Enforcing claims requires staying power.

In this year's fourth edition of the journal "HAVE", Mike Abegg provides an overview of the legal position of the injured party vis-à-vis the liability insurer.

In the latest issue of "UnternehmerZeitung", Mark Meili provides an overview of the revision of Swiss inheritance law and its effects on company succession.

Daniel Hayek and Mark Meili published the Swiss chapter in the latest edition of The Insolvency Review. In this chapter, the authors give an overview of the distinctive features of Swiss insolvency laws and explain why the number of bankruptcies has started to increase despite the financial measures taken by the Swiss government in connection with the covid-19 crisis.

In this article of Getting The Deal Through, Daniel Hayek and Mark Meili outline the statutory framework for joint ventures in Switzerland and discuss current trends in this area.

We are delighted to announce that our Counsel Mark Meili has been named a Rising Star 2022 for Corporate/M&A/Private Equity by IFLR/Euromoney's Expert Guides.

Welcome to the 2022 edition of the Best of the Best Global Expert Guide. The guide, the leading international publication in this field, lists the top 30 legal practitioners in 15 areas of law in the world.

The "Internet of Things" (IoT) causes our private life to increasingly become part of the Internet. Nevertheless, many IoT applications do not meet the requirements of data protection law. In this publication, the authors Dr Andrea Schütz and Dr Christian Schönfeld illustrate that data protection law is not just a regulatory hurdle, but can also be used as a potential competitive advantage.

In the latest issue of "The Restructuring Review", Daniel Hayek and Mark Meili provide an overview of the special features of Swiss restructuring law.

In the latest version of "GAR Know-How Litigation" Dr. Reto M. Jenny and Lukas Strickler provide an overview of the civil litigation system in Switzerland.

The Swiss Federal Supreme Court recently ruled that companies received too little short-time working compensation for employees on monthly wages. In the current issue of the Hotellerie Gastronomie Zeitung Mark Meili explains what to bear in mind in the case of claims for restitution.

1. Introduction

Various federal legal laws encourage saving in the form of occupational pension plans. In this context, not only the paying-in professionals benefit from tax advantages, but also the pension funds which do not pay taxes on their profits. Until now, the tax consequences of pension fund restructurings were largely unclear. Many transactions had to be secured in advance with the tax authorities through rulings. Now, the Federal Supreme Court has provided clarity in one area.

I. Introduction

In the recent past, "class actions" have been one of the prime topics discussed in Swiss civil procedure. The core of the debate is about whether – and if yes, to what extent – representative litigation mechanisms should be adopted in the Swiss Code of Civil Procedure (CPC), in order to ensure effective access to justice for persons affected by mass damages.

Meanwhile, in the European Union the Collective Redress Directive came into force on 24 December 2020. Member states of the European Union have to transpose the EU Directive into their national laws by 25 December 2022 and apply those measures from 25 June 2023 onwards. Legislative procedures are currently underway in the member states to implement the EU Directive.

In line with the recent developments in the European Union, the Swiss Federal Council has sought to facilitate the assertion of mass damage claims by broadening the scope of the (traditional) association claim as well as by introducing new collective redress mechanisms. On 10 December 2021, the message on the draft legislation was issued. The following article provides an overview of the most important amendments proposed.

II. Revision of the (traditional) association claim (art. 89 CPC)

Under current law, the association claim, as enshrined in art. 89 CPC, provides for a representative litigation tool. Pursuant to this provision, associations and other organisations of national or regional importance that are authorised by their articles of association to safeguard the interests of their members are – in specific cases – allowed to bring claims in their own name on behalf of those members. However, despite being praised in the 2006 message on the unified Swiss Code of Civil Procedure as a class action-like mechanism, the association claim has thus far proved toothless in practice. The lack of practical importance is attributable to multiple reasons: not only are association claims currently limited to violations of the personality rights of the members of the group, but remedies are limited as associations can only request that (i) a threatened violation be prohibited, (ii) an existing violation be ceased or that (iii) a violation that continues to have a disturbing effect be declared unlawful. By contrast, monetary claims are not admissible. Moreover, only associations of Swiss or regional importance can make use of this tool.

The draft now aims to strengthen the practical impact of the association claim by broadening its scope of application in several respects. Most importantly, the current limitation to violations of personality rights is to be abolished by opening the scope of application to the enforcement of all violations of rights. In future, association claims thus might be brought in a broad range of substantive areas, such as financial services, antitrust, unfair competition, data protection, product liability and telecommunication, with the aim of making collective redress more uniformly available. In this respect, the proposal goes even further than the EU Directive, which only covers consumer protection.

The requirements are defined more clearly with associations and organisations being entitled to bring a claim in their own name if they:

• are not profit-oriented (indicating that the Federal Council has in mind associations according to art. 60 ff. Swiss Civil Code and foundations according to art. 80 Swiss Civil Code rather than commercial organisations to act as potential claimants);
• have existed for at least twelve months (and are thus not only established ad hoc on a short-term basis);
• are authorised by their articles of association or bylaws to safeguard the interests of the affected persons and
• are independent of the defendant (which under the EU Directive is also a key element, see art. 4 para 3 lit. e EU Directive).

As is the case under current law, the association claim is available for claims for injunctive relief, removal or for declaration of unlawfulness of a violation, whereby in the latter case, the claim does no longer depend on any additional special interest in a declaratory judgment (art. 89 para. 2 Draft CPC). In particular, it would not be necessary that an alleged violation continues to have a disturbing effect, which in the past has already led courts not to admit association claims. In addition, a new paragraph 3 would explicitly provide for an option to request notification to third parties or publication of a court's decision.

III. New association claim to assert damage compensation claims

In addition to strengthening the existing association claim (art. 89 CPC), the draft provides for a separate association claim to assert damage compensation claims (art. 307b et seq. Draft CPC). This "reparatory" association claim is intended to allow the assertion of monetary claims, in particular in cases involving mass damages.

According to the draft, associations or organisations may bring claims in their own name and at their own risk but on behalf of the individuals they represent (art. 307b Draft CPC). The affected persons must either have previously authorised the association to bring an action on their behalf or joined the action after it has been admitted (art. 307d Draft CPC). Persons not directly forming part of the claim are not bound by any judgment in connection with the association claim, even if they have faced a similar type of damage. Accordingly, the proposal is based on the so-called opt-in principle, according to which only persons who have explicitly given their consent to the action are covered by the legal force of the judgment.

The filing of a "reparatory" association claim is permissible under the following conditions:

• The association or organisation is entitled to bring an association claim either under art. 89 Draft CPC or under a special legal provision, such as the Swiss Workers’ Participation Act, the Unfair Competition Act, the Trademark Protection Act or under the Gender Equality Act (art. 307b lit. a Draft CPC).
• The association or organisation has been authorised to bring a claim by at least ten affected persons in writing or in any other form allowing it to be evidenced by text (art. 307b Draft CPC). This is to ensure that an association claim can only be brought if a fairly large number of persons are actually affected. The authorisation requirement must already be met at the time the association claim is filed.
• The claims asserted are based on similar circumstances or legal grounds (art. 307b c Draft CPC). This requirement overlaps with the factual connection as required for the (voluntary) joinder of parties pursuant to art. 71 CPC and is intended to ensure that a bundled assertion of claims for damages is efficient and economical.

To sum up, the association claim provides for a true representative litigation tool to assert damage compensation. However, whether the association claim will also prove effective in small claims disputes – as is also envisaged by the Swiss Federal Council – is difficult to foretell. As mentioned above, the association claim is based on an opt-in principle and thus, in each case a separate authorisation by the affected persons is required.

IV. New collective settlement proceedings

Since experience has shown that a significant number of collective disputes are terminated by settlement, the Draft seeks to supplement the new association claim procedure with provisions allowing for collective settlements (art. 307h et seq. Draft CPC). Parts of the proposal are inspired by the Dutch model on collective settlement procedures which was adopted in July 2005 (Wet collectieve afwikkeling van massaschades, WCAM). With regard to theSwiss Federal Council's draft, a distinction can be made between (i) collective settlements in the context of an association claim and (ii) collective settlements without a preceding association claim. The key elements of the envisaged mechanisms are the following.

1. Collective settlements in the context of an association claim (art. 307h et seq. CPC)

Collective settlements may be reached in the context of an association claim. Also in that case, the settlement must be approved by the court, as the affected persons are not directly parties to the court proceedings. Consequently, the parties to the association claim, being the association or organisation itself on the one hand and the defendant on the other, must submit the settlement reached to the court for approval (art. 307h Draft CPC). The court approves the settlement if (art. 307j Draft CPC):

• The settlement reached is reasonable;
• if agreed by the parties, a minimum number or quota of affected persons bound by the settlement has been reached;
• the settlement does not violate mandatory law;
• the consequences of the costs are adequately regulated; and
• the interests of the persons affected by the settlement as a whole are adequately protected.

As a rule, the persons included in the settlement are those who have joinedthe association claim (art. 307h para. 1 Draft CPC). The bulk of settlements reached will therefore be based on an opt-in principle. However, in some specific cases and upon request by the parties, the court may extend the effects of the settlement to all persons affected by the violation who do not opt out within a period of at least three months after the publication of the settlement proposal in an electronic register (art. 307h para. 2 Draft CPC). In these cases, the group settlement would be of an opt-out nature. However, in order to avoid issues concerning due process or proper service, the extension will only be ordered to affected persons having their seat or domicile in Switzerland. In addition, it will be necessary that (i) the claims covered are of such low value that an individual claim would not be worthwhile (art. 307h para. 2 lit. a Draft CPC) and (ii) a significant number of the affected persons have not joined the association claim (art. 307h para. 2 lit. b Draft CPC). According to the Swiss Federal Council, the latter should always be the case if at least one third of the affected persons have not joined the claim.

2. Collective settlements without a preceding association claim (art. 307k et seq. CPC)

Moreover, the draft also provides for a collective settlement procedure without a preceding association claim (art. 307k Draft CPC). According to the message, the option to conclude a collective settlement should also be available without the parties having to introduce an association claim first. Here, the requirements are largely identical to those of the collective settlement in connection with an association claim as shown above. Collective settlements without a preceding association claim thus may only be negotiated by associations or organisations that are entitled to bring an association claim pursuant to art. 89 Draft CPC or under a special legal provision (art. 307k lit. a Draft CPC). Furthermore, the claims asserted must be based on similar circumstances or legal grounds (art. 307k lit. b Draft CPC). In contrast to a settlement reached in the context of an association claim, collective settlements without a preceding association claim are only permissible based on an opt-out-principle. Therefore, the claims covered must be of such low value that an individual claim would not be worthwhile (art. 307k lit. c Draft CPC). As regards the procedure, the provisions on collective settlements in the context of an association claim are applicable mutatis mutandis (art. 307l CPC). Consequently, also in the scope of collective settlements without a preceding association claim, the parties must submit the draft settlement to the court for approval (art. 307h et seq. CPC).

V. Outlook

By implementing new collective redress mechanisms, the Swiss Federal Council is keeping pace with the recent developments in the European Union. It is thereby fair to assume that the benefits to parties seeking an efficient and cost-effective way for the assertion of mass damage claims are likely to outweigh the potential risks generally associated with collective redress. Thus, for example, the opt-out-based collective settlement procedure may facilitate access to justice in cases where the assertion of claims on an individual basis would have failed because of cost-benefit reasons (rational apathy). Potential defendants could favour the option of collective settlements without a preceding association claim whereby due to the application of the opt-out principle all claims of potential claimants can be settled in one go. This provides for a final solution as well as legal certainty which is relevant for any business. However, the draft is likely to meet with some political opposition. It remains to be seen whether it will be enacted as intended by the Swiss Federal Council.

For a number of reasons, it is not certain that sufficient medical devices will be available to supply the Swiss population in the coming years. This publication intends to show healthcare institutions and healthcare professionals the legal instruments available to them to prevent supply shortages and to make concrete recommendations for action. It also serves as an appeal to politicians and health authorities to proactively address the issue of supply shortages of medical devices, including in vitro diagnostic medical devices.

In the latest issue of "UnternehmerZeitung", Mark Meili provides an overview of health protection at the workplace and the implementation of home office and compulsory certificates.

Daniel Hayek and Mark Meili look at the rules, practicalities and latest developments in what continues to be a friendly, but recently more challenging environment for cross-border financing.

As of 1 January 2021, the calculation of the capitalisation rate for determining the earnings value was adjusted in Switzerland. What influence will this adjustment have on the Swiss tax landscape?"

The revised inheritance law enters into force on 1 January 2023. Last wills that have already been drawn up should be reviewed with regard to the new law.  

News from our Start Up Desk: in the current issue of Ladies Drive Andrea Schütz and Rahel Nedi discuss their commitment for Female Founders

In the 2021 edition of the International Comparative Legal Guide to Project Finance, Daniel Hayek and Mark Meili discuss common issues in project finance laws and regulations in Switzerland – including security, bankruptcy, restrictions on investments, insurance and arbitration.

In the 2021 edition of the InDepth Feature: Bankruptcy & Restructuring 2021, Daniel Hayek and Mark Meili provide an overview of the current economic situation in Switzerland in times of COVID-19 and its impact on corporate bankruptcies and insolvencies. The authors also discuss trends in cross-border restructurings and explain developments in distressed M&A transactions.

On 26 March 2021 the High Court in London sanctioned gategroup's Part 26A restructuring plan. The plan also comprised the Swiss law governed bonds, even though they were issued by a Luxembourg entity and guaranteed by the Swiss gategroup parent. The question remains whether bondholders can still enforce the bonds against the Swiss parent according to its original terms or whether the Part 26A restructuring plan prevents the enforcement of such claims in Switzerland? 

After various shocking incidents involving medical devices, numerous calls were made for stricter measures to increase safety and protect public health. As a result, medical device legislation in both the EU and Switzerland has been thoroughly revised. Andrea Schütz' article critically examines whether the numerous legislative adjustments will actually lead to an improvement in the quality and safety of medical devices. (PDF available in German only.)

In this article, Christian Casanova discusses some important follow-up questions with regard to a recent change of praxis in the Swiss Federal Supreme Court's jurisdiction on the right of recourse of the first-party insurer.

Are the financial measures taken in connection with the Covid-19 pandemic a curse or a blessing for SMEs in terms of taxation? Either way there are several sheet anchors."  By Dr. Roland Böhi and Lukas Scherer in NZZ 12 March 2021

The restaurant sector was hit hard by the Corona crisis. In the current issue of Salz & Pfeffer, Mark Meili discusses instruments for affected companies to avoid insolvency.

Reto M. Jenny and Cinzia Paolucci published the Swiss chapter in the latest edition of "InDepth Feature: Commercial Arbitration". In this chapter, the authors give an overview of the distinctive features of arbitration in Switzerland and of current developments.

This annual report on jurisprudence in Swiss competition law in 2019/20 summarizes the most important cartels, abuse of dominance and merger cases in this period. It further contains some comments on three state aid cases falling under the bilateral air transport agreement CH-EU in 2020 and on the ongoing reform of the Swiss Cartels Act.

We are pleased to announce that our successful lawyers Mark Meili, Andrea Stäubli and Lukas Scherer have been appointed as Counsels as of 1 January 2021. 

In June 2020, the U.K. introduced the so-called Part 26A restructuring plan. This new type of restructuring plan has the potential to become highly relevant for the restructuring of international corporations. To the best of our knowledge, two Part 26A restructuring plans have been sanctioned by English courts so far. However, the extensive possibilities to restrict creditors' rights under such a restructuring plan may create challenges for its recognition in other jurisdictions. Further, as the U.K. is going to leave the EU at the end of 2020, Brexit may create additional problems for the recognition of a Part 26A restructuring plan in Switzerland and other European countries.

Daniel Hayek and Mark Meili published the Swiss chapter in the latest edition of The Insolvency Review. In this chapter, the authors give an overview of the distinctive features of Swiss insolvency laws and current trends.

If the United Kingdom (UK) and the European Union (EU) do not reach an agreement on the consequences of the UK's exit from the EU by the end of 2020, a no-deal Brexit becomes a reality. With Switzerland also not being a member of the EU, the present newsletter gives some preliminary guidance on how a no-deal Brexit will affect the enforcement of judgments and treatment of jurisdiction clauses in Switzerland from January 1, 2021, if a no-deal Brexit actually comes to pass in the new year.

In this article of Getting The Deal Through, Daniel Hayek and Mark Meili outline the statutory framework for joint ventures in Switzerland and discuss current trends in this area.

The Choice of Law in the Employment Agreement; Possibility and Limits.

On 14 October 2020, the Federal Council decided not to extend themeasures against bankruptcies caused by COVID-19. The resulting consequences are explained in this newsletter.

The place of an individual’s tax residence for national tax purposes can be controversial if a person has permanent homes available to himself in more than one canton in Switzerland. A short presentation of some frequent constellations.