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Switzerland

Author: Sandrine Giroud and Sofian Ghezala

I. Overview

Class actions as such do not exist under Swiss law.

In 2006, the Swiss legislator decided not to introduce the Anglo-American concept of class action into the new Swiss Code of Civil Procedure ("SCCP"). This procedural tool is considered generally contrary to the Swiss legal system, which rests on the fundamental principle that only the holder of a legal right can assert such right. There is also a strong suspicion against American style class actions.

In 2013 the Swiss government published two surveys, one on collective redress and another on financial services, acknowledging the general need to increase the procedural protection of financial investors, including by way of collective rights such as where a large number of financial investors in the wealth management sector have incurred losses due to the same damaging event.

In its survey on collective redress, the Swiss government noted in particular that the existing procedural tools were insufficient and inadequate to deal efficiently with mass or group monetary claims. It also identified that the current determination and allocation of litigation costs rules (in principle, the "losing party pays" rule applies) were particularly problematic for an effective access to justice in cases of mass or group claims, in particular where the separate individual claims are relatively small.

The Swiss government is currently examining various legislative measures to facilitate access to justice in cases of mass harm. Until further developments, courts and/or parties to a litigation thus deal with proceedings involving multiple parties by relying on existing procedural instruments, in particular, (A) the joinder of claims filed separately but which are, in substance, closely connected, (B) claims filed by an association on behalf of its members, (C) the use of a test case and (D) special procedural powers entrusted to courts.

A. Joinder

Under Swiss civil procedure law, collective interests are first protected by the joinder of parties. Joinder can be "compulsory" or "simple".

Compulsory joinder

Joinder is compulsory in cases where several individuals and/or entities are involved in a legal relationship for which only a decision binding for all such persons is conceivable (art. 70 SCCP). In such cases, the parties involved must sue or be sued together. Substantive law defines the requirements for a compulsory joinder. The most common examples of compulsory joinders are disputes involving community of heirs.

Simple joinder

By contrast, joinder is simple in cases where the rights and duties which are to be determined are based on similar fact or legal grounds (art. 71 SCCP). In such cases, several persons may sue or be sued together. Yet, each joint claimant remains a separate party to the proceedings and may proceed independently from the other claimants. Simple joinder can for instance be resorted to in cases of several lessees objecting to a rent increase, workers opposing a collective dismissal, or consumers who are victims of a defective product acting against the manufacturer. Simple joinder is, however, inadmissible if the various actions are not subject to the same type of procedure (ordinary, simplified, or summary).

As a rule, the claimants may seek any of the remedies available under Swiss law, such as damages and declaratory relief. Punitive damages are however not admissible, as they are alien to Swiss law. Claimants cannot claim more than the damages actually incurred. Simple joinder may seem comparable to class action but remain a substantially different procedural device, mainly because all of the litigants are separate parties to the proceedings. Accordingly, the judgement may differ for each individual party. Moreover, joint litigants cannot be forced into the proceedings but can join out of their free will.

Parties bound by a compulsory or simple joinder may appoint a joint representative, failing which separate notifications will be made to each party.

Parties may use the possibilities offered by Internet (social media) and/or advertisement through newspapers in order to join forces. In principle, Swiss lawyers are not allowed to proceed with such advertising due to their deontological rules. In particular, they may not suggest to an undetermined number of recipients to contact them in order to initiate litigation; by contrast, the Zurich Supervisory Authority for attorneys-at-law decided that "objective" information on a specific issue provided by a lawyer to a determined group of people, namely in casu at a conference, was admissible.

B. Association claim

Swiss law further provides the possibility, in specific cases, to protect collective interests by way of so-called "association claims" filed by an association on behalf of its members.

According to article 89 SCCP, "[a]ssociations and other organisations of Swiss national or regional importance that are by virtue of their bylaws authorised to safeguard the interests of particular groups can bring an action in their own name against violations of the personality rights of members of such groups." This legal avenue is rather limited as only associations of Swiss or regional importance can make use of it and only if their bylaws authorise them to safeguard the interests of the group they represent. Remedies are also limited as claimants can only request that (a) a threatened violation be prohibited, (b) an existing violation be ceased, and (c) that a violation that continues to cause nuisance be declared illegal; by contrast, claims for damages are not admissible.

Several other statutes reserve explicitly the possibility for representative bodies to file a collective action. For instance the Federal Act against Unfair Competition (art. 10, "FAUC") as well as the Federal Trademark Act (art. 56, "FTA") allow for collective actions of professional and trade associations if their bylaws entitle them to protect the interests of their members. Organisations of nation-wide or regional importance which are dedicated to protect the interests of the consumers are also entitled to bring collective actions under these two statutes. Another statute providing for collective actions is the Federal Act on Equality between Women and Men (art. 7, "FAEWM"). Organisations which, according to their bylaws, advocate the equal treatment of men and women or the protection of the interests of employees may file a collective action in cases of discrimination. Furthermore, associations of employers or employees are entitled to bring a collective action seeking declaratory judgment on the legality of certain behaviours (e.g., in the framework of collective layoffs or transfers of undertakings) under the Federal Act of Participation (art. 15(2), "FAP") in the context of companies of over 50 employees.

C. Test cases

A claimant may initiate proceedings, which, when adjudicated, can serve as a test case for other claimants who can rely on the "model decision" to argue specific questions of law or fact.

While it may be more difficult for a defendant to dismiss the findings made in a test case, the resulting "model decision" will not be binding for the subsequent proceedings, except where all parties involved agreed contractually to such binding effect on third parties.

The advantage of a test case is to limit the risks inherent to legal proceedings, in particular as to the issues of liability, attorney fees and court costs. The downside for the other defendants is in particular that they might have to wait several years before the "model decision" is rendered, with the risks of their action being time-barred (save where the parties agree to a time-bar interruption or if the claimant interrupts the limitation period for instance by initiating debt enforcement proceedings) and the possible loss of evidence.

D. Court procedural powers

Other procedural rules of the SCCP provide courts with the power to take certain measures to accommodate several claims having the same object. For instance, courts can simplify the proceedings by consolidating actions brought separately (art. 125 SCCP). They can also stay the proceedings if necessary, in particular where a decision depends on the outcome of other proceedings (art. 126 SCCP). Where closely connected proceedings are pending before different courts, a court subsequently seized can transfer the action to the court first seized subject to the latter's agreement (art. 127 SCCP).

1. Report of the Swiss government, "Exercice collectif des droits en Suisse: état des lieux et perspectives" (3 July 2013, available at: https://www.bj.admin.ch/dam/data/bj/aktuell/news/2013/2013-07-03/ber-br-f.pdf (last visited 22 November 2015)).

2. Swiss Federal Department of Finance hearing report "Financial Services Act (FFSA): Key thrusts of potential regulation" (18 February 2013, available at: http://www.news.admin.ch/NSBSubscriber/message/attachments/31593.pdf (last visited 22 November 2015)).

3. ZR 104 (2005), p. 161.

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