Swiss Civil Procedure Law in a Nutshell (Volume 9 of 12)
This blog series provides litigators and corporate counsel from other jurisdictions with a practical understanding of the mechanics, advantages, and limits of litigation before State Courts in Switzerland.
No Class Actions
The CPC does not (yet) provide for class actions. In multi-party setups, practitioners resort to auxiliary constructs (such as assignments, pilot cases, or companies or associations between several parties who are basically in the same situation and, therefore, can sue, or be sued, as a group).
The Federal Council has dropped its idea to introduce sector-specific group actions or class actions for the financial industry. Instead, group actions are again being assessed as a potentially useful tool for all sectors, i.e., as a new instrument in the Civil Procedure Code. No changes are expected in the short-to-mid-term, but currently a new piece of legislation allowing for Swiss-style class actions – or group actions – is in the consultation phase.
Derivative actions in corporate law permit a shareholder to bring an action in the name of the corporation against parties allegedly causing harm to the corporation (art. 756 CO). Once the company has fallen into bankruptcy, and provided that neither the shareholders nor the estate bring forward claims for corporate liability, company creditors may also initiate derivative suits (art. 757(1) and (2) CO). In practice, derivative actions are rare.
Disputes pertaining to disputed objects that are, or have been, sold offer another form of derivative action. The seller is no longer the rightful owner, but must, due to his or her former title, continue the litigation in the form of a derivative action unless the buyer takes over the litigation in his or her place (art. 83 CPC).
In bankruptcy proceedings, the bankruptcy administrator must offer to all the company creditors an assignment of those potential claims of the estate that the administrator does not intend to assert him/herself. Despite the misleading term ‘assignment’, the action brought by one or several company creditors is a derivative action as well (art. 260 DEBA). If more than one creditor obtains such ‘assignment’, the creditors must invariably act together, which often renders such assigned claims very difficult to handle in practice.
For amounts in dispute lower than 30,000 Swiss francs as well as for certain specific matters, the CPC provides for fast-track proceedings (art. 243 CPC). After a mandatory conciliation (art. 197 CPC), the proceedings are faster and somewhat less formalistic (e.g., no compulsory written briefs, mainly oral proceedings; arts. 244 et seq. CPC).
Summary Proceedings in Clear-cut Cases
In absolutely clear-cut cases, a Claimant can initiate summary proceedings that, in the case of success, result in a normal (full-fledged) judgment (art. 257 CPC). Summary proceedings are even faster than fast-track proceedings.