Civil asset recovery
Parallel proceedingsIs there any restriction on civil proceedings progressing in parallel with, or in advance of, criminal proceedings concerning the same subject matter?
There are no restrictions on civil proceedings progressing in parallel with, or in advance of, criminal proceedings concerning the same subject matter. However, if the outcome of the criminal proceeding is of the utmost importance for the civil proceeding, the latter may be suspended until a verdict is reached (section 191(1) of the Civil Procedure Act (ZPO)).
ForumIn which court should proceedings be brought?
According to section 30 et seq of the Law on Jurisdiction (JN), the District Court has jurisdiction ratione loci and ratione materiae under the condition that the defendant has his or her common residence in Liechtenstein. Depending on the nature of the matter, there are several particular places of jurisdiction (section 37 et seq of the JN). Under certain conditions relating to the assets of the defendant, it is possible to sue a person who resides abroad if he or she has his or her assets based in Liechtenstein (section 50 of the JN, ‘asset-based jurisdiction’).
LimitationWhat are the time limits for starting civil court proceedings?
Provisions regarding statutes of limitation are found under section 1478 et seq of the Civil Code (ABGB). Time limits can vary between three, five, 10 and 30 years, depending on the nature of the matter (sections 1478, 1480 and 1486 of the ABGB). According to section 1489 of the ABGB, the time limit for a compensation claim is, for instance, three years starting from the date at which the wronged party gains knowledge about the damage and the tortfeasor, regardless of whether the grounds are based on a contract or not. If the damage is caused by crime, the time limit is 30 years (section 1489 of the ABGB). A compensation claim regarding financial services expires after three years, but the ultimate time limit is 10 years instead of 30 years (section 1489a of the ABGB). For the mere non-use of a right, however, the general time limit is 30 years.
JurisdictionIn what circumstances does the civil court have jurisdiction? How can a defendant challenge jurisdiction?
Generally, the District Court, as a civil court, has jurisdiction if the forum is given according to section 30 et seq of the JN. The Court has jurisdiction ratione loci and ratione materiae if, and to the extent, the qualifications of a person’s jurisdiction (usually determined by his or her place of residence) are met.
The District Court must examine the circumstances of jurisdiction ex officio (section 23 of the JN). As in most other jurisdictions, courts first check on the duty to accept the case. In civil proceedings, this examination is primarily based on the statements of the claimant. If the jurisdiction is not given, the claim must be dismissed at each and every stage of proceedings according to section 24 of the JN.
Further, in cases where the court does not examine jurisdiction ex officio the defendant must raise the defence of the lack of jurisdiction at the first opportunity before pleading to the merits of the claim. This usually happens in the first statement of defence.
Time frameWhat is the usual time frame for a claim to reach trial?
Compared to trials in other jurisdictions, Liechtenstein’s justice is considerably swift. There are no rules requiring criminal cases to be granted priority. Once the relevant pleadings are filed, a hearing is usually scheduled within weeks. Although the median time from commencement of a lawsuit to judgment is 12 months, it may take longer if the case is complex and international or foreign law must be applied or witnesses who live abroad must be heard in court. Even if all instances of courts are gone through, a final decision in most civil cases can be reached within two or three years.
Admissibility of evidenceWhat rules apply to the admissibility of evidence in civil proceedings?
Rules regarding the admissibility of evidence in civil proceedings can be found under section 266 et seq of the ZPO. There are five different types of evidence named in the ZPO, all of which have equal weight:
- evidence by documents (section 292 et seq);
- hearing of witnesses (section 320 et seq);
- evidence by (qualified) experts (section 351 et seq);
- evidence by inspection of the court (section 368 et seq); and
- evidence by party interrogation (section 371 et seq).
Under civil procedure law, a judge is free to weigh and consider the evidence submitted by the parties.
If certain evidence is likely to be destroyed or the giving of evidence would be aggravated, the court can take evidence before the trial begins. These possibilities, named in section 384 et seq of the ZPO, are handled restrictively to avoid pretrials and evasion of procedural principles.
Under certain circumstances, hearings of evidence or applications for evidence may also be rejected by the court (eg, in cases where information and evidence could have been provided sooner (section 179(1) of the ZPO)).
WitnessesWhat powers are available to compel witnesses to give evidence?
According to section 326 of the ZPO, the recognising court decides whether, and in what way, the progress of the proceedings in the main case is influenced by the unjustified refusal to testify, the performance of the witness’s oath or by the coercive measures instituted against the witness for this reason. However, in all cases of unjustified refusal to give evidence, the disobedient witness is liable to both parties for the damage caused to them by thwarting or delaying the provision of evidence (section 333 of the ZPO). In particular, he or she is also obliged to reimburse all relevant litigation costs caused by his or her refusal. Moreover, if the witness’s refusal to give evidence was wilful, the witness may be punished with a ‘wanton penalty’ by the court.
In the case of a duly summoned witness who does not appear at the hearing without a sufficient excuse, the judge is allowed to issue an order to reimburse all costs caused by his or her absence. In addition, the witness will be summoned again and an administrative fine can be imposed. In the event of repeated absence, the fine could be doubled to the legal extent, and the forced arraignment of the witness is ordered.
Publicly available informationWhat sources of information about assets are publicly available?
There are different sources of information about assets that are publicly available. One of the most important sources is the Liechtenstein Commercial Register. Article 6 of the Commercial Register Regulation states the publicity of the Commercial Register. Generally, the Commercial Register contains information regarding corporations, trusts, foundations and establishments, etc, that are domiciled in Liechtenstein. The information given about a corporation by the Commercial Register includes the name, domicile and purpose, including members of the board. In specific cases, especially regarding certain foundations, the information may be limited and restricted.
Furthermore, information about real estate and its limitations is available through the Land Register, which is publicly available as well. Anyone who has a vested interest may seek information. However, any person, even without an interest, is entitled to receive basic information such as the name and description of a property, owner’s name and type of ownership, date of acquisition, as well as its easements. Information or an extract from the Land Register may only be provided in respect of a specific property. An individual-related inquiry is not permitted (article 551 of the Property Law).
There is no special or publicly available enforcement or insolvency register. However, bankruptcy information is published on the District Court’s website (www.gerichte.li/publikationen).
Cooperation with law enforcement agenciesCan information and evidence be obtained from law enforcement and regulatory agencies for use in civil proceedings?
No party can obtain on his or her own authority evidence for no reason from law enforcement and regulatory agencies in civil proceedings. However, this is different when a party is an additional party in criminal proceedings. In such a case, the court may allow further inspection of files. According to section 183(1), number 3 of the ZPO, the judge may procure documents held by public authorities or notaries if parties relate to these documents.
Third-party disclosureHow can information be obtained from third parties not suspected of wrongdoing?
If a third party is in possession of a required document, the judge can decide upon a motion by the evidence leader. After hearing the third party and the other party of the trial, the judge decides through a court order whether the third party must provide the specific document or produce certain types of documents (section 308 of the ZPO).
Furthermore, information from third parties not suspected of wrongdoing can be obtained by hearing witnesses (section 320 et seq of the ZPO). A witness is always cautioned and instructed about section 288 of the Criminal Code (StGB), stating that false testimony is a criminal offence. Moreover, a witness is instructed that he or she has the right to remain silent if certain conditions are met (section 321 of the ZPO). If a request of evidence is aimed at clarifying a law-producing or law-destroying fact, the elements of which were not clear to the party itself and that were neither presented nor substantiated by it, this is an inadmissible proof of exploration or discovery.
Interim reliefWhat interim relief is available pre-judgment to prevent the dissipation of assets by, and to obtain information from, those suspected of involvement in the fraud?
As in many other jurisdictions, the success of court actions often depends on the effectiveness of interim remedies or provisional measures taken before or in place of the main proceedings. Generally, for preventing (irreparable) injuries to the applicant, a party might obtain measures for interim relief from a court upon motion. During the pendency of extrajudicial proceedings, interim relief (such as an injunction) may be rendered ex officio (article 270(3) of the Enforcement Act (EO)). The EO deals with interim relief, particularly with such injunctions as described in the following. It is also possible to reduce or avoid the loss of assets through interlocutory injunctions.
Interlocutory injunctions may either take the form of a security restraining order or an official order, the choice of which generally depends on the nature of the claim. Though security restraining orders aim exclusively at securing pecuniary claims, official orders deal with claims other than those of a pecuniary nature. That is why the focus hereinafter is based on security restraining orders.
Security restraining orderAs long as the party has direct access to enforcement, thereby achieving the same results, injunctions are inadmissible. If the applicant is already sufficiently secured, either by a right of lien or retention, or the court views him or her as sufficiently protected, an injunction may be denied.
A court will only grant injunctions if two major conditions are met. Besides certifying the claim that warrants such a legally far-reaching measure, it is necessary to establish reasonable security reasons. The applicant must furnish prima facie evidence that he or she is going to face risk. In some cases, it is sufficient to certify that the opposing party is a ‘domiciliary company’ (B 27.01.1997, 1 C 208/96-35, LES 1998, 166).
As security for pecuniary claims, the court may order different injunctions as follows:
- the seizure, custody and compulsory administration of movable tangible property;
- the deposit of funds in court;
- an injunction by order of the court on the sale or seizure of movable tangible property to the effect that the sale or seizure is rendered invalid; or
- an injunction addressed to a third party in which the alleged debtor must file a pecuniary claim against that third party.
In urgent cases, an applicant may file a preliminary request to the competent authorities to render a provisional order. However, the applicant must file the motion with the court in writing. A preliminary court order loses any effect if the applicant fails to do so (article 272 of the EO).
Interim injunctions are always issued and enforced at the expense of the applicant. Upon service of the injunction, the applicant can be required to pay in advance to the court the amount of money required for the enforcement of the issued injunction. The enforcement may not be effected until that amount has been paid (article 286, paragraphs 1 and 3 of the EO).
Non-compliance with court ordersHow do courts punish failure to comply with court orders?
There are two types of court sanctions. The first are court orders during court hearings, the second are court orders as final court decisions.
During ongoing court proceedings, a judge may ask the speaker to give up the floor as well as to forbid him or her from making further statements (section 197 of the ZPO). The judge may punish improper behaviour through a fine, a short prison sentence or exclusion from a court hearing. The exclusion of a lawyer from a court hearing is not possible. However, the latter may be fined in cases of non-compliance with court orders.
If a party does not comply with a (final) decision of a court, the judgment is enforceable (article 1 of the EO). If a judgment obliges a party to perform or not perform a specific action, the opposing party may file a motion for a fine or a prison sentence to force the party to perform the required action (article 257 of the EO).
Obtaining evidence from other jurisdictionsHow can information be obtained through courts in other jurisdictions to assist in the civil proceedings?
Liechtenstein is a signatory to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters 1970 (the Hague Evidence Convention). As a result, Liechtenstein obtains evidence such as judicial documents, local inspections, witness statements, taking parties to disputes, the production of documents and expert opinions from other jurisdictions.
Parties not signatories to the aforementioned convention may obtain mutual legal assistance but only after case-by-case evaluation.
Assisting courts in other jurisdictionsWhat assistance will the civil court give in connection with civil asset recovery proceedings in other jurisdictions?
As a signatory to the Hague Evidence Convention, Liechtenstein also assists in the service of judicial documents, local inspections, witness statements, taking parties to disputes, the production of documents, providing expert opinions, etc.
Furthermore, the District Court is obliged to assist courts from other jurisdictions unless the assistance would be against the law of Liechtenstein, or there would be no reciprocity (section 27 of the JN).
Foreign judgments are generally not enforceable in Liechtenstein. There are bilateral agreements with Austria and Switzerland. Although Liechtenstein is a member of the European Economic Area, Council Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (EuGVVO, Brussels I) does not apply. Liechtenstein is not subject to EC regulations and directives in this area and is not a signatory to the Lugano Convention. However, Liechtenstein is a signatory to the New York Convention, which entered into force in 2011, which guarantees enforcement of Liechtenstein arbitral awards and vice versa.
To enforce a foreign judgment in Liechtenstein, the decisions of a foreign court must usually be converted into an enforceable Liechtenstein court order.
Causes of actionWhat are the main causes of action in civil asset recovery cases, and do they include proprietary claims?
Civil asset recovery claims may be brought on the basis of many different causes of action. In general, the main cause of action in civil asset recovery cases is damages according to section 1293 et seq of the ABGB. These articles are relevant for nearly every claim for damages, regardless of whether the cause is ex contractu or ex delicto. Contract-based claims may be filed for breach of contract (section 1295(1) of the ABGB). This cause of action also applies where there is no contract but a party unlawfully caused damage to another party (eg, through fraud). Claims based on illegal enrichment (section 1041 et seq of the ABGB) as well as liability regarding entities (article 218 et seq of the PGR) are also possible. With respect to insolvency and bankruptcy matters, legal acts, provided that the debtor carried them out within the year before an enforcement was granted and that he or she was already overindebted at the time of execution, are also contestable according to article 66 of the Liechtenstein Code of Securing Legal Rights (RSO).
Moreover, it is possible to take legal actions on the grounds of ownership.
RemediesWhat remedies are available in a civil recovery action?
There are several remedies when it comes to a civil recovery action. However, applicable remedies usually depend on the cause of action.
According to section 1323 of the ABGB, the first remedy is always restitution in kind if the cause of action allows it. If restitution in kind is not possible, damages may be awarded in cash. Regarding a breach of contract, a party may seek fulfilment of the agreement (specific performance) or sue the other party for damages. With respect to tort-based claims, remedies are usually granted in the form of damages.
Article 277 of the EO grants provisional remedies, such as security restraining orders and official orders.
Judgment without full trialCan a victim obtain a judgment without the need for a full trial?
Under certain circumstances, the law allows a judgment without full trial. If a defendant, for instance, does not attend a court hearing, he or she can be judged, but only under certain circumstances in his or her absence (default judgment, section 396 et seq of the ZPO).
Moreover, the ZPO allows a simplified procedure for pecuniary claims, which is a summary proceeding. For recovery of debt or liquidated demand, summary proceedings are highly relevant. A creditor could simply file a motion for a summary notice to pay the specific amount. The summary notice will be granted by a judge without questioning the merits of the case and subsequently served upon the debtor. The debtor may lodge a protest within 14 days, which leads to the cancellation of this summary notice or, in case such a protest is not lodged within 14 days, to legal validity of the summary notice, which therefore means it is enforceable.
If a protest is lodged within these 14 days, the creditor may bring a claim by way of a Rechtsöffnungsverfahren: a motion for setting aside the debtor’s protest (section 49 et seq of the RSO). In contrast to full trial proceedings, this simple and swift proceeding is particularly favourable to foreign creditors.
For non-pecuniary claims, in order to assert any claim to a declaration, legal form, performance or omission, the ZPO also allows a simplified procedure, the Rechtsbotverfahren (section 593a et seq of the ZPO).
Post-judgment reliefWhat post-judgment relief is available to successful claimants?
If a judgment becomes legally binding and a party is not willing to honour his or her obligations out of this judgment, the EO states that judgments are enforceable (article 1 of the EO). Enforcement proceedings are usually initiated by a motion from the prevailing party, which must refer to the enforceable judgment, the settlement or the payment order.
EnforcementWhat methods of enforcement are available?
Methods of enforcement are enlisted in the EO. Inter alia, the following measures are available to enforce court judgments:
- compulsory creation of a lien;
- compulsory auction;
- seizure of movable and immovable assets;
- forced administration through an official receiver; and
- seizure, confiscation and sale of movable tangible assets.
Article 201 of the EO states several provisions regarding pecuniary claims that must be considered during enforcement proceedings. As mentioned in question 12, a creditor may also file a motion for a fine or a prison sentence to honour the binding judgment if a judgment obliges a party to perform or not perform a specific action (articles 256 and 257 of the EO).
Funding and costsWhat funding arrangements are available to parties contemplating or involved in litigation and do the courts have any powers to manage the overall cost of that litigation?
In general, each party bears his or her own costs a priori (section 40 of the ZPO). However, the party wholly unsuccessful in a legal dispute must reimburse its opponent all costs caused by the conduct of the lawsuit, which were necessary for appropriate legal prosecution or legal defence (section 41of the ZPO). If each party wins or loses in part, costs are usually set off against each other or divided proportionately. However, even in such cases, the court may order one party to reimburse the other party for all costs incurred by the other party, if the prerequisites set forth in section 43(2) of the ZPO are met.
Nevertheless, a party may seek legal aid if he or she is unable to fund legal costs and lawyers’ fees without putting his or her ‘daily needs’ in danger (section 63 et seq of the ZPO). Legal aid is available for natural persons as well as legal entities and can include a temporary exemption from, inter alia, paying court fees.
Another common funding arrangement is an insurance regarding legal expenses.
Lawyers’ fees are regulated by a statutory tariff. This tariff is applicable on a party-to-party basis and determines what costs must be reimbursed to the other party. That aside, lawyers may freely agree their fees. Lawyers are not allowed to assert a contingency fee and are not allowed to purchase a client’s claim, which is the object of ongoing court proceedings.
Normally, parties themselves fund court proceedings. Even though there are no specific provisions with respect to third-party funding, litigation funding by an independent third party is possible.
