An extract from The Dispute Resolution Review, 12th Edition
Court procedurei Overview of court procedure
International jurisdiction is given once the jurisdiction of the Liechtenstein courts is established. National jurisdiction is given either where the general jurisdiction applies or one of the 'special jurisdictions' is given. If a defendant is resident in Liechtenstein, general jurisdiction is established. For practical purposes, the special jurisdiction based on assets is of particular importance. This means that monetary claims may be pursued against an individual or legal entity that does not have its domicile in Liechtenstein if that party has assets within Liechtenstein; for example, in the form of a deposit with a Liechtenstein bank or a claim against a debtor resident in Liechtenstein. Besides this, the parties may also submit themselves to Liechtenstein jurisdiction by express agreement (prorogation).
Civil proceedings are initiated by filing a legal action or statement of claim with the LG. In the legal action, the plaintiff has to set out the facts on which he or she bases his or her claim and the evidence with which he or she intends to prove the asserted facts. If the court accepts that it has jurisdiction, it serves the legal action on the defendant and at the same time sets a date for the first hearing. At the first hearing, the defendant may invoke formal objections and must apply for the order of a security for costs, if the prerequisites are given. Persons who have no residence in Liechtenstein or who lose such during the legal proceedings and are plaintiffs or appellants in a Liechtenstein court are in most cases obliged, if so required, to furnish the defendant or respondent with a security for the costs of the proceedings. Likewise, legal entities that do not have sufficient property on which execution can be levied may also be required to furnish a security for the costs of the proceedings.
Natural persons who are not able to bear the costs of litigation without detriment to the necessary maintenance may apply for legal aid in civil matters with the LG. Likewise, legal persons may apply for legal aid if the means necessary to cover the costs of litigation cannot be borne by the legal person itself or the persons economically involved in the proceedings. Legal aid is only granted if the litigation is not considered vexatious or futile (Section 63 ZPO). If legal aid is granted, the party may also be (and in general is) freed from the payment of court fees and from the provision of a security for costs (Section 64 ZPO).
In cases where the claimant is ordered by the court to deposit a security for costs, the defendant is invited by the court to submit a reply to the statement of claim, if such a security for costs is deposited in time. Thereafter, depending on the complexity of the case, the court usually sets a hearing to decide on the evidence that will be taken. The matter is then heard in one or more oral hearings where the parties may plead their case, witnesses are examined, etc. Once the judge is satisfied and finds that the factual basis of the case is duly presented and the matter ready for taking a decision, he will close the hearing and then deliver the written judgment. As a general rule, further factual pleadings and new evidence may be put forward or offered by the parties to support their pleadings until the closure of the oral hearing.
The control of the proceedings is exercised by the judge who opens, directs and closes the oral hearing and thereby is in charge of the control of the duration of the proceedings (Section 180 ZPO). He may order the parties to submit written pleadings and sets the dates for the examination of witnesses, experts and the production of evidence. He or she is also obliged to discuss the factual and legal pleadings with the parties (Section 182a ZPO) and may not base his or her decision on any legal ground that one of the parties obviously was not aware of unless he or she discussed it with the parties (Section 182a ZPO).Ordinary appeals
The Liechtenstein civil procedure distinguishes between judgments and orders.
Each judgment passed by the LG may be appealed to the OG within four weeks. In appellate proceedings, the OG gives its decision either by confirming the judgment of the LG or by setting it aside and referring the matter back to the LG, or by itself amending the contents of the judgment. The OG in general does not conduct an oral hearing on the appeal. An oral hearing only takes place by specific request by one of the parties or if the OG considers it necessary because of the specific circumstances. To specify the grounds for avoidance, new facts and evidence may be submitted as long as the claim remains identical (novation is not prohibited before the second instance court). However, the court may refuse to accept new pleadings or take further evidence if it concludes that the new pleadings or evidence have negligently not been brought forward in first-instance proceedings (Section 452(3) ZPO). Moreover, the parties may also contest procedural errors or the LG's factual and legal findings. Procedural errors regarding the form of procedural measures, however, may only be contested if they have already been contested in first instance right after the violation happened (Section 196 ZPO).
Judgments of the OG may, in general, be appealed to the OGH within four weeks. An appeal to the OGH is, however, not possible and the judgment of the OG is final in the following cases:
- small-claims proceedings (values in dispute up to 5,000 Swiss francs; Section 471(1) ZPO in connection with Section 535(1) ZPO); and
- generally cases with values in dispute up to 50,000 Swiss francs in which the OG has confirmed the decision of the LG.
The OGH conducts a non-public hearing and is solely concerned with legal errors. Fact-finding by the lower level courts can, therefore, no longer be contested (novation is prohibited). Accordingly, the parties may only raise points of law on material or procedural issues, but new evidence or pleadings are not allowed.
Most orders by the LG, such as the order to lodge a security deposit for costs and fees or the refusal to accept jurisdiction, may be appealed to the OG within two weeks. Decisions by the OG may be appealed to the OGH in general as follows: an order overturning the decision of the LG may be appealed to the OGH within 14 days. Where an order of the OG confirms an order of the LG, no further appeal to the OGH is possible. Pursuant to the revised ZPO, there are, however, certain exceptions from this general rule with respect to orders concerning the sequence of the proceedings which can, in any event, only be appealed to the OG and not to the OGH (also in cases in which the OG does not confirm the decision of the LG, but overturns it).
An appeal against a judgment to the OG or to the OGH has suspensive effect, which means that the appealed decision has no res judicata effect and cannot be enforced (Section 436 ZPO). In contrast, an appeal against a court order does not, in principle, have suspensive effect (Section 492(1) ZPO). Upon application of the appealing party, the court may, however, grant suspensive effect to the appeal (Section 492(2) ZPO).Extraordinary appeal to the StGH
Decisions of the OGH or the OG that are final and ultimately determine a matter (i.e., which are, for example, not merely referring a matter back to the lower instance) may be appealed to the StGH within four weeks for alleged violation of fundamental rights granted by the Constitution or by international conventions such as the European Convention on Human Rights. An appeal to the StGH does not have the effect of staying the judgment, unless such stay is specifically granted by the StGH, acting through its president, upon request of one of the parties. The StGH can only quash the challenged order or judgment; it cannot pass a new decision on the merits. The ordinary courts are, however, bound to the legal considerations of the StGH and have to revise the quashed decision in accordance with the same.ii Procedures and time frames
The duration of proceedings before the first instance obviously depends on the subject matter and complexity of the case at hand. If extensive evidence has to be taken, for example, by hearing a large number of witnesses or if the court needs to appoint an expert witness for special questions of fact or if a witness needs to be heard abroad via letters rogatory, the duration of the oral proceedings before the LG may take up to one year and in complex cases even longer. As a general rule, a decision of the LG may be expected within one year. A final decision that may only be obtained from the OGH can take up to three years. If a matter is of great complexity and if decisions of the lower instances are lifted and the matter handed down to the lower instance for a new decision proceedings may also take considerably longer.
Both prior to the opening of a lawsuit and during litigation, and even during the execution proceedings, interim injunctions may be issued (Article 270 EO). They serve to secure the right of the party complainant if, in the absence of a protective injunction, there is the risk that a future execution will be prevented or made difficult; for instance, if a claim has to be enforced outside Liechtenstein. Interim injunctions may take the form of a protective order to secure money claims, or of an official order to secure other claims. The applicant must furnish prima facie evidence both of his or her claim and of the risk that may render future executions more difficult. Therefore, the only effect of the interim injunction is that it temporarily maintains the status quo (protective injunction). An interim injunction is normally issued ex parte within two to three days. It is up to the court to decide if the defendant shall be heard prior to the passing of the interim injunction. Under Liechtenstein law, it is not possible to obtain a free-standing injunction. This is because in all cases where an interim injunction is granted the court will set a time limit for the claimant to file a statement of claim and commence ordinary civil proceedings. If that time limit is not adhered to, the injunction will be lifted.iii Class actions
Generally, class actions are not included in Liechtenstein procedural laws. Section 11 et seq. ZPO contain provisions regarding the joinder of parties (either as joined plaintiffs or joined defendants). Pursuant to these provisions, several persons may act as joint claimants or joint defendants if their rights are based on the same legal and factual grounds. The Liechtenstein Consumer Protection Act (KSchG) enables certain consumer protection organisations to claim on behalf of several individuals, for example, against terms and conditions of businesses that are disadvantageous to consumers (Article 41 et seq. KSchG). However, these are not class actions in the strict sense.iv Representation in proceedings
The civil procedure law of Liechtenstein does not provide for compulsory representation: irrespective of the amount claimed or the object in dispute or the instance, every person may represent himself or herself or be represented. In practice, however, it rarely occurs that parties act without representation before the courts.v Service out of the jurisdiction
Although Liechtenstein is not a member of the Hague Treaty on International Service, service on foreigners is regularly performed via letters rogatory to the competent court where the defendant resides. The rules regarding service out of the jurisdiction are contained in Article 13 of the Law regarding the Service of Official Documents. In the absence of any international treaties, service has to be effected in the way provided for by the laws or other legal provisions of the country in which a court document has to be served, or alternatively, as permitted by international custom, or where necessary via the diplomatic route. The LG will request the foreign court to which the letter rogatory is addressed to provide a confirmation of service. The rules of service for natural and legal persons do not differ.vi Enforcement of foreign judgments
The levying of execution or the performance of individual acts of execution on the basis of a foreign judgment (or other foreign enforceable instruments) is possible in Liechtenstein according to Article 52 et seq. EO only if this is provided for in treaties or if reciprocity is guaranteed to the government by treaties or government policy statements. There have not been any such statements guaranteeing reciprocity so far.
The few bilateral and multilateral treaties concluded by Liechtenstein and the enforcement of foreign judgments in the absence of an enforcement treaty are discussed below.Bilateral treaties
On 25 April 1968, Switzerland and Liechtenstein concluded a treaty on the Recognition and Enforcement of Court Decisions and Arbitration Awards in Civil Law Matters (published in the LGBl 1970/14). On 5 July 1973, Liechtenstein concluded a treaty on the same subject matter with Austria (published in LGBl 1975/20). The treaty with Austria also covers the reciprocal recognition of settlements and public documents.
Both treaties require all of the following conditions to be met in order to recognise a judgment:
- recognition of the judgment must not be contrary to public order of the state in which the judgment is asserted and a plea of res judicata must not be possible;
- the judgment must have been passed by a court with jurisdiction relating to the subject matter according to the principles set out in the treaty;
- the judgment must have entered into legal force according to the law of the state where it has been passed; and
- in case of a default judgment, the writ of summons, by which proceedings are instituted, must have been served on the party in default personally or on a proper representative.
In 1972, Liechtenstein ratified the Convention of 15 April 1958 concerning the Recognition and Enforcement of Decisions Relating to Maintenance Obligations Towards Children (LGBl 1972/55), and in 1997 the European Convention on Recognition and Enforcement of Decisions concerning Custody of Children and on Restoration of Custody of Children (LGBl 1997/110).
The Liechtenstein Parliament consented to the signing of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 on 19 May 2011. The New York Convention was then ratified and entered into force on 5 October 2011.
Currently, Liechtenstein has not signed or become a party to any other multilateral treaty or instrument. In particular, it is not a party to the Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters of 1988/2007 or Council Regulation (EC) No. 44/2001 of 2000 resp. Regulation (EU) No. 1215/2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (Brussels-I Regulation resp. Brussels-Ia Regulation).Enforcement of a foreign judgment in Liechtenstein
As mentioned above, foreign judgments may generally not be enforced in Liechtenstein. Consequently, a judgment creditor must obtain a Liechtenstein enforceable instrument against the judgment debtor, before he can successfully levy execution in Liechtenstein. A foreign judgment is sufficient to be granted what is called Rechtsöffnung, in other words, simplified proceedings to obtain a Liechtenstein enforceable instrument. On the account of the Rechtsöffnung, the creditor who has obtained a default summons or other decision within summary proceedings may have the debtor's opposition or legal proposal annulled by the court, if the claim he or she has put forward is based on a Liechtenstein or foreign public instrument. The respondent in such proceedings may avoid an enforceable instrument only by bringing an action for denial. Once an action for denial has been brought, the merits of the case are decided upon in contentious proceedings before a court of law. In practice, this means that if the opponent does not want a foreign judgment to be validated by Rechtsöffnung, the whole case has to be re-tried on the merits before the Liechtenstein courts.vii Assistance to foreign courts
The provisions of Section 17 et seq. JN provide assistance to foreign courts. Pursuant to Section 27 JN the LG has to grant legal assistance unless the requested act does not fall within the competence of the LG or if an act is requested that is prohibited by Liechtenstein law or if reciprocity is not given. Where the LG doubts the existence of reciprocity, it has to obtain a binding declaration from the OG in this respect.
The most common cases of legal assistance for a foreign court in civil proceedings are the service of documents and the examination of witnesses. The court has to provide legal assistance in accordance with the Liechtenstein procedural laws pursuant to Section 28(1) JN.viii Access to court files
As a rule, court hearings in civil cases are open to the public. However, in specific cases, where the public interest or the protected interests of a person are directly affected, the public may be excluded. Written submissions in civil proceedings are not made available to the public. Therefore, non-parties are not granted access to the court file, unless the parties of the lawsuit agree to grant information to the third party or such third party can prove some legal interest (for example, if the information is required for a lawsuit) and is granted access through a court decision. Judgments may be requested by anyone, but are only made available in anonymised form.ix Litigation funding
There are no rules in Liechtenstein regarding litigation funding by disinterested third parties. It is in principle up to the litigating parties how they fund their litigation. Parties may therefore use third-party funding to pay the legal costs in order to reduce their risks. Litigation funding usually occurs in large arbitration and litigation disputes or when a number of people suffer losses with a common cause (so that in aggregate, those losses are significant).