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Damages and costs
What rules and standards govern the calculation and award of damages?
The calculation of damages depends on the cause of the action on which the claim is based. As a rule, a party may claim monetary compensation for damages directly caused by the defendant. ‘Damage’ constitutes the involuntary reduction of a person's assets (ie, the diminution of assets or non-diminution of liabilities, or the increase in liabilities or non-increase in assets). Such damage is classed as ‘economic damage’, which may be awarded by the courts. However, courts are reluctant to award normative damages, such as commercialisation damage or frustration damage.
With regard to prospectus liability claims, damages are the difference between the securities purchase price and the securities market price after the correct information has been disclosed to the public or market. However, when determining the damages, further factors which usually also affect market prices (eg, market outlook or business circles) should be taken into account. Such factors may reduce the value of securities claims.
Are damages capped?
Yes. As a rule, compensation for damages may not exceed the economic value of the loss suffered.
Are punitive damages allowed?
No. A claimant may request compensation only for damages suffered from the defendant's misconduct or action. Parties to a contract may agree on liquidated damages or contractual penalties. However, such contractual compensatory claims are not comparable to punitive damages.
Are any other remedies available?
N/A. The Financial Market Supervisory Authority has various penalties under the Financial Market Supervision Act.
Who bears the costs of proceedings? Can this burden be shifted in any way?
The Civil Procedure Code states that the unsuccessful party is liable for the litigation costs. The costs include the court costs (eg, for taking evidence and ruling on the case) and the costs incurred by the successful party (eg, the reimbursement of the necessary outlays and the attorney fees). If no party is entirely successful, the court has discretion to allocate costs in accordance with the outcome of the case. For example, if the claimant was caused to litigate in good faith, it may not be liable for the entire cost, even if it lost the case. Unnecessary costs are charged to the party that caused them, regardless of which party won the proceedings.
How are costs calculated? Does interest accrue on costs?
Litigation costs depend on the dispute's value. However, attorney fees are charged at an hourly rate. The exact cost calculation is provided by cantonal law and may differ from canton to canton. The costs of the proceedings do not accrue interest.
What rules and procedures apply to the provision of security for costs?
For the provision of security, the Swiss rules distinguish between the advance payment of court costs and the security for the party’s costs. With regard to the court costs, the court may demand the claimant to make an advance payment up to the amount of the expected costs. However, a defendant may request security on the costs from the claimant only if:
- the claimant has no residence or registered office in Switzerland;
- the claimant appears to be insolvent or owes costs from prior proceedings; or
- there is a considerable risk that the compensation will never be paid.
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