General climate and recent developments

State of legal development

In general terms, how developed are the product regulation and liability laws in your jurisdiction?

In terms of product regulation and liability law, Switzerland has kept up with international developments. On 12 June 2009, the Swiss Parliament enacted the Product Safety Act (SR 930.111) which governs the safety of products that are placed on the Swiss market at a product level.

Since the act came into force on 1 July 2010, Switzerland has established general requirements that subsidiarily apply for a selection of products. The Product Safety Act aligned Switzerland’s product safety regulation with the EU Product Safety Directive (2001/95/EEC). Before the act came into force, only the safety of technical equipment and devices was regulated by a product-overarching act, whereas the safety of all other products was governed by sectoral law, if at all.

Swiss legislators are constantly developing sectoral product regulations, as Switzerland is statutorily obliged to coordinate its technical regulations with its most important trading partners (Article 4 of the Act on Technical Barriers to Trade).

Switzerland has adopted most of the harmonised rules issued by European standardisation organisations (the European Committee for Standardisation, the European Committee for Electrochemical Standardisation and the European Telecommunications Standards Institute).

In addition, liability arising from an unsafe or defective product is governed by the Product Liability Act (SR 221.112.944), which is almost identical to its European equivalent, the EU Product Liability Directive (85/374/EEC).

Recent developments

Have there been any notable recent developments in relation to product liability law and product safety law in your jurisdiction, including any regulatory changes and case law?

As regards regulatory changes, a revised foodstuffs and utility articles law entered into force on 1 May 2017. Further, a comprehensive revision of legislation on therapeutic products is due to enter into force at the beginning of 2019. Noteworthy developments in Swiss case law include the following:

  • The Federal Supreme Court decision of 19 December 2006 (133 III 81) dealt with a glass carafe from a coffee maker which exploded. The court addressed the concept of defect pursuant to Article 4 of the Product Liability Act (SR 221.112.944) in detail and held that a product is deemed defective if it does not provide for the safety that the general public may legitimately expect of it during its use, without regard to any product misuse beyond reason. However, the producer must take into account any foreseeable use and warn the user accordingly and provide information on the prevention of product risks.
  • In its decision of 19 June 2010 (4A_255/2010) the Federal Supreme Court assessed liability claims arising from a defective window. It held that a producer was not liable for the manipulation of a product after its market placement which was beyond the reasonable expectation of the producer.
  • In its decision of 18 March 2011 (137 III 226) the Federal Supreme Court dealt with so-called ‘development risks’ of products after their market placement. It confirmed that a producer was not liable for any defects that were not detectable at the time of the market placement according to the then current state of science and technology (Article 5, Paragraph 1 of the Product Liability Act).
  • In its decision of 4 October 2010 (4A_319/2010) the Federal Supreme Court reduced the compensation for an injured party who failed to carefully study the product manual before using the product.
  • In its decision of 9 September 2013 (2C_13/2013) the Federal Supreme Court found that the malfunction of a product constituted a product defect if the value of the product specifically lies in its serviceability (eg, a fire extinguisher).

Legal framework

Legislation

What primary and secondary legislation governs product safety and liability in your jurisdiction?

Switzerland is a civil law country and the primary legal framework is the statutory law. The regulation of product safety follows a sectoral approach. If the product specific law (ie, the foodstuffs or utility article legislation) does not provide safety requirements for the product in question, the provisions of the Product Safety Act (SR 930.111) and the implementing Product Safety Ordinance (SR 930.111) apply.

However, when it comes to product liability legislation, the approach is different; Swiss law provides for different product liability claims subject to varying legal requirements. For example, the Product Liability Act (SR 221.112.944) provides strict causal liability, in the sense that the manufacturer is generally liable for damage caused by its product regardless of fault.

Pursuant to Article 11 of the Product Liability Act, the injured party may also base its claims on less strict tort or contractual law. When it comes to secondary sources of law, Swiss courts may fall back on customary law if statutory law is incomplete. However, for product safety and liability customary law is of only minor importance. A further secondary source of guidance is Swiss case law.

Regulatory and enforcement authorities

Which government authorities regulate and enforce product safety and liability laws in your jurisdiction, and what is the extent of their powers?

With regard to product safety law, the Federal Council and its administrative bodies have legislative powers to specify the law within the scope of the delegation of powers in the pertinent statutory provision. For example, the Product Safety Act (SR 930.111) empowers the Federal Council to determine the essential health and safety requirements for products, taking the relevant international law into consideration (Article 4). With regard to product liability regulation, administrative bodies have limited legislative power.

The enforcement of product safety regulation follows a sectoral approach. In general, the enforcement of product safety legislation is the responsibility of the authorities that govern the specific product sector (Article 2 of the Product Safety Ordinance SR 930.111.). For example, pursuant to Article 42, Paragraph 1 of the Swiss Foodstuffs and Utility Articles Act, the Swiss cantons are competent to enforce the foodstuffs and utility articles legislation in Switzerland (with a few exceptions) and are therefore also competent to enforce product safety regulations.

However, the Product Safety Ordinance sets out specific enforcement provisions for:

  • machines;
  • elevators;
  • gas appliances;
  • pressure equipment;
  • simple pressure vessels; and
  • personal protective equipment.

For these specific products, the Swiss Accident Insurance Institution and the Swiss Advice Centre for Accident Prevention are responsible for enforcing product safety provisions. The Federal Department of Economic Affairs, Education and Research (WBF) regulates the specific enforcement powers for each product category in a separate ordinance (Ordinance of the WBF on the Execution of Market Surveillance in accordance with Section 5 of the Product Safety Act, SR 930.111.5).

Liability

Product defects

How is a ‘product defect’ defined in your jurisdiction?

Pursuant to Article 4 of the Product Liability Act (SR 221.112.944), a product is deemed to be defective if it does not meet safety expectations taking into account all circumstances, particularly:

  • how the product is presented;
  • its reasonable foreseeable use; and
  • the timing of its market placement.

However, a product is not deemed defective only because an improved product was placed on the market at a later date. The undefined term ‘justified safety expectations’ is determined in view of the product knowledge of the average user in Switzerland. According to legal doctrine, Article 3 of the Product Safety Act (SR 930.111), which defines the regulatory requirements for the safety of a product, further clarifies Article 4 of the Product Liability Act. Pursuant to Paragraphs 3 and 4 of the article, the following should be considered:

  • the product's lifespan;
  • the product’s foreseeable interaction with other products;
  • the user;
  • the labelling and get-up;
  • the packaging and instructions for the assembly, installation and maintenance of the product;
  • warning and safety notices;
  • the user manual;
  • information about disposal; and
  • all other information ensuring the safety of the product.

Therefore, a product can be defective if it does not meet the safety expectations pursuant to Article 3 of the Product Safety Act.

Causation and burden of proof

How is causation of loss or damage established in relation to product liability claims and where does the burden of proof lie? Can this burden be shifted in any way?

Causation requires that there is a natural and adequate causal relation between the product defect and the damage. Natural causation is given if the defectiveness of the product is a necessary condition for the damage. However, a producer is liable only for adequately caused damage by a defective product. In other words, a producer is liable only if the product defect is deemed capable of causing the damage which occurs in the ordinary course of events and according to the general use of the product. Generally, the injured party must establish that the requirements for liability are met in a detailed manner. However, the injured party may face considerable difficulty in adducing evidence in cases where the defective product has been destroyed or disposed of. In such cases, Swiss courts apply a less strict standard of evidence.

Legal bases for claims

On what legal bases can a product liability claim be brought?

In Switzerland, product liability claims can be brought under the following legal bases:

  • An injured party may invoke Article 1 of the Product Liability Act (SR 221.112.944) which holds that the producer is liable for damage if a defective product causes the death or injury of a person or damage or destruction of an object which was normally intended for private use and which was used for private purposes by the injured party. Under the act, the producer is not liable for the defects of the product in question.
  • An injured party may bring forward product liability claims based on general bases of liability such as contract or tort law. If there is a contractual relationship between the producer and the injured party (eg, a sales or rental contract), the producer is liable for any damage arising from the defective contractual object when they are at fault for the defect. If there is no contractual relationship between the producer and the injured party, the latter may bring forward product liability claims based on the producer's general fault-based liability pursuant to Article 41 of the Swiss Code of Obligations (SR 220) or based on the liability of the principal (Article 55 of the code).
  • Product liability claims may also be brought forward under federal or cantonal law (eg, Article 27 of the Act on Explosive Substances).

Criminal liability

Can a defendant be held criminally liable for defective products?

A defendant can be held criminally liable for defective products particularly if the product defect constitutes a safety or health risk. The pertinent criminal liability provisions are regulated by sector. For example, Article 86 of the Therapeutic Act (812.21) states that any person who wilfully endangers human health by placing on the market medicinal products that do not comply with the requirements of the act will be penalised with imprisonment or a fine.

At a subsidiary, overall product level, the Product Safety Act (SR 930.111) states that any person who deliberately places a product on the market that more than slightly endangers the safety and health of the user and third parties during normal or reasonable foreseeable use and which does not meet the fundamental safety and health requirements set forth by legislation or, if no such requirements are established, that do not correspond to the state of the science and technology, will be liable to imprisonment of up to one year or a fine (the maximum fine is Sfr1.08 million, Article 34 of the Swiss Criminal Code (CC, SR 311.0)). In case of negligence, only a fine is imposed.

Liable parties

Which parties can be held liable for defective products?

Pursuant to Article 1 of the Product Liability Act (SR 221.112.944), the producer is liable for damage arising from a defective product. Pursuant to Article 2 of the act, the person who made the final product, a basic substance or a partial product, or who imports a product for the purpose of selling, leasing, hire-purchase or any other form of distribution in the course of its business, or who is claiming to be a manufacturer by putting its name, trademark or other identifying mark on the product is deemed to be a ‘producer’ and can be held liable.

Under civil liability, any person providing another person with a defective product can be held liable for damage arising from such a product provided that there is causation between the defect and the damage and provided that fault is established. Further, the person who is responsible for the product defect can be subject to criminal liability. This is either the responsible natural person within the producer's organisation or the producer's company itself if the offence is not attributable to any particular natural person within the company.

Limitation of liability

Can liability be excluded or mitigated in any way?

For claims brought under the Product Liability Act (SR 221.112.944) a producer cannot validly exclude or mitigate its liability for damage arising from a defective product towards the injured party. Article 8 of the act states that agreements restricting or excluding liability towards the injured party are deemed void.

However, liability disclaimers outside the scope of the Product Liability Act are permitted. Thus, a producer can validly exclude its liability for damage to commercially used objects arising from a defective product, as the act does not cover damage to objects in commercial use. The producer of a component of the final product can also exclude its liability towards the producer of the final product because the act can be invoked only by the injured party.

Under contract or tort law, a producer can validly exclude or mitigate its liability for damage arising from a defective product, except for wilfulness or gross negligence (Article 100, Paragraph 1 of the Swiss Code of Obligations (SR 220)).

Litigation

Procedure

What is the procedure for filing a product liability claim before the courts in your jurisdiction?

There is no special procedure for filing a product liability claim as such claims are filed in the same manner as other claims. Before filing an action with the court, the claimant must file a reconciliation request with a justice of peace who then attempts to facilitate a settlement between the parties. If no settlement can be reached, the claimant may file its action with the court. Actions are filed by way of written brief.

Generally, the prayers for relief request the payment of quantified damages. However, the claimant can also request payment for unquantified damage if it is impossible or unreasonable to quantify the amount of the damage at the start of the proceedings. In such a case, the plaintiff must indicate a minimal amount as a provisional value in dispute and must quantify its damages at a later point in the proceedings when evidence has been taken.

Interlocutory motions

Can the court issue interlocutory orders or judgments in product liability cases? If so, what rules and procedures apply?

In principle, the court can issue interlocutory decisions if the claimant can establish that the requirements for such measures are met. In product liability cases, the precautionary taking of evidence by a civil court may be of use. However, court practice has established strict conditions for such a measure to be granted.

Pre-trial disclosure

What pre-trial disclosure/discovery mechanisms are available in product liability cases, if any?

There is no pre-trail disclosure or discovery mechanism in Swiss civil procedure. Depending on the circumstances, a potential claimant may file a request under the Data Protection Act, which in some cases may offer some ‘discovery through the backdoor’. In addition, parties can apply for the precautionary taking of evidence (see above), but there are strict conditions for this measure to be granted.

Evidence standards

What evidence is accepted to support claims in product liability cases? What formalities apply to evidence submission?

In essence, all means of evidence are accepted to support product liability cases, including:

  • witness testimony;
  • documentary evidence;
  • inspection; and
  • court-appointed expert opinions.

The following must be filed along with written briefs:

  • documentary evidence that a party wishes to rely on;
  • indication of witnesses to be used; and
  • requests to the court to appoint an expert or to arrange for an inspection.

It should be noted that witnesses are examined by the court and there is no cross-examination. If a specific and relevant document is not provided that a party wishes to rely on, the opposing party may request the court to order that the document is provided.

Expert evidence

Under what circumstances will the court appoint an expert to assist it in examining the merits of the case? What rules and procedures apply?

The court may seek an opinion from one or more experts, at the request of a party or ex officio. The court will do so only if it considers an expert opinion necessary to prove relevant facts that are disputed by the parties.

The court instructs the expert and submits the relevant questions to them. The parties are given an opportunity to ask additional questions or to have the questions modified. The court can order that the expert submit their opinion in writing or present it orally. It may also summon the expert to the hearing to explain their written opinion. The parties are given the opportunity to ask for explanations or to put additional questions to the expert. However, cross-examination of the expert is not permitted.

4Can the parties rely on expert witness testimony to support their claims? If so, what rules and procedures apply?

Pursuant to Article 175 of the Swiss Civil Procedure Code, the court may ask an expert witness questions to assess the facts. The expert witness must have special expertise in the subject so that the court can examine them not only with regard to the facts, but also on their assessment of the facts. However, an expert witness cannot replace an expert opinion. In the event of an expert witness having an interest in the outcome of a case, the Swiss Federal Supreme Court holds that the witness must not be asked to assess the facts (cf BGE 94 I 417). In contrast to an expert, the expert witness is not subject to an appointment procedure. Further, an expert witness is liable to prosecution only for giving false testimony (Article 307 of the Swiss Criminal Code (SCC)) and not for giving a false expert opinion (Article 320 of the SCC).

Class actions

Are class actions or any other collective proceedings available for product liability claims in your jurisdiction? If so, what is the procedure for their formation and what benefits do they afford claimants? Are class actions formed on an opt-in or an opt-out basis?

There are no real collective redress procedures in Switzerland. However, it is possible to jointly bring several claims (eg, by a number of claimants filing their claims together when there are similar facts and legal grounds) in one proceeding or by way of an assignment of the individual claims to a claimant party. However, this is cumbersome and rarely done.

The Federal Council has recently published a proposal for certain amendments to the Civil Procedure Code which would provide for collective redress mechanisms, but it remains to be seen whether they will be adopted and if so, in what form and to what extent.

Appeals

What rules and procedures govern appeals of court decisions?

Apart from the specialty of the commercial courts that exist in some but not all cantons, the Swiss civil court system essentially provides two appeal opportunities:

  • from the court of first instance to the cantonal superior court; and
  • from the cantonal superior court to the Swiss Federal Supreme Court.

Depending on the type of appeal, the rules and procedures vary. Generally, the legal remedies against a court decision can be classified as:

  • ordinary remedies that suspend the legal effect of a decision and its enforceability; and
  • extraordinary remedies that suspend the legal effect only if ordered by the court.

The most relevant and only ordinary remedy is the vocation remedy (Article 308 of the Civil Procedure Code), which is directed against final and interim decisions of a first-instance court and decisions on interim measures of a first-instance court. Such an appeal may be filed on grounds of incorrect application of the law or incorrect establishment of the facts, in writing and within 30 days (10 days in summary proceedings) from service of the decision. Unless the appeal is obviously inadmissible or unfounded, the appellate court serves the appeal on the counterparty for its answer, which must be submitted within 30 days (10 days in summary proceedings).

As regards extraordinary remedies, the most pertinent is the complaint remedy (Article 319 of the Civil Procedure Code). Further extraordinary remedies are:

  • the revision remedy (Article 328 of the code);
  • the explanation remedy (Article 334 of the code); and
  • the rectification remedy (Article 334 of the code).

The complaint remedy is admissible against final and interim decisions and decisions on interim measures of a first-instance court which are not subject to an appeal (ie, vocation remedy), as well as other decisions and procedural rulings if the law provides so or if such decisions or rulings threaten to cause harm that cannot easily be made good.

The admissible grounds for a complaint remedy are an incorrect application of the law or an obviously incorrect establishment of the facts. It must be filed within 30 days (unless a summary proceeding decision or procedural ruling is being appealed where the deadline is generally 10 days). The appellate court may hold hearings and order further exchanges of briefs and the taking of evidence. It may:

  • confirm a challenged decision;
  • render a new decision; or
  • remit the case to the court of first instance.

Statute of limitations

What is the statute of limitations for filing product liability claims?

Claims under the Product Liability Act (SR 221.112.944) become time-barred three years from the date on which the injured party has or should have become aware of the damage, the defect and the manufacturer (Article 9 of the Product Liability Act). If a product liability claim is based on contractual liability, the statute of limitation is two years from the date of the delivery of the defective product. A product liability claim may also be brought on tort pursuant to Article 41 of the Swiss Code of Obligations, which provides for a relative statute of limitation of one year from the date on which the injured party became aware of the damage and the liable person and an absolute statute of limitation of 10 years from the date of the damaging event, irrespective of the injured party's knowledge of the damage (Article 60 (1) of the code).

Timeframe

What is the typical duration of proceedings in product liability cases?

Typically, a decision of the court of first instance is rendered within one to two years from the filing of the action. However, the duration depends on the parties' conduct, including:

  • the requests for extension of deadlines;
  • the filing of unrequested briefs; or
  • the taking of evidence.

Appellate proceedings before the court of second or last instance generally take another one to one-and-a-half years.

Costs, fees and funding

Can the successful party to the litigation recover court and attorneys’ fees and any other related expenses from the losing party? If so, what rules and procedures apply?

In Switzerland, the ‘loser pays’ principle applies. The costs follow the event. In other words, the successful party is entitled to compensation for its legal costs in accordance with a tariff which is primarily based on the amount at stake. The tariffs vary between cantons. The compensation granted does not necessarily cover the real costs incurred by a party; depending on the amount at stake, the amount payable as compensation for legal fees can be higher or lower than the actual costs incurred.

Some cantons take effective costs into account, but it is dependent on the canton and the respective court practice whether the court requests information on the legal fees incurred. For example, in Zurich, the court would not normally ask for costs statements, but would simply fix the amount of the compensation for legal costs based on the amount at stake in accordance with the tariff. The losing party must also bear court costs.

The allocation of procedural costs is regulated by Article 104 of the Swiss Civil Procedure Code. Procedural costs consist of court and party costs. Court costs are determined and allocated by the court ex officio; while party costs are awarded on request and in accordance with the relevant tariff, the parties may file their cost notes.

Pursuant to Article 106, Paragraph 1 of the Civil Procedure Code, both court and party costs must be borne by the unsuccessful party. The court does not reimburse an advance payment on court costs made by the successful party to such party, but only grants this party a compensation claim against the unsuccessful party, so that the successful party bears the risk that the costs may not be collected (Article 111, Paragraph 2 of the Civil Procedure Code).

If no party succeeds entirely, the costs are allocated in accordance with the outcome of the case. Further, unnecessary costs are charged to the party that caused them, independently of whether it was the losing party (Article 108, Civil Procedure Code).

What rules and restrictions (if any) govern contingency fee arrangements?

No win, no fee and contingency fee agreements are not permitted in Switzerland. It is possible to agree on a success fee element in the sense that counsel would receive a top-up fee if successful, but the fee that is payable in any case (regardless of the outcome) must at least cover any and all costs of counsel and must contain some profit element. However, in a widely criticised decision, the Swiss Federal Supreme Court established certain restrictions on success fee element arrangements, although the extent of the restrictions has not been made clear.

Is third-party litigation funding permitted in your jurisdiction? If so, do any rules or restrictions apply?

Third-party funding is permitted; provided that the party to the proceedings is directly funded by a third party, no limits apply. However, third-party funding may interfere with the independency rule for counsel mandated to represent their client’s interest. In this case, the rules of professional conduct may prohibit counsel from entering into a correspondingly funded client relationship.

Is legal aid (ie, public funding) available to claimants in product liability cases? If so, what rules, restrictions and procedures apply?

A person is entitled to legal aid if they do not have sufficient financial resources and if their case is not devoid of any chance of success. If legal aid is granted, the party is exempt from the obligation to pay an advance on court costs or to provide security for legal costs. The individual is also exempt from court costs and has the right to be allocated a legal representative.

If a party with legal aid is unsuccessful, the court costs and the costs for their legal representative are paid by the canton in question. However, legal aid does not relieve the party from paying the legal costs of the opposing party in case of defeat. A party benefiting from legal aid has to reimburse the costs as soon as they are in the position to do so.

In order to obtain legal aid, an individual must apply in a formal proceeding which generally precedes the main proceeding. In this legal aid proceeding, the applicant must disclose their financial situation and must state their position on the merits of the case. In the proceeding, the counterparty is also heard in case the legal aid would relieve the applicant from the obligation to provide security for the legal costs of the counterparty. In the proceeding for legal aid, no court costs are imposed on the applicant. If legal aid is denied, the applicant may appeal.

Settlement

What rules and procedures govern the settlement of product liability cases?

There are no peculiar rules or procedures with regard to the settlement of product liability cases. Generally speaking, many cases are terminated by way of settlement, that is:

  • out of court;
  • in court (so that the settlement is on the court’s record and the court issues a corresponding termination order);
  • as result of a reconciliation before the justice of peace; or
  • as result of mediation.

In the case of a court settlement, the court terminates the proceedings based on the settlement and the settlement takes full legal effect and is enforceable.

How common are settlements in product liability cases?

Settlements in product liability cases are common. Swiss producers generally prefer to settle claims in a confidential manner, in order to avoid a court decision that is, at least in principle, open to the public. This is also a reason why there are few court decisions on product liability claims.

Alternative dispute resolution

Are any alternative dispute resolution (ADR) methods required or advised before or in lieu of proceeding with litigation?

Before filing an action with the court, the claimant must institute a reconciliation proceeding before the justice of peace pursuant to Article 197 of the Civil Procedure Code. There are certain exceptions where no reconciliation proceeding is required (eg, in cases that fall within the jurisdiction of a commercial court). If an attempt at reconciliation is unsuccessful, the claimant may file its action with the court.

The parties may agree to replace the reconciliation procedure by mediation pursuant to Article 213 of the Civil Procedure Code. The parties may enter into mediation at any stage during the reconciliation or ordinary proceeding on the court's recommendation or at their joint request. Moreover, the parties may mutually agree to waive the attempt at reconciliation in financial matters when the disputed amount is at least Sfr100,000.

How commonly is ADR used in relation to product liability cases in your jurisdiction?

Settlements as a result of negotiations between parties are common, reconciliation proceedings are seen before the justice of peace and there is a tradition that courts facilitate settlement between parties if possible. Consequently, mediation is not commonly used in Switzerland (apart from in family law matters). However, as outlined above, it is common for parties to enter into direct negotiations on the disputed matter without the assistance of a court or mediator.

Defences

Available defences

What defences are available to defendants in product liability cases?

Pursuant to Article 5 of the Product Liability Act, a producer is not liable for damage arising from a product defect if it can prove that:

  • it has not placed the product on the market;
  • it can, in the circumstances, be assumed that the defect causing the damage did not exist when the product was placed on the market;
  • it has not manufactured the product for the sale or any other form of distribution for commercial purposes nor produced the product within the scope of its business;
  • the product defect is caused by the fact that the product complies with binding, officially issued regulations; or
  • the product defect was not detectable according to the state of science and technology at the time the product was placed on the market.

Further, the producer of a basic or semi-finished product is not liable if it proves that the defect was caused by the design of the product incorporating the basic or semi-finished product or by the instructions of the producer of that product.

If the claim is based on the Product Liability Act, the producer cannot defend itself by arguing lack of fault as the liability under the act is a strict liability.

Preliminary actions

What preliminary procedural mechanisms are available to defendants, if any?

A defendant who has reason to believe that an ex-parte interim measure will be requested against them in court may state their position in a protective letter in advance. The protective letter is served on the counterparty only if they initiate the proceeding in question. The protective letter is valid for a period of six months (Article 270 of the Civil Procedure Code).

Remedies

Damages

What types of damages may be awarded in product liability cases? What rules and standards govern their calculation? Are damages capped?

Damages can be awarded in the form of financial compensation or restoration. In the case of death or injury, financial compensation is paid, which is determined by the court taking into account the circumstances and the fault of the producer. Under the definition of ‘circumstances’, Swiss case law has developed several grounds for the reduction of damages. For example, the court may reduce the damages or exempt the liable person from liability if the injured party consented to the damaging action or if circumstances attributable to the injured party had an effect on the formation or aggravation of the damages.

In principle, compensation must cover all expenses arising from the damaging event (eg, costs for medical treatment and losses arising from inability to work). In the case of permanent damages, the compensation can be paid in the form of a pension or a one-off lump-sum payment. The Federal Supreme Court views the pension as the most appropriate form of compensation for permanent damages, as the injured person, with a pension adjusted to the wage or inflation index, receives compensation for the loss for as long as they suffer. Damages payments are not capped; however, they may not exceed the actual damages suffered.

Are punitive damages allowed?

Swiss liability law does not provide for punitive damages.

Other remedies

Are any other remedies available?

In the case of death or personal injury arising from a defective product, the court may award the injured person or the dependants of the deceased person an appropriate sum by way of satisfaction  pursuant to Article 47 of the Swiss Code of Obligations. The satisfaction serves to compensate the injured party for the suffered intangible injury (ie, the reduction of their wellbeing). The satisfaction is not meant to punish the liable person, but rather to compensate the injured party for the injustice by otherwise enhancing their wellbeing or making the damages more bearable for the injured party. Compared to other jurisdictions, satisfaction payments are small.

Product recalls

General requirements

Are there any statutory criteria under which a product must be recalled or other corrective action be taken?

The Product Safety Act provides for corrective actions to be taken by the producer or distributor of a dangerous or defective consumer product. The act is horizontally applicable and becomes applicable only if the sectoral applicable law does not provide for any corrective measures. Pursuant to Article 8, Paragraph 2 of the Product Safety Act, the manufacturer or any other distributor that places a consumer product on the market must take adequate measures to recognise the potential dangers arising from a normal or reasonably foreseeable use of its product, to prevent such danger and to trace back the product during its stated or reasonably foreseeable lifespan. Such adequate measures may consist of a sales stop or a recall.

Notification

What rules and procedures govern notification of the product recall to government authorities and the public?

If a producer or distributor learns or has reason to believe that its product poses a risk to the safety or health of consumers or third parties, it must immediately notify the competent authority of:

  • the product in question;
  • the risk involved; and
  • the measures which have already been taken to prevent the risk arising from the product.

The requirements of such a notification are provided in Article 8, Paragraph 5 of the Product Safety Act.

However, the act is applicable only if requirements are not provided by a specific sectoral law. The corrective measures to be taken by a producer in case of a safety or health risk, include:

  • informing the members of public concerned by:
  • releasing publications in magazines;
  • distributing letters to customers; or
  • publishing a notice of the safety risk on the website of the Federal Bureau of Consumer Affairs, which informs the Swiss public about current recalls and other safety measures of producers on a regular basis); or
  • sales stops and recalls.

The competent enforcement authorities may order or recommend further measures if deemed necessary. The Swiss State Secretariat for Economic Affairs has published a template form for the notification of dangerous consumer products which can be found on its website.

Repairs, replacements and refunds

What rules and procedures govern repairs, replacements and refunds for defective products?

Under product safety law, there are generally no statutory rules or procedures in place requiring a producer or distributor to repair or replace affected products or to refund the purchase price. If there is a contractual relationship between the producer and the buyer, the buyer may claim the repair or replacement of the product or the refund of the purchase price based on contract law (eg, based on a breach of warranty pursuant to Article 197 of the Swiss Code of Obligations) if the seller has not validly disclaimed such liability to the buyer.

Non-compliance

What penalties apply for non-compliance with the legal provisions governing product recalls?

The applicable penalties for non-compliance with product recall provisions are governed by sectoral law in the first instance. On a subsidiary basis, Article 16 of the Product Safety Act contains several criminal offences entailing penalties for non-compliance. Pursuant to Article 17 of the act, a producer or distributor that fails to inform the relevant authority of a detected safety or health risk arising from its products and take measures to prevent such risks (eg, information of its customers or the public, or the initiation of a product recall) against its obligation to do so under Article 8, Paragraph 5 of the Product Safety Act can be fined up to Sfr40,000. In case of negligence, the fine is limited to Sfr20,000. Fines are imposed on the responsible natural person within the producer's or distributor's organisation (Article 17, Paragraph 3 of the Product Safety Act and Article 6, Paragraph 1 of the Administrative Criminal Act).