Switzerland Clears The Path For Class Actions

Author:Dr. Urs Feller and Nina Lim
Profession:Prager Dreifuss

A proposed new class action procedure should allow companies to make a 'clean break' while facilitating a more efficient dispute resolution process overall.

In Switzerland, typical class actions as known in many other jurisdictions are not available. However, 'Dieselgate' and similar cases also affect consumers in Switzerland. If a large number of people suffer the same or similar damage, each has to file their claim individually. While total damages are usually large the individual claims may be relatively small, which means many individuals do not assert their claims because of the disproportionate risk-benefit relationship.

Under current Swiss law, only associations are allowed to bring group actions in their own name for a violation of the personality of their members, provided the articles of association authorise these associations to do so. The Swiss Federal Council (government) now proposes to allow group actions not only for the violation of personal rights but for all claims under Swiss private law, including financial claims. Furthermore, it proposes to introduce a dispute resolution mechanism that would allow companies to find a collective settlement for mass claims for all affected parties.

Group actions

Since the introduction of the Swiss Civil Procedure Code in 2011, not a single group action has been filed by an association or organisation. By revising the law on group actions, the Federal Council intends to introduce more suitable legal tools to this area of dispute resolution.

As before, only associations and other organisations of national or regional importance are allowed to bring group actions. These associations and organisations may not be profit-oriented and must be found fit to protect the interests of their group. They can assert group actions and damaged parties can participate in the claim by an 'opt-in' concept. To ensure all parties are aware of proceedings, the organisations have to notify those parties known to them and also inform the public by means of media releases such as newspapers or online advertisements.

Damaged parties who have already filed an individual claim can join the group action by simultaneously declaring withdrawal of their own action.

Collective settlement procedures

Besides extending the scope for group actions, the Swiss Federal Council also proposes to introduce a new procedure to collectively settle mass disputes. A company causing damage to a substantial number of possible claimants...

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