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The Legal Affairs Committee of the National Council discussed the “class action” bill again this Monday. This bill aims to substantially expand the range of instruments in Switzerland for the collective enforcement of legal claims. The Committee decided to postpone the decision on whether to accept the bill and instead commissioned further clarifications. SwissHoldings welcomes this. A look at other European countries shows that the authorisation of class actions has resulted in the establishment of a professional “litigation industry”, which has significantly changed the litigation and legal culture in the country. The introduction of class actions is therefore a fundamental decision that should be made on the basis of a careful weighing of the opportunities and risks.
On 10 December 2021, the Federal Council adopted the dispatch on class actions (Business 21.082). The bill is essentially based on preliminary work done by the administration in 2014. It provides that the already existing class action for the assertion of personality violations is to be expanded to include all violations of rights and that in addition a new class action is to be introduced to enable the collective enforcement of claims for damages or profit restitution in the case of mass or scattered damages. Furthermore, collective settlements are to be permitted for the first time. The Legal Affairs Committee of the National Council (RK-N), for its part, began discussing the matter at its meeting on 24 June 2022 and expressed doubts about the Federal Council’s proposal. At the same time, it requested extensive additional clarifications from the Federal Office of Justice (FOJ). The reports of the FOJ are now available, and so the Committee of the National Council dealt with the bill again the day before yesterday.
Measures are needed to counter the high risks of abuse inherent in the bill
However, the reports of the administration (see also the media release of the RK-N) only marginally address the justified fundamental concerns of the Committee with regard to the introduction of class action instruments. This is in direct contrast to the current discussions at EU level. There, far-reaching “safeguard” instruments up to a fundamental ban on commercial litigation funding or a general restriction of access to ordinary civil proceedings via a pre-examination clause are being discussed in order to limit the potential for abuse of the instruments. Furthermore, it raises questions that not a single company in Switzerland was consulted for the Regulatory Impact Assessment (RIA), although it is customary in such cost assessments that the main stakeholders affected can contribute. It is therefore logical that the Committee decided on Monday that an extended examination of safety measures as well as a validation of the already existing RIA report through direct company interviews is indicated before it can decide on the further course of action.
Switzerland should take the necessary time to find a well thought-through solution
Good framework conditions are the key to success and prosperity in Switzerland. Switzerland would do well to carefully examine the extent to which there is actually a need for action and whether, in the case of constellations of mass and scattered damage, there are not approaches based on existing instruments that are superior to the essentially already very outdated concepts of the Federal Council’s proposal currently under discussion. There is no reason to jump to conclusions. The quality of the Swiss legal system is already above average in international comparison. The revised Code of Civil Procedure will result in a further improvement in access to court. Moreover, under current law, affected parties can already assert their claims for compensation for mass or scattered damages, even in the case of small damages. Current technological developments – especially in the AI field – will further expand these possibilities.
For further inquiries:
Denise Laufer | Member of the Executive Committee SwissHoldings | +41 (0)76 407 02 48
