Yesterday, the Legal Committee of the National Council decided against the introduction of class actions in Switzerland with a clear majority. SwissHoldings explicitly welcomes this decision. An adoption of the bill would have resulted in far-reaching changes to the Swiss legal system, with significant consequences for Switzerland as a business location, our understanding of the law and our culture of debate. Effective instruments for the efficient resolution of collective claims are already available today outside of civil proceedings and courtrooms.
For more than ten years, Switzerland has been debating the introduction of class actions. The bill proposed by the Federal Council in its dispatch of 10 December 2021 (business 21.082) is currently being discussed. It entails an extension of the existing class action for the assertion of personality rights to all legal violations. In addition, a new class action is to be introduced to enable the collective enforcement of claims for damages or the surrender of profits in the case of mass or scattered damage. The National Council’s Legal Committee (RK-N) has already dealt with the Federal Council’s bill several times in recent years, requesting additional clarifications from the administration. Yesterday, it took the decision not to approve the bill by 14 votes to 10 with one abstention.
Learning from negative experiences abroad
SwissHoldings welcomes this clear decision. Experience from abroad shows that the introduction of class actions leads to the establishment and constant expansion of a professional ‘litigation industry’. A major driver of this development is third-party litigation funding (TPLF), in which external investors finance lawsuits and thus increase the willingness to file lawsuits without bearing the actual risks. This is not a purely US-American development. In the EU, the number of class action lawsuits has increased significantly in recent years, due to legislative changes and easier access to litigation financing. This assessment is also reflected in the Sotomo study commissioned by economiesuisse and SwissHoldings at the beginning of the year: the more experience the experts from large companies and SMEs were able to gain with class action instruments in the US and the affected EU countries, the better they were able to assess the inherent risks of such instruments and the more urgently they formulated the demand that Switzerland should maintain the status quo without class actions.
Right and important decision by the Legal Committee
SwissHoldings rejects the bill as unnecessary and dangerous. There is no reason to follow similar misguided developments in Switzerland. The quality of the Swiss legal system is above average by international standards. Under current law, victims of mass or scattered damage can already claim damages even for smaller losses. Current technological developments, particularly in the field of artificial intelligence, will further expand these possibilities. It is now up to the National Council to stand up for our business location, to follow its Legal Committee and reject the bill.
Contact
Denise Laufer | Head Economics & Member of the Executive Board | +41 (0)76 407 02 48