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We recommend that the class action bill (Business 21.082) not be passed
- The class action bill is not ready for political consideration.
- The Federal Council looks at the issue of dispute resolution from too limited a perspective and focuses in its proposal exclusively on a specific instrument in procedural law. In doing so, it does not take into account the developments abroad in recent years, the new technological possibilities and possible alternatives to class actions before the courts.
- Switzerland would do well to The introduction of such far-reaching instruments should be decided on the basis of a careful analysis of the initial situation and in consideration of all relevant factors:
- A comparative legal analysis: Recent developments have shown that the introduction of new class action instruments in EU Member States have led to significant implementation difficulties – not least against the background of new technological possibilities (keyword “legal tech” such as blockchain, distributed ledger, social media, claim collection platforms). However, there is no sound analysis of these interactions. The message does not go beyond a simple descriptive description of the applied instruments of procedural law.
- A serious regulatory impact assessment: Enforcing claims through litigation is costly. Especially when collectivized claims are sued, the litigation costs and also the litigation risks increase. This is all the more true since the bill would theoretically allow plaintiffs’ claims from all over the world to be asserted in a concentrated manner before a Swiss court. The economic costs arising from the introduction of the new instruments could be considerable, but have not been examined.
- Examination of alternative dispute resolution instruments: Due to the high expenses for litigation financing, one assumes a scattering loss of 25-35 percent in civil litigation – funds that are then lacking for the effective settlement of compensation claims of the affected parties. Instruments based on the traditional Swiss approach of compulsory arbitration and combined with elements of modern technical infrastructure are likely to be significantly more efficient in enforcing the law – but the Federal Council has not included such so-called alternative dispute resolution instruments in its considerations. This arises in particular with a view to the following aspects The quality of the Swiss legal system is already above average in international comparison. In addition, the ongoing and not yet completed revision of the CCP (Business 20.026; in the RK-N as the preliminary advisory committee of the Second Council) will bring a further improvement in “access to justice”.
- In a recent ranking of the World Bank “efficiency of legal framework in settling disputes“, Switzerland is already in fourth place with regard to the design and functioning of the judiciary as well as the mechanisms of dispute resolution according to the Code of Civil Procedure.
- The ongoing and not yet completed revision of the CCP(Business 20.026) will result in a further improvement of “access to justice (e.g. lowering of cost barriers, simplification of procedural coordination).
The disadvantages of instruments of “real” collective legal protection cannot be remedied. The “de-Americanization” of class actions envisaged in the Federal Council’s message is therefore not possible.
- There is no “collective legal protection light”: A look at other European countries reveals that the real disadvantages of instruments of “real” collective legal protection cannot be eliminated. The class actions filed in the Netherlands, for example, often have an international dimension. Either the lawsuit is a copy of a claim already filed in the U.S. or a defendant domiciled in the Netherlands is misused as an “anchor” to be able to sue parties outside the Netherlands. A look at the United Kingdom, the Netherlands and Germany, for example, also shows that the class action instruments available there have resulted in the establishment and constant expansion of a professional “litigation industry”. The result is a strikingly different legal culture that is addicted to litigation and disputes. It demonstrably benefits lawsuit professionals, but does not ensure better victim protection and imposes high economic costs that must be borne by society as a whole.
- Class actions would bring about a fundamental paradigm shift in Swiss law. In Switzerland, civil proceedings are based on the individuality of the plaintiff and the defendant in order to assess the individual case individually and bring it to a just solution so that legal certainty can be created. This is a historically established principle in our legal system. It would be deviated from without necessity.
- In addition, procedural enforcement cannot be viewed in isolation from substantive law. This has been carefully weighed in every respect in the legislative process with regard to the effects on the groups concerned and is the result of balanced compromises, which would be jeopardized by the introduction of new instruments.
The current proposal of the Federal Council is not balanced. Moreover, it goes beyond the current EU directive in essential points.
- In its proposal, the Federal Council envisages that opt-out settlements should also be possible in the future, including all potentially injured parties. In this way, very high alleged damage amounts can result, this without the express will of the injured parties. The EU Directive, for example, does not provide for such opt-out settlements.
- In the original draft of the CCP, it was stipulated that the association or organization entitled to sue must be of “nationwide importance”. This criterion is now no longer part of the proposal. This means that foreign organizations are also permitted to file lawsuits in Switzerland without further ado. Plaintiffs’ claims from all over the world can thus be brought before a Swiss court in a concentrated manner – which makes Switzerland unnecessarily attractive as a location for litigation and entails high costs and risks.
- According to the Federal Council’s proposal, Swiss class actions should be possible in all areas of law. In contrast, some EU member states impose restrictions in this area.
