This is an automated translation.
The introduction of class actions has been discussed in Switzerland for over ten years. Yesterday’s decision by the Council of States to vote against the proposal means it is now off the table. Among other things, this was due to fears of high risks of abuse, a possible overloading of the courts and negative effects on the established culture of litigation. SwissHoldings welcomes this decision, which ensures legal certainty and continuity.
During its debate yesterday, the Council of States decided by 30 votes to 13 with two abstentions to vote against the class action proposal. In doing so, the Council is following the lead of the National Council, which already did not adopt the proposal in the spring. The matter has thus been definitively written off. SwissHoldings welcomes this clear decision. After all, the Swiss legal system works and already offers effective instruments to help injured parties obtain their rights. It is a clear vote against a risky system change.
Litigation funding as a driver of litigation developments
A look abroad shows why scepticism towards class actions is justified. The introduction of such instruments has led to a sharp increase in proceedings in several EU countries. In Germany, the number of class actions has doubled since their introduction, in the Netherlands it has increased six-fold and in Portugal it has even increased thirty-fold. At the same time, a market for litigation financing worth billions has established itself, which is dominated by large international law firms and financial institutions. It is predicted that this market will grow to USD 7.6 billion by 2032. This clearly shows: There is no such thing as “class actions light”.
Committee wants to strengthen tried and tested instruments
With its decision, the Council of States has recognised these undesirable developments. The Legal Affairs Committee of the Council of States has outlined a tried-and-tested alternative in Postulate 25.3954. This instructs the Federal Council to examine whether existing arbitration and ombudsman procedures could represent an appropriate and practicable alternative to the expansion of class actions. Conciliation proceedings lead to an amicable settlement in up to eighty per cent of cases involving individual claims, often within a few months and at minimal cost. By rejecting the class action proposal, the Council of States has created the opportunity to further strengthen the tried and tested approach: efficient legal protection for those affected without a litigation industry and without multi-million litigation financiers in the background.
Contact
Denise Laufer | Member of the Executive Committee | 41 (0)76 407 02 48
