The introduction of class actions has been discussed in Switzerland for over ten years. The National Council’s Legal Affairs Committee has been discussing the introduction of extended class actions and group settlements for two years. This week, the committee once did not enter on the bill. Instead, it has tasked the administration with clarifying how the bill should be viewed in light of the ECtHR ruling in favour of the Swiss “KlimaSeniorinnen”. This shows that the Legal Affairs Committee takes its political responsibility seriously and has recognised the high risks of the bill.
The Federal Council adopted the dispatch on class actions on 10 December 2021 (21.082). The bill is essentially based on preliminary work carried out by the administration in 2014 and provides for the existing class action for the assertion of personal injury claims to be extended to all legal violations and for a new class action to be introduced to enable the collective enforcement of claims for damages or disgorgement of profits in the event of mass or scattered damages.
The Legal Affairs Committee of the National Council (LAC-N) has already dealt with the Federal Council’s proposal on several occasions. The Committee has always emphasised that the question of whether Switzerland should introduce class actions is a fundamental decision that should be made on the basis of a careful consideration of the opportunities and risks. In recent months, it has repeatedly requested extensive additional clarifications from the Federal Office of Justice (FOJ). Following the recent ruling by the ECtHR in favour of the “Verein KlimaSeniorinnen Schweiz”, the Commission sees a need for further clarification (see also media release LAC-N). It has instructed the administration to explain in a note what direct or indirect consequences this decision could have for the organisation of instruments of collective legal protection. The bill will therefore not be discussed by the National Council until the autumn session at the earliest.
Increase in high-profile court proceedings expected
When one thinks of class actions, one thinks primarily of the USA. Such lawsuits are also widespread there, not least due to a well-established professional litigation industry. However, class action lawsuits are also on the rise in Europe: 121 such lawsuits were filed in 2022, compared to 55 five years earlier – which is more than double the number of cases. A further increase is expected in the coming years – with all sectors potentially affected by this development. In absolute terms, the UK, the Netherlands, Germany and Portugal have recently seen the highest number of consumer complaints filed. The countries with the largest growth in these claims are Germany, Slovenia and Portugal (see also EU Class Action Report).
Switzerland should not even be following these undesirable developments
The business community clearly rejects the Federal Council’s proposal for the introduction of extended representative actions and class settlements. This was also clearly demonstrated by the recently published survey conducted by the Sotomo research centre under the direction of renowned political geographer Michael Hermann. It is unnecessary and dangerous. A look abroad confirms this. There is no reason to replicate such undesirable developments in Switzerland. The proposal should therefore no longer be pursued. Efficient dispute resolution instruments exist for the efficient settlement of collective claims outside of civil proceedings and therefore outside of courtrooms. Especially in the wake of current technological developments, solutions are possible here that are significantly superior to the Federal Council’s ten-year-old proposal. Switzerland would do well to focus on the right technology instead of introducing outdated and obsolete instruments into our legal system.
For further information:
Denise Laufer | Member of the Executive Committee SwissHoldings | +41 (0)31 356 68 60
