DENMARK: An Introduction to Dispute Resolution

1. Introduction to Dispute Resolution in the Danish Legal System

Under the Danish legal system, the decision of the Danish court is based on the claims and arguments made by the plaintiff(s)/claimant(s) and defendant(s) as well as the evidence presented to the court by these parties. Danish courts are divided into three instances. The first instance is most notably represented by the 24 district courts and Maritime and Commercial High Court. The second instance is represented by the two High Courts (the Eastern and Western High Court) and the third level is represented by the Supreme Court, which is the country’s highest court of appeal.

In addition, resolving legal disputes before a tribunal outside of the state-established court system, i.e., arbitration, is recognised and practised in Denmark. Other methods of alternative dispute resolution, e.g., mediation, are also employed.

Arbitration in Denmark is mainly solved through two institutes: the DIA (The Danish Arbitration Institute) and the Arbitration Board (the Danish Building and Construction Arbitration Board). While the Arbitration Board is focused on dispute resolution in the field of building and construction, the DIA offers dispute resolution in multiple national fields as well as in international arbitration cases. The proceedings at the DIA are regulated by the DIA’s Rules of Arbitration, which were recently renewed in April 2021.

2. Confidence in the Legal System in Denmark Among Other Member States of the EU

Denmark is one of the 27 states that are members of the EU. Every two years the European Social Survey (ESS), which has been established with funds from the European Commission, the European Science Foundation, and several national research councils, conducts uniform questionnaire surveys every two years in European countries with the aim of mapping changes in the social, political, and moral climate in Europe. The latest report was made in 2022.

In the survey, Denmark was reported with the highest degree of trust in the legal system among the 29 European countries of the survey. The participants were assessed on their trust in the legal system on a score from 1-10, where 0 meant ‘no trust at all’ and 10 meant ‘full trust’. The respondents in Denmark ranked highest, with 7.5 being the average response. There was no reported difference in the degree of trust in the legal system for men and women in Denmark, just as there was no difference in trust in the legal system in different age groups.

3. Danish Courts Score High on Independence at the 2022 EU Justice Scoreboard

The EU Justice Scoreboard is part of the EU Commission’s comprehensive “Rule of Law Mechanism”, which works to promote and expand dialogue and common awareness of legal certainty as a fundamental value for the EU. The report compares the European legal systems on several parameters and is one of the most important tools of the Commission regarding support the rule of law and the development towards more well-functioning legal systems in the EU. The scoreboard is based on data from several different sources.

Denmark takes first place in Europe in the category where the respondents assessed the independence of their courts. Here the score was ”very good”, which is the best assessment that can be chosen. 42% of the Danes surveyed gave this answer; Finland came into second place with 28% choosing “very good”; while Germany came third with 26%. This year, Denmark is the country with the largest influx of civil cases – land registration cases integrated – per 100 inhabitants in the EU, according to the EU Justice Scoreboard 2022.

Despite this, Denmark retains longstanding first place for the lowest case processing time for civil cases. Possibly, the background for the excellent ranking is largely attributed to a significant number of Danish land registry cases and the digitisation of the land registry. Denmark is also still among the ten cheapest countries in Europe to bring a civil case in.

The EU Justice Scoreboard 2022 also shows that Denmark is the country in the EU where the state allocates the second fewest resources to the courts in relation to the country’s gross domestic product (GDP). In Denmark, only 0.17% of the national GDP is allocated to the courts. In comparison, other Northern European countries, like Sweden and Finland and the Netherlands, allocate between 0.24%-0.29%. At the same time, Denmark – with 6.6 judges per 100,000 inhabitants – is the country in the EU with the second fewest judges per 100,000 inhabitants. The other European countries range between 11.2 and 41.5 judges per 100,000 inhabitants.

4. The Jurisdiction and Enforcement of Court Decisions in the Civil and Commercial Law Area

Jurisdiction is the rules for the legal authority granted to a legal entity to enact justice, i.e., which of several courts with the same jurisdiction will hear a court case – e.g., the two High Courts (the Eastern and Western High Court). The main rule is that civil cases must generally be brought in the jurisdiction where the defendant is domiciled; that is, the jurisdiction where the person in question resides. These venue rules can be waived in civil cases by agreement between the parties to the case. Cases concerning contractual relations are in principal brought before the court in the place where the obligation underlying the case has been fulfilled or must be fulfilled.

In a recently concluded case at the Supreme Court, the question concerned whether there was jurisdiction in Denmark or Sweden. The case was brought by a Danish company against a Swedish company. Although the other party did not believe that there was a legal agreement between the parties, the Supreme Court found that the relationship between the two parties was contractually anchored. The Supreme Court justified this by the fact that in an e-mail from the Swedish company the term “en god broker-aftale” (translated to ”a good broker-deal”) was used, and that they were willing under certain circumstances to pay a brokerage fee to the Danish company if they facilitated a contract for a buyer of the Swedish property portfolio. In this case, the Supreme Court thus considered when a contractual relationship is probable for the purposes of Article 7(1), no. 1, of the Brussels I-Regulation regarding the jurisdiction and enforcement of court decisions in the civil and commercial law area in between EU member states.