SWITZERLAND: An Introduction to Litigation

Switzerland has always been praised for its stability as a jurisdiction, mostly due to an independent and efficient legal system which mirrors a strong economy underpinning the steadiness and consistency of its laws. This appeal is further enhanced by the cost efficiency of carrying out legal proceedings there.

The Swiss parliament recently revised its the country's Civil Procedural Code (CPC) with effect from 1 January 2025. The amendments cover, inter alia, the following:

• the extension of Swiss jurisdiction to international disputes before a specialised commercial court;
• the use of English as a procedural language;
• the use of electronic communications and technology in court hearings
• the right of refusal to collaborate for in-house counsel under certain circumstances in civil proceedings.

Potentially enhancing the efficiency of their resolution before the country’s courts, these these amendments will add to Switzerland’s appeal as a place for hearing international disputes.

Extension of Swiss Jurisdiction to International Commercial Hearings and Use of English as a Procedural Language

The current rules already allow the cantons to decide whether they wish to introduce a commercial court to solve commercial disputes, and Zurich has opted to do so. The new amendments allow the cantons to create dedicated international commercial courts to apply specific regulations in order to rule more efficiently on international cases. Further steps to implement these international commercial courts are still required at cantonal level, with each canton deciding whether it wishes to set up a dedicated court by 1 January 2025. Zurich and Geneva have been considering this as a next step. If the cantons do proceed with this possibility, these courts will be able to hear international commercial cases as long as:

• the cases in question concern the commercial activity of at least one of the parties;
• the litigious amount is a minimum of CHF 100,000;
• the parties have agreed on the jurisdiction of the international commercial court;
• at the time of the agreement, at least one party had its domicile, habitual residence or registered office abroad.

The cantons may opt to have dedicated rules applied at the international commercial courts, setting specific requirements in terms of specific expertise or knowledge for the judges acting in the courts. 

In addition, if all the parties so request, the cantons can also allow for the proceedings before the ordinary courts or, if applicable, the dedicated international commercial courts, to be conducted in English. The opportunity to use English will require that: i) the canton allows for it and, therefore, facilitates it within its own regulations; and (ii) both parties agree on the use of English. The parties will also be entitled to present their proceedings in another official language of Switzerland that is not the language of the canton. 

If the parties elect to conduct the proceedings in English, they will also be entitled to present their appeal proceedings before the Federal Supreme Court (as is now also permitted for appeals against arbitration awards before that same court) in English.

Right to Refuse to Co-Operate in Court Proceedings Under Certain Conditions

Current rules in Switzerland do not provide for any special in-house counsel privileges. This situation has been highly debated for years, as it creates an imbalanced situation for Swiss companies versus, as an example, a US company if the Swiss entity is regularly found to be in a weaker position than its US affiliate in a US-based hearing.

This situation will at least partially be solved from 1 January 2025, given the CPC amendments. While not deemed a full privilege, it is construed under Swiss law to be the right of in-house counsel to collaborate or otherwise in civil proceedings, although subject to restrictive and specific conditions. Provided these are met, an in-house counsel will have the right not to give testimony or to disclose in-house privileged documentation.

The benefits of this right can be triggered provided that:

• the company is registered as a legal entity in the Swiss Commercial Register or in an equivalent foreign register;
• the head of the legal department holds a bar licence to practice as an attorney either in Switzerland or their home country; and
• the activities of the in-house counsel to be protected are regarded as typical in-house counsel services, to be assessed like a lawyer’ services.

It is to be noted that all employees of the legal department will be protected by this rule provided that the head of department qualifies as a licensed lawyer. The introduction of this privilege into the activity of the in-house counsel should reduce procedural disadvantages suffered by Swiss companies compared to foreign companies, and particularly in foreign court proceedings.

Electronic Communication and Remote Hearings

Since the COVID-19, when several Swiss courts had to adapt and switch to remote hearings based on an urgent bill that was enacted a few weeks after the first Swiss lockdown, Switzerland’s Parliament has enacted a permanent rule to allow the cantons to elect for the use of technology and potential remote hearing.

Such remote procedures could be used, in particular, for evidentiary hearings, but will always be subject to the consent of the parties involved and to compliance with data privacy protection.