In the two and a half years since the Swiss Code of Civil Procedure came into force, cantonal and federal case law have clarified a number of questions relevant for practice. In particular the Federal Supreme Court seems intent on implementing the legislature's objective to unify civil procedure law.

1 INTRODUCTION

On 1 January 2011, the Swiss Code of Civil Procedure ("CCP") came into effect, which replaced the former 26 cantonal codes of civil procedure and brought about a nationwide unification of civil procedure law. The first two and a half years since the Swiss Code of Civil Procedure entered into force were marked by intensive legal discussions about issues arising in practice when applying the new codification. Cantonal courts and the Federal Supreme Court have already rendered a series of decisions which clarified a number of questions relevant for practice.

2 SUBJECT MATTER JURISDICTION

2.1 Agreements on Subject Matter Jurisdiction

In certain cantons, the old cantonal codes of civil procedure allowed parties to waive subject matter jurisdiction of a court and to agree on the subject matter jurisdiction of a different court instead.

In its decision 138 III 471, the Federal Supreme Court held that under the CCP, subject matter jurisdiction is no longer subject to the parties' disposition - in contrast to territorial jurisdiction. Unless explicitly permitted by statute, the parties cannot agree that their dispute be settled by a court other than the court which has subject matter jurisdiction according to statutory law. For instance, the parties cannot agree that the District Court shall have jurisdiction if according to statutory law, the dispute falls within the jurisdiction of the Commercial Court. Even a waiver of subject matter jurisdiction which was valid under former cantonal law has lost its validity under the new federal law.

2.2 Jurisdiction of the Commercial Courts

The CCP provides that the plaintiff may choose between the Commercial Court and the ordinary court, if only the defendant, but not the plaintiff, is registered in the Swiss commercial register or in an equivalent foreign register. However, all other conditions for the jurisdiction of the Commercial Court must be met, i.e. the dispute must be related to the commercial activity of at least one party, and the decision must be subject to a setting aside petition to the Federal Supreme Court. The Federal Supreme Court held in its decision 138 III 694 that the right to choose between the Commercial Court and the ordinary court is not only available to sole proprietorships without registration in the commercial register and to partnerships in their founding stage. Rather, according to legislative intent, the right of choice extends to natural persons who are not registered in the commercial register, in particular to consumers. By this decision, the subject matter jurisdiction of the Commercial Courts has been extended to consumer disputes, which is of great relevance in practice. The Commercial Courts have, for instance, jurisdiction over lawsuits brought by a customer, who is not registered in the commercial register, against his/her bank or his/her asset management company, or by the victim of an accident against the insurance company. "The subject matter jurisdiction of the Commercial Courts has been extended to consumer disputes." By contrast, the Commercial Courts are not competent for adjudicating labor disputes, because the legal relationship between the parties to an employment contract pertains to the private, internal sphere of the company and does not concern the commercial activity of one of the parties as required by the CCP for the Commercial Courts to have jurisdiction (decision of the Commercial Court of the Canton of Zurich dated 16 July 2012).

3 THIRD PARTY ACTION

In contrast to the instrument of third party notice, which was provided for by all cantonal codes of civil procedure, the related institute of third party action was only known to the codes of civil procedure of the cantons of Geneva, Vaud and Valais before the CCP came into force. By lodging a third party action, a party who believes to be entitled to a claim against a third party if it loses the main proceedings can bring this claim before the court dealing with the main action. The third party is in other words sued with an action for recourse, i.e. the third party becomes a main party in the proceedings. According to the Federal Council's Message on the CCP, a third party action may for instance be an option if a purchaser claims damages from a seller and the seller wants to raise an action for recourse against the producer of the product. The lodging of a third party action therefore results in multiparty proceedings, in which the court not only renders a decision on the obligations of the defendant in the main proceedings, but also on the claim of the losing party against the third party in the third party proceedings.

"A third party action not only helps to avoid contradicting judgments in the main and in the recourse proceedings, but it may also spare the parties a potentially cumbersome change of forum."

In its decision 139 III 67, the Federal Supreme Court, with reference to the Message on the CCP, underlined the various advantages of a third party action: A third party action not only helps to avoid contradicting judgments in the main and in the recourse proceedings, but it may also spare the parties a potentially cumbersome change of forum. A third party action also creates synergies, because the court's knowledge of the file can be used in two proceedings. Moreover, considerable costs and resources may be saved during the taking of evidence, because a site visit or witness examination may, for instance, be conducted for both proceedings at the same time, or an expert report may be used in both proceedings.

However, these advantages are accompanied by certain disadvantages of third party actions. In particular, the third party is possibly forced to litigate at a "foreign" forum. Moreover, a third party action will necessarily entail delays and complications in the pending main proceedings. Despite these disadvantages, the CCP does not leave it to the court's discretion to decide on the admissibility of a third party action: The Federal Supreme Court emphasizes that it is not for the court to decide whether or not a third party action shall be admitted for reasons of procedural efficiency (e.g., because of a possible complication of the main proceedings). If the statutory prerequisites are met, a third party action must be admitted.

However, the claim raised with the third party action must be factually connected with the main claim, or depend on the main claim's existence. In particular, claims for recourse, warranty and damages claims, as well as contractual or statutory rights of recourse may be the subject matter of third party actions. According to the Federal Supreme Court, it is sufficient if the factual connection follows from the pleadings of the party raising the third party action and if that party thereby shows a potential interest in taking recourse. The Federal Supreme Court emphasizes that the court shall not examine the merits of the claim when deciding on whether or not to admit a third party action. The Federal Supreme Court therefore sets a low threshold for admitting third party actions. Practice will show whether or not the Federal Supreme Court thereby helps this new and potentially very useful institute to become a success.

4 PRECAUTIONARY TAKING OF EVIDENCE

Based on the institute of precautionary taking of evidence, courts may take evidence at any time, independent of pending proceedings. Precautionary taking of evidence is in particular available if the applicant shows prima facie that it has a legitimate interest. Reference is thereby made to the possibility to conduct proceedings for the precautionary taking of evidence to assess the prospects of evidence and of potential court proceedings. This possibility was already provided for by a number of cantonal codes of civil procedure and introduced nationwide with the CCP. However, in its decision 138 III 76 the Federal Supreme Court held that a precautionary taking of evidence for the assessment of the prospects of evidence and of potential court proceedings may only be requested with a view to a specific substantive claim. In other words, the applicant must credibly demonstrate that based on the facts of the case and substantive law, it is entitled to a claim against the opposing party, and that the piece of evidence to be taken may serve to prove these facts. No demonstration is required with respect to the facts which shall be proven by the piece of evidence to be taken. In case the piece of evidence to be taken is the only evidence with which the applicant can prove its claim, it suffices that the applicant alleges the facts supporting its claim in a substantiated manner. The cantonal court decisions rendered so far on the precautionary taking of evidence show that the requirements to be met for there to be a legitimate interest vary from canton to canton. An applicant may therefore have some leeway to file its application with a court that applies the statutory requirements less strictly. "Concerns that the institute of the precautionary taking of evidence for assessing the prospects of evidence and of potential court proceedings might be used to conduct Concerns that the institute of the precautionary taking of evidence for assessing the prospects of evidence and of potential court proceedings might be used to conduct a US-style "pre-trial discovery" procedure have so far proven to be unfounded. The required relation to a substantive claim, which needs to be credibly demonstrated, as well as the required substantiated allegation of the facts with regard to which evidence shall be taken on a precautionary basis limit the use of the institute of precautionary taking of evidence to this end.

5 COSTS

The CCP provides that the court may demand that the plaintiff make an advance payment up to the amount of the expected court costs. Even though this statutory rule is not mandatory and it is at the court's discretion whether or not to impose an advance on costs, in practice, courts regularly request payment of an advance before they deal with a lawsuit, except in cases where the proceedings are free of cost. From the point of view of legal policy, a discussion was sparked by the further provision of the CCP that the court costs are to be set off against the advances paid by the parties. This statutory rule applies regardless of which party, i.e. the prevailing or the losing party, paid the advances on costs. The party liable for costs must restitute the advances paid by the other party. The CCP therefore imposes the collection risk for court costs entirely upon the prevailing plaintiff, who only has a claim for recourse against the losing defendant. According to the Supreme Court of the Canton of Zurich, this rule applies irrespective of whether or not the financial standing of the losing party is doubtful (decision of the Supreme Court of the Canton of Zurich dated 28 February 2012).

CCP imposes the collection risk for court costs entirely upon the prevailing plaintiff."

6. COLLECTIVE REDRESS

The existing law only provides for few mechanisms allowing plaintiffs who suffered damage in an identical or similar way to proceed in a coordinated manner, namely in the form of actions brought by associations or other organizations seeking redress in their own name in case of infringement of the personal rights of their members, in the form of a joinder of parties, or in the form of a joinder of actions. The legislature deliberately refrained from introducing instruments for collective redress in the strict sense when drafting the CCP.

In the aftermath of the rescue of UBS by the government in 2008, the issue of improving collective redress was once again the subject matter of political discussions. In a report passed on 3 July 2013, the Federal Council, after having analyzed the existing legal situation, came to the conclusion that the possibilities of collective redress are insufficient under existing Swiss law. The Federal Council is of the view that possible measures to improve collective redress could be taken within the framework of the existing instruments, such as improved rules on court costs, promotion of third party litigation funding, or an extension of the right of associations and other organizations to pursue claims affecting the interests of their members. On the other hand, the Federal Council is also contemplating the introduction of new instruments of collective redress, such as the creation of so-called model or test proceedings, which are known under German law.

The report of the Federal Council will serve as a basis for possible legislative proposals to improve collective redress in Switzerland. Specific legislative amendments, if they are proposed at all, are not, however, to be expected soon.

7. CONCLUSION

Two and a half years after the Swiss Code of Civil Procedure came into force, the overall conclusion to be drawn is positive. Even if on the level of the cantons there are still attempts to maintain former cantonal practice by interpreting the CCP accordingly, the CCP nevertheless has brought about the desired unification of the law in most areas.

Numerous decisions rendered by the Federal Supreme Court and the upper cantonal courts, which clarified important open issues and resolved the corresponding uncertainties in practice, have contributed to that result. Notably the Federal Supreme Court seems to be intent on implementing the legislature's objective to unify civil procedure law. Room for improvement exists in the area of collective redress, although specific legislative amendments are not be expected in the near future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.