SWITZERLAND Law and Practice Contributed by: Daniel Zimmerli, Michael Schifferli and Nathalie Herzog, Wenger Plattner
damages may be reduced or entirely waived (Article 264 para. 2 CPC). 10.2 Alternative Dispute Resolution Several different possible methods of alternative dis - pute resolution are available. Most proceedings before the Swiss courts must be preceded by a mandatory conciliation procedure (Article 197 CPC). Summary procedures (which are applicable for interim meas - ures) are exempt (Article 198 CPC). Furthermore, if a commercial court has jurisdiction (see 2.2 Courts ) the conciliation procedure is voluntary (Article 199 para. 3 and Article 6 CPC). The parties can also agree to mediation instead of the conciliation procedure (Arti - cle 213 CPC). Furthermore, the parties can agree on arbitration instead of litigation in front of the state courts (Article 61 CPC). In such cases, the Swiss Federal Court acts as the sole appellate court (Article 77 of the Federal Supreme Court Act (FSCA, SR 173.110). A third-party funder typically advances court costs (see 11.2 Costs ) alongside all other procedural expenses. The funder assumes the cost risk if the case is unsuccessful, and in return receives a share of the proceeds if the claim succeeds. In practice, this share generally ranges between 20% and 40% of the proceeds, depending on the nature of the case. To secure funding, the dispute must usually involve a substantial amount at stake and present at least a reasonable prospect of success, in order to make the investment worthwhile. In many cases, the funder will, furthermore, require some form of security for the duration of the proceedings. The funder is typically not the attorney, as the Swiss rules of professional conduct prohibit attorneys from entering into agreements with clients whereby their 11. Funding and Costs 11.1 Litigation Funding Litigation funding is possible and available. Third-Party Funding
fees are settled using anticipated proceeds from legal disputes. Legal Aid For private persons (but not legal entities) the gov - ernment may grant legal aid if the applicant lacks the means to pay court costs and party expenses (see 11.2 Costs ) while still ensuring subsistence for them - selves and their family. Legal aid is therefore available only where the payment of these costs would reduce the applicant below the subsistence minimum. 11.2 Costs Award of Costs Two types of costs must be distinguished: court costs and party expenses (attorney’s fees). Both types of costs are, as a general rule, borne by the losing party. However, the court has a certain discretion, particu - larly in atypical situations. The amount of the costs is regulated by cantonal laws. Court costs usually depend on the value in dispute. With regards to party expenses, some cantons like - wise base the amount on the value in dispute. Others determine the amount based on the complexity and the effort appropriate for the specific case. Either way, the amounts awarded rarely cover the actual expens - es of the parties. Security for Costs To secure the court costs, the courts will usually ask for an advance in court costs payable by the claim - ant. In most cases, they can ask for up to half of the expected amount. In some types of procedures, they can demand the full expected amount. Furthermore, the court may ask for an additional advance for certain costly types of evidence taking (ie, an expert opinion). In most proceedings, a defendant can request secu - rity for party expenses if the claimant (i) is domiciled outside of Switzerland; (ii) appears to be insolvent; (iii) owes costs from prior proceedings; or (iv) presents another substantial risk that the costs will not be paid. With regards to point (i), it must be noted that this may be inapplicable with regards to persons domi - ciled in certain jurisdictions with which Switzerland has concluded a treaty forbidding such clauses. In some types of procedures, such as the summary pro -
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