SWITZERLAND Law and Practice Contributed by: Aurélie Conrad Hari, Pascal Hachem, Julien Renaud and Arthur M. Urben, Bär & Karrer
– the right to file a civil action to find or appeal against discrimination as specified in paragraph 3 (a) of this provision. Test Cases Current Swiss law lacks specific statutory provisions on test actions, which formally do not exist as such. However, practically this can be achieved by initiating a test claim first. A test case allows for the protection of collective interests by initially conducting a single representative “model procedure” between two par- ties over a specific matter in dispute. The decision made in this model case serves as a procedural ref- erence regarding particular factual or legal questions for subsequent disputes among other parties, thus avoiding the need to readdress the same disputed issue. Conceptually, the model action is an individual action by the model plaintiff, aiming for the resolution of factual or legal questions in the model procedure to have a broad impact on multiple cases. There is, however, no procedural guarantee that will be given to other cases based on that purported test case. Specifically, parallel claims may have to be filed without a guarantee that the court will stay or sus- pend these claims pending the outcome of the test case. Furthermore, each claim will eventually be ruled upon individually without any binding effect of the test case’s outcome on the other cases – although, in practice and provided the cases are indeed similar and pending before the same court, it is very likely that the test case will impact the subsequent cases. Sectoral Laws – Group Action Even though the Swiss legal system does not provide for a general collective legal action, it does include instruments that are governed by specific laws and which produce collective satisfaction of rights through a representative, with effects comparable to those of a collective legal action. Specifically, the CISA – which regulates the distribution of foreign collective investment schemes in Switzer- land – provides for a collective framework for investors seeking reimbursement for unlawfully withheld entitle- ments or benefits (Articles 85 and 86 of the CISA). This type of collective action is only feasible within “open-ended” collective investment schemes, such
as contractual funds or investment companies with variable capital. The defendant is the person or entity responsible for the damages; however, proceedings can only be conducted for the benefit of the invest- ment fund, making the fund the direct beneficiary while investors benefit indirectly. A court-appointed representative holds the same procedural rights as the investors. If the representative files an action for resti- tution under Article 85 of the CISA, individual investors are prevented from filing a similar claim. Additionally, a judgment secured by the representative is binding on all investors, meaning there is no need for individuals to opt in or choice to opt out. Further- more, the representative’s costs are generally borne by the collective assets, deviating from the Swiss legal principle whereby the loser pays all the costs. It is worth noting that, to date, this action has had little to no practical significance. In the sector of bond loans, creditors automatically form a community of creditors under Article 1157 (1) of the SCO. This community is not a legal entity but pos- sesses the capacity to initiate legal proceedings. The representative of this community, determined either by the loan’s terms or elected during a creditors’ meet- ing, can enforce the creditors’ rights if empowered to do so by the meeting. This prevents individual credi- tors from independently exercising their rights. Thus, this mechanism resembles a class action – enabling collective defence and the pursuit of creditors’ rights through a single proceeding led by a common repre- sentative, with the judgment applicable to all creditors. Nonetheless, according to the Swiss Federal Supreme Court, this action is intended to defend common inter- ests and address indirect damages suffered by bond creditors. It does not cover direct damages, such as those due to liability under Article 752 of the SCO. Given that unanimity among creditors is generally required to empower the representative, this effec- tively creates an opt-in group action – either all credi- tors agree to a group action or no group action occurs. Furthermore, Article 260 of the DEBA allows any credi- tor to ask the bankruptcy estate to assign a claim that the estate has waived and pay itself in priority from any proceeds. This is not an assignment within the
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