SWEDEN Law and Practice Contributed by: Andreas Eriksson, Anders Arthur, David Nykvist and Saga Hanson, TIME DANOWSKY Advokatbyrå
4.4 Timing of ADR ADR typically takes place before court or arbitration proceedings are initiated, but it can also occur during the proceedings. Notably, Swedish courts are obliged to encourage settlements and have the power, if the parties agree, to refer the dispute to a mediator. There are no general rules governing the effect of ADR on limitation periods. However, in the case of media- tion under the Mediation Act, limitation periods are automatically extended until at least one month after the mediation proceedings have been concluded, unless other rules apply under treaties to which Swe- den is a party. 4.5 Confidentiality The parties participating in ADR are not bound by any automatic duty of confidentiality, but they usu- ally agree that confidentiality will apply. Provisions on confidentiality covering both the parties and the person(s) administering the ADR are often included in institutional ADR rules such as the SCC Mediation and Express Dispute Assessment Rules. The person(s) administering ADR, such as the media- tor in the case of mediation or the independent expert in the case of expert determination, are typically bound by confidentiality. A mediator appointed under the Mediation Act has a statutory duty of confidenti- ality covering information that comes to the media- tor’s attention during the mediation process. A similar duty also often applies to persons administering other forms of ADR, pursuant to the agreement under which they were appointed, either under express provisions (such as those mentioned in the preceding paragraph) or as an implied term for the assignment. The Code of Judicial Procedure expressly prohibits questioning of a mediator appointed under the Code of Judicial Procedure or the Mediation Act on what they have learnt in connection with the assignment. 4.6 Costs The allocation of costs in ADR proceedings is deter- mined by the parties’ agreement. In the absence of any specific terms in this regard, the costs are typi- cally shared equally between the parties.
4.7 Courts and ADR The courts generally take a positive view of ADR. They are obliged to encourage the parties to settle the dis- pute, unless this would be inappropriate considering the nature of the matter and other circumstances, and they even have the power to refer the dispute to a mediator with the parties’ consent.
5. Costs, Fees and Funding 5.1 Legal Fees
The general rule in civil cases in court is that the los- ing party reimburses the winning party’s reasonable legal costs. The same principle is usually also applied in arbitration. 5.2 Third-Party Funding Third-party funding is available in Sweden and has seen an increase in recent years, but it remains rela- tively uncommon. 5.3 Contingency Fee Arrangement The Code of Conduct of the Swedish Bar Association prohibits, in principle, that members of the bar (advo- cates) make fee arrangements which give the attor- ney the right to a share of the outcome of a dispute. Exceptions are possible in special circumstances. One such situation concerns representation in a class action, in which case, the terms of the fee arrange- ment are subject to certain restrictions set out in the Class Action Act ( lagen om grupprättegång ) and must be approved by the court. Another situation where an exception is possible is if the client would in effect be denied access to justice without a contingency fee arrangement. However, the fee arrangement must never result in the attorney’s financial self-interest becoming disproportionate or negatively affecting the performance of the assignment. The client’s interests must always come first. 5.4 Insurance Insurance coverage for costs for legal proceedings is a common component in most business insuranc- es. The terms for coverage depend on the insurance policy and may therefore vary. However, costs for the party’s own and the opposing party’s legal fees are usually covered up to a certain amount, regardless of
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