LIECHTENSTEIN Law and Practice Contributed by: Alexander Ospelt, Lukas-Florian Gilhofer, Vivianne Auer and Laura Bayer, Ospelt & Partner Attorneys at Law Ltd
9.2 Insurance Disputes Over Jurisdiction and Choice of Law Under Liechtenstein law, insurance disputes concern- ing jurisdiction and choice of law are generally gov- erned by the contract, but with important exceptions for consumers: policyholders in consumer insurance contracts may sue at their place of residence, even if the contract designates a different forum, limiting exclusive forum clauses favouring the insurer. Par- ties may freely choose the applicable law, provided mandatory provisions are not overridden; in consumer contracts, statutory protections of the home jurisdic- tion cannot be circumvented. International conventions such as the Hague Conven- tion on Choice of Court Agreements (2005) and the Lugano Convention are applicable in cross-border disputes, particularly for recognition and enforcement of foreign judgments. Reinsurance and commercial insurance contracts between professional parties are primarily governed by the contract terms and general private law principles. 9.3 Litigation Process In Liechtenstein, insurance law litigation begins with filing a claim before the competent court. The litigation process involves each party mutually exchanging their standpoint via written statements. Evidence is taken during oral court meetings. The litigation process ter- minates with a verdict in first instance. In civil mat- ters, the judicial system in Liechtenstein is structured across three levels: cases are initially heard by the Princely Court of Justice followed by appeals to the Princely Court of Appeal, and, ultimately, the Princely Supreme Court. Liechtenstein does not maintain spe- cialised courts, while the Constitutional Court func- tions as an extraordinary appellate body. All courts are located in Vaduz. 9.4 Enforcement of Judgments Domestic final judgments can be enforced in Liech- tenstein directly, whereas foreign judgments require recognition and enforcement by a Liechtenstein court. The Liechtenstein Enforcement Act (EO) regulates the execution of court judgments, arbitral awards, and provisional measures. Under Article 52 EO, foreign judgments are enforceable in Liechtenstein only if such enforcement is permitted by applicable treaties
risk notification, compliance with safety measures, or payment of the premium. Conditions precedent in an insurance contract do not require explicit designation as such, but they must be clearly and unambiguously drafted. If a condition precedent is breached, the insurer gen- erally may deny coverage to the extent that the condi- tion was essential for the occurrence of the insurer’s obligation. Minor or ambiguous breaches are often interpreted in favour of the insured party, particularly in consumer insurance contracts. Clear drafting and proper documentation of compliance are therefore critical to ensure enforceability and avoid disputes. 9. Insurance Disputes 9.1 Insurance Disputes Over Coverage In Liechtenstein, disputes over insurance coverage are primarily governed by the Insurance Contract Act (VersVG). It sets out the rights and obligations between insurers and policyholders. If no mutual agreement can be reached, coverage disputes are generally resolved before the ordinary civil courts. According to Article 38 of the VersVG, claims arising from an insurance contract expire five years after the insurer’s obligation to pay arises (eg, occurrence of the insured event). This five-year period applies to con- tractual performance claims, such as claims for insur- ance benefits. Consumer contracts involve individual policyholders and are subject to specific protective rules under the VersVG. Reinsurance contracts, by contrast, are negotiated between professional mar- ket participants and are governed by general civil law principles, without the application of consumer pro- tection rules. According to Article 74 (1) of the VersVG, the policy- holder is entitled to designate a third party as benefi- ciary without the consent of the insurance company. Any beneficiary is entitled to assert the insurance claim directly against the insurance company, once the insured event has occurred.
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