SWITZERLAND Law and Practice Contributed by: Peter Ch Hsu, Daniel Flühmann and Tiffany Ender, Bär & Karrer
9.7 Alternative Dispute Resolution Alternative dispute resolution has steadily gained importance and is ideally suited for large liability cases where very unequal parties are involved, and the injured party tends not to be able to afford long disputes. If the insurance undertaking is a member company, the insured may refer to the Ombudsman before com- mencing litigation proceedings (see 9.1 Insurance Disputes over Coverage ). In Switzerland, mediation, where an impartial third party helps to resolve disputes by facilitating settle- ment negotiations, is not very established in com- mercial matters (including insurance and reinsurance matters), and the mediator has no decision-making powers. Upon request of all parties, mediation may replace conciliation proceedings (Article 213 CPC). The parties may also request mediation at all times during the court proceedings (Article 214 paragraph 2 CPC). However, the court cannot oblige the parties to mediate their dispute but only recommend that they do so (Article 214 paragraph 1 CPC). 9.8 Penalties for Late Payment of Claims Punitive damages are not available under Swiss law. However, there are certain specific provisions under Swiss law that generate results that may, to a very limited extent, seem similar, such as the disgorgement of profits under supervisory law. Further, a Swiss court, in principle, cannot award or enforce the full award of punitive damages even if the applicable foreign substantive law provides for those damages as this usually constitutes a violation of Swiss public policy. An insured’s claim becomes due four weeks after the date on which the insurance undertaking has received sufficient information to assess whether the claim is correct (Article 41 paragraph 1 ICA). As soon as the claim is due, the insured may demand payment from the insurance undertaking and may put the insurance undertaking in default by sending a reminder (Article 102 paragraph 1 CO). No reminder is necessary if an expiry date has been agreed (Article 102 paragraph 2 CO). Default triggers the obligation to pay interest
that amounts to 5% per annum in the absence of any other agreement (Article 104 CO) and possibly further damages that arose because of late payment, such as the cost of obtaining “replacement money” (Article 103 CO). 9.9 Insurers’ Rights of Subrogation To the extent that the insurance undertaking has paid compensation to the policyholder, the policyholder’s claim against third parties is transferred to the insur- ance undertaking, save for certain exceptions (Arti- cle 95c paragraphs 2 and 3 ICA). In other words, the insurance undertaking subrogates to the policyhold- er’s claims against the third parties and the insurance undertaking can thus assert the claims against the third parties. According to the Swiss Federal Supreme Court, this applies not only to claims in tort ( unerlaubte Handlung ), but also to claims arising from causal and strict liability ( Kausal- und Gefährdungshaftung ). The question of whether subrogation also applies to the policyholder’s contractual claims against the third party has not yet been clarified by the Swiss Federal Supreme Court, but, according to prevailing doctrine, it can be assumed that the insurance undertaking sub- rogates to the policyholder’s claims in this case as well. However, the policyholder benefits from a quota privilege; in the event of subrogation, the claim of the policyholder has priority over the claim of the insur- ance undertaking. The latter can only enforce its claim once the claim of the policyholder has been fully sat- isfied. Insurtech combines traditional insurance business with modern technologies and fosters alternative business models and distribution channels, inter alia, in the following areas: • Contract management/digital brokers offer broker- age of insurance policies through online platforms and mobile apps and facilitate the management of insurance policies for the customer (eg, Knip in Switzerland). 10. Insurtech 10.1 Insurtech Developments
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