SWEDEN Law and Practice Contributed by: Simon Arvmyren, Christopher Stridh and Mikaela Tysk, Delphi
3.2 Statutes of Limitations The main rule under the Swedish Act on Statutes of Limitation (the “Limitation Act”) is that a claim is time- barred when ten years has passed from the occur- rence of the debt (ie, the event giving rise to the claim). Determining the starting date is unfortunately complex and there is no simple rule to apply. The Limitation Act covers claims based on a contract (deviations from it may be agreed) as well as non-con- tractual claims (such as damages). For claims against consumers, the time period is three years. The Limita- tion Act does not cover property rights claims, such as rights of ownership, right of retention, right of use, etc. The period of limitation can be renewed before it has passed through a notice to the debtor, through initiating legal proceedings or if the debtor acknowl- edges the debt. In addition to the main rule described above, there are numerous specific statutes governing the limitation period in different situations. These limitation periods are normally shorter and are relevant, for instance, in relation to sale of goods, employment law claims and in insolvency proceedings. Regarding contractual claims, a creditor who is aware of a claim and remains passive may also lose the right to bring forward the claim. 3.3 Jurisdictional Requirements for a Defendant The main rule is that the district court where a defend- ant is domiciled has jurisdiction (Chapter 10, Section 1 of the Procedural Code). For legal entities, the domi- cile is the registered seat of the legal entity. The main rule applies also for lawsuits against a government authority, the state or a municipality. If a person (or legal entity) is not domiciled in Swe- den, a Swedish court may still seize jurisdiction if the dispute concerns real property located in Sweden. Similarly, a Swedish district court may seize jurisdic- tion if a person (or legal entity) has other assets within the court’s domicile. However, it is not certain that the court would accept jurisdiction, and the defend- ant may successfully argue that the Swedish court would not be appropriate (forum non conveniens)
are affected by trends from other more developed markets. 2.6 Contingency Fees The Procedural Code does not prohibit the use of contingency fees; accordingly, such arrangements are permitted. However, under the Code of Conduct of the Swedish Bar Association (Section 4.2.1) it is not permitted for bar members to enter into contingency fee arrangements except for in certain exceptional situations, such as: • if the Swedish Advokat is local counsel in a case where a contingency fee has been agreed in the main jurisdiction; • in a Swedish class action, within certain limitations (see 3.7 Representative or Collective Actions ); or • in cases where the claimant otherwise would be denied access to justice due to a lack of funds. 2.7 Time Limit for Obtaining Third-Party Funding There are no time limits with regard to when a party to a litigation should obtain the funding from a third party. There are no mandatory pre-action requirements in Swedish law under the Procedural Code or other- wise. Accordingly, a plaintiff may sue the respondent without giving any notice. It is, however, customary for a plaintiff to notify a prospective defendant before initiating proceedings. If the plaintiff does not notify the potential defendant before initiating proceedings and the defendant concedes and complies with relief sought, the court may order the plaintiff to bear the defendant’s costs for litigation, Chapter 18, Section 3 of the Procedural Code. Furthermore, according to Section 5.2.1 of the Swed- ish Bar Association’s Code of Conduct, an Advokat is obliged to notify the counterparty before initiating legal proceedings. This obligation does not apply if there are compelling reasons not to notify the coun- terparty, for instance that the matter is urgent or that a time limit is about to lapse. 3. Initiating a Lawsuit 3.1 Rules on Pre-Action Conduct
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