Litigation funding—Switzerland—Q&A guide
Litigation funding—Switzerland—Q&A guide

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Litigation funding—Switzerland—Q&A guide
  • 1. Is third-party litigation funding permitted? Is it commonly used?
  • 2. Are there limits on the fees and interest funders can charge?
  • 3. Are there any specific legislative or regulatory provisions applicable to third-party litigation funding?
  • 4. Do specific professional or ethical rules apply to lawyers advising clients in relation to third-party litigation funding?
  • 5. Do any public bodies have any particular interest in or oversight over third-party litigation funding?
  • 6. May third-party funders insist on their choice of counsel?
  • 7. May funders attend or participate in hearings and settlement proceedings?
  • 8. Do funders have veto rights in respect of settlements?
  • 9. In what circumstances may a funder terminate funding?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to litigation funding in Switzerland published as part of the Lexology Getting the Deal Through series by Law Business Research (published: October 2020).

Authors: Nivalion AG—Marcel Wegmueller; Isabelle Berger-Steiner; Franziska Studer

1. Is third-party litigation funding permitted? Is it commonly used?

The Swiss Federal Supreme Court held in 2004 that litigation funding by third-party funders is permissible in Switzerland if the funder acts independently of the client’s lawyer (BGE 131 I 223). The court stated that it could even be advantageous for a claimant to have his or her claim assessed by an independent expert who intends to cover the financial risk of the envisaged litigation process and who is thus complementing the claimant’s lawyer’s view (BGE 131 I 223 c. 4.6.3).

In 2014, the court expressly confirmed its earlier decision. It further concluded that, in the meantime, litigation funding has become common practice in Switzerland, and it held that it is part of the lawyer’s professional conduct as provided by the Federal Act on the Freedom of Movement for Lawyers (BGFA) to inform claimants about a potential litigation funding option as the circumstances require (Federal Supreme Court decision 2C_814/2014 c. 4.3.1).

Thus today, litigation funding is an accepted practice in Switzerland and has been judicially endorsed by the Federal Supreme Court twice in recent years. In light of its rather

Popular documents