Contributed By Lundsgaard & Partnere
The Danish legal system is based on civil law. The primary sources of law in the Danish legal system are statutes, which prevail over executive orders (bekendtgørelser) and other written legal sources. Secondary sources of law are preparatory works, case law as well as legal doctrines and principles.
Denmark is a member of the European Union (EU) but has reservation in relation to the supranational co-operation pertaining to the areas of justice and internal affairs. However, Denmark has, by a parallel agreement, adopted the Brussels I Regulation.
The legal system follows an adversarial model. The decisions of the Danish courts will be based on the claims made by the parties and the evidence presented to the court by the parties. Thus, it is the principal rule that the tasks of obtaining the necessary evidence and presenting the relevant legal arguments are the responsibilities of the parties.
The Danish Administration of Justice Act (the AJA) applies directly to the general courts and regulates the legal proceedings taking place at these courts (see the AJA, Section 1). The general courts handle both civil and criminal cases. The general courts are competent in relation to all subject matter unless the subject matter in question is explicitly assigned to another court.
The general courts of Denmark are structured on three levels. It is the principal rule that all cases are tried in the District Court in the first instance. There is a total of 24 District Courts. In addition to hearing criminal and civil cases, matters of enforcement, probate, notarial acts and bankruptcy are also cases for the District Courts.
The judgments of the District Courts can generally be appealed to the Eastern High Court or the Western High Court. The Supreme Court is the final court of appeal and, almost exclusively, reviews cases of general public importance or matters of legal principles.
Additionally, there is the Maritime and Commercial High Court (MCHC). The jurisdiction of the MCHC is limited to specific subject matter (see sections 225 and 227 of the AJA). In cases regarding EU trade marks and EU designs, it is mandatory for the case, at first instance, to be tried in the MCHC. Unless otherwise agreed by the parties, the MCHC also has subject matter jurisdiction in relation to, inter alia, international cases where international business knowledge is of significant importance (see Section 225(2) of the AJA).
Other courts, whose jurisdictions are limited to certain specified subject matters, are the Land Registration Court (Tinglysningsretten), the Labour Court (Arbejdsretten) and the Rent Court (Boligretten) and the Special Court of Indictment and Revision (Den Særlige Klageret).
Section 65(1) of the Danish Constitutional Act stipulates that, in the administration of justice, proceedings shall, to the widest possible extent, be public and oral. In practice, the legal process is started and prepared through written submissions before the hearing in the court, which is held orally and in principle open to the public.
Section 28a of the AJA stipulates that hearings, as a rule, are public (ie, everyone has the possibility to appear and observe hearings). However, witnesses are not allowed to observe the hearing of other witnesses before they have testified. The court can also refuse access for specific individuals if it is deemed necessary in order to ensure a truthful statement from a witness or party. The courts can also exceptionally decide that a hearing is to be held behind closed doors (see Section 29 of the AJA).
Judgments and court orders are available to the public following the oral hearing. From two days before the beginning of the main hearing, it is possible to request access to the parties’ case summaries (if any) and, after judgment is delivered, anyone can request access to any written procedural documents. With regard to other documents, such as pleadings, expert opinions and other available evidence, anyone with an individual, significant interest can be given access. However, the courts can, if necessary, restrict this right of access to, inter alia, protect a person’s private life or a trade secret. The courts are obliged to consider if these interests can, instead, be protected with measures of anonymisation.
Some judgments of general interest are published in summary in various law journals. In addition, courts will also publish some judgments on their websites. In many instances, these publications anonymise the identity of the parties.
It is the principal rule that only attorneys-at-law (advokater) have the right to appear as legal representatives in the courts. Pursuant to Section 119 of the AJA, attorneys-at-law must have legal capacity, a degree in law, at least three years of legal experience in practice, passed the bar exam and a practical litigation exam. An attorney also cannot be under bankruptcy.
The exclusive privilege of the right to appear being vested with attorneys-at-law is not without exceptions (see Section 260 of the AJA). Firstly, any party is free to decide not to engage an attorney-at-law and represent themselves in court. However, if the party is unable to administer the case in an appropriate manner, the court can order the party to be represented by an attorney-at-law. Secondly, there are some cases where individuals other than attorneys can be legal representatives. A party’s close relation (eg, guardians, parents, children, siblings or spouse) can represent a party unless they are under the age of 18 or of blemished reputation. A party can also choose to be represented by an employee provided this individual has been employed by the party for a month and – when the party is not an attorney-at-law – not for the specific purpose of representing the employer in court.
It is possible for a citizen of another EU or EEA member state, as well as citizens of Switzerland, to practice law as an attorney in Denmark. Those who do so must first have obtained the right to practise law as an attorney in another EU/EEA member state or Switzerland. In order to be able to appear before court, it is a prerequisite that “EU lawyers” are registered with the Danish Bar and Law Society. In cases where the court has ordered that the party must appear with an attorney (ie, the party is ordered unable to represent themselves) the EU lawyer will have to meet in court together with a Danish attorney. Citizens from non-EU member states cannot act as attorneys-at-law unless they have obtained a law degree from an EU member state.
Litigation funding by a third-party funder is permitted under Danish law. Although there are no restrictions, third-party funding is not prevalent in Denmark. However, while the phenomenon of equity funds and insurance companies funding litigation against a share of the possible outcome of the case is still rare, there are ongoing examples of such proceedings.
All types of lawsuits are available for third-party funding.
Third-party funding is available for both the plaintiff and defendant.
There is no minimum or maximum amount for a third-party funder stipulated in Danish law.
Some of the costs that a third-party funder is likely to consider funding includes lawyers’ fees, court fees and possible orders for costs.
Attorneys-at-law are obliged to follow the Code of Conduct of the Danish Bar and Law Society. Section 16(2) of the Code of Conduct stipulates that a lawyer cannot agree to receive a share of any result achieved by the client upon conclusion of the case.
As third-party funding is unregulated in Danish law, there are no time limits as to when third-party funding must be obtained.
There are no general rules for the parties in relation to steps that they are required to take before initiating legal proceedings in civil suits. However, in relation to debt collection, the debtor must, prior to initiating legal actions, have received a letter of demand providing a minimum of ten days to make payment. Non-compliance may influence the court’s order of costs.
When initiating legal proceedings by filing of a writ of summons with the court, there are some specific requirements that apply to the content of the writ (see 3.4 Initial Complaint).
In the Danish Limitation Act, it is the main rule that a claim is time-barred after three years, calculated from the earliest time the creditor could have demanded fulfilment of their claim. The beginning of the three-year period can be suspended until the creditor obtains knowledge, or should have known, of their claim. However, in any event, the absolute limitation of a claim is ten years, calculated from the moment the damages were caused, regardless of the creditor’s knowledge or constructive knowledge of their claim or the identity of the debtor. For special cases a longer limitation period applies (eg, personal injury cases).
In cases of inactivity/passivity, a creditor can also lose the effectiveness of their claim, where this inactivity has given the debtor reason to believe that the creditor has abandoned the pursuit of their claim.
In some areas of law, there are specific regulations containing limitation periods for bringing a certain claim before the courts. Examples of these rules are limitation periods for bringing an administrative decision before the court or for commencing legal proceedings in cases of insolvency.
As the primary rule, the defendant’s home court will have territorial jurisdiction (see Section 235 of the AJA). For legal persons it is the main rule that the home court is the court for the judicial district in which the main office is located (see Section 238 of the AJA). In addition, there can also be other applicable jurisdictions where a defendant can be subject to suit (supplementary jurisdiction).
Legal proceedings against persons carrying on business can be instituted in the court for the district from which the business is carried out, if the case concerns that business (see Section 237 of the AJA). Legal proceedings regarding real estate rights can be instituted in the court for the judicial district in which the property is located (see Section 241 of the AJA). Except for most money claims, the defendant can be sued at the place of performance in lawsuits arising from contractual relations (see Section 242 of the AJA). Legal proceedings involving a claim for penalty, damages or redress can be instituted in the court for the judicial district in which the damage was committed (see Section 243 of the AJA). The parties can generally also agree which courts will be territorially competent (see Section 245 of the AJA).
For persons not domiciled in Denmark, and where the above-mentioned sections do not statutorily prescribe jurisdiction, legal proceedings can be instituted in the court for the judicial district in which they are staying when the writ of summons is served or where they holds assets (see Section 246 of the AJA).
The jurisdictional rules of the Brussels I Regulation and the Lugano Convention of 16 September 1988 are applicable in Denmark; these rules can govern where a defendant can be subject to suit in relation to, inter alia, residential property or the place of contractual performance.
Civil proceedings at the court are initiated with the submission of a writ of summons (see Section 348 of the AJA). The writ of summons must fulfil the following requirements:
Where these requirements are not fulfilled, and the writ is therefore unsuited to serve as the basis for legal proceedings, the court dismisses the case. However, the court may, instead of dismissing the case, grant the plaintiff time to rectify the deficiencies.
The writ of summons itself cannot be changed after submission; but claim(s), evidence and points of law can be specified, clarified or modified until the pre-trial procedure is closed.
The Danish court system has in recent years implemented a digital platform for the management of civil lawsuits. Thus, in practice the proceedings are initiated (and the further processes of the case are conducted) through this digital platform.
It is the principal rule that only the writ of summons and notice of appeal are subject to service, while other pleadings, procedural notices and other documents are made available on the digital platform (see 3.4 Initial Complaint). Service is the responsibility of the court.
Service can be done in the following ways: (i) by letter, (ii) electronically, (iii) by post, (iv) by personal service or, (v) where the defendant is a natural person, by telephone (see Section 155 of the AJA). Service by post or personal service can also take place, if the defendant is not encountered, before members of the defendant’s household, their spouse or at the defendant’s place of work. If a party has engaged an attorney-at-law, service can also be done before him or her.
If the defendant’s place of residence is outside of Denmark and service by post or personal service is not possible, service is completed in the manner prescribed by the applicable convention, in particular the Hague Service Convention, or alternatively by the law of the jurisdiction concerned.
If the defendant fails to comply with the deadline for submitting their statement of defence, the court may deliver a default judgment in favour of the plaintiff, provided that the plaintiff's claim is found to be justified on the basis of the statement of claim and any other information available to the court (see Section 352 of the AJA).
The court can also deliver such default judgment in favour of the plaintiff (and dismiss the defendant’s counterclaims, if any) if the submitted statement of defence fails to state the defendant's plea, to state any counterclaims and their amount, or include the necessary submissions on points of fact and law made by the defendant in support of their plea and counterclaims and is therefore unsuited to serve as the basis for the hearing of the case.
However, in cases of default judgment, the defendant can demand that the case be reopened by submitting an application within four weeks (and in exceptional instances, within a year) of the judgment (see Section 367 of the AJA). In order for the case to be reopened, the court may require that the defendant pay the awarded costs or provide security.
The Danish legal system allows uniform claims from several individuals to proceed as a class action. It is the principal rule that all subject matter pertaining to the jurisdiction of the courts can proceed as a class action.
Pursuant to Section 254b of the AJA, class actions can be initiated when:
The representative can be a member of the group, an appropriate association or the Consumers' Ombudsman (as it is currently the only public authority authorised to do so). The group representative is ultimately appointed by the court and is the only individual/entity considered a party.
Class actions can both be opt-in or opt-out. Opt-out actions are possible when it is presumed that the claims, due to their small size, are generally not expected to be pursued as individual actions and an opt-in class action is not considered appropriate (see Section 254e(8) of the AJA). In addition, in an opt-out action, only a public authority (ie, the Consumers’ Ombudsman) can be appointed as group representative which means opt-out class actions are currently limited to consumer-related matters.
In opt-in actions, the group representative can be (i) a group member, (ii) an association, or (iii) a public authority.
Where the client is a consumer, the client must be provided with an estimate of the legal fees. The estimate of costs must be provided to the client following the client’s engagement of the attorney. If the client is not a consumer, the attorney is only obliged to provide an estimate of the costs if requested to do so by the client.
The court can order an interim injunction prior to a trial or hearing provided it is proven, or shown to be sufficiently probable, that:
Where the damage or inconvenience caused to the opposing party is disproportionate to the interests supporting an injunction, the court can deny its granting.
Part 56 of the AJA also provides for actions concerning money claims, including freezing assets.
Please also see 6.1 Circumstances of Injunctive Relief.
Pursuant to Section 253 of the AJA, the court may direct that the legal proceedings are to be provisionally limited to a part of the claim with which the case is concerned and the court may deliver a separate ruling on that part of the claim. This can relate to both procedural issues and the merits of the case.
As summary judgments are not applied under Danish law, motions for summary judgment are not possible. The court can, however, decide to provisionally limit the case (see 4.2 Early Judgment Applications).
Regardless, it is possible to make a motion to dismiss due to, for example, the plaintiff’s lack of legal interest in the matter, the court’s lack of territorial or subject matter jurisdiction or the fact that the dispute is subject to arbitration.
Pursuant to Section 251 of the AJA, a third party can, in the first instance, join as a party where:
The parties can request the court to disallow the third party becoming a party in the case if the joinder should have been done at an earlier point in time. After the end of pre-trial procedures, a third party can only join with the court’s consent.
Alternatively, a third party with a legal interest in the outcome of the case can request that the court allow it to join the proceedings in support of one of the parties (see Section 252 of the AJA). The third party will, in this case, join as a non-party intervenor. The court determines in which way a non-party intervenor is allowed to participate in the proceedings and may award costs to or against the intervenor.
Additionally, it is possible, pursuant to Section 250(2) of the AJA, for both the plaintiff and the defendant to add claims against third parties where:
The defendant can only apply for an order that the plaintiff provide security where the plaintiff is domiciled outside of the EU/European Economic Area (see Section 321 of the AJA). However, this ability for the court to order security does not apply when the plaintiff is domiciled in a jurisdiction where that security would not be ordered for plaintiffs from Denmark. The case will be dismissed if the security ordered by the court is not provided.
The courts deal with the costs of interim applications/motions in the same way as in other instances where the court delivers a decision (see Section 421 of the AJA). See also 9 Damages and Judgment.
The parties can, in a notice to the court, request that the court deal urgently with the application/motion; but this decision is ultimately at the court’s discretion.
The form of discovery available in Denmark is the court’s ability to order a counterparty to disclose documents that are at their disposal (see Section 298 of the AJA). A party’s non-compliance with this order may result in adverse inference. However, orders are not possible if the documents contain information about which the party will be excluded or exempted from giving testimony as a witness.
A party’s request to the court to make this type of order must state the facts to be proven by the disclosure and the reasons supporting the disclosure – ie, the request must be specific. The requesting party will also have to consider whether it is possible to obtain the documents otherwise.
Upon a request from a party, the court can order a third party to disclose documents that are at their disposal and relevant to the case (see Section 299 of the AJA). Compelling measures, such as fines, can be employed by the court against a third party if it fails to comply with a discovery order. This does not apply where the third party will be excluded or exempted from giving the information in testimony as a witness.
In practice, the main focus of discovery motions relates to accounting information, contracts and otherwise inaccessible documents from public authorities.
See 5.1 Discovery and Civil Cases.
A party or a third party is not obliged to disclose documents containing information which is excluded or exempted from the general duty to give evidence. Pursuant to Section 170 of the AJA, attorneys are exempted from the duty to give evidence about matters which have come to their knowledge in the course of the exercise of their functions as attorneys, where it is against the wishes of the person having the right of confidentiality.
However, the courts may order attorneys (excluding defence counsel in criminal proceedings) to testify where it is assessed to be essential to the outcome of the case and that order is justified by the merits of the case and its importance to the party concerned or to society at large. Nevertheless, the order cannot extend to information that the attorney has obtained during legal proceedings he or she has been entrusted to conduct or in which his or her advice has been sought.
A party’s duty to disclose a document is restricted in the same way as their duty to give evidence. Thus, pursuant to Section 171 of the AJA, the duty to follow a disclosure order from the court can, inter alia, be waived where the giving of evidence is deemed likely to:
In civil proceedings the court can, if requested to do so by a party, impose interim injunctions and thereby order individuals to temporarily do, refrain from doing, or tolerate certain actions (see Part 40 of the AJA). See also 4.1 Interim Applications/Motions.
The injunction can be made conditional on the party providing security for any detriment and disadvantage inflicted on the opposing party as a result of the injunction.
The party applying for the injunction must (unless the parties have agreed otherwise) begin legal proceedings within two weeks of the decision to grant the injunction becoming final. In cases of non-compliance, or if the conditions for injunction are no longer met, the injunction may be discharged.
The types of injunction available in the Danish legal system include freezing of assets, seizing movable property, and actions preserving assets or evidence.
In the Danish legal system, there are no injunctions to prevent parallel proceedings in another jurisdiction. However, the principle of lis alibi pendens prevents the problem of parallel proceedings as a similar case between the same parties cannot be initiated in a different court. The principle also extends to other EU member states (see Article 29 of the Brussels I Regulation).
There are no arrangements concerning out of hours judges or other urgent applications. The timeframe for obtaining injunctive relief depends on the specific circumstances of the case and the type of injunction.
Applications for injunctive relief, pursuant to Part 40 of the AJA, are heard at a hearing in the court where the necessary evidence must be produced. It is the principal rule that the court notifies the opposing party of the time and place of the hearing. However, the court may omit notification if the purpose of the prohibitory or mandatory injunction is deemed to be lost if the opposing party is notified.
The applicant is liable for damages if the injunction is granted on the basis of a right which is later held not to exist. If the applicant’s right is later held to only exist to a limited extent, the applicant is liable for damages resulting from the injunction having been too broad in its scope. If the injunction is illegal for other reasons, the applicant is liable for damages if the applicant should have abstained from applying for it (see Section 428 of the AJA).
Claims for damages can be entered as counterclaims in pending proceedings or in a separate action. If the claim is brought as a separate action, legal proceedings must be commenced within three months of the discharge or cessation of the injunction.
Injunctive relief against the worldwide assets of the respondent can be granted when this is within the scope of the Brussels I Regulation.
Injunction pursuant to Part 40 of the AJA is only applicable against a party to the proceedings.
However, a third party may intervene as a party in the hearing of the application for a prohibitory or mandatory injunction, with regard to the question of whether that injunction will conflict with the rights of that third party (see Section 420 of the AJA). Alternatively, the third party can join the proceedings in support of one of the parties if the third party has a legal interest in the outcome.
If the respondent, regardless of the court’s order, violates the injunction, the respondent can be fined or imprisoned and may be required to pay damages. Furthermore, it is possible to request the Enforcement Court (Fogedretten) for assistance in enforcing the injunction.
Legal proceedings are commenced with the submission of the writ of summons. Upon service of the writ of summons, the court directs the defendant(s) to file a statement of defence with the court within a specified timetable, generally at least two weeks. The court will then convene the parties to a pre-trial hearing, unless the court finds this hearing unnecessary (see Section 353 of the AJA).
The questions to be discussed at the pre-trial meeting are, inter alia, the parties' positions on the points of fact and law of the case, the organisation and timetable of the pre-trial procedure, and objections on points of law and other issues of evidence (such as the request for an expert report by one or more court-appointed experts).
A timetable determined by the court at the pre-trial hearing will normally outline deadlines for further pleadings, such as reply and rejoinder, as well as a summary of the parties’ final claims or pleas. The time for the conclusion of the pre-trial procedure, which is – unless otherwise directed by the court – four weeks before the beginning of the hearing, will also be evident from the timetable. After the conclusion of the pre-trial procedure, the parties’ ability to change their claims, make new allegations or submissions, and present new evidence is restricted (see also 7.4 Rules That Govern Admission of Evidence).
The trial hearing begins with the parties stating their claims. Then, the plaintiff must generally make an objective statement of the facts and evidence on which the parties rely. It is important that claims, allegations or submissions and evidence are presented to the court as the court decides upon what it is presented. After the plaintiff’s opening statement, potentially supplemented by comments from the defendant, the hearing continues with the production of evidence. If relevant, the parties, witnesses and experts give evidence.
The plaintiff and the defendant will then each argue their case with the possibility for rebuttal and surrebuttal. When the oral procedure is completed, the case will be set down for judgment.
If the parties consent to do so, the court may direct that the case is to be decided without an oral procedure where special circumstances so warrant.
As mentioned in 7.1 Trial Proceedings, the court will convene the parties to a pre-trial hearing (normally held as a conference call), unless the court finds such a hearing unnecessary. The purpose of the pre-trial hearing is to prepare the case for trial as well as to narrow and specify the issues in dispute.
The court can choose to convene additional pre-trial hearings or reopen the pre-trial procedure.
In civil cases, jury trials are not available under the Danish legal system.
As mentioned in 1.1 General Characteristics of the Legal System, the duty to obtain and produce relevant evidence rests with the parties. In principle, there are no limitations on the forms in which evidence may be produced – eg, documents, video, photos or audio recordings. The court is unrestricted in relation to its assessment of the evidence produced before the court.
Pursuant to Section 339(3) of the AJA, the court can invite a party to produce evidence when a question of fact would remain uncertain without that evidence. If the party fails to comply with the court’s invitation to produce the evidence, the court may draw an adverse inference (see Section 344(3) of the AJA). In contrast, it is also possible for the court to preclude evidence deemed to be without relevance to the case (see Section 341 of the AJA).
A pre-trial procedure precedes the hearing (see also 7.1 Trial Proceedings). If a party wishes to produce evidence which has not been specified during the pre-trial procedure, that party must notify the court and the opposing party. If the opposing party does not give consent to the admittance of new evidence, the court may allow the new evidence produced, if:
Where the opposing party consents to the admittance of new evidence, the court can refuse the request to produce new evidence if granting that request may be assumed to necessitate an adjournment of the hearing.
Traditionally, expert evidence in legal proceedings is produced through court-appointed experts. However, it is also possible for the court to allow (after request from the parties) the parties themselves to present unilaterally obtained expert opinions, either supplementing or replacing a report from a court-appointed expert (see Section 209a of the AJA).
As a rule, expert opinions which are obtained by a party after legal proceedings are commenced cannot not be presented in the case (see Section 341a of the AJA). However, while it is not specifically regulated in the AJA, the possibility to, during the legal proceedings at the courts, obtain an opinion on the state of things in general from associations within the relevant business area, etc, has been accepted in practice. If a party wishes to obtain an expert opinion after the commencement of legal proceedings, it must be conducted through the general rules – ie, a court-appointed expert, when the opinion entails a specific assessment of the factual circumstances of the case.
To engage court-appointed experts, a party requests that the court commission an expert to report on one or more questions (see Section 196 of the AJA). The parties then submit their questions for the expert to the court. The court sets a deadline for the parties' submission of questions. The court can refuse a question if it is outside the scope of the expert’s expertise, outside of the scope of the export report, deemed to be of no relevance to the case, deemed to improperly attempt to lead the expert in a particular direction or require them to consider judicial issues which are to be considered by the court (see Section 197 of the AJA).
After the court has received the questions, the court appoints one or more experts and forwards the parties’ questions (see sections 198 and 202 of the AJA). After potentially inspecting the object in question, the expert answers the questions by a written report addressed to the court. The court-appointed expert can be summoned to testify at the hearing to answer supplementary questions.
The court cannot itself seek expert testimony or guidance.
It is the principal rule that hearings are open to the public (see 1.3 Court Filings and Proceedings).
The level of intervention by a judge is traditionally not high in civil cases. Where a party’s claim or allegations/submissions are unclear or incomplete, the court can ask clarifying questions as well as otherwise invite the party to declare their position (see Section 339 of the AJA).
The general timeframe in which judgments must be delivered ranges from two weeks to two months (see Section 219 of the AJA).
In some cases the judge(s) ask(s) the parties, if they are interested in an advisory opinion – ie, how the case will be decided in a formal judgment.
In the first half of 2020, proceedings in the district courts were settled, on average, 18 months after commencement. In the high courts, the timeframe for settlement averages around 12.5 months and the Supreme Court averages around 11 months.
Naturally, the timeframe of a case varies depending on the circumstances – eg, the timeframe is generally longer in cases where expert opinions are produced.
Court approval is not required to settle a lawsuit. Following the principle of the parties’ right of disposal, the parties’ rights in regard to the subject matter in dispute are unaffected by the legal proceedings. Thus, the parties are free to settle a lawsuit at any time during the proceedings.
Pursuant to Part 26 of the AJA, the courts are, in the first instance, obliged to attempt the reaching of a settlement agreement through a conciliation procedure. However, this can be omitted if – based on the nature of the case, the circumstances of the parties or similar – it may be assumed that attempts at conciliation will be in vain.
An alternative to the above-mentioned conciliation is mediation. Pursuant to Part 27 of the AJA the parties can request the court to appoint a mediator. The mediator does not have any powers to make a decision but works with the parties in an attempt to reach a solution to the dispute. Either party can decide to leave the mediation proceedings and the case will continue its course through the courts.
A settlement agreement reached by conciliation procedures is, per default, entered into the court records (see Section 270 of the AJA). As mentioned in 1.3 Court Filings and Proceedings, this creates the possibility that anyone with an individual, significant interest in the settlement can be given a right of access to the agreement.
In extrajudicial settlement agreements (eg, agreements reached by mediation), the parties can request that the agreement not be entered into the court records which leaves the parties free to agree confidentiality.
A settlement agreement that is entered into the court records is directly enforceable (see Section 478 of the AJA).
For settlement agreements reached in mediation, the parties can (where the mediator is a judge) request that the agreement is entered into the court records, which will ensure that the settlement agreement is directly enforceable to the same extent as settlements reached after conciliation procedures (see sections 279 and 478 of the AJA).
Despite not being entered into the court records, an extrajudicial settlement can serve as the basis for enforcement when (i) it is written, (ii) it is in regard to overdue debts and (iii) it is made explicit, in the settlement itself, that it may serve as the basis of enforcement.
Settlement agreements are contractually binding on the parties. Thus, if the settlement agreement is valid and effective pursuant to Danish contract law, it cannot be set aside.
The form of award delivered by the court depends on the parties’ claims. Where a party claims for a declaration, the award will determine the existence or content of a legal question. Where a party claims damages, the award will be determined by the extent, if any, of damage to the plaintiff. Depending on the party’s construction of its claims, an award delivered by the court can also stipulate that the opposing party must do, or refrain from doing, something.
Danish law regarding damages is not directly regulated under statutory law but developed by case law.
In order to be awarded damages:
The maximum possible amount of damages is limited to the financial loss suffered. The sufferer must provide the court with evidence showing this financial loss. Where the sufferer has failed to limit the damage, or the damages can also be attributed to the sufferer’s own fault, the damages can be reduced. Punitive damages, as they are applied in other jurisdictions (eg, the USA) are not available under Danish law.
The party’s ability to collect interest is regulated by the Overdue Payments Interest Act (hereinafter the Interest Act).
If the due date for payment is predetermined, interest can be collected from this day (see Section 3(1) of the Interest Act). Where the due date is not predetermined, interest can be collected from 30 days after the creditor has requested payment (see Section 3(2) of the Interest Act). However, in any event interest can be collected at latest from the day on which the plaintiff commenced legal proceedings (see Section 3(4) of the Interest Act). With reservations for the claim being time-barred, interest can be collected until payment is received – ie, also after judgment is entered.
The default interest rate is calculated as 8% plus the official lending rate of the Central Bank of Denmark, which since 2015 has been 0.05%.
A judgment delivered by a Danish court is directly enforceable at the Enforcement Court (see Section 478 of the AJA). Judgments become enforceable on expiry of the waiting period unless an appeal has been filed before that expiry (see Section 480 of the AJA). The waiting period is 14 days from the date of the judgment (unless otherwise stated in the judgment).
The mechanisms available to the Enforcement Court include levy attachment or execution and assistance in upholding injunctions.
Judgments delivered by courts of another country are only recognised and enforceable in Denmark if a bilateral agreement stipulates that mutual recognition/enforceability exists.
Under a parallel agreement with the European Community, Denmark has agreed to be bound by the Brussels I Regulation and Lugano Convention. Thus, rulings from other member states of these conventions are enforceable in Denmark under the rules of these conventions.
Rulings delivered by District Courts are appealed to one of the two High Courts and rulings by the High Courts are appealed to the Supreme Court. It is the principal rule that the parties have the right for the case to be heard in two instances – ie, first-instance rulings can be appealed.
Appeal to the Supreme Court for a third-instance review requires permission from the Appeals Permission Board, which may be granted if the case concerns fundamental legal questions (see Section 371 of the AJA).
Under the Danish legal system there is a distinction between appeal (anke) and interim decisions that are subject to interlocutory appeal (kære).
As mentioned in 10.1 Levels of Appeal or Review to a Litigation, the parties have the option to appeal a first-instance judgment to a higher court. However, proceedings concerning claims of a maximum economic value of DKK20,000 can only be appealed with the permission of the Appeals Permission Board, which may be granted if the case concerns fundamental legal questions or if special circumstances so warrant (see Section 368 of the AJA).
The High Courts can refuse to hear an appeal if there is no prospect of them reaching a conclusion other than the one reached by the district court and the appeal does not concern fundamental legal questions or where no other reasons exist, in general, in favour of the case being heard before the High Court (see Section 368a of the AJA). However, this does not apply where permission to appeal is granted by the Appeals Permission Board.
Judgments delivered by the Maritime and Commercial Court are generally appealed to the High Court of the district in which the case should have been brought if the case had not been brought before the Maritime and Commercial Court. Where the outcome of the case is of fundamental legal importance, and of general importance to the application and development of the law or has significant societal implications in general, or where there are other special reasons, the judgment from the Maritime and Commercial Court may be appealed to the Supreme Court.
Most interim decisions are not appealable without permission from the Appeals Permission Board, since orders and other decisions made by the District Court during the pre-trial procedure and hearing are non-appealable without such permission (see Section 389a of the AJA). Most interim decisions of the High Courts or the Maritime and Commercial Court are only appealable with permission from the Appeals Permission Board (see sections 392 and 392a of the AJA).
The appeal process begins by filing a notice of appeal with the court whose judgment is being appealed (see sections 372 and 373 of the AJA). The court will then arrange for the notice of appeal to be served and will direct the respondent to file a defence (see Section 375 of the AJA). No defence is needed if the respondent pleads affirmation of the judgment and will not rely on submissions, documents, etc other than those relied on before the lower court (see Section 377 of the AJA).
It is the principal rule that a party must commence appeal within four weeks from the date of the judgment (or from the date on which the applicant has been granted permission to appeal) (see Section 372 of the AJA). However, the appellate court may, exceptionally, permit appeal until one year after the judgment.
Judgments generally become enforceable after two weeks if they are not appealed (see 9.4 Enforcement Mechanisms of a Domestic Judgment).
A request for permission to initiate an interlocutory appeal must be submitted to the Appeals Permission Board within two weeks of the order or decision. Generally, the interlocutory appeal must be initiated within two weeks after permission is granted to the applicant (see Section 394 of the AJA).
It is the principal rule that the appellate court reviews the case through an oral (re)hearing.
The appellate court can decide that the appeal is to be decided without an oral hearing if (i) the parties so agree, (ii) the subject matter of the procedure is limited to whether a judgment may be delivered, or (iii) it is found to be expedient because of the special nature of the case.
Where the opposing party objects to claims or pleas and allegations or submissions which have not been made before the lower court, these may only be taken into account with the court's permission (see Section 383 of the AJA). Even if the opposing party does not object, the court can refuse permission to submit claims or pleas and allegations or submissions not explored at first instance which would make it necessary for the appellate court to consider issues not brought before the lower court (see Section 384 of the AJA).
The court cannot impose conditions on granting an appeal.
However, the court will not accept a notice of appeal if it does not state the judgment under appeal, the appellant’s claim(s) or an address for the appellant; and is therefore unsuited to serve as the basis for the hearing of the appeal case (see Section 374 of the AJA).
After the hearing of an appeal, the appellate court delivers a ruling on the matters appealed by the parties – ie, the appellate court does not have the power to change the decisions of the lower court on matters which are not appealed by the parties. The measures available to the appellate court are modification or reversal of the appealed judgment, as well as remission.
As a starting point each party is responsible for payment of the costs incidental to the procedural steps taken or requested by that party (see Section 311 of the AJA). The parties’ own expenses, such as travel expenses and expenses for attorneys, must also initially be paid by each party. Upon delivering a judgment (either at first instance or after appeal) or where the case is withdrawn from the court or dismissed by the court, the court will, ex officio, decide on the matter of awarding costs (see 11.2 Factors Considered When Awarding Costs).
The costs associated with litigation that are recoverable include court fees, legal fees and other costs (such as expenses for expert opinions and witnesses). Legal fees (ie, costs for legal assistance) are only recoverable where they are reasonable, while it is the main rule that the rest of the costs, provided they are necessary for the adequate conduct of the case, are recoverable in full (see Section 316 of the AJA). The amount of legal fees awarded is based on a standardised scale with reference to the amount in dispute.
Costs awarded in judgments and decisions by the District Courts can be challenged at the High Court by interlocutory appeal if the costs in question are more than DKK20,000 (see sections 369(2), 389 and 391 of the AJA). Challenge of costs of a smaller amount requires permission from the Appeals Permission Board. Where a party wishes to also appeal the main decision (ie, not only the costs), that party can include a claim for the appellate court to change the costs of the previous court.
The unsuccessful party must compensate the opposing party for the costs incurred as a result of the action, unless otherwise agreed by the parties (see Section 312 of the AJA). Likewise, if a party is not successful in having the decision modified or reversed under appeal, that party will be deemed to have lost for the purposes of costs. In special circumstances, or where the unsuccessful party has offered what is due to that party, the court may direct that no, or only partial, compensation is to be paid to the winning party.
If each of the parties partly loses and partly wins the case, the court can choose to order one of the parties to pay partial costs to the other party or that neither party is to pay costs to the other party (see Section 313 of the AJA). However, if the outcome only differs insignificantly form the outcome of the case, the court can order a party to pay full costs.
Pursuant to Section 8a of the Interest Act, interest on the costs awarded can be collected from the expiry of the waiting period for execution (see also 9.3 Pre and Post-Judgment Interest and 9.4 Enforcement Mechanisms of a Domestic Judgment).
The most popular method of alternative dispute resolution (ADR) in Denmark is arbitration. The use of other methods of dispute resolution, such as mediation, is growing but they remain less common. Moreover, it is also possible to conduct mediation via specialised institutions, such as the Danish Mediation Institute.
As mentioned in 8.1 Court Approval, it is the main rule that the court, at first instance, is obliged to attempt the reaching of a settlement agreement through conciliation procedures. If the parties agree to attempt to solve their dispute through mediation, they can, to that end, request that the court appoint a mediator. Despite the introduction of provisions on such dispute resolution methods in the AJA, it is more common, due to Danish tradition, that the parties (in some cases assisted by their legal counsel) conduct negotiations among themselves in attempt to settle the dispute.
If the parties agree to attempt solving their dispute through mediation, they can request the court to appoint a mediator. Despite the introduction of provisions on such dispute resolution methods in the AJA, it is more common, due to Danish tradition, that the parties (in some cases assisted by their legal counsel) conduct negotiations among themselves in attempt to settle the dispute.
The Danish legal system promotes both conciliation procedures and mediation (see 8.1 Court Approval). However, there are no specified sanctions if a party refuses. Attempting to resolve disputes through ADR is only compulsory if it is agreed between the parties; for instance, such an obligation can be found in a commonly used agreement document in the building and construction sector.
Besides the Mediation Institute, there are two established arbitration institutions in Denmark – the Danish Institute of Arbitration (DIA) and the Danish Building and Construction Arbitration Board (Arbitration Board).
The jurisdiction of DIA is not sector-specific and DIA adjudicates cases in a wide variety of subjects. Besides being a forum for arbitration, DIA also offers mediation. The arbitration and mediation procedure at DIA is regulated by a set of rules adopted by the institute.
The Arbitration Board adjudicates in the majority of disputes in the building and construction sector as the most commonly used agreed documents refer to the Arbitration Board as the institution for dispute resolution. The proceedings at the Arbitration Board deviate from traditional arbitration in some ways; for instance, technical arbitrators (eg, an engineer or architect) are proposed by the Secretariat of the Arbitration Board when appointing arbitral tribunals. The Arbitration Board does also offer mediation and conciliation procedures.
The central law regarding the conduct of arbitrations is the Danish Arbitration Act, which to a large extent reflects the 1985 version of the UNCITRAL Model Law. It is the main rule that an arbitration award is recognised and enforceable in Denmark regardless of where it is made (see Section 38 of the Arbitration Act). Section 39 of the Arbitration Act contains an exhaustive list of the grounds for the courts to refuse recognition or enforcement, which are largely overlapping with Section 37 of the Arbitration Act (see 13.4 Procedure for Enforcing Domestic and Foreign Arbitration).
It is the principal rule that arbitration can be agreed for disputes relating to subject matter over which the parties have an unrestricted right of disposition (see Section 6 of the Arbitration Act). Naturally, subject matter which according to specific provisions are non-arbitrable (eg, disputes regarding residential leases) cannot be referred to arbitration.
Furthermore, disputes that pertain to matters of law protecting public policy interests, where those public interests outweigh the contractual autonomy of the parties, are generally non-arbitrable.
As mentioned in 13.1 Laws Regarding the Conduct of Arbitration, the courts can refuse recognition or enforcement of an arbitral award on grounds listed in Section 39 of the Arbitration Act. Likewise, the court can set aside an arbitral award pursuant to the grounds listed in Section 37 of the Arbitration Act.
The circumstances in which the courts can set aside the award are, at the request of the party, where:
In addition, the court can set aside an arbitral award where:
If none of the grounds listed in Section 39 of the Arbitration Act apply, an arbitration award is enforceable in Denmark, pursuant to Part 46 of the AJA, irrespective of the country in which the award is made. Enforcement proceedings can be commenced by the competent Enforcement Court.
As mentioned in 3.4 Initial Complaint, the Danish court system has in recent years implemented a digital platform and the proceedings of civil lawsuits are largely conducted digitally. Moreover, it has been announced by the Danish Court Administration that it has entered into an agreement with a private company to create a public database of the judgments made by the Danish courts. The database is expected to be ready in the first half of 2021.
During the peak of the COVID-19 outbreak in Denmark, the courts suspended their operations of the meetings which required physical attendance by judges, attorneys, parties, etc, and hearings scheduled in this period were postponed. Currently, the courts have reopened but they operate in accordance with guidelines to ensure the health and safety of the participants at physical meetings.
The Danish government has not passed legislation or similar, which suspends the operation of limitation periods due to COVID-19. However, the ability for a creditor to commence legal proceedings and thereby suspend the limitation period has not been particularly impaired by COVID-19 as this can be done digitally.