Product Liability & Safety 2023 Comparisons

The Swiss product safety legal framework consists of regulations that fall into two broad categories: sector-specific and horizontal framing regulations.

Sector-Specific Federal Regulations

These regulations apply to specific product categories and include the following.

• The Federal Act on Foodstuffs and Utility Articles and implementing ordinances, such as:
1. the Federal Council’s Ordinance on Foodstuffs and Utility Articles;
2. the Federal Department of Home Affair’s Ordinance on the Safety of Toys; or
3. the Federal Department of Home Affair’s Ordinance on Cosmetic Products.
• The Federal Act on Medicinal Product and Medical Devices and implementing ordinances, such as the Federal Council’s Ordinance on Medical Devices.
• The Federal Council’s Ordinance on Machines.
• The Federal Act on Electrical Light and Heavy Current Installations and implementing ordinances, such as:
1. the Federal Council’s Ordinance on Electrical Low Current Installations; or
2. the Federal Council’s Ordinance on Electromagnetic Compatibility.
• The Federal Act on Construction Products.

Horizontal Framing Regulations

These are applicable cross-sectorally to all products, and include:

• the Federal Product Safety Act and the implementing Federal Council’s Ordinance on Product Safety – these regulations are applicable to the extent that a sector-specific regulation does not address product safety (eg, regarding post-market surveillance or competencies of the enforcement authorities);
• the Federal Act on Technical Barriers to Trade and the Federal Council’s Ordinance on the Placing of Products on the Market according to Foreign Regulations – these regulations shall ensure free trade between Switzerland and its main trading partners by obliging the Swiss legislators to align product regulations with those of such partners, in particular with the European Union; and
• the Federal Act on Product Liability which provides for the strict liability (ie, not depending on the producer’s fault) of a producer for its defective products.

The enforcement of product safety regulation in Switzerland is generally sector-specific. This means that the enforcement authorities that are competent in a specific product sector are likewise competent to enforce the specific product safety regulations for that sector. Depending on the sectoral law, the responsibility for enforcement either lies with the cantons or the federal government. The main regulators are the following.

• The State Secretariat for Economic Affairs (SECO) co-ordinates the enforcement of Swiss product safety legislation in agreement with the competent sector-specific enforcement bodies and is, additionally, the surveying regulatory enforcement authority in several product sectors; the SECO also operates a product safety reporting and information centre together with the Federal Consumer Affairs Bureau (FCAB).
• The Federal Inspectorate for Heavy Current Installations (ESTI) is responsible for the technical supervision and inspection of electrical installations and electronic devices.
• The Swiss Council for Accident Prevention (BFU) is competent for personal protective equipment, specifically with regard to traffic, sport and household needs, and for machines, though with regard to recreational use only.
• The Swiss Accident Insurance Institution (SUVA) is the competent enforcement body for personal protective equipment and machines, with regard to operational use.
• The Swiss Agency for Therapeutic Products (Swissmedic) is competent for the market surveillance of therapeutic products and medical devices.
• The respective cantonal bodies – eg, cantonal inspectorates/laboratories – are generally competent to enforce the Swiss Foodstuffs and Utility Articles legislation (including in regard to toys, cosmetic products or food contact materials).
• The respective cantonal bodies – eg, cantonal inspectorates/laboratories – are generally competent to enforce Swiss chemical legislation.

Generally, for consumer products (ie, products that are intended for consumers or likely to be used by consumers under reasonably foreseeable conditions), the Swiss Product Safety Act obliges the producer or any other distributor to take adequate measures (ie, corrective actions) in the course of its business to prevent potential dangers arising from those products.

A corrective action is deemed “adequate” if the disadvantages that arise for the producer or other distributor are not considered completely disproportionate in comparison with the advantages resulting for the affected consumers. Potential measures include the issuing of warnings, a sales stop, the withdrawal from the market or the recall of the product. The law does not provide for any fixed formal requirements. Therefore, any corrective action may be chosen if it ultimately serves to avert the danger emanating from the product. In practice, the competent enforcement bodies regularly require a producer/importer to issue a warning throughout the supply chain as well as towards consumers (provided that the product has already reached the consumer). Depending on the actual safety risk, the enforcement body may also require that the warning be made public – eg, on the producer’s website and/or on the website of the Swiss Federal Consumer Affairs Bureau (regarding the role of the Bureau, please refer to 1.2 Regulatory Authorities for Product Safety).

Switzerland follows a risk-based approach regarding the obligation to notify the regulatory authorities. Generally, the duty to notify the authorities in respect of a product safety issue is triggered – for consumer products – if a producer or any other person placing a product on the market knows or ought to know that the product in question presents a risk to the safety or health of users or third parties (Article 8, paragraph 5, Swiss Product Safety Act). The respective provision in the Product Safety Act corresponds to the producer’s or other distributor’s obligation to notify the authority according to Article 5, paragraph 3 of the EU General Product Safety Directive (2001/95/EC). The notification obligation of the Product Safety Act applies where the specific sectoral law does not provide for any separate notification obligation.

The notification must be made immediately. According to an FAQ guide published by the State Secretariat for Economic Affairs (SECO), “immediately” means no later than one to two days, depending on the associated safety risk. Swiss legal scholars advocate a longer period of a maximum of ten days pursuant to the European Commission’s Guidelines for the Notification of Dangerous Consumer Products to the Competent Authorities of the Member States by Producers and Distributors in accordance with Article 5, paragraph 3 of Directive 2001/95/EC.

The Swiss Product Safety Act defines the minimum content of the notification. There are no legal requirements as to the form of the notification. However, some regulatory bodies provide for voluntary notification templates on their websites but emphasise that the completion of the form should not delay the notification.

Generally, whoever fails to timely notify the authorities of a dangerous or potentially dangerous consumer product according to Article 8, paragraph 5 of the Swiss Product Safety Act or whoever violates the duty to collaborate with the enforcement authorities (Article 11, Swiss Product Safety Act) is liable for a fine of up to CHF40,000 (in the case of wilfulness) or CHF20,000 (in the case of negligence). Sectoral law, however, sometimes provides for different criminal liability. In any case, the law sets forth that the person within the producer’s organisation who is responsible for the offence should be punished. The principal is only punished if they wilfully or negligently, in breach of a legal obligation, failed to prevent the offence.

There are no publicly available examples of companies being prosecuted or fined for breaching these obligations. However, that does not mean that no such cases exist. Under Swiss criminal prosecution law, the courts may generally only publish a judgment if the publication is in the public’s interest or in the interest of the injured party.

Depending on the respondent of the action (eg, a producer, distributor or retailer), an injured party would likely base its claim for damages on the following grounds.

Against the Producer

The Federal Product Liability Act provides for the non-contractual strict liability (ie, not depending on fault) of a producer for damages if a defective product leads to the death or injury of a person or the damaging or destruction of property. “Producer” means the person who has manufactured the end product, a basic material or a partial product; any person who claims to be the producer by affixing its name, trade mark or other distinctive sign to the product (“quasi-producer”) as well as any person importing the product for distribution purposes to Switzerland. The liability is only triggered if the product is deemed defective – ie, if it does not offer the safety that one may expect considering all circumstances (such as the get-up or overall appearance of the product, the expected use or the time of market placement). The Federal Product Liability Act, however, provides for several defences (please refer to 2.12 Defences to Product Liability Claims for further details).

In addition, the injured party could base a damages claim on contract (if the producer is the seller and the injured party is the buyer) or general tort law. The latter, however, would require proof of fault. Given this obstacle, a claimant would generally invoke the respective tort claim only on a subsidiary basis.

Against the Seller

The Swiss Code of Obligations provides for the strict contractual liability of a seller for the direct damage suffered by a buyer due to a defective object purchased from that seller. “Direct damage” would also include any personal damage or damage to property which was directly caused (ie, without any additional causal link) by the product’s defect. If the seller were also the producer of the defective product, the injured buyer could alternatively base its claim for damages on the Federal Product Liability Act as discussed above.

In Switzerland, the standing to bring claims for product liability is – such as with any other claim – a matter of substantive law – ie, it depends on the legal basis of a claim. A party has standing to sue if it (at least allegedly) has a substantive claim under a certain law or legal relationship.

In the context of product liability, claims are usually based on either the Federal Product Liability Act, a contract or tort law (as discussed in 2.1 Product Liability Causes of Action and Sources of Law).

Under the Federal Product Liability Act, any person injured by a defective product or any person suffering property damage due to a defective product may bring a claim against the responsible producer.

For contractual claims, a party to a contract usually has standing to sue if it suffers damage following a violation of the contract by the other party (in the context of product liability – eg, in case of the delivery of a defective product).

Under general tort law, any person who has suffered damage following a civil wrong committed by another person – whether or not the injured party is linked to that person by a legal relationship, such as a contract (eg, as often in product liability cases: the consumer and the producer of a product) – has standing to sue.

Which of these legal bases is the most favourable for an injured party to bring claims related to a product depends largely on the underlying facts of the case. Whenever there is a contractual relationship, an injured party will most probably bring claims under that contract given that, under Swiss law, there is a presumption of fault – ie, the burden of proof is on the breaching party causing damage, and in sales contracts there is even a strict liability without requirement of fault for direct damage. If there is no such contract – which is usually the case between an injured party and a producer – the injured party would generally try to sue a producer primarily under the Federal Product Liability Act because of its strict liability, whereas under tort law the producer can only be held liable in case of fault.

The applicable time limit depends on the legal basis that the respective claim is based on.

For claims based on the Federal Product Liability Act, the statute of limitations is three years, starting from the date on which the injured person became or should have become aware of the damage to, defect of and the identity of the producer (Article 9 of the Federal Product Liability Act).

For claims based on contract law (in the context of product liability most likely a sales contract), the statute of limitations is two years, starting from the day the defective product was delivered (Article 210, Swiss Code of Obligations).

For claims based on tort law, the Swiss Code of Obligations provides for two different statutes of limitations, a relative and an absolute one (Article 60, Swiss Code of Obligations). The relative limitation period is three years, starting from the date on which the injured person became aware of the damage and the person liable for it. The absolute limitation period is ten years for damaged goods and 20 years for personal injuries, starting from the date on which the damaging event occurred or ended. This absolute limitation period runs regardless of whether the injured person has any knowledge of the damage and even if the damage has not yet occurred. This longer limitation period, under tort law with regard to personal damage, has the effect that a producer may be held liable by an injured party under tort law, even if the limitation period for claims under the Federal Product Liability Act has already lapsed.

The Swiss Civil Procedure Code defines the locally competent court for a dispute in domestic matters, whereas the Swiss Federal Act on Private International Law or the Lugano Convention (applicable in civil and commercial matters involving parties from EU or European Free Trade Association (EFTA) states) deals with the question of territorial jurisdiction of a Swiss court in international, cross-border disputes.

Rules regarding the place of jurisdiction are quite comparable both in domestic and in international cases. As a general rule, proceedings can be initiated in the competent court at the domicile or seat of the respondent (eg, at the seat of the liable producer). Depending on the area of private law concerned, a claimant may also initiate proceedings at another forum – eg, in product liability cases, a consumer would be entitled to bring a claim at its own domicile.

With regard to subject-matter jurisdiction, it can be said that generally speaking, all cantonal courts in Switzerland have jurisdiction in all areas of the law and apply both cantonal and federal law. There are no specific/specialised courts for product liability claims, which can therefore be brought before any locally competent court.

However, the Swiss Civil Procedure Code grants the cantons the option to establish specialised commercial courts, in which the panel of judges is mixed – ie, composed of regular judges and experts (so-called “expert judges”) in the economic sector relevant for the case. Four cantons – Zurich, Berne, Aargau and St. Gallen – have established such a court, which is part of the cantonal supreme court and serves as a court of first instance for commercial matters. Such a commercial court has subject-matter jurisdiction if:

• a claim concerns the commercial activity of at least one of the parties to the dispute;
• the decision could be appealed to the Swiss Federal Supreme Court (which requires an amount in dispute of at least CHF30,000); and
• the parties to the dispute are registered in the Swiss commercial register or a similar foreign registry.

Where only the defendant is registered in the commercial register, a claimant can choose to initiate proceedings either before the commercial court or the locally competent ordinary court. If a producer has its registered seat in a canton with a commercial court, an injured party can thus choose to bring its product liability claim either before the commercial court or the ordinary court.

If a claiming party has the possibility to choose where to bring its claims, it again depends on the underlying facts and on the party’s perspective which court is the most favourable. Commercial courts have the advantage that experts from the relevant sectors are part of the judges’ panel, whereas judges of ordinary courts generally do not have expert knowledge in the specific product sector, but their decisions might be more consumer-friendly. Another difference to take into consideration is that there is only one legal remedy against decisions rendered by a commercial court, whereas decisions of the ordinary courts can be appealed against twice (see 2.11 Appeal Mechanisms for Product Liability Claims).

Swiss procedural law provides for mandatory reconciliation proceedings. Before initiating the main proceedings, the claimant must submit a reconciliation request to the Conciliation Authority (the so-called “justice of the peace”), following which the Authority will schedule a conciliation hearing. If no agreement can be reached, the Conciliation Authority will issue an authorisation to proceed (ie, to file a claim before a court), which is valid for three months. If a claim is filed before a court without a valid authorisation to proceed, the court will not decide on the merits but dismiss the case for procedural reasons.

Despite the mandatory nature of the reconciliation proceeding, the Civil Procedure Code provides for a few exceptions which might be of relevance in product liability cases. A claimant may unilaterally waive conciliation if the respondent’s registered domicile is outside of Switzerland. The parties may mutually agree to waive reconciliation if the amount in dispute is at least CHF100,000. In addition, and irrespective of the amount in dispute, the parties may agree to replace the reconciliation procedure with mediation pursuant to Article 213 of the Swiss Civil Procedure Code.

In addition, and as set out in 2.4 Jurisdictional Requirements for Product Liability Claims, certain cantons have established commercial courts. If a producer has its registered seat in one of these cantons, an injured party may choose to bring its product liability claim either before the commercial court or the ordinary court, as long as the criteria as set out in 2.4 Jurisdictional Requirements for Product Liability Claims are met. If a claimant decides to bring a claim before a commercial court, no reconciliation proceedings take place and the claim must be filed directly with the commercial court.

There are no specific rules under Swiss product liability law or Swiss procedural law, obliging a producer or other distributor to preserve any evidence in product liability cases.

There are, as in many other jurisdictions, general evidentiary risks in not preserving evidence. In a product liability case, the claimant is generally required to prove that the defendant’s product is defective, and that the product defect is the cause of his or her injury or damage to property. Under Swiss product liability law, the defendant (producer or other distributor) has several defences (please refer to 2.12 Defences to Product Liability Claims for further discussion of these). In this light, a producer or other distributor is well advised to preserve documentation (eg, random samples, technical documentation, consumer feedback, etc) and product samples for every batch so that such evidence can be readily produced if necessary. Furthermore, under some sectoral laws, producers may be required to preserve the conformity declaration or technical documentation.

There are no specific rules on the taking of evidence in product liability cases, and the Swiss Civil Procedure Code does not provide for any pre-trial or discovery mechanisms.

Pursuant to the general rules on the taking of evidence in civil procedure, each party must indicate the evidence it wants to rely on in its briefs. To the extent that such evidence is already in its possession, the party must file the evidence together with its briefs. For product liability cases, this holds, in particular, true for:

• product samples;
• documentary evidence (such as technical documentation, risk assessment, customer feedback, etc);
• expert opinions; and
• digital or other data.

Court-Ordered Evidence

To the extent that it is the responsibility of the court to order the taking of evidence, parties must submit respective requests together with precise descriptions of the evidence. This holds true, in particular, for:

• opinions to be submitted by a court-appointed expert (indication of the questions to be presented);
• inspections to be executed by the court (indication of the subject); and
• witness testimony (indication of the witnesses) – under Swiss law, witnesses will be examined by the court and there are no cross-examinations.

If a party wants to rely on evidence in the possession of the opposing party or a third party (eg, a defective product, purchase receipt or medical reports), it has to precisely identify the evidence and request that the court order that the evidence be provided.

Preventive taking of evidence

If a potential claimant (ie, an injured person) has reason to believe that evidence is at risk, it may request the preventive taking of evidence by the court. This request can be filed at any time during the proceedings and even prior to the commencement of the proceedings.

The preventive taking of evidence is considered an interim measure. The request is usually granted if:

• a specific law or provision allows the preventive taking of evidence;
• the evidence is at risk (which is the case if the evidence may cease to exist or may alter before the ordinary evidentiary proceedings); or
• there is another interest worthy of protection.

In any case, the requesting party has to credibly demonstrate (but not prove) the grounds on which it bases its request. In case of imminent harm, the request can be granted ex parte.

The court may seek an opinion from one or more experts at the request of a party or ex officio. However, the court will do so only if it considers an expert opinion necessary to prove relevant facts that are disputed by the parties. If such an opinion is sought, it is the court that appoints as well as instructs the experts and submits the relevant questions to them. Prior to this, the parties are given the opportunity to submit additional questions or to have the questions modified. The court can order that the experts submit their opinion in writing or present it orally. It may also summon the experts to the hearing to present and explain their written opinion. In that case, the parties will be given the opportunity to ask for explanations or to put additional questions to the expert. However, cross-examination of the expert is not permitted.

Furthermore, the court may put questions to a witness with expert knowledge in order to assess the merits of the case. The expert witness must have special expertise in the subject so that the court can examine the expert witness not only with regard to the merits, but also on its assessment thereof. However, an expert witness cannot replace an expert opinion. In contrast to an expert, the expert witness is not subject to an appointment procedure. Finally, an expert witness is liable to prosecution only for giving false testimony and not for giving a false expert opinion.

Parties are free to individually commission an expert opinion and to submit it in the proceedings. As opposed to an expert opinion that was produced by a court-appointed expert, the party expert opinion is not considered to be evidence but will only qualify as a party allegation.

As a general rule under Swiss civil law, it is incumbent upon the party who wants to rely on a certain fact to establish and prove this fact. For product liability cases this means that it is generally the injured person who bears the burden of proof for all facts underlying its claim.

This holds true for all claims (and the respective requirements) based on tort law and on the Federal Product Liability Act. For claims based on a contract there is one deviation from this rule: the burden of proof for fault is reversed. This means that if all other requirements are met, it is assumed that the defendant was at fault and it will be upon the defendant (ie, the producer) to prove that this was not the case. From a procedural perspective, it may thus be favourable for an injured person to bring a claim based on contract rather than based on tort law. For claims based on a sales contract, provided that a direct nexus between the damage and the defect of the product can be established, fault is not a requirement at all. The same holds true for claims based on the Federal Product Liability Act.

The Federal Product Liability Act provides, however, for several exceptions to this strict liability (see 2.1 Product Liability Causes of Action and Sources of Law). In accordance with the general rule as set out above, it is the producer who bears the burden of proof for any fact it wants to rely on in order to exonerate itself from liability.

As to the relevant standard of proof: the general threshold is full proof, meaning that the court has to be convinced beyond any reasonable doubt. Where this is not possible (eg, because the defective product has been destroyed or disposed of or the amount of damage suffered cannot reasonably be quantified) the courts may apply a less strict standard.

There are no specific or specialised courts for product liability cases in Switzerland. Therefore, such cases generally must be brought before ordinary courts (ie, the competent local court) or – in certain cantons and if the statutory prerequisites are fulfilled (see 2.4 Jurisdictional Requirements for Product Liability Claims) – before the competent commercial court.

Depending on the value in dispute, the proceeding is held in a simplified proceeding (for claims below CHF30,000) or in an ordinary proceeding (for claims above CHF30,000 or claims without monetary value).

In Switzerland, cases are decided by judges and the exact composition of a bench depends on local, cantonal law. In simplified proceedings, the court is, however, often composed of a single judge (Einzelrichter), whereas there are usually three or more judges (Kollegialgericht) on the panel in ordinary proceedings.

There is usually no minimum threshold with regard to the damages that can be claimed. If claims are brought under the Swiss Product Liability Act, however, the claimant must bear a deductible of CHF900 in case of a claimed damage to property.

With regard to the damages that can be awarded to a claimant, there is no maximum in absolute numbers. However, a claimant can only be compensated for the damages it actually suffered. In other words, Swiss courts do not award so-called punitive damages that exceed the amount of the actual loss. Swiss law does not allow a damaged party to take monetary advantage (enrichment) from the event of damage. Accordingly, the claimant must prove each individual damaged position (exact amount) and the causal link between the damaging event (in product liability cases: the defective product) and the respective position.

There are no specific rules governing the appeal mechanisms in product liability cases. The general procedural rules provide essentially for two appeal opportunities which are relevant for product liability cases: a first one to the high court of the respective canton and a second one to the Swiss Federal Supreme Court.

Appeal to the High Court of the Respective Canton

Final and interim decisions and decisions on interim measures of a court of first instance can be appealed if the amount in dispute is at least CHF10,000. The time limit for the filing of an appeal is 30 days in the case of an ordinary proceeding and ten days in that of a summary proceeding. The appellant may submit that the first-instance court has (i) applied the law incorrectly, and/or (ii) established the facts incorrectly. The conduct of the proceeding is, to a large extent, at the discretion of the appeal instance – ie, the court of second instance will decide whether to conduct a second round of written submissions or to hold an oral hearing. The appeal instance may conclude the proceedings by either confirming the challenged decision, by rendering a new decision or by remitting the case to the court of first instance.

Appeal to the Swiss Federal Supreme Court

The decision of the court of second instance may be appealed to the Swiss Federal Supreme Court if the amount in dispute is at least CHF30,000 or if a question of fundamental interest is to be decided. The time limit for filing the appeal is 30 days. The appellant may essentially claim that the previous instance has (i) violated federal law; and/or (ii) established the facts manifestly wrongly or in violation of the federal law, provided that such deficiency was relevant for the outcome of the case. The procedure will be conducted in writing and will usually be limited to two written submissions. As in the previous instance, the Swiss Federal Supreme Court may confirm the challenged decision, render a new decision or remit the case to the previous instance.

Exception: Decisions of the Commercial Courts

There is only one legal remedy against a decision rendered by a commercial court, which is the appeal to the Swiss Federal Supreme Court. The procedure will be the same as described above.

The Federal Product Liability Act provides for the strict liability of a producer. The producer is, however, not liable under the Federal Product Liability Act if it can prove that:

• it has not placed the product on the market;
• there was no defect when the product was put into circulation;
• it did not manufacture the product for sale, or any other form of distribution with an economic purpose, or manufacture or distribute the product in the course of its professional activity;
• the defect is due to the fact that the product complies with binding regulations issued by public authorities; or
• the defect could not have been detected according to the state of the art in science and technology at the time the product was put into circulation.

Furthermore, the producer of a raw material or part product is not liable under the Act, if it can prove that the product defect is due to the construction of the product or the instructions of the producer of the end product.

A producer’s failure to meet the regulatory requirements is considered a breach of the product user’s justified safety expectations and can be decisive for the determination of the defectiveness of the product. Swiss courts, however, have repeatedly found that adherence to regulatory requirements is the minimum standard only when determining the justified safety expectations. The producer must assess in each individual case, whether its product meets the user’s safety expectations and may not rely on adherence to regulatory requirements or the conformity assessments of regulatory bodies.

In Switzerland, the claiming party has to pay an advance on the court costs to initiate court proceedings. The payment of the advance is a procedural requirement for the action, meaning that if no payment is made the case will be declared inadmissible. This has been quite a threshold for claiming parties in general and in particular in product liability cases involving consumers, given that the amounts to be advanced are calculated based on the amount in dispute and are generally relatively high.

However, the claiming party may get reimbursement of the advance, if it wins the case as, in Switzerland, the “loser pays” principle applies. Accordingly, the costs follow the event which means that the losing party must bear the court costs and, on top of that, must compensate the successful party for its legal costs. Court costs are determined and allocated by the court ex officio, while party costs are awarded upon request.

Currently, the court does not directly reimburse an advance payment of court costs made by a successful party, but only grants this party a compensation claim against the unsuccessful party, so that the successful party bears the risk that the costs cannot be collected.

The compensation for legal costs is determined in accordance with a tariff which is primarily based on the amount in dispute. The tariffs vary between cantons, but in the majority of cases, the compensation granted does not cover the real legal costs incurred by a party; depending on the amount at stake, the amount payable as compensation for legal fees can be higher or lower than the actual costs incurred.

If no party succeeds entirely, the costs are allocated in accordance with the outcome of the case and unnecessary costs are charged to the party that caused them, independently of whether it was the losing party.

The Swiss Civil Procedure Code is currently undergoing a revision which will affect the costs in civil proceedings. In particular, the draft revision proposes to cut the advance payments in half (as a general rule but with certain exceptions), which will lower the threshold to initiate proceedings. Furthermore, the proposal provides that the successful party will be directly reimbursed by the court for the advance it paid and will no longer have to reach out to the losing party to be reimbursed. It is expected that the revised Civil Procedure Code will enter into force on 1 January 2025.

Third-Party Funding

Third-party funding is permitted and exists, although it is not very common in Switzerland. In principle, there are no restrictions to it, as long as the funded party is still in control of the claim. If the funded party is represented by legal counsel, it is important to avoid any set-up that might impair the counsel’s ability to act independently and to pursue only its client’s interests. Otherwise such a set-up might interfere with the counsel’s obligations pursuant to the rules of professional conduct.

Contingency Fee Agreements

“No win, no fee” and contingency fee agreements are not permitted under Swiss law since they are considered to stand in contradiction to the counsel’s obligations to act independently. According to the Swiss Federal Supreme Court, the attorney’s rules of professional conduct require a base salary, which does not only cover the attorney’s costs but must also guarantee a certain profit. Only if this precondition is met, may the parties agree on an additional success fee element in the sense of a top-up fee.

Legal Aid

Legal aid is available (mostly) for private individuals under the preconditions that (i) the requesting party does not have the funds to finance the proceedings itself, and (ii) the case is not devoid of any chance of success. The request must be placed with the same court that is also deciding on the merits. The court will decide on the request in a formal, preliminary proceeding, during which the requesting party must fully disclose its financials and state its position on the merits. If legal aid is granted, the applicant is relieved from the obligation to pay any court costs (including any advance on costs) and the state will cover any reasonable lawyer’s fees. Legal aid does, however, not relieve the applicant from the obligation to pay party compensation to the opposing party in the case of defeat.

Legal Protection Insurance

Since the threshold for receiving legal aid is high and the costs for initiating proceedings are considerable, legal protection insurance is becoming more and more common amongst consumers. Even standard insurance packages include a legal protection policy. While the conditions of such policies vary significantly and most insurance policies tend to avoid litigation and to settle potential disputes, it is, however, difficult to quantify the impact of legal protection insurance on product liability claims.

There are no real collective redress procedures in Switzerland. However, it is possible to jointly bring several claims (eg, by a number of claimants filing their claims together when there are similar facts and legal grounds) in one proceeding or by way of an assignment of the individual claims to a claimant party. However, since this is usually cumbersome, it is rare.

When the general revision of the Swiss Civil Procedure Code was initiated in 2018, it was envisaged that it would introduce certain collective redress mechanisms. However, the proposed amendments triggered so many debates that the Federal Council decided to split them off and to deal with them in a separate revision project in order not to jeopardise the revision as such.

There are not many published decisions concerning product liability in Switzerland because most cases are settled. The following cases are noteworthy. 

In its decision of 5 January 2015 (4A_365/2014; 4A_371/2014), the Federal Supreme Court held that in the case of prescription drugs, the justified safety expectations of the product need to be assessed with regard to the safety expectations of the patient, but also with regard to the knowledge of the prescribing physician. In the specific case (it concerned the contraceptive pill “Yasmin”), it was deemed sufficient that the warning of a possible increased risk of a thromboembolic event, compared to contraceptive pills of previous generation, was only included in the expert information, but not in the patient information.

In its decision of 31 May 2019 (2C_60/2018), the Federal Supreme Court specified that missing expert information from a preparation label, which therefore does not warn of a preparation-specific risk, is not to be considered a product defect in every case.

Furthermore, the Swiss Federal Supreme Court clarified that the provisions of food law also apply to intermediaries. In the case at hand, the package leaflet was qualified as inadmissible, even though it was only directed at the sales staff of drugstores and pharmacies (Decision 2C_733/2020 of 15 March 2021).

In its decision of 9 September 2013 (2C_13/2013), the Federal Supreme Court held that the malfunction of a product is considered a product defect if the product’s value is specifically based on its serviceability (ie, a fire extinguisher).

On 18 March 2011 (137 III 226), the Federal Supreme Court decided that a producer was not liable for any defects that were not detectable at the time of the market placement according to the then current state of science and technology (so-called development risks).

In its decision of 19 June 2010 (4A_255/2010), the Federal Supreme Court had to rule on a product liability claim relating to a defect window. The court held that the producer was not liable because the window was manipulated after it had been placed on the market, which was beyond the reasonable expectation of the producer.

On 4 October 2010, the Federal Supreme Court found that the compensation of an injured party is to be reduced if that party has failed to carefully study the product manual before using the product (4A_319/2010).

On 26 November 2021, the Higher Court of the Canton of Berne found in its decision ZK 20 399 that the court of first instance had unjustifiably rejected a claim for product liability brought against Johnson & Johnson by a patient who had suffered from several complaints after the implant of a hip prosthesis. The prosthesis was finally removed. The Higher Court held that it was reasonable to conclude that a prosthesis which had caused a toxic reaction in half of the cases:

• had to be removed in more cases than expected;
• was the object of an “Urgent Field Safety Notice”;
• was revoked from the Swiss market after five and a half years; and
• for which the producer had declared (thereby not accepting any liability) to cover all costs for examinations, treatments and revision surgeries,

did not meet the user’s justified safety expectations and was, therefore, faulty in the sense of Article 4 of the Federal Product Liability Act.

Medical Devices

Switzerland and the EU have gradually tightened the requirements for medical devices in recent years in order to improve the quality and safety of these products. In parallel, the chapter on medical devices in the MRA (Agreement between the Swiss Confederation and the European Community on mutual recognition in relation to conformity assessment) should have been completely updated. This agreement is intended to avoid barriers to trade between Switzerland and the EU and to ensure joint market surveillance by the enforcement authorities of Switzerland and the EU. The necessary update of the chapter in the MRA on medical devices has not yet been possible. After the Federal Council unilaterally decided in May 2021 not to sign the institutional framework agreement with the EU, the EU linked the updating of the agreement in the area of medical devices to institutional issues for political reasons. As long as there is no progress on the latter, no update will take place. As a result, medical device providers established in Switzerland can no longer benefit from the facilitation of the Swiss-EU MRA as of May 2021. At that time, an update of the MRA was necessary to take into account the application of the EU Medical Device Regulation (MDR) and the corresponding legislation in Switzerland. The European Commission also reiterated in 2022 that an update of the MRA can only be envisaged in the context of a resolution of the institutional issues.

Despite the institutional deadlock, Switzerland has embarked on a major legislative project in recent years to comprehensively revise Swiss legislation on medical devices and bring it into line with the EU regulations on medical devices (MDR and In Vitro Diagnostic Medical Device Regulation (IVDR)). The last step to complete this alignment in the area of medical devices concerned the new Ordinance on In Vitro Diagnostic Medical Devices that came into force on 26 May 2022. The new Ordinance is intended to increase the safety of in vitro diagnostics. For this reason, every manufacturer must have a quality management system in place. This system outlines, for instance, the responsibilities and requirements for risk management, product development and related performance studies, market surveillance and error management (corrective and preventive measures). Even after placing the product on the market, the manufacturer must permanently monitor and document the safety of the product. Furthermore, the manufacturer is obliged to describe the expected properties and performance of the in vitro diagnostic medical device in a technical documentation and to demonstrate that the relationship between risks and benefits is acceptable.

New MRA Between Switzerland and the UK

Since the UK’s withdrawal from the EU, the MRA between Switzerland and the EU, which covers twenty product areas, no longer applies to the UK. On 17 November 2022, Switzerland and the UK signed an agreement on the mutual recognition of conformity assessments. The agreement has been provisionally applied from 1 January 2023. The MRA covers five sectors: transportable pressure equipment, telecommunications equipment, electromagnetic compatibility (EMC), noise emissions from equipment used outdoors and measuring instruments. Together with the three product areas ((i) motor vehicles, (ii) Good Laboratory Practice (GLP) and Good Manufacturing Practice (GMP) inspection for medicinal products and (iii) batch certification) already incorporated into the trade agreement with the UK from 2019, there are currently eight product areas subject to mutual recognition.

There are several areas of focus concerning future policy development in respect of product liability or product safety. The following developments are noteworthy.

Tobacco Regulation

Parliament passed a new Federal Act on Tobacco Products and Electronic Cigarettes (Tobacco Products Act) on 1 October 2021. In addition to tobacco products, it also regulates electronic cigarettes and herbal smoking products, especially low-THC hemp cigarettes with CBD. With regard to the protection of minors, advertising for tobacco products and electronic cigarettes that is directed at minors or that may reach minors is prohibited. As a result, the Tobacco Products Act prohibits the advertising of tobacco products and electronic cigarettes on posters, in cinemas, on sports fields, in and on public buildings, and in and on public transport. It also prohibits the sponsorship of events for minors or events of an international character. Currently, the implementing ordinance to the Tobacco Products Act is being drafted. This includes, for instance, the details on combined warnings, test purchases or the notification of products to the Federal Office of Public Health. Both the Federal Act and its implementing ordinance are expected to enter into force at the beginning of 2024.

New Mobile Technologies Guidance Document for Human and Veterinary Medicinal Products

The Swiss Agency for Therapeutic Products (Swissmedic) has issued a new guidance document regarding regulations on the use of mobile technologies, which came into force on 1 March 2023. The guidance document contains, among other things, information on the use of QR codes on packaging and in medicinal product information. Essentially, the code is intended to facilitate access to information on the use of a medicinal product. For this purpose, the QR code can be linked to information on the therapeutic products law and/or additional information such as educational videos.

Ban on Electric Heaters is Constitutional

In a recent ruling, the Federal Supreme Court (BGer, 1C_37/2022 of 23 March 2023) confirmed a ban on electric heating in the Canton of Zurich. The Energy Act of the Canton of Zurich provided that no electric heating systems may be in operation in the Canton of Zurich from 2030. The Federal Supreme Court ruled that the ban on electric heaters and boilers after 2030 and the associated threat of punishment (fine of up to CHF20,000) are compatible with the constitutionally protected right of ownership. The measures are designed to protect the environment and ensure an adequate energy supply and are therefore in the public interest. Furthermore, the ban also stands up to a proportionality test. On the one hand, it was not enacted suddenly in an unforeseeable manner. Rather, it is in line with a process of tightening legislation for electric heaters that started as early as 1990. The court therefore considers the ban to be a logical consequence of this development. In addition, there is a seven-year period granted to the owners for replacement. On the other hand, the ban is not absolute since exceptions are still possible and provided for in cantonal legislation. For instance, in small building areas of less than 50 square metres, electric heaters may remain in operation. The same applies to very remote properties where the installation of another heating system would not be technically feasible or reasonable. It remains to be seen to what extend the Federal Supreme Court ruling will prompt other cantons to enact similar legislation.

During the COVID-19 pandemic, various measures, restrictions and bans were put in place to contain the virus and prevent the Swiss healthcare system from becoming overloaded. In June 2022, all nationwide restrictions and bans were lifted.