The Danish legal system is based on civil law. The principle of orality applies in Danish legal proceedings, so cases are primarily conducted orally in court during a final hearing. However, the preparation of cases largely takes place in writing.

Statutes are the primary source of law in Danish legal practice. Court decisions also constitute a significant source of law, as the interpretation of the law is determined and clarified through the courts' legal precedents. Furthermore, there are legal principles in Danish law that are not explicitly stated in the law but can be derived from the courts' legal precedents.

Denmark is a member of the EU, so EU law plays a significant role in Danish law. Denmark has reservations regarding supranational co-operation, but does participate in some areas of EU co-operation through parallel agreements, including the Brussels I Regulation.

The Danish legal system follows an adversarial model. The parties involved in a court case are responsible for presenting the relevant claims, arguments and evidence that form the basis for the court's decision.

General Courts

In Denmark, the judicial system is structured into three levels, with 24 district courts, two high courts and one Supreme Court. These are general courts that handle all types of cases, including civil and criminal cases – unless the nature of the case necessitates referral to a specialised court.

Procedures in the general courts are regulated by the Administration of Justice Act.

Cases are normally heard by the district court in the first instance, with the possibility of appeal to the high court. A case can be heard in the high court in the first instance if the case is of a principled nature, has general significance for the application and development of law, or has significant societal implications. The possibility of appealing a case a second time (to be heard in third instance) requires permission from the Danish Appeals Permission Board. The Supreme Court primarily deals with cases of a principled nature and cases of general public importance.

Processing times

In 2023, the average processing time for civil cases in district courts was 13 months, reflecting an increase of 0.2 months compared to 2022.

In the high courts, the average processing time for first-instance civil cases was 37.6 months in 2023, an increase of 9 months compared to 2022. Civil appeal cases had an average processing time of 9.8 months.

The average processing time for civil appeal cases in the Supreme Court was 12.2 months in 2023, representing a decrease of 0.6 months compared to 2022.

The average processing time for civil cases is expected to decrease in the coming years due to a political agreement regarding the judiciary's budget for the period 2024–2027, which was reached by all political parties in the Danish Parliament on 22 November 2023 (see 14.1 Proposals for Dispute Resolution Reform).

Specialised Courts

In addition to the general courts, there are specialised courts with limited jurisdiction.

The Maritime and Commercial High Court is a specialised court with exclusive jurisdiction to handle cases concerning EU trade marks and EU designs. Unless otherwise agreed by the parties, a case requiring expertise in international business matters or maritime, aviation, rail transport or competition law may be initiated before the Maritime and Commercial High Court. Its judgments can be appealed to the high court or the Supreme Court. A judgment can be appealed to the Supreme Court if the Supreme Court finds it is of a principled nature and has general significance for the application and development of the law or significant societal implications, or if there are other special reasons for the case to be heard by the Supreme Court as the second instance.

There are also other specialised courts with limited jurisdiction, including the Registration Court (Tinglysningsretten), the Labour Court (Arbejdsretten), the Housing Court (Boligretten) and the Special Court of Indictment and Revision (Den Særlige Klageret).

It follows from the Danish Constitutional Act that, in the administration of justice, all proceedings shall be public and oral, to the widest possible extent. Court cases are normally conducted orally in court during a final hearing, including presentation of the relevant documents, witness hearings and presentation of the parties’ arguments. The preparation of cases, however, largely takes place in writing.

According to the Danish Administration of Justice Act, court hearings are open to the public. Therefore, the public generally has the right to attend a court hearing and court proceedings can be publicly reported, including in the media. In criminal cases, the court may limit public access to the proceedings.

Witnesses – but not the parties to the case – are not allowed to attend the court hearing until they have given their own testimony in court.

According to the Danish Administration of Justice Act, anyone can obtain copies of judgments and rulings, as well as decisions regarding legal costs in civil cases. It is possible to request copies of the parties' pleadings two working days before the start of the final court hearing. Anyone who has an individual, substantial interest in a specific legal issue can demand access to documents related to a civil case.

However, access to documents can be restricted, including if the documents contain information such as trade secrets, and if it is deemed that public access should yield to significant considerations for the party concerned in the case, and these considerations cannot be safeguarded through anonymisation.

Attorneys-at-law are generally the only ones allowed to appear as legal representatives on behalf of a client in court. The title of attorney-at-law (Advokat) is protected in Denmark, so such individuals must be appointed by the Ministry of Justice in order to act as attorneys-at-law. All attorneys-at-law can represent a client in the district court.

Representation in the high courts and the Supreme Court requires an obtained right of audience before these courts. An attorney-at law from another EU country, known as an “EU lawyer”, can obtain Danish authorisation if they can demonstrate that they have been actively and regularly involved in the Danish legal system for at least three years.

It should be noted that, as a general rule, parties can represent themselves in a case. However, the court can order a party to be represented by an attorney-at-law if the court assesses that the party is unable to conduct the case effectively without the assistance of an attorney. In addition, a party can be represented by close relatives, individuals from the same household or an employee, under certain conditions.

Litigation funding is not regulated in Danish law, so there are no limitations regarding litigation funding in Denmark.

All lawsuits are available for third-party funding.

Third-party funding is available for both the plaintiff and the defendant.

There are no minimum or maximum amounts that a third-party funder can fund in Denmark.

The costs a third-party funder will usually consider funding are those of the client’s attorney’s fees, court fees and adverse costs ordered by the court (if a case is lost).

If the case is assessed to require a court-appointed expert for the party to obtain relevant evidence (eg, regarding technical matters), the third-party funder will also consider funding such costs.

Attorneys' fees in Denmark are regulated by the Code of Conduct of the Danish Bar and Law Society, which was most recently amended on 1 September 2022. Previously, it was not possible for an attorney to agree that they would receive a percentage of the amount won in the case.

Under the new regulation, there is no such prohibition. However, an attorney cannot demand a higher fee for their work than what can be considered reasonable, pursuant to Section 126, Paragraph 2 of the Administration of Justice Act. Furthermore, an attorney cannot enter into agreements with clients or others where the fee is to be determined in a manner that could affect the attorney's independence during the performance of their duties. As the rules are relatively new, there is currently no established practice that sets out the specific limits for a performance-based fee.

There are no time limits within which a party to the litigation should obtain third-party funding.

The parties are not required to take any steps before initiating civil cases in Denmark. However, in regard to debt collection, it is required by law to send a claim letter with a deadline of ten days for payment of the debt. If this requirement is not met, the party initiating a lawsuit may not be awarded legal costs by the court, even if the case is won.

The starting point in Danish law is that a claim becomes time-barred after three years. The limitation period is calculated from the earliest point at which the creditor could demand the fulfilment of the claim. If the creditor is unaware of the claim or the debtor, the limitation period starts from the day when the creditor became aware or should have become aware thereof. In any case, the absolute statutory limitation period is ten years.

There are special, longer statutes of limitations – eg, a payment claim based on a promissory note becomes time-barred after ten years.

In special legislation, there are also shorter limitation periods – eg, in legislation relating to the Convention on the Contract for the International Carriage of Goods by Road (CMR), the statutory limitation period is generally one year.

It should also be noted that the creditor’s passivity – in cases where the claim is not formally time-barred – can result in the claim no longer being enforceable if the debtor acquires a legitimate expectation that the claim will not be enforced due to the creditor's passivity. Passivity is often asserted by the parties but rarely applied by the courts.

In Danish law, the general rule is that a defendant must be sued in the district court corresponding to where the defendant resides (for natural persons) or where the main office is located (for legal persons).

In addition, the Danish Administration of Justice Act contains a provision on supplementary jurisdiction, which allows a lawsuit to be initiated against a defendant in the following locations:

• cases against persons conducting commercial business may be filed in the court at the location where the business is conducted, when the case concerns the business;
• cases concerning rights to real estate can be filed in the court where the property is located;
• contractual disputes may be filed in the court located at the place where the obligation underlying the case has been fulfilled or is to be fulfilled; and
• cases in which claims for penalties, compensation or restitution arising from legal infringements are asserted may be brought before the court located at the place where the infringement occurred.

If the court has no jurisdiction as outlined above, a case may also be filed in the court located at the place where the defendant has assets at the time the case is brought before the court, or where the assets related to the claim are located at the time the case is brought before the court.

The Brussels I Regulation and the Lugano Convention are also applicable in Denmark.

A civil lawsuit is initiated by submitting a writ of summons to the court. It follows from the Danish Administration of Justice Act that the writ of summons must contain the following:

• the parties' names and addresses;
• specification of the court in which the case is filed;
• the plaintiff's claim;
• the case value;
• the case type;
• the plaintiff's personal or CVR number (if applicable);
• a brief description of the case;
• a comprehensive presentation of the factual and legal circumstances on which the claim is based;
• identification of the documents and other evidence upon which the plaintiff intends to rely; and
• the plaintiff's proposal for the handling of the case, including suggestions for topics to be discussed at the preparatory meeting.

If the writ of summons does not meet these requirements and is thus unsuitable as the basis for processing the case, the case will be dismissed by a court decision. The court may also grant the plaintiff a deadline to remedy the deficiencies.

Parties can change/modify their claim(s), arguments and evidence in subsequent submissions to the court. However, such changes and the basis for the changes will be taken into consideration by the court in its decision on costs.

In Denmark, the court is responsible for the service of the submitted writ of summons. Other subsequent submissions and/or documents are not subject to service.

In civil cases, the service can be performed in the following ways:

• electronically;
• by letter;
• by phone (followed by written confirmation);
• by personal service; or
• by publication in the Government Gazette (if the police cannot locate the correct individual).

A party with a residence/seat located outside of Denmark can be sued in Denmark if the writ of summons is submitted to the court, as the court is responsible for the service. The service in such cases will be carried out in accordance with the applicable law and conventions, including the Hague Service Convention.

If the defendant does not respond to a summons within the set deadline, the court will render judgment in accordance with the plaintiff's claim, if the court finds that this is justified based on the summons and any other relevant information.

The defendant can request the court to reopen the case by submitting a written application within four weeks from the judgment's pronouncement. In exceptional circumstances, the court may reopen the case if the request is made later but within one year of the judgment's pronouncement. The court may make the retrial conditional upon the defendant paying the litigation costs imposed on them or providing security for payment.

Uniform claims made on behalf of multiple individuals can be handled as a class action in Denmark.

Class actions can be initiated when:

• there are uniform claims;
• there is jurisdiction for all claims in Denmark;
• the court has jurisdiction over one of the claims;
• the court has jurisdiction with regard to one of the claims in regard to the subject matter;
• a class action is deemed to be the best way to handle the claims;
• the group members can be identified and notified about the case in an appropriate manner; and
• a class representative can be appointed.

Class actions are conducted on behalf of the group by a class representative, who is appointed by the court.

In Denmark, both opt-in and opt-out class actions are possible. However, opt-out class actions can only be initiated if the class action pertains to claims where it is clear that, due to their small size, they generally cannot be expected to be pursued through individual lawsuits, and it is assumed that a class action with opt-in registration would not be an appropriate way to handle the claims; upon request from the class representative, the court may decide that the class action should include the class members who have not opted out of the class action.

In opt-out class actions, the class representative can only be a public authority authorised by law to act as such. In opt-in class actions, the class representative can be a group member, an association or a public authority.

When the client is a consumer, the attorney must provide the client with written and direct information about the key elements of the anticipated assistance, the determination of fees, and the costs associated with the assistance.

When the client is not a consumer, the attorney must provide the client with a cost estimate if such is requested by the client.

According to the Danish Administration of Justice Act, it is possible for a party to apply to the court to order an interim injunction before a trial.

The enforcement court can freeze assets as a security for monetary claims when:

• execution of the claim is not possible (as no judgment has yet been obtained); and
• it is presumed that the possibility of obtaining coverage later would otherwise be significantly impaired.

The enforcement court may decide that the creditor must provide security for the harm and inconvenience that may be caused to the debtor.

The court may decide that the preparation or main hearing should initially be limited to a part of the claim that the case concerns, or to one claim or issue where the case includes multiple claims or issues.

The court can make a separate decision regarding a part of the claim that the case concerns. If the case involves multiple claims or issues, the court may render a separate decision regarding one of these. For example, the court may consider that the issue of the statute of limitations for the claim should be determined preliminarily.

A party may request the dismissal of the case on the grounds of the court's lack of jurisdiction, for instance, or that the claimant is not the proper plaintiff or the defendant is not the proper party to sue regarding the presented claim. Formal objections must be raised in the first pleading to the court.

If the defendant requests the court's permission to adjudicate the formality of the case separately (see 4.2 Early Judgment Applications), the defendant may limit themselves to raising their formality objections in their response pleading.

A third party – not named as plaintiff or defendant – can apply to join a lawsuit by filing a writ of summons with the court if:

• there is jurisdiction in Denmark for their claim;
• the claim can be processed under the same procedural rules as the other claims; and
• the third party will assert an independent claim concerning the subject matter of the case, or the third party's claim is so connected to the original claim that it should be addressed within the case, and this will not cause significant inconvenience to the original parties.

Upon the request of one of the original parties, the court may reject the third party's application if it should have occurred earlier. After the conclusion of the preparation of the case, joining the cases can only occur with the court's consent.

In addition to the above, a third party who has a legal interest in the outcome of a case may apply to join the case in support of one of the parties. The court determines the manner in which the joining party may present their arguments and evidence during the case.

The court may award or impose litigation costs on the joining party.

Under certain conditions, third parties can also be involved in an already initiated court case by the parties to the case.

In the response pleading, the defendant can request the court to require a plaintiff who does not have residence or domicile in the European Economic Area to provide security for the litigation costs that they may be ordered to pay to the defendant. However, this does not apply if the plaintiff resides or has a domicile in a country where a plaintiff with residence or domicile in Denmark is exempt from providing security for litigation costs.

The court decides on the costs ex officio, without the parties having to make separate claims in this regard.

The parties may request the urgent handling of a matter; such requests are generally recognised by the court if the matter is of an urgent nature. However, the parties do not have a legal right to have their request processed within a specific timeframe.

According to the Danish Administration of Justice Act, upon the request of a party, the court may compel the opposing party to produce documents under their control – unless doing so would reveal information about matters on which they would be prohibited or exempted from testifying as a witness. It must be demonstrated that the requested documents are or could be relevant to the case.

The general rule is that everyone – except the parties or their close relatives – has a duty to testify in court unless they are exempted. A witness is exempted from the duty to testify in court if their testimony is likely to:

• expose the witness to self-harm or loss of well-being;
• expose their closest relatives to self-harm or loss of well-being; or
• inflict significant harm on the witness themselves or their closest relatives.

Witness testimony cannot be demanded from priests or other religious denominations, doctors, defenders, mediators or lawyers regarding matters that have come to their knowledge in the exercise of their profession. However, such individuals can be compelled to provide testimony. See also 5.5 Legal Privilege.

According to the Danish Administration of Justice Act, upon request of a party, the court may compel a third party to present or hand over documents within their control that are relevant to the case, unless doing so would reveal information about matters on which they would be prohibited or exempted from testifying as a witness.

A decision regarding the presentation of documents is made after the person who has control over the documents has had the opportunity to express their views.

The third party may demand their expenses incurred in the presentation to be prepaid by the party, or may request security for the payment of expenses.

Discovery is mainly centred around internal information that is not publicly available but is within the control of a party or a third party. This could include internal correspondence, financial information, bank statements and contracts.

In addition to the procedures mentioned in 5.1 Discovery and Civil Cases and 5.2 Discovery and Third Parties, a party may make procedural requests for the opposing party to present documentation and request the court to attribute procedural consequences to the failure to present it. Whether the failure to present documents is attributed procedural consequences by the court depends on an assessment of the specific matter.

There is no obligation for parties or third parties to reveal information about matters on which they would be prohibited or exempted from testifying as a witness.

According to the Danish Administration of Justice Act, attorneys are exempt from the duty to testify as witnesses. However, the court may compel an attorney (with the exception of criminal defence attorneys) to give testimony when such testimony is deemed crucial to the outcome of the case and when the nature and significance of the case, both to the party and to society, justify requiring the testimony. In civil cases, this compulsion cannot extend to information an attorney has learned from a case entrusted to them for execution or in which their advice has been sought.

The same rules apply as for witness testimonies; see 5.1 Discovery and Civil Cases.

Please see 4.1 Interim Applications/Motions.

It is possible to request the court to order a person to temporarily perform, refrain from, or tolerate specific actions through an injunction or order.

Injunctions or orders can be issued if the party requesting the injunction or order demonstrates that:

• they have the right sought to be protected by the injunction or order;
• the conduct of the opposing party necessitates the issuance of the injunction or order; or
• the party's ability to obtain their right will be forfeited if they are required to await the legal resolution of the dispute.

See 4.7 Application/Motion Timeframe.

The request for an injunction or order is considered at a court hearing where the evidence is presented.

The court notifies the opposing party of the time and place of the hearing to the extent possible, but notification may be omitted if the court deems it appropriate to hold the hearing without prior notice to the opposing party or if it is assumed that the purpose of the injunction or order will be forfeited if the opposing party is notified.

The applicant will be liable for damages suffered by the respondent if it turns out that the claim forming the basis for the application does not exist to the extent presented.

The court may decide that the creditor must provide security for the harm and inconvenience that may be caused by the application.

Injunctive relief can be granted against the worldwide assets of the respondent, provided that this is within the scope of the Brussels I Regulation.

According to the Danish Administration of Justice Act, injunctive relief can only be obtained against a party. However, third parties may intervene as a party during the consideration of the request for an injunction or order, insofar as it concerns the question of whether the injunction or order would violate their rights.

A third party who has a legal interest in the outcome of a case may also join the case in support of one of the parties.

According to the Danish Administration of Justice Act, a respondent who intentionally violates an injunction or order may be sentenced to a fine or imprisonment for up to four months, and may also be ordered to pay compensation.

A civil lawsuit is initiated by submitting a writ of summons to the court (see 3.4 Initial Complaint). The court will then perform the service of the submitted writ of summons (see 3.5 Rules of Service).

Once the defendant submits a response to the court, the court will schedule a short hearing, which is usually conducted as a conference call. The parties’ attorneys will attend this hearing, the purpose of which is mainly to organise the preparation of the case, including discussing relevant procedural steps (eg, the appointment of expert witnesses), agreeing on relevant deadlines and scheduling a final hearing in the case (if possible at the time).

After the initial preparatory hearing, the parties may submit additional writs to the court. The preparation mainly takes place in writing.

The court may schedule additional preparatory hearings (if relevant).

The final part is a final hearing in the court, which is structured in the following manner:

• the parties state their claims;
• the plaintiff makes a chronological and objective presentation of evidence and factual circumstances;
• the parties provide testimony to the court;
• the witness hearing is conducted; and
• the attorneys present their arguments orally.

After the final hearing, the court will render a judgment. In civil cases, the judgment is normally rendered within four weeks.

See 7.1 Trial Proceedings.

Jury trials are not available in civil cases in Denmark.

The parties involved in a court case are responsible for submitting the evidence in support of their claims, which will form the basis for the court’s assessment of the case.

However, if a party's claim, arguments or statements about the case are unclear or incomplete, the court may seek to remedy this through posing questions to the party. The court may encourage a party to state their position on both factual and legal issues that appear to be relevant to the case. The court may request a party to submit documents, provide inspections or expert assessments, or otherwise present evidence when the factual circumstances of the case would remain uncertain without such evidence.

Evidence that is considered to be irrelevant to the case cannot be presented.

The stage of preparation of the case is normally concluded eight weeks before the final hearing in district court. A party must notify the court and the opposing party if it wishes to:

• expand the claims made during the case preparation stage;
• introduce arguments that were not presented during the preparation stage; or
• present evidence that was not indicated during the preparation stage.

Even if the opposing party has given consent, the court may oppose the expansion of claims, the introduction of new arguments or the presentation of new evidence if complying with the request is likely to necessitate a postponement of the main hearing.

Even if the opposing party has not given consent, the court may grant permission for the expansion of claims, the introduction of new arguments or the presentation of new evidence in the following circumstances:

• there are special reasons that make it excusable that the request was not made earlier;
• the opposing party has sufficient opportunity to safeguard their interests without delaying the main hearing; or
• refusal of permission would result in a disproportionate loss for the party.

In Danish civil court cases, expert testimonies are normally provided by court-appointed experts who are not related to the parties nor have any conflicts of interest. Such expert testimonies are given significant evidential weight by the court.

The appointment of a court-appointed expert witness is done by request to the court from the parties. The request should include information about the subject matter of the inspection and expert assessment and the purpose of the proceeding. The court-appointed expert witness will answer the questions asked by the parties, both in writing, after an inspection and assessment of the relevant object.

The court may reject questions that are beyond the expert's professional competence or the court's decision on conducting an inspection and expert assessment, or that are considered irrelevant to the case. The court may also reject questions that, in an improper manner, attempt to guide the expert in a specific direction or assume that the expert should make determinations on issues that are within the scope of the court’s assessment (eg, the assessment of evidence and legal assessments).

In civil cases, upon joint request therefrom, the court may allow the parties to the case to submit statements as a supplement to or instead of expert testimonies by the court-appointed experts, which the parties individually obtain from experts, regarding specific technical, economic or similar matters.

Statements on specific technical, economic or similar matters that a party has obtained from experts before initiating the case may be presented as evidence, unless the content of the statement, the circumstances of its creation or other factors provide a basis for denying a party to present such evidence. If a party has presented such a statement, the opposing party may, under the same conditions, present a corresponding statement, even if this statement could only be obtained after the case was initiated.

Only the parties to the case can introduce expert testimonies during a lawsuit.

See 1.3 Court Filings and Proceedings.

In civil lawsuits, the level of intervention by a judge is normally limited. As described in 7.4 Rules That Govern Admission of Evidence, the court can ask question to the parties if their claim, arguments or statement are unclear, and the court may encourage a party to state their position on both factual and legal issues that appear to be relevant to the case – or request a party to submit documents, inspections or expert assessments. Although there is legal basis for such intervention, it rarely occurs in practice, as the court will normally assess the case based on the arguments and evidence presented by the parties.

In 2023, the average processing time for civil cases in district courts was 13 months, reflecting an increase of 0.2 months compared to 2022.

In the high courts, the average processing time for first-instance civil cases was 37.6 months in 2023, an increase of 9 months compared to 2022. Civil appeal cases had an average processing time of 9.8 months.

The average processing time for civil appeal cases in the Supreme Court was 12.2 months in 2023, representing a decrease of 0.6 months compared to 2022.

The average processing time for civil cases is expected to decrease in the coming years due to a political agreement regarding the judiciary's budget for the period 2024–2027, which was reached by all political parties in the Danish Parliament on 22 November 2023 (see 14.1 Proposals for Dispute Resolution Reform).

The processing time may vary depending on the nature of the case, including the number of court days required for the final hearing in court. Processing times also vary between different district courts, with courts in larger cities generally experiencing longer processing times.

Court approval is not required to settle a lawsuit; the parties can settle the case at any time.

The parties to a court case can settle the case by presenting a settlement before the court. Such settlement is entered into the court's records and can be subject to requests from interested third parties for access to such documents (see 1.3 Court Filings and Proceedings).

The parties to a court case can also deicide to settle the case out of court, and then inform the court that they have settled the case. Such settlement will not be entered into the court records and can therefore not be subject to requests from interested third parties for access to documents.

Settlements that are entered into court records are (directly) enforceable.

Settlements that are not entered into court records are also enforceable, if:

• the settlement is in writing;
• the settlement concerns overdue debt; or
• it is explicitly stipulated in the settlement that it can serve as the basis for enforcement.

Settlements are considered as agreements that are contractually binding for the parties – if the settlement is valid from the perspective of Danish contractual law, it cannot be set aside.

The award available to a successful litigant will depend on the type of case and the claim presented before the court.

A successful litigant will obtain an award that corresponds to the presented claim, if such claim is within the scope of the types of claims that can be made according to the law.

• Monetary claims: a successful litigant will receive a judgment in which a monetary claim is established and can be enforced through the enforcement court.
• Recognition claims: a successful litigant will receive a judgment in which the actual circumstances or interpretation of law is determined by the court. Such a judgment can most often not be enforced through the enforcement court, but a party can incur liability if it acts contrary to what has been determined.
• Prohibition/injunctions claims: a successful litigant will receive a judgment whereby the opposing party must take action or refrain from taking a specific action.
• Claims demanding freeze of funds: a successful litigant will receive a judgment according to which the opposing party’s assets are frozen.

In Danish law, general liability for damages is not regulated by legislation but can instead be inferred from legal precedent.

The following conditions must be met to establish liability for damages:

• there must be a damage that has affected someone other than the wrongdoer;
• there must be a basis for liability – the wrongdoer must have engaged in conduct that incurs liability;
• there must be a causal connection between the wrongdoer's actions and the damage incurred;
• the damage must be adequate;
• there must be no grounds for exemption from liability; and
• there must be a financial loss.

The damages are limited by the actual suffered (and proven) financial loss. In this regard, the party that suffered the loss has an obligation to limit the loss (if possible). Punitive damages are generally not available in Danish law; the possibility of receiving damages that exceed the actual financial loss is very limited in Danish law.

The possibility of collecting interest under Danish law is regulated by the Interest Act. However, special legislation in specific areas may contain separate rules.

According to the Interest Act, interest must be paid from the due date if such date has been predetermined. If the due date is not predetermined, interest must be paid 30 days from the demand for payment.

In the case of legal proceedings, interest can be demanded from the day the case is filed in court.

Interest is calculated until the payment date, unless the interest has become time barred, in which case it is generally subject to a three-year statutory limitation (see 3.2 Statutes of Limitations).

According to the Interest Act, the default interest rate is 8% per annum plus the official lending rate set by the Central Bank of Denmark.

Domestic judgments can be directly enforced in the enforcement court. If a judgment concerns a monetary claim, it is possible to enforce the judgment at the enforcement court, which can involve securing the debt in the debtor's assets and conducting a forced sale, if necessary. The enforcement court can also assist in maintaining injunctions and prohibitions.

Judgments can be enforced 14 days after they are issued by the court, unless the case is appealed before the expiration of this deadline.

Judgments from foreign countries are enforceable on the basis of bilateral agreements. In this regard, the Brussels I Regulation and the Lugano Convention apply in Denmark.

See 1.2 Court System.

According to the Danish Administration of Justice Act, the parties can appeal a court judgment (anke) or other decisions (kære), such as decisions on costs.

As described in 1.2 Court System, cases are normally heard by the district court in the first instance, with the possibility of appeal to the high court. However, claims with a value up to DKK20,000 can only be appealed with the permission of the Danish Appeals Permission Board.

The possibility of appealing a case a second time (to be heard in the third instance) requires permission from the Danish Appeals Permission Board.

The high court may decline to hear a case at the second instance if there is no prospect that the outcome of the case will differ from that in the district court, and the case is not of a principled nature or there are no other reasons in favour of the case being heard by the court of appeals. However, the high court cannot decline a case that has been brought after permission from the Danish Appeals Permission Board has been granted.

Most decisions other than judgments – including interim decisions – cannot be appealed without permission from the Danish Appeals Permission Board.

An appeal is initiated by submitting a writ of appeal to the court whose judgment is being appealed, which shall then send the case documents to the appellate court. The defendant is required to submit a written response, unless they only seek to have the judgment confirmed.

The deadline for filing an appeal is four weeks from the date of the judgment, but in exceptional cases the appellate court may allow an appeal to be filed up to one year after the judgment.

The appeal court will make its own assessment of the appealed part of the claim. The appeal case ends with a final oral hearing, which is generally conducted in the same way as the final hearing in the first instance; see 7.1 Trial Proceedings for further details. Witnesses who gave their testimony in court during the first instance do not need to be heard again regarding the same matters on which they testified in the first instance.

It is possible to conduct appeal proceedings without an oral hearing if:

• the parties agree on this;
• the subject of the hearing is solely whether the appeal can proceed; or
• it is otherwise deemed appropriate due to the specific nature of the case.

If the opposing party objects, claims and allegations that have not been raised in the previous instance can only be considered with the court's permission. The court may grant permission if it is deemed excusable that the claims and arguments were not previously presented or if there is reason to believe that the denial of permission would result in a disproportionate loss for the party. In the case of an appeal to the high court, permission may also be granted if the opposing party has sufficient opportunity to safeguard their interests.

Claims and allegations that have not been asserted in the previous instance and that would necessitate the court to consider matters that were not heard before the previous instance may be refused by the court during the appeal, even if the opposing party does not object.

The court cannot impose any condition on the granting of an appeal.

Based on an assessment of the appeal, the court will uphold, modify, annul or remand the decision from the court of first instance. The appeal court is bound by the claims made by the parties, and does not have the power to make a judgment outside the scope of the parties’ claims.

During court proceedings, the parties are responsible for their own costs related to the lawsuit, including costs related to procedural steps such as obtaining answers to questions asked of a court-appointed expert witness.

When the court renders a judgment, it will ex officio consider the costs of the case. Costs for lawyers are normally not fully refunded (the actual incurred costs); instead, the court uses fixed amounts based on guidelines, which mainly focus on the value of the disputed matter (value of the case). Other expenses, such as court fees, expert witness fees and translation costs, are usually fully refunded, assuming they were incurred by the party that wins the case.

The court's decision on costs can be appealed separately, without appealing the court's judgment on the substantive issue of the case. However, this requires the costs to exceed DKK20,000; the appeal of costs for a smaller amount requires permission from the Appeals Permission Board. If a party appeals the court's decision regarding the substantive issue of the case (the judgment), a claim can be made to change the costs from the previous instance.

The court will consider who – if anyone – can be considered to have won the case, either fully or partially. The losing party – unless otherwise agreed – will be required to pay litigation costs to the winning party. This also applies in the appellate instance.

If a party fails to change the court's decision during an appeal, that party will be considered the losing party in the appeal.

If a party offers a sum of money as settlement, and the other party does not receive a judgment that is higher than the offered settlement during the court proceeding, the winning party may forfeit their right to be awarded litigation costs (from the moment the other party made the offer). If a case is only partially won, partial litigation costs may be awarded. The court can also choose to determine that each party bears their own costs, depending on the outcome of the case. Excessive costs cannot be reimbursed.

According to the Danish Interest Act, interest accrues on litigation costs from the due date. Litigation costs are due for payment 14 days after the judgment is rendered (corresponding to the enforcement deadline of the decision). See also 9.3 Pre-judgment and Post-judgment Interest and 9.5 Enforcement of a Judgment from a Foreign Country in this regard.

There is a positive view on ADR in Denmark, and parties are encouraged to seek a resolution to their dispute outside of court proceedings when involved in a court case. When a lawsuit is initiated, the parties are actively encouraged to consider whether they wish to engage in mediation facilitated by a court-appointed mediator. Such mediation can take place concurrently with the preparation of the court case. Mediation is facilitated by a judge or a lawyer appointed by the court, who has undergone special training. This form of mediation is free of charge.

In connection with the initial preparatory court hearing (see 7.1 Trial Proceedings), the possibility of reaching a settlement is normally an agenda item.

Outside the court system, arbitration is the most popular form of ADR. There are also professional institutions that offer mediation.

ADR is voluntary in the Danish legal system. If a party declines mediation, there are no associated sanctions. See also 12.1 Views of ADR Within the Country.

In Denmark, there are several professional ADR institutions, including the Danish Mediation Institute, the Danish Institute of Arbitration (DIA) and the Danish Building and Construction Arbitration Board, the latter of which is a sector-specific institution that handles disputes within the field of building and construction. It is common in this legal area to include ADR clauses in agreements.

The DIA is a non-sector-specific institution that handles various types of disputes.

The Danish Arbitration Act is the primary legislation in Denmark governing arbitration, providing the framework for arbitration in the country. It is largely based on the 1985 UNCITRAL Model Law.

Denmark has acceded to the New York Convention of 1958, concerning the mutual recognition and enforcement of arbitration awards.

The Danish Arbitration Act includes an exhaustive list of grounds that can lead to the refusal of recognition or enforcement; see 13.3 Circumstances to Challenge an Arbitral Award.

The primary rule is that parties can agree to arbitration for all civil matters over which they legally have the freedom to dispose. Matters that parties cannot agree upon (in dispositive matters) cannot be subject to arbitration.

Arbitration can be agreed upon for disputes that have already arisen or for future disputes arising from a specific legal relationship within or outside of a contractual relationship. In cases involving consumer agreements, an arbitration agreement entered into before the dispute arises is not binding on the consumer.

According to the Danish Arbitration Act, an arbitral award can be set aside if the party requesting this can prove that:

• one of the parties to the arbitration agreement lacked legal capacity under the law of the country where they had their domicile at the time of entering into the agreement, or the arbitration agreement is invalid according to the law chosen by the parties or, in the absence of such choice, according to Danish law;
• the party requesting the setting aside did not receive proper notice of the appointment of an arbitrator or the proceedings of the arbitration, or was unable to present their case for other reasons;
• the arbitral award deals with a dispute not covered by the arbitration agreement or decides on issues outside of the scope of the arbitration agreement; or
• the composition of the arbitral tribunal or the conduct of the arbitration proceedings was not in accordance with the agreement of the parties or the Danish Arbitration Act.

In addition, an arbitral award can be set aside if the court finds that:

• the nature of the dispute is such that it cannot be resolved through arbitration; or
• the arbitral award is manifestly incompatible with the Danish legal order.

The enforcement of an arbitral award in Denmark is done by submitting a request for enforcement to the enforcement court in the district with jurisdiction for the enforcement.

Over the past few years, due in part to disruptions caused by COVID-19, Danish courts have faced increasing pressure, leading to extended processing times for court cases. In response to this, on 22 November 2023, all political parties in the Danish Parliament reached a multi-year political agreement on the budget for the period 2024–2027. Under the agreement, the courts will receive a total of DKK2.3 billion over the agreement period, approximately DKK1 billion of which is allocated to maintaining the current level of activity, while approximately DKK1.3 billion is set aside for new initiatives. This significant financial boost is expected to gradually reduce case processing times.

One of the main areas of growth for commercial disputes has been construction disputes, which can be attributed to the significant activity in this sector in recent years. M&A insurance claims have emerged as another key area of growth for commercial disputes, which is also driven by an increase in market activity in mergers and acquisitions.