Council of States reject proposal to introduce class action lawsuits

The Council of States has rejected a proposal to introduce class action lawsuits in Switzerland, arguing that changes to the current law would negatively affect the Swiss economy.

Class action proposal rejected by Swiss Council of States

The Council of States has rejected a motion to strengthen the current law on class action lawsuits. Class action, also referred to as collective redress or collective action, is when a group of people file a single lawsuit, usually against a company or organisation, to sue for damages.

The current law on class action is outlined in Article 89 of the ZPO. It details how non-profit organisations can take action for a group of people, but this is limited to claims about personality rights (for example, personal data or image). The current procedure is “cumbersome”, writes RTS.

The proposal put to the Council of States sought to extend Article 89 of the Swiss Code of Civil Procedure (ZPO) to include monetary cases. The motion was rejected by 30 votes to 13.

Class action would damage Swiss economy, argue councillors

Councillor Beat Rieder (Centre) believes that the existing law “already allows most cases to be addressed”, reports RTS. An increase in class action lawsuits could “damage the economy” because they would result in a “flood of lawsuits” against organisations, Rieder claimed in a report by SRF. 

On the other hand, Carlo Sommaruga (PS) said that the current approach is “too costly and complex for consumers”, reports RTS. In European countries that allow class action, there is “no abuse” of the system or damage to the economy, argued Justice Minister Beat Jans (SP).

Sophie Michaud-Gigo, Secretary General of the French-speaking Consumer Federation (FRC), was unhappy with the Council of States’ decision, arguing that the proposal “would have reduced an injustice”. Michaud-Gigo believes that there is still a gap in Swiss law that needs to be addressed.