Switzerland: Unifying the Swiss legal market

Author: | Published: 1 Apr 2009
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On January 1 2011, the first unified federal codes of civil and criminal procedure will come into force in Switzerland. This will be the last stage of a large scale legal reform which started in 1996 and dramatically modified the Swiss judicial landscape.

The present paper offers firstly a brief overview of the Swiss legal system. It then presents the major changes that have taken place since 1996, and exposes how these changes affect the legal profession and more specifically the practice of the bar.

The new unified codes will remove today's barriers which hinder a global Swiss legal market. The Swiss law firms employing highly trained and specialised attorneys will be able to offer their skills throughout Switzerland without facing procedural and legal obstacles.

Swiss legal overview

Like the United States and Germany among others, Switzerland is a federal state. The federal state, the Swiss Confederation, comprises twenty-six federated states called Cantons.

Switzerland is a multilingual country, German being the most spoken language, with French and Italian being second and third. Each federal act is adopted in all three languages, while cantonal acts are passed in the official language of the relevant Canton.

Switzerland is not part of the European Union and European laws and regulations therefore do not apply.

The Swiss Constitution states that the Cantons are sovereign to the extent their sovereignty is not limited by the federal Constitution itself. They exercise all rights that are not vested in the Confederation. Therefore, the Confederation has the power to establish federal laws regarding a particular matter, only if such a power is explicitly granted by the federal Constitution. In the absence of such power, each Canton remains competent to regulate the matter at hand by adopting its own laws and regulations.

Under the 1848 federal Constitution, the Cantons were in charge of commercial, civil and criminal law, and Switzerland had therefore 26 different codes regulating these matters.

Twentieth century legal system

Under the federal Constitution passed in 1874 and its subsequent amendments voted at the end of the nineteenth century, the Confederation was granted the power to unify commercial, civil and criminal law, by adopting new federal codes governing these matters. It did so over the subsequent years, so that a Swiss Code of Obligations was adopted by the federal Parliament in 1881. This was followed by a Civil Code in 1907, a new Code of Obligations in 1911, and finally a Criminal Code in 1937.

However, the Confederation was not granted the power to unify the procedural laws regulating these matters. Each Canton therefore adopted a code of civil procedure (determining the procedure before civil and commercial courts) as well as a code of criminal procedure. The Confederation also passed its own code of criminal procedure. However, until recently, this code was only used for some specific and serious offences against national security, directly brought before the federal Supreme Court. All other cases were (and to a large extent still are) brought before courts established by the Cantons. Therefore, the procedure before Swiss courts was, and will continue until 2011, to be governed by twenty-six codes of civil procedure and twenty-seven codes of criminal procedure.

The practical result of this situation has been that Swiss law firms located in a given Canton had the ability and knowledge to advise clients on issues of substantive Swiss law irrespectively of the location of the client. But they were not necessarily qualified to assist them in litigation if that would involve the courts of another Canton.

Twentieth century bar practice

Before June 1 2002, the admission to the bar was not regulated at the federal level and each Canton had its own law regarding the practice of the bar and the surveillance of the legal profession.

It was difficult for an attorney admitted to the bar in one Canton to practice in another Canton. A lawyer who successfully passed the bar exam in one Canton was recognised by all other Cantons. However, an attorney wishing to relocate had to go through a cumbersome process of registration in the new Canton of practice.

Moreover, due to the different civil and criminal codes of procedure enforced by each Canton, as well as to the language barrier between the three regions of Switzerland, it was rather difficult for a lawyer to practice outside the Canton where they had been initially trained.

This situation, added to the small size of the population in each Canton, resulted in most lawyers working in small local law firms, with a limited number of partners, associates and trainees in each firm.

The new federal Constitution of 1999

Judging that the 1874 federal Constitution was obsolete, the Swiss Government (the federal Council) submitted to the Parliament on November 20 1996 a new federal Constitution project.

In its message to the Parliament, the federal Council exposed in great detail the need to implement a vast legal reform, including both a unification of civil and criminal procedures, as well as a new organisation of the federal judiciary. However this reform was not included in the new federal Constitution adopted by the Swiss people and Cantons on April 18 1999 and enacted on January 1 2000. It was decided that the new Constitution would be amended at a later stage and that the reform of the justice would be adopted at the occasion of this amendment.

The new Constitution did however grant the explicit power to the Confederation to legislate regarding the admission to the bar and the regulation of the legal profession.

EU bilateral agreements

On June 6 1999, two months after the adoption of the new federal Constitution, the European Union and Switzerland signed seven bilateral agreements including the Agreement on the Free Movement of Persons, which came into force on June 1 2002. This agreement allows for the free movement of persons and workers between Switzerland and the EU, and contains provisions for a number of regulated professions, including attorneys. It was left to each party to adopt specific regulations in order to implement the agreement at the national level.

Free Movement of Attorneys Act

Considering the new legislative power vested in the Confederation by the 1999 federal Constitution, the Swiss Parliament voted, on June 23 2000, for the new federal Act on the Free Movement of Attorneys.

The Act came into force simultaneously with the bilateral Agreement on the Free Movement of Persons, on June 1 2002, to fulfil several purposes. It sets a core of minimal rules regarding admission to the bar for Swiss attorneys. The Cantons remain in charge of the administration of the bar exam. Once a trainee has successfully passed the exam, he can register with a cantonal bar. He is then allowed to practice law everywhere in Switzerland without further formalities.

It also sets exhaustive professional rules for attorneys. Most ethical rules are indeed incorporated in the Act. Finally, it determines which conditions apply to foreign European lawyers willing to practice in Switzerland.

Many barriers towards the unification of the Swiss legal market disappeared when the federal Act on the Free Movement of Attorneys came into force. However, it was only a first step, as the procedural and linguistic obstacles remained.

Constitutional amendment

The Swiss authorities were fully aware that guaranteeing the free movement of attorneys was an important but insufficient step in the removal of existing barriers towards a unified and efficient Swiss legal market.

Therefore, immediately after the federal Constitution of 1999 was enacted, the federal Council and the Parliament resumed their efforts to pass a vast legal reform. This included both a unification of civil and criminal procedures, as well as a new organisation of the federal judiciary.

On October 8 1999, less than six months after the new Constitution was adopted, the Parliament passed a constitutional amendment. This was approved on March 12 2000 by an overwhelming majority of the Swiss population (86.4%) and the twenty-six Cantons unanimously.

This amendment totally reorganised the federal judiciary, establishing a new federal criminal court as well as a federal administrative court, and redefining the powers and purposes of the federal Supreme Court.

Most importantly, the amendment gave the power to the Confederation to unify both criminal and civil procedures within Switzerland, by passing new federal acts exhaustively governing these matters, and replacing the present twenty-six cantonal codes.

The amendment came gradually into force, with all its provisions being fully implemented since January 1 2007.

The new federal judicial organisation

Notwithstanding the enactment of the constitutional amendment regarding the reform of the justice, and even after the unified codes of civil and criminal procedure will come into force, the cantonal courts will remain competent to hear most cases arising under Swiss law. However, they will follow the new procedures established by these codes instead of their own cantonal procedural laws.

Although these cantonal courts will continue to deal with most disputes in the future, the constitutional amendment of 2000 established new federal courts with specific prerogatives. The parliament therefore enacted new federal acts regarding the federal criminal court, the federal administrative court and the federal Supreme Court.

The Federal Criminal Court Act was passed on November 4 2002, and came into force on August 1 2003. It establishes the new federal criminal court, which deals with offences against national security, such as terrorism, but also with large scale financial felonies, such as money laundering or corruption. Except for these limited prerogatives, the cantonal criminal courts remain in charge of all other offences committed in Switzerland.

The Federal Administrative Court Act and the Federal Supreme Court Act were both passed on June 17 2005 and came into force on January 1 2007. The first of these acts establishes the federal administrative court, which deals with appeals against decisions made by the federal administration. The second of these acts reaffirms the role of the federal Supreme Court, in Lausanne, as the Supreme Court of the country, and determines the specific procedure applicable before this court.

Federal Code of Criminal Procedure Act

Considering the enactment of the constitutional amendment regarding the reform of the justice, the federal Council nominated a commission of professors, attorneys, judges and other legal scholars, entrusted with the writing of a draft project for a new unified code of criminal procedure.

The draft project was presented to the Swiss Parliament. It was further discussed and modified. A common text was agreed on by both chambers of Parliament.

The Federal Code of Criminal Procedure Act was adopted by the Parliament on October 5 2007. This Act will come into force on January 1 2011 and will govern all matters regarding the procedure in criminal cases, no matter if these cases are brought before the newly established federal criminal court or a cantonal court.

The time period between the moment the Act was passed by Parliament and its coming into force is deliberately long, in order to allow all Cantons to adapt the organisation of their respective judiciary to the imperatives of the new law.

The new code of criminal procedure is mainly a compromise between the different legal traditions represented in Switzerland. More specifically, in French-speaking Cantons, the independent investigating judge, who is today in charge of most cases before the trial, will cease to exist. His powers will be transferred to the office of the public prosecutor. The public prosecutor will be in charge of both the investigation and the prosecution before the trial court.

In order to balance the increase of the prosecutor's powers, the new code gives rights to the defence, including the right of the defendant to be assisted by a lawyer immediately after his/her arrest by the police (first-hour attorney).

Federal Code of Civil Procedure Act

In its endeavour to pass a New Code of Civil Procedure the federal Council and the Swiss Parliament followed a largely similar process to that of the new Criminal Code. A commission was appointed by the federal Council, and a project was drafted by the learned members of the commission.

The project was then sent to the Parliament for further discussion and amendments.

On December 12 2008, the Parliament passed the Federal Code of Civil Procedure Act. This Act will come into force on January 1 2011, together with the new Criminal Code, and will govern all matters regarding the procedure in civil and commercial cases.

Unlike the Criminal Code, the Cantons will have less time to adjust to the new code of civil procedure. This is partly due to the fact that the federal Council wants both codes to come into force at the same time, and partly to the fact that the differences between the present cantonal codes are less dramatic as they were between the cantonal codes of criminal procedure. It nevertheless remains that it will be a challenge for both lawyers and judges to be ready to face the courts in 2011 pursuant to rules of procedure which shall apply throughout the country, but that will be new for all.

Independently of their previous experience, all attorneys will have to study from the start, in order to achieve the level of proficiency expected by clients, at the time the new codes will come into force.

Conclusion

Switzerland is a small country, with three official languages, direct democracy, and a federal system consisting of twenty-six Cantons, each pursuing their own priorities, goals and interests.

The people of Switzerland are often seen abroad as conservatives, for their refusal to join the European Union, as well as for their reluctance to enact regulations imposed by foreign powers.

Due to its very unique institutional characteristics, and its own conservatism, major changes in Switzerland happen at a slow pace. Switzerland is indeed not used to cataclysmic events, which would abruptly modify the political or legal landscape.

The slow cadence adopted by the Swiss authorities when it comes to the legal reform presented in this paper is not unusual for Switzerland. That being said, although the work started in 1996 and will only come integrally into force fifteen years later, this reform is a dramatic shift for the country's judicial landscape. The deliberate slow pace allowed the work to progress consensually, without encountering major resistance. As a result, the unified criminal and civil procedures for the entire country, which seemed a remote possibility only ten years ago, will be a reality as of January 1 2011.

These new federal codes of criminal and civil procedure, and the already enforced federal Act on the Free Movement of Attorneys, remove many barriers that continue to hinder the move towards a global, or at least regional, Swiss legal market. Swiss law firms have regularly advised clients on issues of Swiss substantive law irrespectively of the location of the client in Switzerland. As the new codes of procedure come into force, it can be expected that the Swiss firms will be able to handle litigation matters without being confined to the borders of their Cantons.

Although the process has been long and discreet, on January 1 2011, the Swiss judicial system will achieve its dramatic evolution towards a modern, unified, and efficient legal market, fully prepared for the challenges of the 21st century.

Author biographies

Benoît Chappuis

Lenz & Staehelin

Dr iur, Lecturer on contract law (Fribourg University)
Former chairman of the Geneva Bar

Benoît Chappuis is the managing partner of Lenz & Staehelin in Geneva. His practice covers litigation and arbitration, general civil litigation, criminal litigation, bankruptcy and debt collection, enforcement of foreign judgements and awards and international legal assistance. He was a deputy judge with the Geneva Court of Appeal from 1992 to 2007, and a member of the Geneva Superior Council of the Magistrature (a disciplinary council for judges) from 2001 to 2007.

Daniel Tunik

Lenz & Staehelin

Lic iur (Geneva University)
LLM (Georgetown University)

Daniel Tunik is a partner of Lenz & Staehelin. His practice covers litigation and arbitration, international legal assistance, contract and commercial, intellectual property, employment and pensions. He is a member of the board of the Self-Regulated Body of the Swiss Lawyers and Notaries Federation, a supervision authority under the Swiss Federal Act concerning the fight against money laundering in the financial sector.