Pricey But Predictable: Civil Litigation Costs and Their Allocation in Switzerland

Abstract

The Swiss approach to cost and fee allocation in civil litigation is a typical example of the traditional model still prevailing in the German speaking countries and some adjacent regions in continental Europe. The general principle is that the loser pays (virtually) all the winner’s litigation expenses. Court costs are tied to the amount in controversy and are fairly high; attorney fees are calculated on the basis of official schedules and are far from cheap either; and judicial discretion in allocating litigation costs is closely circumscribed. As a result, civil litigation in Switzerland tends to be pricey but its costs are very predictable. Recently, this highly regulated approach has become somewhat less rigid and more open towards a market model. Attorneys can now charge clients more than the official tariff (although additional fees are not shiftable); success oriented fees are permitted (albeit within fairly narrow limits); and outside litigation funding is beginning to occur (although still at a fairly low level). The relatively high costs of civil litigation in Switzerland pose a serious barrier to access to justice, and full-fledged litigation without legal aid, legal cost insurance or outside litigation investment is often beyond the means of private litigants or small firms.