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The International Comparative Legal Guide to: Product Liability 2011 A practical cross-border insight into product liability work

Published by Global Legal Group, in association with CDR, with contributions from: Advokatfirmaet Wiersholm, Mellbye & Bech AS Akin Gump Strauss Hauer & Feld LLP Allen & Overy Luxembourg Allen & Gledhill LLP Arnold & Porter (UK) LLP Averture Bahas Gramatidis & Partners Baker & McKenzie Béatrice Toussaint Avocat Borislav Boyanov & Co., Attorneys at Carroll, Burdick & McDonough International LLP Caspi & Co. Clayton Utz Cliffe Dekker Hofmeyr Inc. Crown Office Davies Arnold Cooper LLP Engineering Systems Inc Eversheds Exponent, Inc. Fiebinger Polak Leon & Partner Rechtsanwälte GmbH Gowlings Greenberg Traurig, LLP Herbert Smith LLP Hogan Lovells Jones, Walker, Waechter, Poitevent, Carrère & Denègre L.L.P. Kennedys Kim & Chang Kromann Reumert McGrigors LLP Monereo Meyer Marinel-lo Abogados, S.L.P. Nelson Mullins Riley & Scarborough LLP Pachiu & Associates Patrikios Pavlou & Associates LLC Pinheiro Neto Advogados R&D Strategic Solutions Sidley Austin LLP Simpson Grierson Smith & Partners Tilleke & Gibbins Tonucci & Partners Chapter 44

Akin Gump Strauss Hauer & Feld LLP Vanessa Liborio Garrido de Sousa

1 Liability Systems 1.2 Does the state operate any schemes of compensation for particular products?

1.1 What systems of product liability are available (i.e. liability There are no schemes of state compensation for particular products in respect of damage to persons or resulting under Swiss law. from the supply of products found to be defective or faulty)? Is liability fault based, or strict, or both? Does contractual liability play any role? Can liability be 1.3 Who bears responsibility for the fault/defect? The imposed for breach of statutory obligations e.g. consumer manufacturer, the importer, the distributor, the “” ? supplier or all of these?

A person harmed by a defective product may bring a claim based Under the provisions of the PLA, a producer is strictly liable for a upon the Swiss Product Liability Act (PLA), law, law, defective product. A producer is defined to include: a manufacturer or various statutory provisions. of a finished product or component part as well as a producer of any The Product Liability Act (PLA), enacted on January 1, 1994, raw material; any person who presents himself as the producer of a provides for of manufacturers, importers, and product by placing his name, trademark or other distinguishing suppliers for death or injury or damage to property in private use feature on the product; and any person who imports a product for resulting from a defective product. The provisions of the PLA are sale, hire, lease or any form of distribution within the normal course largely similar to the provisions of Directive 85/374/EEC. Under of business, without prejudice to conflicting international treaties the PLA, a product is considered defective if it does not provide the (Article 2(1) PLA). Where the producer of a product cannot be safety which a person is entitled to expect and a producer may not identified, the supplier is treated as the producer for purposes of contractually limit its liability for injuries caused by defective liability unless it discloses to the injured person, within a reasonable products. The PLA does not affect the legal rights of a potential time, the identity of the producer or person who supplied the claimant based on other grounds; rather, it provides a supplemental product or the identity of the importer, if applicable (Article 2(2) cause of action (Article 11(1)). Claims based in tort or contract may PLA). The claimant bears the burden of proving that the defendant allow for recovery of a wider scope of than claims brought is a producer within the PLA’s definition. under the PLA. In addition, , contract law, and tort law provide for fault- A person harmed by a defective product may also bring claims based product liability for tortfeasors, real owners, and based in tort or contract law. The Swiss Code of Obligations (CO) contractors and establish fault-based product liability for provides for fault-based liability in tort for a person who unlawfully manufacturers, wholesalers, and distributers. Federal statutes causes damage to another (Article 41 et seq. CO). Liability is, regulating specific products and industries also generally establish however, mainly derived from the liability of a principal for the acts a liability regime based on . of its subordinates, such as the liability of a company for damages cause by its employees (Article 55 CO). A claim for damages may 1.4 In what circumstances is there an obligation to recall also be based on general contract liability (Article 97 et seq.) or products, and in what way may a claim for failure to recall specific contractual provisions, such as the contractor’s be brought? responsibility for the quality of his work (Article 197 et seq., 368 CO). In general, contract liability is also fault-based; however, While the PLA does not specifically provide for recall of defective direct damages may be recoverable based on strict liability of a products or issuance of consumer warnings following the seller in certain circumstances (Article 208(2) CO). of a defect, a duty to recall defective products arises from general Product liability-related relief may also be sought, based on federal civil and tort law. Federal Supreme has established statutes that regulate specific products, industries or activities, e.g. a general principle of Swiss law that a producer has a duty to Article 27 of the Federal Act on Electrical Installations, Article 59a monitor use of its products and to take reasonable measures to of the Environmental Protection Act and Article 27 of the prevent potential damage. This duty includes an obligation to Explosives Act. change product design or instructions in order to prevent accidents, or to issue appropriate warnings concerning products already in circulation. A duty to recall a defective product may also arise under the Swiss Unfair Competition Act (UCA), which prohibits

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placement into commerce of a product which contains hidden theory allows Swiss to limit liability where the chain or defects or which does not comply with applicable product and events has been interrupted by an independent cause or event for safety standards (Article 2, 3, 7, and 9). Finally, statutes regulating which the defendant cannot be held responsible. Under Swiss law, specific products or industries may contain duties to recall or warn an independent cause or event resulting in damage may exonerate of defective products. Under the Swiss Federal Product Safety Act the tortfeasor in part or in whole. (PSA), during the indicated or assumed life-cycle of a given product, the manufacturers of importers must take suitable 2.3 What is the legal position if it cannot be established which measures to recognise and avert risk, for example by recall. The of several possible producers manufactured the defective erland PSA, however, does not provide for specific circumstances under z product? Does any form of market-share liability apply?

it which the products must be recalled. A properly executed recall or consumer warning does not discharge Under the PLA, if two or more producers contribute to the same Sw a producer from liability, but may reduce damages in a subsequent defect resulting in damage, they are held jointly and severally liable legal action. Moreover, if a claimant has kept a defective product (Article 7 PLA). There is no applying market-share despite notice of a recall or disregarded consumer warnings, the liability in Switzerland. producer may be able to assert the defence of contributory . 2.4 Does a failure to warn give rise to liability and, if so, in what circumstances? What information, advice and 1.5 Do criminal sanctions apply to the supply of defective warnings are taken into account: only information products? provided directly to the injured party, or also information supplied to an intermediary in the chain of supply While the PLA contains no provisions for criminal sanctions, between the manufacturer and consumer? Does it make any difference to the answer if the product can only be criminal liability may arise under the Swiss Penal Code (SPC) in obtained through the intermediary who owes a separate case of negligent bodily injury or involuntary manslaughter (Article obligation to assess the suitability of the product for the 125 and 117 SPC). The SPC not only provides for individual particular consumer, e.g. a surgeon using a temporary or liability, but also allows for the liability of a company for a criminal permanent medical device, a doctor prescribing a act occurring within the company’s course of business, if the medicine or a pharmacist recommending a medicine? Is individual within the organisation who committed the act cannot be there any principle of “learned intermediary” under your identified (Article 102 SPC). Statutes governing specific products, law pursuant to which the supply of information to the activities, or industries may also provide for criminal sanctions (see learned intermediary discharges the duty owed by the e.g., Article 16 and 17 PSA). manufacturer to the ultimate consumer to make available appropriate product information?

2 Causation Under the PLA, a product is defective if it does not provide the safety which a person is entitled to expect, taking into account all circumstances, including product presentation (Article 4(1) PLA). 2.1 Who has the burden of proving fault/defect and damage? A product may thus be considered legally defective if accompanied by inadequate information, instructions, or warning. Warnings are Under tort law, the claimant generally bears the burden of not required if the product’s danger is well known or obvious, and (Article 42(1) CO). For damage claims brought based on contract, the product will not be considered defective for lack of warning in the defendant bears the burden of proving the absence of fault this case. Furthermore, a producer will not be held liable if a (Article 97 et seq. CO). consumer fails to heed adequate warnings or follow proper Under the PLA, as under general tort law, the claimant must prove instructions. damages and causation. The PLA provides that the injured claimant The PLA does not provide for the principle of a “learned bears the burden of proving: (1) that the defendant is a producer intermediary”. The theory of adequate causation will be applied to within the meaning of Article 2 PLA; (2) that the product did not determine whether the failure to instruct or warn caused the damage provide the safety that a person is entitled to expect; and (3) to the consumer. In the case of pharmaceutical products, however, damages and causation, in accordance with general provisions of the Federal Act on Therapeutical Products requires certain product the Swiss Code of Obligations (Article 11(1) PLA). However, the information to be included in the packaging. Similarly, the PSA defendant in a product liability claim must prove that he has taken regulates the presentation and description of products. More all appropriate precautions to prevent damage of the kind that particularly, the labelling, warning and safety notices, use and occurred. The claimant need not prove that the defect existed when operation instruction must correspond to the specific risk potential the product was put into circulation. of a product (Article 3(4) PSA).

2.2 What test is applied for proof of causation? Is it enough for the claimant to show that the defendant wrongly 3 Defences and Estoppel exposed the claimant to an increased risk of a type of injury known to be associated with the product, even if it 3.1 What defences, if any, are available? cannot be proved by the claimant that the injury would not have arisen without such exposure? Six statutory defences are available to a producer under the PLA. A Swiss courts use the theory of adequate causation in determining producer will not be held liable if he is able to prove: (1) that he did liability. The burden falls on the claimant to establish adequate not put the product into circulation; (2) that the defect which caused causation. Adequate causation is established if everyday the damage did not exist at the time the product was put into experience shows that the defect at issue normally leads to the type circulation; (3) that the product was neither manufactured for sale of damage that has occurred in the usual course of events. This or any other form of distribution for economic purpose nor

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manufactured or distributed in the producer’s course of business; 3.5 Can defendants claim that the fault/defect was due to the (4) that the defect occurred due to compliance with mandatory actions of a third party and seek a contribution or and standards issued by the public authorities; (5) that indemnity towards any damages payable to the claimant, the state of scientific and technical knowledge at the time the either in the same proceedings or in subsequent product was put into circulation did not allow detection of the proceedings? If it is possible to bring subsequent proceedings is there a time limit on commencing such defect; and (6) that, in the case of a raw material producer or proceedings? component part manufacturer, the defect is attributable to the design of the product on which the raw material or component part has The PLA provides for joint and several liability of all producers liable been incorporated in accordance with manufacturer instructions erland for damages caused by a defective product (Article 7 PLA). In the z

(Article 5 PLA). it case that damage is caused by a defendant and a third party, both are Swiss Federal Supreme Court jurisprudence also establishes several

jointly and severally liable regardless of individual contribution. Sw defences to product liability claims, including contributory However, a defendant may be able to seek recourse against a third negligence, or wilful misconduct on the part of the party for damages paid to a client in separate legal proceedings, claimant (see Article 43 et seq. CO), voluntary and lawful subject to the of limitations applicable to the initial claim. of the claimant to the act which caused the damage, unforeseeable use of the product, inconsistent with its purpose and producer instructions, and a defence (see the answer to 3.6 Can defendants allege that the claimant’s actions caused or contributed towards the damage? question 3.2 below).

Under the Swiss Code of Obligations, a judge may deny liability in 3.2 Is there a state of the art/development risk defence? Is part or in whole if circumstances for which the claimant is there a defence if the fault/defect in the product was not responsible have cause or aggravated damages (Article 44 CO). discoverable given the state of scientific and technical This principle also applies to claims brought under the PLA (Article knowledge at the time of supply? If there is such a 11(1) PLA). defence, is it for the claimant to prove that the fault/defect was discoverable or is it for the manufacturer to prove that it was not? 4 Procedure

Under the PLA, a producer will not be held liable for damage caused by a defective product if, based on the state of scientific and 4.1 In the case of court proceedings is the trial by a judge or technical knowledge at the time the product was put into a jury? circulation, the defect was not discoverable (Article 5(1)(e) PLA). The claimant must prove that the defect was not discoverable at the As a preamble, it is important to note that in December 2008, a new time the product was put into circulation. Code of (CCP) was approved by the Parliament, and provides Switzerland with a uniform of civil procedure at the national level. The CCP came into force on 3.3 Is it a defence for the manufacturer to show that he January 1, 2011 and superseded the twenty-six cantonal Codes of complied with regulatory and/or statutory requirements Civil Procedure that the States of Switzerland (Cantons) used to relating to the development, manufacture, licensing, have. The organisation of the remains up to the States. marketing and supply of the product? Accordingly, the CCP is applied by the existing cantonal courts within their existing judicial structures. A producer is not liable under the PLA if it proves that the defect in a product occurred due to compliance with mandatory regulations All civil cases are tried before a single judge or a of judges, issued by the public authorities (Article 5(1)(d) PLA). However, depending on the applicable cantonal law. There are no juries in compliance with regulatory standards does not exempt the producer civil matters in Switzerland. from the obligation to design and manufacture a product according to the latest scientific and technical knowledge available. 4.2 Does the court have power to appoint technical specialists to sit with the judge and assess the presented by the parties (i.e. expert assessors)? 3.4 Can claimants re-litigate issues of fault, defect or the capability of a product to cause a certain type of damage, provided they arise in separate proceedings brought by a The court generally does not have the power to appoint experts to different claimant, or does some form of issue estoppel assess the evidence presented by the parties. However, pursuant to prevent this? Article 183 CCP, the court may at the request of a party or ex officio, ask for an expert opinion. Furthermore, the Cantons may institute Different claimants may re-litigate issues of fault, defect, or the specialised courts that will have jurisdiction in specific matters. For capability of a product to cause a certain type of damage, provided instance, Article 6 CCP allows the creation of a Commercial Court these issues arise in separate proceedings. Nonetheless, while prior acting as the sole cantonal competent to hear commercial litigation judgments will not have a legal effect on subsequent proceedings, cases. they may influence a court’s decision. 4.3 Is there a specific group or procedure for multiple claims? If so, please outline this. Is the procedure ‘opt-in’ or ‘opt-out’? Who can bring such claims e.g. individuals and/or groups? Are such claims commonly brought?

Swiss procedural do not provide for class actions. However,

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in certain circumstances it is possible for claimants or defendants to 4.6 Can the court try preliminary issues, the result of which file a claim as a group. Pursuant to Article 71 CCP, the determine whether the remainder of the trial should requirements are: (i) the facts and cause of action are sufficiently proceed? If it can, do such issues relate only to matters similar or identical; (ii) the causes of action do not fall under of law or can they relate to issues of fact as well, and if different procedures; and (iii) the same court is competent for all there is trial by jury, by whom are preliminary issues decided? claims. Furthermore, organisations may pursue multiple claims if the following conditions are met: (i) the association or organisation Preliminary trials do not exist in Switzerland; however, trials are is a national or regional organisation; (ii) the statutes provide

erland usually preceded by preliminary proceedings (“conciliation”; protection for the interests of specific types of individuals; (iii) the z Article 197 et seq. CCP), which take place in front of a competent

it actions of these organisations, whether their purpose is economic or ad hoc authority. Generally, the conciliation authority will not rule ideal, cannot be an action for damages but only an action to prohibit

Sw on the parties’ claims and is limited to determining whether the any violation of the personal rights of members of the group, proceedings end or continue to trial (Article 209 CCP). suspend such violation, or to declare it illegal (Article 89 CCP). Nevertheless, in some cases, the competent authority may grant a motion for judgment, or even issue a decision (Article 212 CCP). 4.4 Can claims be brought by a representative body on behalf of a number of claimants e.g. by a consumer association? 4.7 What appeal options are available? Group actions may be permitted in the furtherance of judicial efficiency and economy; however, the effect of a judgment is Every canton has a District Court and an Appellate Court. separate for each member of the group and judicial acts of each Appellate Courts serve as appeal bodies for judgments issued by member of a group are attributable only to each such member. District Courts. There are two types of appeal: the “appel”, or Where it would be efficient, the members of the group may appoint ordinary ground for appeal (Article 308 CCP); and the “recours”, joint counsel and form an association to bring a on behalf of an extraordinary ground for appeal used whenever an appel is its members. The association must have a legal personality; its forbidden or in certain cases defined by law (Article 319 et seq. members must have the legal capacity to bring the lawsuit on their CCP). own; the members must have assigned their rights to the The Swiss Federal Supreme Court is the highest court in association; and the or articles of the association must Switzerland. The conditions of appeal to the Federal Supreme stipulate the protection of the interests of its member. Court are as follows: (i) the appeal must be lodged against a decision taken by the cantonal Appellate Court; (ii) there must be a violation of federal law; and (iii) the amount in dispute must exceed 4.5 How long does it normally take to get to trial? CHF 30,000 (Article 74 (1)(b) of the Swiss Supreme Court Act). However, some cases may be brought directly in front of the Swiss The time it takes to get to trial depends on the type of procedure. In Supreme Court (Articles 5-8 CCP). Switzerland, three types of civil proceeding are possible: the ordinary procedure (“procédure ordinaire”); the simplified procedure (“procédure simplifiée”); and the shortened proceeding 4.8 Does the court appoint experts to assist it in considering (“procédure sommaire”). technical issues and, if not, may the parties present expert evidence? Are there any restrictions on the nature If the amount in dispute exceeds CHF 30,000, the trial will take or extent of that evidence? place according to the ordinary procedure (Article 219 et seq. CCP). This is preceded by preliminary proceedings (“conciliation”). In Pursuant to Article 183 CCP, the court may, at the request of a party case of failure, permission to proceed to trial will be granted. The or ex officio, appoint independent experts. The court is not bound principal steps are the exchange of briefs and documentary by expert evidence and has broad discretion to assess the expert evidence, followed by the hearings and the decision. report. Although the new Swiss Civil Procedure Code does not If the amount in dispute does not exceed CHF 30,000, the make any reference to party-designated experts, the parties may simplified procedure will apply (Article 243 CCP). The appoint an expert in support of their claim or defence. The court proceedings are similar to the ordinary procedure, but procedural will, however, give greater weight to the opinion of a court- formalities are simplified and the length of trial is shortened. appointed expert, who is considered more impartial. Pursuant to Article 248 et seq. CCP, the shortened form of procedure applies to various cases, including decisions regarding 4.9 Are factual or expert witnesses required to present the granting of conservatory measures that may be requested in themselves for pre-trial deposition and are witness urgent cases. The procedural formalities are even more flexible statements/expert reports exchanged prior to trial? since the application may be lodged orally or in writing, and the procedure is even more rapid because the introduction of evidence Pre-trial depositions do not exist in Switzerland. Witness is limited. For the “procédure ordinaire”, it usually takes statements and expert reports are generally introduced during the approximately two months from the of a complaint to get to trial. trial. It is, however, difficult to estimate the timing of each type of proceedings, as the CCP entered in force recently, on January 1, 2011. Nonetheless, pursuant to Article 209(3) of the CCP, if the 4.10 What obligations to disclose documentary evidence arise either before court proceedings are commenced or as preliminary proceedings are not successful, the claimant must file a part of the pre-trial procedures? claim within a period of three months, and the court will then provide the defendant with a deadline to answer to the claim pre-trial discovery procedures do not exist in (Article 222 CCP). Switzerland. There is no obligation to disclose documentary evidence before the commencement of evidentiary proceedings.

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4.11 Are alternative methods of dispute resolution available 6 Remedies e.g. , arbitration?

Alternative methods of dispute resolutions, such as preliminary 6.1 What remedies are available e.g. monetary compensation, injunctive/declaratory relief? proceedings (“conciliation”) (Article 19 CCP), mediation (Article 213 CCP) and arbitration (Article 353 CCP) are available. The PLA, general tort and contract law normally provide for monetary compensation for damages caused by defective products.

5 Time Limits erland z

6.2 What types of damage are recoverable e.g. damage to it 5.1 Are there any time limits on bringing or issuing the product itself, bodily injury, mental damage, damage Sw proceedings? to property?

The limitation period depends on the legal grounds on which a Pursuant to the provisions of the PLA, compensatory damages are claim for damages is brought. Claims brought under the PLA must available in cases of death or as well as damage to be brought within a three-year statute of limitation, which begins to any item of property other than the defective product itself (Article run from the date on which the claimant becomes aware, or 1, 2 PLA). If compensation is sought for damages to an item of reasonably should have become aware of the damage, defect and property, that property must be of a type ordinarily intended for identity of the producer (Article 9 PLA). The PLA also provides for private use or consumption and used by the injured person mainly an absolute barring any claims brought more for his own private use or consumption (Article 1(1)(b) PLA). A than ten years after the defective product causing the damage was producer is only liable for damages in excess of CHF 900 (Article put into circulation (Article 10 PLA). 6(1) PLA). Claims based on tort law are subject to a statute of limitations of While damages for pain and suffering are not recoverable under the one year from the date the claimant becomes aware or reasonably PLA, such damages can be claimed by the injured party or close should have become aware of the damage and the identity of the relatives as an equitable remedy under general tort law (Article 47 liable person and ten years from the date of the commission of a CO). In determining the amount of damages, a judge will consider tortuous act (Article 60 CO). the nature and seriousness of the injury, the effect and duration of the suffering, and the degree of fault of the tortfeasor. Swiss tort Claims based on contract are subject to a general statute of law also provides for compensation for damages resulting from the limitations of ten years (Article 128 et seq. CO). Claims based on death of a close relative, including burial costs, medical expenses, sales , however, are subject to a statue of limitation of one and the loss of financial support (Article 45 CO). year from the delivery of the goods, except in cases where the defect was wilfully concealed (Article 210 CO). Damages to a defective product may only be recovered based on contract law (Article 97 et seq., 197 et seq. CO).

5.2 If so, please explain what these are. Do they vary depending on whether the liability is fault based or strict? 6.3 Can damages be recovered in respect of the cost of Does the age or condition of the claimant affect the medical monitoring (e.g. covering the cost of calculation of any time limits and does the Court have a investigations or tests) in circumstances where the discretion to disapply time limits? product has not yet malfunctioned and caused injury, but it may do so in future? As stated in the answer to question 5.1 above, the statute of limitations applicable varies depending on the legal grounds of a There is no established Swiss jurisprudence on claims for the cost claim. In general, the age or condition of the claimant will not of medical monitoring in circumstances where the product has not affect calculations of time limits as statutes of limitations are yet malfunctioned or caused injury. Some authors state that such regulated by federal law. costs might be claimed based on the civil law principle of (Article 62 et seq. CO), but this theory remains uncertain. 5.3 To what extent, if at all, do issues of concealment or fraud affect the running of any time limit? 6.4 Are recoverable? If so, are there any Pursuant to the PLA, the statute of limitations for claims for restrictions? recovery of damages runs from the date on which the claimant becomes aware, or reasonably should have become aware of the Punitive damages are not recoverable in Switzerland and are damage, defect and identity of the producer (Article 9 PLA). considered a violation of Swiss public policy. Furthermore, Therefore, concealment or fraud is taken into account. The PLA, pursuant to the Swiss Private Act (PILA), Swiss however, also provides for an absolute statute of limitation of ten courts must refuse an award of punitive damages even if the years from the date a product is put into circulation, whether or not payment of such damages is provided for in the applicable foreign the claimant was prevented from discovering the defect or identity substantive law (Article 135(2) PILA). of the producer because of concealment or fraud (Article 10 PLA). If the tortuous act of a producer also constitutes a criminal offence, 6.5 Is there a maximum limit on the damages recoverable the longer statute of limitations under the SPC also applies to civil from one manufacturer e.g. for a series of claims arising claims (Article 60(2) CO). from one incident or accident? According to case law, if defects are wilfully concealed, claims for recovery based on sales warranties are no longer subject to the There is no maximum limit on damages recoverable from one statute of limitations of one year (Article 210(1) CO), but to the manufacturer. general statute of limitation of ten years for contractual claims. ICLG TO: PRODUCT LIABILITY 2011 WWW.ICLG.CO.UK 317 © Published and reproduced with kind permission by Global Legal Group Ltd, London Akin Gump Strauss Hauer & Feld LLP Switzerland

6.6 Do special rules apply to the settlement of 7.5 Is third party funding of claims permitted and, if so, on claims/proceedings e.g. is court approval required for the what basis may funding be provided? settlement of group/class actions, or claims by infants, or otherwise? Third party funding is permissible, and parties may agree to return a share of the resulting award to third parties in exchange for such Claims may be settled by private contract. A settlement contract funding. must be filed with the court in order to have a procedural effect on ongoing court proceedings.

erland 8 Updates z

it 6.7 Can Government authorities concerned with health and social security matters claim from any damages awarded 8.1 Please provide, in no more than 300 words, a summary of Sw or settlements paid to the Claimant without admission of any new cases, trends and developments in Product liability reimbursement of treatment costs, unemployment Liability Law in Switzerland. benefits or other costs paid by the authorities to the Claimant in respect of the injury allegedly caused by the The Swiss Federal Product Safety Act entered into force on July 1st, product. If so, who has responsibility for the repayment of 2010, replacing the Federal Statute on the Safety of Technical such sums? Installations and Objects. The PSA aligns Swiss product requirements with the Directive 2001/95/EC on general product Under the Federal Act on the General Part of the Social Security safety and introduces new pre-sale (“conditions requises pour la Law (Article 72 et seq.), insurance carriers to whom this law mise sur le marché”; Articles 3-7 PSA) and post-market obligations applies, including carriers of compulsory health insurance, (“obligations consécutives à la mise sur le marché”; Article 8 PSA). unemployment insurance, accident insurance, and disability Civil liability for defective products is, however, still governed by insurance, may seek reimbursement for treatment costs, the PLA and tort and contract law. unemployment benefits or other costs from any person liable for Under the provisions of the PSA, only products which, considering damage to the injured party. The injured party’s claims are normal use or any reasonably foreseeable use, do not or only subrogated to those of the insurance carrier. minimally endanger the safety or health of the user or any other person may be placed on the market. All products subject to this act 7 Costs / Funding must meet basic health and safety requirement in accordance with government regulations or, in the absence of government regulations, must be consistent with the current state of scientific 7.1 Can the successful party recover: (a) court fees or other knowledge or technology. In addition, any health and safety risks incidental expenses; (b) their own legal costs of bringing specific to a product must be appropriately identified. the proceedings, from the losing party? Manufacturers and importers must continue to take appropriate The claimant must advance court fees prior to commencing measures to identify and prevent risk throughout a product’s life proceedings, but may be able to recover these costs and all or part span, including examining complaints concerning a product’s safety of its legal costs from the losing party, according to a statutory and issuing recalls if necessary. The PSA also requires that schedule based on the amount at stake. If neither party prevails in manufacturers and marketers notify the authorities immediately if an action, the court may divide the legal fees and leave the parties they become aware of risks or potential risks associated with a to bear their own legal costs. product. According to Article 10(2) and (3) PSA, if the authorities find that 7.2 Is public funding e.g. , available? safety requirements have not been complied with: (a) the further distribution of a product may be prohibited; (b), the population may A party may be exempt from paying court fees if it can establish be warned, if necessary; (c) any export may be prohibited; and (d) prima facie that it has a valid case on the merits and that it is unable the product may be seized or destroyed by the authorities. to pay such costs. Upon request, the court may appoint an attorney Every manufacturer, importer or dealer of products which comply without charge to the party who will be remunerated by the with previous laws, but which do not comply with the new PSA are appointing authority of the canton. A defendant may contest the still permitted on the market until December 31, 2011. grant of aid through a submission to the court. Manufacturers, importers and dealers have until December 31, 2011 to comply with the post-market obligations.

7.3 If so, are there any restrictions on the availability of public funding?

See the answer to question 7.2.

7.4 Is funding allowed through conditional or contingency fees and, if so, on what conditions?

Under cantonal laws and regulations, fee agreements must always provide for remuneration to cover the attorney’s cost and expenses. Under the laws of certain cantons, however, agreements as to success fees are permissible, but only in addition to traditional fee arrangements.

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Vanessa Liborio Garrido de Sousa

Akin Gump Strauss Hauer & Feld LLP 3, François Bellot Geneva, 1206 Switzerland Tel: +41 22 787 4000 Fax: +41 22 787 4010 Email: [email protected] erland z URL: www.akingump.com it Vanessa Liborio Garrido de Sousa is a Partner practicing

primarily in the area of international litigation and arbitration, with Sw a particular focus on complex, high-value disputes involving major infrastructure construction projects, consortia and joint venture agreements. She has acted as counsel in numerous international arbitration proceedings before the International Chamber of Commerce, the London Court of International Arbitration, the Swiss Chambers of Commerce and other international fora and subject to a variety of procedural and substantive laws. She has also represented parties in setting aside proceedings before the Swiss Supreme Court. In addition, she regularly provides advice to clients on Swiss substantive law, in particular contract law. Vanessa has written for several publications in the area of international dispute resolution and . Vanessa graduated from the University of Geneva Law School in 1999. In 2003, she earned a Master of Laws (LL.M.) from New York University School of Law and was admitted to the Geneva bar in 2001.

With more than 800 in 14 offices, Akin Gump Strauss Hauer & Feld LLP is one of the world’s largest law firms. A frequent recipient of industry recognition for its strength in litigation and high-stakes appellate work, its leadership in groundbreaking transactions and its depth in public policy, Akin Gump provides a comprehensive suite of services for global companies and local individuals. Its team of litigators, dealmakers, and policy lawyers and advisors collaborate with a single goal: the success of its clients. Akin Gump’s Geneva office is the headquarters of the firm’s global international arbitration practice, anchoring our international tax planning and restructuring practice on the European continent and serves as a platform for the firm’s international trade practice in relation to the World Trade Organization and other Geneva-based international organisations. The Geneva office also offers a wide range of legal services in Swiss transactional, financial, regulatory and litigation matters, through a team of experienced and accomplished professionals fluent in English and Switzerland’s three principal languages of French, German and Italian.

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