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The Three Most Important Features of Switzerland’s Legal System

By Franz Werro1 and Marjolaine Viret2

A Federal State surrounded by the European Union Switzerland is a federal union of 26 federating States called “Cantons” and a federal power, hereinafter referred to as “the Confederation”. Even though Switzerland is located in the centre of Europe, and even though its ties to the EU have become stronger and stronger over the years, it is not (yet!) a member of the EU. Ever since the Swiss refused to enter the European Economic Space in 1992, Switzerland has chosen the way of bilateral negotiations with the EU, which resulted in the conclusion of two Bilateral Treatises. In practice, however, most of the recent legal developments in Switzerland are to some extent conditioned by the evolution of the EU legislation. Nowadays, one cannot gain a true picture of the Swiss legal system without taking into account its global context, and in particular the Swiss-EU interactions. In turn, the Swiss experience could be of interest to Member States to cope with the difficulties the EU encounters in dealing with its cultural diversity.

The basic features of the Swiss federal system are defined in the Swiss Federal Constitution (“Cst”)3, which lays out the institutional structure of the State, the respective powers of the Cantons and the Confederation and mechanisms for coordinating the two levels. The basic concept is that of federalism, which is not only a rule governing State organisation, but also a fundamental political principle, deeply rooted in the Swiss legal culture4. This principle has lost none of its importance under the new Federal Constitution revised in 20005. The main features can be summarized as follows6:

1. The Cantons’ Autonomy: the Cantons are sovereign insofar as their sovereignty is not limited by the Federal Constitution (art. 3 i.c. with 42 and seq. Cst). Within the boundaries set by the Federal Constitution, the Cantons are autonomous in administering their own political and financial affairs. Each Canton is free to choose its institutions and has its own constitution. The Confederation must respect this autonomy (art. 46 and seq. Cst), provided the organization chosen fulfils basic requirements of democracy (art. 51 Cst). Each Canton is also fairly independent in generating income in order to cover its own expenditures by levying taxes, unless the Confederation is given by the Federal Constitution the exclusive

1 Professor of Law at the University of Fribourg (Switzerland) and at the Georgetown University Law Center, Washington, DC (USA).

2 Attorney-at-Law (non-practising), Research Assistant at the University of Fribourg (Switzerland), PhD cand.

3 The Swiss Constitution is available in English (and other languages) under www.admin.ch/org/polit/00083/index.html?lang=en, but only in its version as per October 2002.

4 BUSER Denise, p. 8.

5 BUSER Denise, p. 12.

6 THALMANN Urs, p. 65.

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right to levy a particular tax type (art. 134 Cst)7.

2. The Subsidiarity Principle: The Cantons are competent for any task that is not explicitly allocated to the Confederation by the Federal Constitution (art. 3 and 42 Cst) 8. In order for the Confederation to enact legislation in an area that is not enumerated in the Constitution, the powers to act must first be transferred to the Confederation by constitutional amendment. Moreover, the implementation of federal law is left to the Cantons where the Constitution does not provide otherwise (art. 46 Cst).

3. The Cantons' Rights of Participation9: as a compensation for the powers transferred to the Confederation, Cantons have constitutionally enshrined rights to participate in the decision-making process on the Federal State level (art. 45 Cst). The Cantons have both a proportional and an equal share in the central legislator. The Swiss Federal Parliament – the supreme legislative authority – consists of two Chambers with equal powers (art. 148 Cst): the House of Representatives ("Conseil national"), where each Canton’s representation is proportionate to its population, and the Senate ("Conseil des Etats"), where each Canton has an equal right to elect two representatives according to its own electing modalities (art. 150 Cst). Other rights of participation are:

i. the Federal Constitution can only be amended if both a majority of the People and a majority of Cantons accept the amendment (art. 140 and 142 Cst)10; ii. each Canton may submit to the Federal Parliament a proposal for an amendment of the Federal Constitution (art 160 Cst); iii. eight Cantons may oppose to the Parliament enacting a federal statute by requesting that the modification first be submitted to the vote of the People (right of referendum, art. 141 Cst).

Given the importance of the Cantons’ collaboration when it comes to enforcing and implementing federal law, the Confederation takes particular care to involve the Cantons into the legislative process in order to avoid any subsequent difficulties (art. 45 and 55 Cst).

4. The Loyalty Principle: this rule commands that the Cantons and the Confederation shall grant each other support and assistance in the fulfillment of their tasks. The Confederation and the Cantons are under a mutual duty to cooperate in the State’s best interest (art. 44 Cst). The Cantons must abide to federal law (art. 49 Cst) and have a constitutional obligation to implement federal statutes and to enforce federal law and decisions by setting up adequate administrative and judiciary authorities11. The Cantons are politically still very influential and prompt at defending their sovereignty, which means that, in practice, the central authorities will often hesitate before making decisions that might not find support in

7 The Confederation has introduced various mechanisms of compensation to ensure that part of the financial means is reallocated in a fair way among the Cantons, cf. art. 46 Cst and THALMANN Urs, p. 95.

8 This basic rule governing power allocation rests on the thought that a matter should be entrusted to the lowest State level that is capable of properly performing the task concerned; cf. MENGISTU Arefaine, p. 163.

9 LINDER Wolf, p. 146 and seq.

10 The same applies to important international treaties, e.g. adhesion to a supranational community.

11 FLEINER Thomas, p. 106.

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a majority of Cantons12. Since the foundation in 1993 of the “Conference of the Cantonal Governments”, the dialog and collaboration among the Cantons has been getting more and more important13.

Federalism is not a panacea. The decisional procedures are long and burdensome. Nowadays, federal law has an effect on almost all legal areas, so that it becomes increasingly difficult to distinguish federal from cantonal powers14. Full implementation by the Cantons may take years and the result may vary significantly from one Canton to another. Those discrepancies have a detrimental effect on legal predictability and procedural efficiency. The Cantons’ reluctance to abandon their local peculiarities may impede the circulation on the Swiss market15. Some obstacles have been eliminated only very recently as an indirect effect of the Bilateral Treatise I with the EU (e.g. for the free circulation of the lawyers).

The drawbacks of the system are particularly striking when one looks at the judiciary. Up to this day, each Canton is free to organize its own judiciary system, according to its own rules of proceedings. Each Canton has its own courts, with local denominations and allocation of powers (art. 191b Cst)16. The resulting complexity makes it delicate for attorneys to intervene before a judge outside their home Canton. More peculiarly, this is true even for areas in which the power to enact substantial law has been transferred to the Confederation, for example the whole area of civil law, as each of the 26 Cantons has its own law of civil procedure. The situation is made yet more intricate by the fact that the distinction between substantial and procedural law is not always evident17. With the growing importance of international law (e.g. the European Convention on Human Rights, “ECHR”) and the increasing weight put on procedural guarantees, recent federal statutes include a number of procedural rules imposing minimum standards onto the Cantons (e.g. the right to be heard)18. Over the past decade, with the argument of ensuring a uniform application of federal substantial law, federal rules have become more and more intrusive (e.g. rules about the burden of proof)19. This forces the Cantons to adapt their procedure in a piecemeal way and causes difficulties of harmonization between federal and cantonal law. The politicians have recognized the need to take a global action and launched an ambitious plan of reform of the judiciary. Thus, in 2000, the Federal Constitution (art. 122 Cst) has been amended to give the central State the power to enact uniform rules of civil procedure. The organisation of the civil jurisdictional system, however, will basically remain within the power of the Cantons, which could well create new problems of delimitation. A draft uniform Code of Civil Procedure has been submitted to the

12 FLEINER Thomas, p. 109.

13 SCHWEIZER Rainer J., p.668.

14 BUSER Denise, p. 10.

15 MACH Oliver, p. 355.

16 FLEINER Thomas, p. 115.

17 AUBERT Jean-François, ad art. 122, n° 10.

18 WALTER Hans Peter, p. 314.

19 ZIMMERLI Ulrich, p. 311 ; AUBERT Jean-François, ad art. 122, n° 20.

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Parliament’s scrutiny in June 200620. Its adoption is not expected before 2008 and, in the meantime, the Cantons’ procedural laws continue to apply21.

Switzerland’s experience in dealing with the disputes that necessarily arise out of the coexistence of different linguistic, cultural and religious communities under one banner can to a certain extent inspire the Member States and the EU authorities on their way towards more Europe. On the other hand, the EU can also learn from the difficulties encountered in Switzerland, difficulties which are inherent to a system that has to find a balance between diversity and efficiency. Those problems can become even more apparent in a large structure such as the EU, that has been erected within a historically very short time period by elites of politics and economics without necessarily being understood and supported by the people.

The Swiss example demonstrates that regional entities can work together towards a common goal without abandoning their identities and peculiarities. The trend towards more transparency and larger involvement of the regions and local parliaments in the EU process is a sign that the concept of federalism is not obsolete22. The extensive use made by the EU of the directive as a legal instrument leaving the implementation to the Member States and a margin for local differences resembles what one may call “federalism of execution”, a concept well-known to the Swiss lawyer23. The Swiss model could also be useful to the EU on its – long and burdensome – way to an European Constitution.

In turn, the Swiss - European integration process (with the Bilaterals I and II) commands that the Swiss federalism be somewhat adapted to the new context. As a rule, one may say that the current trend is to strengthen the dialog and promote partnerships between all entities involved24. New forms of cooperation are being tested to strike a balance between participation of the Cantons in the internal decision-making process on one hand, and the need for the Confederation to be able to appear at the external level as the EU’s sole interlocutor on the other hand25.

Direct Democracy still Alive and the Role of the ECHR One of the secrets of the livelihood of the Swiss federal system is the important part played by the instruments of direct democracy at each level of the system26. Direct democracy in this context means that the people’s influence on the State affairs is not limited to electing representatives to the parliament or government. Citizens can express their views and intervene directly into their representatives’ activities27. There are two main institutions

20 Message du Conseil fédéral du 28 juin 2006 relatif au Code de procédure civile suisse, FF 2006 6841.

21 AUBERT Jean-François, ad art. 122, n° 3.

22 KOLLER Arnold, p. 365; BUSER Denise, p. 9.

23 KNAPP Blaise, p. 438 and seq.

24 SCHWEIZER J. Rainer, p. 675.

25 Cf. WEBER Martin, p. 944 and seq.

26 FLEINER Thomas, p. 116.

27 EPINEY / SIEGWART / COTTIER / REFAEIL, p. 79.

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through which the Citizen can become involved in the decisional process: popular initiative and referendum (art. 136 Cst). Popular initiative is an instrument that allows a portion of the Citizens to ask for a proposal of legal amendment to be submitted to the People’s vote. At the federal level, this right exists only for amendments of the Constitution (art. 138 and seq. Cst). Even though a large majority of the initiatives are finally rejected by the voters, the public debates around the proposal often uncover a need for regulation and force the State authorities to look at the issue28. Referendum gives the Citizens the power to prevent that an act passed by the parliament be enacted. At the federal level, referendum can be mandatory (art. 140 Cst) – e.g. for any amendment of the Constitution and for important international treatises - and requires a double majority of the People and the Cantons for the act to become valid. It is only optional for federal statutes (art. 141 Cst), which means that a portion of the Citizens may request that the federal law be submitted to popular vote for approval before entering into force. At their own level, the Cantons’ laws usually allow for a much more extensive use of those institutions (e.g. all Cantons have introduced the popular initiative and the mandatory referendum for amendments at statutory level also29).

The fact that federal statutes are adopted in a process which is both very democratic and very respectful towards federalism does have some important side-effects. One of the corollaries is that any authority must apply the federal statutes (art. 190 Cst)30. This has been interpreted by the courts as an “immunity of federal statutes” against constitutional judicial review. Consequently, even the Swiss Federal Supreme Court may not challenge the statute enacted by the Federal Parliament31. According to its most recent case law, the Federal Supreme Court may assess whether a provision of federal law violates the Federal Constitution and must try to interpret the federal statute in a sense that is consistent with the Federal Constitution. However, when the Federal Court reaches the conclusion that the federal provision enacted by the Parliament is contrary to the Federal Constitution, it will nevertheless be bound to enforce that provision. Only if the federal statute violates a provision of international law that can be invoked directly before the courts by the person affected – the main instance being the fundamental rights catalogue of the ECHR - will the Federal Supreme Court be entitled to refuse to apply the federal statute in the case at stake32. While this case law must certainly be supported to the extent that it confirms the precedence of international law over internal law, it bears the risk of some problematic results. One of these risks is to create two categories of constitutional rights that enjoy different levels of protection: the rights that have their equivalent in a provision of international law with direct effect and can therefore be invoked to prevent the enforcement of a federal statute on the one hand, and those that are enshrined "only" in the Swiss Constitution on the other hand. In the latter case, a private person will not be able to successfully invoke before a judge that a provision of the law violates his/her constitutional right if the violation results from a correct application of a federal statute. This risk puts into question the adequacy of the absence of judicial review

28 FLEINER Thomas, p. 119.

29 NUSPLIGER Kurt, p. 46.

30 Art. 190 Cst reads : « Applicable law : The Federal Supreme Court and the other authorities shall apply the federal statutes and international law ».

31 MENGISTU Arefaine, p. 162.

32 AUER / MALINVERNI / HOTTELIER, n° 1874 and seq.

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outside the scope of international law.

The extensive popular rights are part of the Swiss’ political culture and play an important part in the stability of the system. As a matter of fact, people feel that the mere existence of those rights adds to the transparency and quality of the public debate. In particular, the threat of a referendum is a strong incentive for the Parliament to take the opinion of all groups of interests already when drafting the legislation. No wonder direct democracy – just as Swiss chocolate and the banks – has often been qualified as Switzerland’s “holy cow” 33. This fear – whether justified or not - of losing the grasp onto the politics and the politicians has been used efficiently for many years by the opponents to an adhesion to the EU.

Surprisingly, a feeling of a loss of control exists among Citizens of the EU Member States also, and not only among those who have been accustomed to direct democracy. Over the past decade, the gasp between those who are building the EU and the average European has become more and more obvious. The European institutions have launched an ambitious programme of transparency and participation to try and reduce the distance between the governments and the peoples, but those efforts do not seem to be successful so far, if one considers the failure of the European Constitution. One can only regret that, as a non-member, Switzerland is largely excluded from this debate and precluded from adding its stone to the European construction. In 1991, Arnold Koller, a member of the Swiss Federal Government, was expressing his concern that the Swiss’ deep attachment to democracy should not develop into a ‘voluntary insularity`34. More than fifteen years later, this warning is still perfectly up- to-date.

Private law – the European Impact One of the most important areas of federal law is private and commercial law. Symptomatically, the need for harmonization first arose in the matters connected with commerce35, when it became clear that Switzerland was growing into a single market and that the discrepancies between the 26 cantonal legislations had a detrimental effect on commercial transactions. Thus, the Confederation was given jurisdiction to regulate the law of obligations as early as 1874, which resulted a.o. in the Swiss Federal Code of Obligations of 1881, enshrining all the provisions dealing with law of contracts, tort law and commercial law36. In 1898, private law as a whole was allocated to the Confederation and it is only in 1912 that the Swiss Civil Code, which includes the 1881 Code of Obligations, was adopted37. Unless specifically provided for in a provision of the federal legislation, the Cantons have no residual power in those areas38.

Globally, the civil law codification has remained remarkably unchanged since the Code was

33 KÖRKEMEYER Stephan, p. 26.

34 KOLLER Arnold, p. 365 and seq.

35 AUBERT Jean-François, ad art. 122, n° 1.

36 DUNAND Jean-Philippe, p. 55 ; HAMZA Gàbor, p. 108.

37 AUER / MALINVERNI / HOTTELIER, n° 1008.

38 AUBERT Jean-François, ad art. 122, n° 1et 3.

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enacted in 1912, even though some chapters have been amended to keep in tune with the evolution of society (e.g. in family law). In particular, only minor changes have been made to the Code of Obligations. Admittedly, the law of obligations has developed outside the Code, e.g. in specific tort law statutes introducing strict liability for particularly dangerous activities. The Swiss Supreme Court has also played a vital part in the modernization of the law and keeps doing it. By interpreting Swiss law in a dynamic way, according to a modern understanding of society, and by spontaneously cross-checking the conformity of the solution with the legal situation in EU Member States, the Swiss Supreme Court helps maintaining our civil law codification up-to-date39.

Today, no one in Switzerland seriously suggests that a complete revision of the Code of Obligations would be necessary. However, some areas could benefit from a more global approach. This is the case for consumer law. Despite the Swiss' refusal to enter the European Economic Space in 1992, the Federal Government chose to stick to his plan and to have a number of EU directives implemented directly into federal statutes, many of them in the field of consumer law. Nowadays, the principle of “euro-compatibility” is one of our Federal Government’s primary concerns and a major source of inspiration for the legislator40. Through this autonomous implementation of some EU directives, the most urgent problems have been handled - in a piecemeal way (e.g. product liability, consumer credit, package travel) - but Switzerland is still lacking a general corpus of consumer law that would for example protect the consumer at the conclusion of a contract41.

Even though Europe is economically getting closer each day to a single market and even though the European institutions have been granted far-reaching legal powers, Europe is de facto far from being perceived as a unity by its population, who does not seem to be ready to abandon their national codifications. The EU is not (yet) a federal state and the debate around a global harmonization of civil law may be premature. However, the Swiss example is a proof that diversity does not make unification impossible. Once the variety of legislations will have enough negative effects on the Citizen’s everyday routine, a global harmonization – in a form yet to be defined - will be welcome and the implementation process facilitated. But there again, Switzerland is very unlikely to have a say when the time will come for Europe to shape the civil law of the future.

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40 MACH Olivier, p. 374 ; WERRO Franz, p. 40.

41 THÉVENOZ / WERRO, n° 7.

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Suisse, Geneva / Zurich / Basle 2005, p. 53 and seq.

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