Martin Bernet: There are no major legislative developments that have already affected the focus of our practice over the past year but a number of potentially significant projects are in the pipeline. The Swiss Federal Civil Procedure Code, in effect since 1 January 2011, replacing the former cantonal (state) law regimes, is currently under revision. To a large extent the planned revision is merely a brush-up but three topics deserve mentioning.
First, the cost regime for civil procedure is being looked at with the aim to ease the claimant’s obligation to pay the full court fee into court at the outset of the proceedings. Second, the right of bodies such as consumer organisations to bring representative actions shall be expanded in scope so as to include damage claims on behalf of the individuals concerned. Third, a collective settlement mechanism following the Dutch model shall be introduced.
The project is still at an early stage, with a first draft by the government planned to be put out for consultation by interested circles at the end of 2017 or in early 2018. Whether the project will eventually be submitted to parliament remains to be seen. Other projects include the strengthening of the Ombudsman system for claims in the financial industry.
Of interest is also the project of an overhaul of Chapter 12 of the Private International Law Act, which is the framework for international arbitrations seated in Switzerland. The consultation process of a draft text ended in early summer 2017. Overall the intention is to only make light changes, essentially to reflect important case law of the Swiss Federal Supreme Court and thus to make the Swiss lex arbitri even more user-friendly. The current draft provides, inter alia, that English-language briefs will be allowed in challenge proceedings before the Swiss Federal Supreme Court (which hears challenges against international arbitration awards rendered by arbitral tribunals seated in Switzerland). It is expected that the government will, in the near future, inform about how it intends to take the project further.
Colette Wilkins: The Confidential Information Disclosure Law (2016) (the Disclosure Law) replaced the Confidential Relationships (Preservation) Law in July 2016. The previous law was often inaccurately portrayed outside the Cayman Islands as a secrecy law, and the full title of the Disclosure Law better reflects the aim of this legislation, namely to permit the disclosure of confidential information in the circumstances identified. These circumstances include disclosure to local tax, regulatory and law-enforcement authorities, and would include disclosure under the Proceeds of Crime Law and the Criminal Justice (International Cooperation) Law. Further, good faith disclosure of confidential information is permitted under the Disclosure Law in the event of a serious threat to life, health or the safety of a person or serious threat to the environment.
The Disclosure Law retains the provision for seeking court directions when the disclosure of confidential information is required for evidence in proceedings (in the Cayman Islands or elsewhere); and this gateway has continued to be well used in our jurisdiction over the past year.
The protection afforded to dissenting shareholders under the statutory merger provisions in the Cayman Islands Companies Law has been in place for some time, but there has been a significant increase in the use of section 238 of the Law, under which dissenting shareholders may seek the assistance of the Grand Court in determining the fair value of their shares at the merger date.
Martin Bernet: There is no sector that stands out particularly in everyday practice.
There has, however, been a general increase in corporate law disputes, including lawsuits brought by minority shareholders following a squeeze-out merger as well as shareholder actions brought against companies by private equity investors.
Also, in early September 2017, the Swiss Foundation for Consumer Protection announced that it filed a representative action against Volkswagen and its Swiss importer, AMAG. The action seeks a declaration that Volkswagen and AMAG breached Swiss law by selling cars affected by the emissions-rigging scandal. In a second step, the Foundation intends to bring damage claims against Volkswagen and AMAG. It currently seeks the assignment of individual damage claims from buyers of affected cars. The Foundation is at present in negotiation with professional litigation funders for the funding of the damage claims.
This approach is novel. The combination of a representative action by a body set up for the protection of the collective interests of a particular group for a declaratory judgment combined with the pursuit by the same body of damage claims assigned to it by the concerned individuals has to our knowledge never been used in practice. Should this case be successful it could potentially serve as model for similar claims in other industries. Future cases might be helped if the government’s project mentioned above should become law.
Colette Wilkins: We have seen an uptick in litigation by trust beneficiaries, and in part this may be driven by the generational shift which has taken place in many multi-generation trusts, resulting in former minor beneficiaries taking an active interest in the trusts.
The economic pressures felt by offshore drilling, mining and oil and gas sectors has led to an increase in litigation related to restructuring, and in particular schemes of arrangement.
Martin Bernet: We have not observed a general trend towards a general increase in arbitration-related litigation work. What we have noted, though, is that in high-value international arbitration cases – and particularly if a state is involved – the losing party almost inevitably challenges the award before the Swiss Federal Supreme Court, even if the chances of success are – statistically speaking – minimal. Also the proceedings before the Supreme Court seem to become more and more hard-fought; in many cases there is a second round of briefs, which was not the case until recently.
Colette Wilkins: Despite the modern arbitration framework introduced to the Cayman Islands by the Arbitration Law 2012, we have yet to see any significant increase in the use of the Cayman Islands as the seat of arbitration. We expect this to change as the number of Cayman Islands law-governed contracts containing an arbitration clause increases. We have seen a significant increase in the number of instructions relating to the recognition and enforcement of arbitral awards. In most cases this is relatively straightforward and fairly routine in the Cayman Islands, and where appropriate one can seek interim injunctive relief to protect the award holder. These facts seem to be becoming better known globally, and may explain the increase in arbitration award enforcement work.
As to “spin-off proceedings”, we have seen some but they are not common in the Cayman Islands. One of the fundamental principles of arbitration is that judicial intervention should be limited, a principle which the Grand Court endorsed in the first case considered under the Arbitration Law: Appalachian Reinsurance (Bermuda) Ltd v Greenlight Reinsurance Ltd (5 February 2014).
Martin Bernet: We anticipate that litigation funding will continue to gain importance in Switzerland.
Colette Wilkins: Since 2009 the Grand Court and many Cayman Islands litigators have been exceptionally busy dealing with a number of claims following the global financial crisis, including Primeo v HSBC & others (a $2 billion claim) and AHAB v Saad Investments Cayman Limited & others (around $15 billion) which have been tried this year. The efficient handling of cases of such size and complexity, using the latest trial technology, has demonstrated that our jurisdiction is second to none when it comes to high-stakes litigation, and that the Court, practitioners and other service providers can be relied upon to give first-rate service. That being so, we expect Cayman will continue to be chosen as a jurisdiction, where available, and that practitioners in this field will continue to be busy.
Martin Bernet: The competition for good litigation work is fierce.
Colette Wilkins: As with all healthy markets, the legal market in the Cayman Islands continues to be competitive. The increasing number of practitioners recognised in the global legal directories is evidence that the jurisdiction continues to be serviced by many skilled and experienced legal professionals.