Latest updates

Supreme Court decides on ambiguous clauses in general insurance terms
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 24 February 2015

The Federal Supreme Court recently issued a decision on the rule of ambiguity in the context of the interpretation of general insurance terms. The court found that a provision which excludes accidents as a result of the deliberate causation of a crime or offence is neither considered unusual nor ambiguous, and can therefore validly be relied upon by the insurer.

A guide to franchise standard form agreements
Badertscher Attorneys at Law
  • Franchising
  • Switzerland
  • 17 February 2015

Standard form agreements are used regularly in franchising. In principle, contractual freedom applies to such standard form agreements. However, the franchisor must keep in mind certain aspects before submitting a standard form agreement to the franchisee for signing.

Group cash-pooling limitations – new Federal Supreme Court guidance
Badertscher Attorneys at Law
  • Company & Commercial
  • Switzerland
  • 26 January 2015

The Federal Supreme Court recently decided an appeal against a Zurich Commercial Court decision. The Federal Court clarified company law issues in relation to intra-group loans and cash-pooling systems.The decision limits the amount of free reserves which can be paid out as dividends for as long as loan advancements to other group companies exist which are not at arm's length within the Swiss company.

General insurance terms integral to insurance agreement
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 28 October 2014

The Federal Supreme Court recently held that general terms and conditions can be validly included in an insurance contract even if no reference is made to a particular version or edition, provided that the reference to the general terms and conditions is made expressly in the application form. In such a case, the general terms and conditions in force at the time of signing of the application will apply.

New limitations on cash pooling?
Badertscher Attorneys at Law
  • Company & Commercial
  • Switzerland
  • 22 September 2014

A recent Zurich Commercial Court decision risks jeopardising the use of cash pooling by setting overly onerous standards for the characterisation of an intra-group payment in the cash pool as a legally permitted intra-group loan. Many existing cash pools involving Swiss group companies would violate Swiss law, and the legality of a large amount of dividends already paid by such group companies to their holding companies would be questionable.

Effect of cartel law on franchising
Badertscher Attorneys at Law
  • Franchising
  • Switzerland
  • 22 July 2014

For the drafting and implementation of franchise agreements, it is paramount for parties to respect the boundaries of the Act on Cartels and Other Competition Restraints. In all cases, franchisees must ensure that their prices are set independently and franchisors must not restrict passive sales by one franchisee in any market assigned to another franchisee.

Insurance fraud through omission – qualified duty to act required
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 15 July 2014

The Federal Supreme Court recently quashed a criminal verdict and held that insurance fraud by omission requires a qualified duty of the perpetrator to act. The ruling makes it clear that insurers should enquire regularly into changes in insureds' circumstances. By continuing payment of insurance benefits without enquiry, an insurer cannot hold an insured criminally liable for fraud.

New rules for asset managers of Swiss professional pension insurances
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 10 June 2014

Revisions to the Professional Pension Insurance Act specify requirements for the management of Swiss professional pension insurance assets. The Upper Supervisory Authority for Professional Pension Insurances can now admit both Swiss and foreign financial service providers to manage Swiss professional pension insurance assets. The new law provides for extensive examination of integrity before admission.

Prescription period for paid sick day allowance clarified
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 01 April 2014

A recent Federal Supreme Court case clarified that the general limitation regime applies with regard to the underlying right for loss-of-income insurance, unless a special rule is stipulated. According to the court, the scope of the Insurance Contract Act is limited to individual instalments paid under the insurance contract. The court also defined the point in time at which the limitation period starts running.

Distinction between subordination franchise and cooperative franchise
Badertscher Attorneys at Law
  • Franchising
  • Switzerland
  • 04 March 2014

Courts must determine whether each franchise relationship is based on all its economic characteristics, or whether it is a partnership franchise or a subordination franchise. A recent court decision provides detailed guidance on how franchise sys­tems may be structured from a business perspective, with a view to avoiding any uncertainty to legal characterisation alternatives.

'Fat cat' initiative revisited – government implements ordinance
Badertscher Attorneys at Law
  • Company & Commercial
  • Switzerland
  • 27 January 2014

Following Switzerland's vote in favour of an initiative against excessive salaries for board members, the federal government has recently adopted the respective implementing ordinance. Swiss listed companies must start early to implement all changes to their articles, regulations, employment contracts and annual general meeting voting procedures, as these decisions fundamentally affect the rights of their shareholders.

FINMA circular on market conduct rules extended to apply to insurers
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 19 November 2013

A revised Financial Market Supervisory Authority circular containing rules on market conduct now applies to insurance companies. Insurers must take the organisational measures necessary to fulfil the duties laid down by the circular. While the insurance industry is sceptical, it remains to be seen what the practical impact on insurers will be.

Standard form contract available online constitutes valid prorogation of jurisdiction
Badertscher Attorneys at Law
  • Company & Commercial
  • Switzerland
  • 21 October 2013

The Federal Supreme Court recently clarified that the Lugano Convention offers the possibility to choose Switzerland as a neutral jurisdiction for companies domiciled in any of its member states, even if the companies are not domiciled in Switzerland. The court also clarified that standard form contracts available only by fax are insufficient, but contracts available only online are sufficient to fulfil the conditions of the convention

Strict rules for disclosure of risk factors confirmed
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 20 August 2013

The Federal Supreme Court recently dismissed the appeal of an insured individual who challenged the rescission of a private insurance contract for misrepresentation. The court confirmed the strict rules for the disclosure of conclusive risk factors when concluding private insurance agreements and outlined the reasons which entitle an insurer to terminate a policy for misrepresentation.

Personal liability of board members for abusive lawsuits
Badertscher Attorneys at Law
  • Company & Commercial
  • Switzerland
  • 10 June 2013

In the wake of a recent Supreme Court case, diligent board members of Swiss companies would be well advised to minimise their personal liability before launching lawsuits on behalf of their company by seeking legal advice on the related personal liability risk. The consultation should not be limited to a mere assessment of legal issues, but should also include whether a claim on behalf of the company has merit.

Prescription period clarified for benefits under loss-of-income insurance
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 14 May 2013

The Federal Supreme Court recently ruled on the applicable prescription period for loss-of-income insurance. The decision clarifies the prescription period regarding the underlying right for this type of insurance with periodic payments. The draft of the revised Insurance Contracts Act suggests that the prescription period should be amended from two years to five years.

Voters say yes to 'fat cat' initiative
Badertscher Attorneys at Law
  • Company & Commercial
  • Switzerland
  • 08 April 2013

Switzerland recently voted in favour of an initiative against excessive salaries for board members and executives. New transparency rules and a rigid regime on a binding say on the pay of board members and executives must be enacted. Once enacted, shareholders must vote annually on the aggregate compensation for the board, advisory board and executive management.

State buildings insurance providers admitted to the private insurance market
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 05 February 2013

The Federal Court recently rendered two decisions in favour of state insurers which hold a monopoly. In its leading case, the court ruled that when insuring buildings under state monopoly, state insurer Glarnersach of Glarus Canton may also compete with private insurance companies. In its second decision, the court dismissed a licence challenge by the Swiss Insurance Association and two private insurers.

Admissibility of law firms under legal form of corporate bodies
Badertscher Attorneys at Law
  • Company & Commercial
  • Switzerland
  • 26 November 2012

The Federal Court recently considered whether non-incorporated law firms are permitted to adopt the legal form of a company limited by shares. The court held that it is the organisational structure of a law firm which is decisive, not its legal form. A law firm constituted as a company limited by shares is admissible, provided that it is fully controlled by its attorneys, thereby granting it institutional independence.

FINMA opens consultation regarding liquidity requirements of insurance companies
Badertscher Attorneys at Law
  • Insurance
  • Switzerland
  • 25 September 2012

The Swiss Financial Market Supervisory Authority (FINMA) recently published for consultation a draft of its new circular that aims to illustrate in detail the provisions of supervisory law regarding risk management by defining principles for reporting on liquidity. FINMA requires that insurers file a liquidity report covering the points raised and the criteria outlined in the circular at least once a year.