The Supreme Court recently dealt with the scope of a full and final settlement clause in an insurance matter. The decision confirms the rules for interpreting settlement agreements in insurance matters and emphasises the importance of carefully drafting the wording of such agreements if they are intended to be full and final settlement agreements of certain insurance claims.
Shareholders of closely held companies often mutually agree on additional contractual rights and duties. However, the company itself cannot be a contract party to a separate shareholders' agreement. Apart from that legal restriction, such shareholders' agreements usually benefit from the contractual freedom of the parties. A recent Federal Court decision confirmed that such agreements may be recharacterised as abusive or contrary to the principle of good faith.
The European Court of Human Rights recently concluded that Switzerland violated Article 8 of the European Human Rights Convention due to surveillance of an insured party. The case brings uncertainty regarding the extent of observation under Swiss law. Article 8 guarantees the fundamental right to respect private and family life. In its statement, the court held that Swiss federal law offers no precise legal basis for photo and video surveillance of insured parties.
In the context of loss of earnings insurance, the Federal Supreme Court recently had to decide whether sickness or the inability to work due to the respective sickness constitutes an insured event and therefore triggers the insurer's duty to provide insurance benefits. The court abandoned its existing case law in which it had appraised the sickness as a primary event for the determination of when the insured event had occurred.
A recent Zug Cantonal Court decision sheds light on the way that Swiss company articles of association must be interpreted under Swiss company law in cases in which they are not only applicable internally among a few shareholders, but also have an effect on third parties. The decision confirms that the observation of merely the letter and not the spirit of company articles by a company board or majority company shareholders in a general meeting can even amount to an abuse of law.
The Federal Supreme Court recently ruled that the regulation in the Freedom of Movement Agreement concerning the liability of new daily benefits insurance for ongoing claims that started before the conclusion of an insurance contract under a previous insurance contract does not breach the prohibition of retroactive coverage according to Article 9 of the Insurance Contract Act.
In 2013 the Federal Parliament rejected a bill for a total revision of the Federal Act on Insurance Contracts, with an order to the Federal Council to elaborate a partial revision on selected subjects. In its second attempt to adapt the law to existing standards and policyholders' need for reasonable and feasible insurance protection, the Federal Council drafted an amended bill and recently initiated consultation proceedings on the proposals.
A recent Swiss Federal Court decision clarified the circumstances under which the personal liability of board members or managers of a Swiss company for their business decisions and omissions can be reduced by applying the so-called 'business judgement' rule or, if the related prerequisites are not met in a particular case, based on other grounds.
The Federal Court has ruled that no or insufficient disclosure of indicating circumstances by an insured party falls under Article 6 of the Insurance Contract Act if this information was relevant in determining the probability of the risk which later was realised and caused damage. Further, the court held that the insurer is freed from its contractual payment obligation if it terminated the insurance contract within the required time.
The Federal Supreme Court recently clarified how to deal with defects in company organisation caused by deadlock between two equal shareholders. For the first time the court has confirmed that courts are authorised to order a share auction in such cases. However, it is strongly recommended that such a harsh outcome be avoided by installing suitable measures to solve conflicts from the outset.
The Federal Supreme Court recently rendered a rare judgment on the temporal scope of liability policies and the claims-made principle. Although it may lead to a broader scope of covered claims, the decision should be seen in a positive light, as it brings additional clarity with regard to the interpretation of claims-made clauses in insurance policies.
The need for further revision to the Insurance Supervisory Law has been revealed through the introduction of risk-based solvency measuring methods, including the Swiss Solvency Test. The establishment of the test as the sole instrument for testing solvency and a focus on Solvency II will result in harmonisation, while revisions to the Insurance Supervisory Ordinance should see increased reporting efforts.
On July 1 2015 a new regime for bearer shares in Swiss companies was enacted, introducing new legal obligations for company boards and shareholders and severe penalties for cases of non-compliance. To achieve transparency the Code of Obligations established a general duty for all owners of bearer shares in non-listed Swiss companies to disclose their ownership, identity and address to the company within one month of their acquisition.
Before the conclusion of a new franchise agreement, franchisors usually have more knowledge than franchisees about the particular franchise. A franchisee thus risks entering into a permanent binding contract without an accurate prior assessment of the consequences. To counterbalance this information asymmetry, certain duties of care are imposed, of which the franchisor's pre-contractual information obligations are paramount.
As highly qualified specialists in risk assessment, reinsurers deal with nanotechnology as an emerging risk. The small amount of available data regarding nanoparticles complicates insurers' risk assessments and has led to calls for future-oriented coping strategies that identify, record and analyse risks and implement appropriate measures. Not all risks are insurable: a risk must be measurable and financially definable to qualify for insurance.
The Federal Supreme Court recently clarified exactly when board members and their close associates and affiliates must return benefits received from a Swiss company because they are manifestly disproportionate to the value of their related performance and the company's overall economic situation.
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.
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.
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.
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.