New jurisdiction for European claimants at their domicile due to the revision of the Swiss Insurance Contract Act?

16. Dezember 2021

As of 1 January 2022, the amendments to the Insurance Contract Act (ICA) will come into force. Among other things, injured parties now have a direct right of action against the insurance company. Has the legislator (unintentionally) created a future place of jurisdiction for claimants in euro-international relations at their domicile with this new regulation?

On 13 December 2007, the European Court of Justice ruled in its famous Odenbreit case that an injured person may bring an action against the tortfeasor’s liability insurance company at his or her place of residence if a direct right of action against the insurance company is admissible. This case law was adopted in Switzerland (BGE 138 III 386). Whether a direct of action is admissible is determined by the applicable law, whereby according to the European Court of Justice it is irrelevant whether tort law or insurance contract law provides for such direct right of action (see also Art. 18 of REGULATION (EC) No. 864/2007 of 11 July 2007 on the law applicable to non-contractual obligations [Rome II]).

In practice, an action by a European injured party at his or her place of residence against a Swiss insurance company has so far only been of importance in road traffic law, as Swiss law provides for a direct right of action there (Art. 65 para. 1 of the Road Traffic Act). The Odenbreit ruling also concerned this constellation. However, with the introduction of a general direct right of action, the jurisdiction at the residence of the claimant will gain considerably in importance. Swiss law and the direct right of action newly provided for therein is in principle always applicable if an accident occurs in Switzerland or, if liability is derived from a contractual relationship, if the person providing the main contractual service is domiciled in Switzerland (e.g. a certain service provider). This is provided for by the provisions of Rome II (see above) or of REGULATION (EC) No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) which are to be applied by the foreign judge.

It can therefore be assumed that in future, for example, a skier resident in Europe will be able to file a claim at his or her place of residence against the liability insurance of another (Swiss or foreign) skier with whom he has collided or that of the Swiss mountain railways if he or her accuses them of inadequate piste safety. The same will apply to the European patient or client who wants to take legal action against a doctor or lawyer. This will undoubtedly strengthen the (negotiating) position of foreign injured parties as a court abroad will be more inclined to look favourably on the claim of its citizen against a foreign insurance company. It is therefore eagerly awaited what influence the Swiss revision of the insurance contract law will have on eurointernational claims settlement. In any event, it is to be expected that the cooperation between the Swiss and foreign lawyer of the injured person will gain in importance.