Third-party funding: class actions in Switzerland

In this article – our fifth in this blog series on third-party funding in Switzerland – we look at class action lawsuits, a broad collective redress mechanism that could soon find its way into Switzerland’s Civil Procedure Code (CPC).

For some background on third-party funding in Switzerland, check out our first four articles in this series, where we present an overview of third-party litigation funding  and discuss how it could be used in arbitration cases, divorce proceedings and inheritance disputes.

Class actions

The CPC does not provide for general class actions, although several narrow forms of collective redress are available:

1. Simple joinder of parties: people with the same complaint can join their cases and get a single ruling. The value of their combined claims is higher than it would be for an individual complaint, and the claimants have greater negotiating power. The catch is that each person must file suit separately.

2. Test case: the claimants and defendant agree that the outcome of certain aspects of the case brought by one claimant will apply to all related claims.

3. Assignment of claims: numerous claimants assign monetary claims on the same debtor to a single entity, such as a consumer organization, which then files a broad claim in its own name.

4. Association claim: this mechanism allows associations to safeguard the economic interests of their members. However, it is only applicable in cases where the personality rights of group members are violated, and claims for damages are not permitted.

Lastly, Swiss law provides investors with a form of legal redress that is similar to class actions, but in only two specific areas – mergers and collective investment schemes. 

Potential for class-action suits in Switzerland

There is growing momentum for authorizing class actions in Switzerland. In 2013, the Federal Council issued a report in which it recognized shortcomings in the Swiss judicial system’s ability to deliver justice in mass tort and consumer cases. It indicated that the existing method for allocating litigation costs was a particular barrier – and noted the relevance of third-party funding in collective redress.

In December 2021 the Federal Council proposed various changes to the CPC. It sought to strengthen the association claim mechanism by broadening its scope to include all kinds of violations (not just violations of personality rights) and by recognizing monetary compensation as an additional form of relief. The government also proposed a court-approved collective settlement mechanism for such cases. 

The proposed changes did not make it into the latest update of the CPC, which took effect on 1 January 2025. The revised Code does, however, include two changes of particular interest to third-party funding: the government is now required to inform plaintiffs of the existence of such funding, and courts are required to reduce their advance costs – the amount that plaintiffs have to pay the court before litigation begins – by half.

It's also worth noting that both houses of Switzerland’s parliament have been considering introducing class actions into Swiss law, but neither has moved forward. In March 2025, the National Council – acting on the recommendation of the Legal Affairs Committee – decided not to proceed with a bill on collective redress, while the Council of States has yet to take a position. 

The way forward

Class actions are an effective way for a group of potential claimants to hold powerful defendants to account – and third-party funding is widely recognized as a useful tool in what can be an expensive process. In view of current efforts to introduce class actions in Switzerland, please drop us a line at Swiss Legal Finance if you’d like to know more: info@swisslegalfinance.ch or 022 512 37 37. And be sure to check out our website: www.swisslegalfinance.ch.