Bank clients face uphill battle before Swiss courts

Bank clients face uphill battle before Swiss courts

In a LinkedIn post dated 10 October 2018, I had explained, among other things, that it is difficult for bank clients to obtain compensation for their losses before Swiss courts because of the very strict requirements for proof of loss demanded by such courts. At the beginning of January 2019, the Commercial Court of the Canton of Zurich (Zurich Commercial Court) uploaded a new judgment dated 20 June 2018 (file number: HG150277-O), which, in my opinion, gives a good overview of some of the hurdles that clients of Swiss banks regularly face in Swiss courts.

It is far from my intention to criticize the above-mentioned judgment. On the contrary, I believe that this judgment is a good example of the careful drafting of judgments by the Zurich Commercial Court. Nor am I familiar with the facts of the dispute in question, which is why I can and should not judge the conclusions of the court.

However, as mentioned above, the judgment shows some of the typical difficulties that bank clients regularly face in Swiss courts, including the following:

The standard banking agreements regularly contain relatively short notice periods to complain about uninstructed or incorrect transactions. The courts in Switzerland tend to be rather strict in applying these notice periods.

Oral testimony in Swiss courts often does not carry much weight. This makes the file situation all the more important, and if clients were negligent in their business relationship with the bank in this respect, this normally poses a considerable problem in a lawsuit before a Swiss court.

The proof of financial loss before Swiss courts is regularly a considerable challenge. A particular challenge here is that the bank customer must also prove, with regard to an investment in breach of contract, which investment he or she would have made if the bank had acted in accordance with the contract. Let us take the following hypothetical and simplified example as an illustration: A client’s relationship manager invests CHF 100,000.00 in a put warrant without authorization, which leads to a total loss. The client cannot simply claim CHF 100,000.00 as damage, but must also show how he or she would have proceeded with regard to the CHF 100,000.00 if this amount had not been invested in the put warrant. If the customer claims, for example, that he or she would have left the amount of CHF 100,000.00 in a current account, he or she must assert this and make it plausible. If, to give another example, the client would assert that he or she would have invested the amount of CHF 100,000.00 in a certain ETF, then he or she would have to claim this as well and make it credible, and would have to prove the ETF’s relevant performance.

As already mentioned in my above-mentioned LinkedIn post dated 10 October 2018, from a dogmatic viewpoint, the Swiss courts’ damage calculation approach described above is stringent. However, from the perspective of a damaged investor one may ask oneself whether such proof of damage does not make unrealistically high demands. At least it would seem important that this aspect is examined and discussed in more detail by the Swiss legal scholars.

One last thought in the present context: The difficulties that bank clients regularly face in Swiss courts underscores how important it is that any claimant is fully informed about his or her case’s chances of success as well as of the costs associated with a litigation, prior to filing a lawsuit with a Swiss court. (Regarding the crucial importance of a careful analysis of a litigation’s chances of success and the costs involved, please see my article published by Jusletter on 25 September 2017, with the title: Zur Bedeutung und zum Inhalt von Prozesschancenanalysen)

PHH, Zurich, 31 January 2019 (

The information contained in this post is for general informational purposes only and is not intended to constitute legal advice. Readers of this post should not take any actions or decisions without seeking specific legal advice.




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