Company Representation in Swiss Conciliation Hearings: Who Holds the Reins?

As we look towards the amendments to the Swiss Civil Procedure Code next year, it seems to be a good occasion to revisit and recapitulate the topic of representation of legal entities. Conciliation hearings serve as a vital mechanism in Swiss civil proceedings, designed to encourage dispute resolution outside of the courtroom. This process can save time, reduce costs, and often lead to more amicable outcomes for all parties involved. 

Personal Appearance

Parties are generally required to appear in person during conciliation hearings unless an exception applies. This requirement also holds true for legal entities where the choice of representative is governed by strict legal criteria. The representative(s) can either be someone with the necessary statutory authority, e.g., a board member with sole signing authority or two board members with joint signing authority. A board member with joint signing authority may also appear alone and present a power of attorney for the respective proceedings from another (non-present) board member with joint signing authority. Alternatively, the company may grant permission to a third party to represent the company's interests in the conciliation hearing based on a commercial power of attorney (kaufmännische Vollmacht). The representative must be authorised to litigate and conclude a settlement agreement. An ordinary power of attorney pursuant to art. 32 et seqq. CO (bürgerliche Vollmacht) is not sufficient.

Representatives

If an exception from the personal appearance principle applies, such as a domicile outside the canton or abroad, a party may be represented in civil proceedings. Professional representation in civil proceedings is generally limited to attorneys at law who are permitted to represent parties before Swiss courts and, in some instances, specific professionals. However, representation by other persons, such as laypersons, is permissible provided that they act on a non-professional basis. For representatives (Vertreter), an ordinary power of attorney pursuant to Art. 32 et seqq. CO (bürgerliche Vollmacht) is sufficient and must be presented to the conciliation authority. In the case of companies, the representative will also provide an excerpt from the Swiss or foreign commercial register to demonstrate that the power of attorney was duly signed.

Accompanying Person

Representatives need to be distinguished from accompanying persons (Begleitperson). While a representative appears without the party, accompanying persons attend the conciliation hearing together with the party. A party may be accompanied by a legal counsel (Rechtsbeistand) or another confidant. Accompanying persons who qualify as legal counsel must fulfil the requirements of authorised professional representatives, i.e., only attorneys at law who are permitted to represent parties before Swiss courts and, in some instances, specific professionals may act as legal counsel. An associate lawyer of a legal protection insurance, however, does not meet these requirements and may thus not appear as an accompanying person in conciliation hearings.

Consequences of a Default

If the plaintiff does not appear in person or is not duly represented at the conciliation hearing, the conciliation request is considered withdrawn and will be dismissed. As only the conciliation request, not the claim, is considered withdrawn, the plaintiff may initiate new proceedings by submitting another conciliation request. In the event of the defendant’s default, the conciliation authority proceeds as if no agreement had been reached and will issue the authorisation to sue (Klagebewilligung) to the plaintiff. If both parties default, the proceedings will be dismissed.

The validity of the authorisation to sue is a procedural requirement for the first instance proceedings. Where the conciliation authority issues an authorization to sue in spite of a lack of personal appearance or undue representation of the plaintiff, the authorisation to sue is invalid. The defendant may contest the validity of the authorisation to sue in the first instance proceedings but the court is, in any event, obliged to examine this requirement ex officio. In case the first instance court concludes that the authorization to sue is invalid, the claim will not be admitted.

Clarification in the Revised Civil Procedure Code

Looking ahead to the changes set to take effect on 1 January 2025, the revised Swiss Civil Procedure Code clarifies that a legal entity must be represented by an individual who is not only authorised to litigate and settle but also possesses a commercial power of attorney (kaufmännische Vollmacht) and has intimate knowledge of the dispute at hand.

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