Understanding the cost structure is essential for potential claimants, especially foreign clients, considering litigation in Switzerland. This article offers a comprehensive overview of legal expenses in Swiss civil court proceedings, with a focus on legal fees and court costs. Additionally, it provides a comparative analysis of the Swiss and German legal systems.
Swiss legal fees and court costs vary significantly from canton to canton, with factors such as the value of the dispute and the complexity of the case influencing the costs. While Switzerland follows a "loser pays" principle for court costs and attorney's fees, the allocation is not always straightforward, with courts having discretion to adjust costs based on specific circumstances. In addition, even if a party is completely successful in a Swiss court proceeding, the claimant must be aware that the court will not necessarily reimburse the full amount of the legal fees incurred, but only the amount calculated according to the relevant cantonal tariff. Experience shows that even the successful party often must pay a significant part of the costs.
By comparison, the German system offers a more uniform and transparent approach to court fees and legal costs across the federal states, with certain similarities, such as the requirement for advance payment of court fees. This makes it particularly important for German clients, who may expect a similar system in Switzerland, to obtain accurate information about costs in Switzerland. This is also because court costs and attorney's fees are significantly higher in Switzerland than in Germany. Regardless of the jurisdiction, parties to litigation should carefully assess the potential costs, including both legal fees and court costs, in order to make informed decisions about whether to proceed.
LEGAL COSTS IN SWISS CIVIL COURT PROCEEDINGS
I. OVERVIEW AND KEY QUESTIONS
Litigation is often complex, time-consuming and financially demanding. Understanding potential court costs and legal fees before initiating proceedings is essential to avoid unexpected expenses and to assess whether a claim is worth pursuing. Cost considerations can also influence the choice of forum and play a strategic role in the negotiation of jurisdiction clauses in commercial contracts.
The purpose of this article is to provide an overview of the cost structure in Swiss court proceedings, in particular for German clients considering pursuing their claims in Switzerland, distinguishing between legal fees and court costs, and focusing on the enforcement of civil claims before the cantonal courts (with one or two instances, depending on the case) and the Federal Supreme Court, excluding enforcement proceedings such as debt collection.
II. LEGAL FEES
A. Switzerland
In Switzerland, lawyers' fees in civil court proceedings are subject to free negotiation. Unlike other countries such as Germany (see below for more details), there are no legally binding minimum or maximum rates. The amount of the fee depends inter alia on the topic involved, the lawyer's level of experience and the client's personal and financial circumstances. Hourly rates can also vary significantly across different cantons and between different cities, with economically stronger cantons and bigger cities usually commanding substantially higher fees. In order to calculate costs in advance, it is customary and advisable to ask the lawyer for an estimate of time.
Unlike other countries, such as, with certain restrictions, England and Wales, the Unites States and Austria, Swiss law prohibits lawyers from receiving a share of the proceeds of litigation (i.e. contingency fee) as compensation for their services. Similarly, arrangements in which a lawyer waives a fee in the event of an unfavourable outcome are not permitted.
In civil proceedings the costs of professional representation are charged to the unsuccessful party as part of the procedural costs, which consists of court costs and party costs. If no party is entirely successful, the costs are allocated in accordance with the outcome of the case (i.e. proportional to the amount of gain or loss). As a general rule, the court decides on the procedural costs in the final decision. While court costs are charged by the state as a fee for the use of the judicial infrastructure, party costs compensate the successful party for the costs incurred as a result of the proceedings. These party costs include necessary expenses and the costs of professional legal representation, which are calculated according to cantonal tariffs. Pre-litigation expenses (i.e. consultation costs incurred before the initiation of legal proceedings) may also be reimbursed if they are directly related to trial preparation and considered necessary. Notably, a claimant having no residence or registered office in Switzerland may be required to provide security for the party costs at the request of the defendant.
It is crucial to differentiate the party costs as a part of procedural costs and the actual legal fees incurred and charged by the lawyer to his client. Even if a party is completely successful in a Swiss court proceeding, the court will not necessarily reimburse the successful party the full costs incurred, but only the amount calculated from the corresponding cantonal tariff. In fact, experience shows that even the successful party often must bear a significant part of the costs and that the amount awarded by the court as party costs only covers a part of the actual legal fees incurred.
The amount of party costs awarded by the court varies considerably from canton to canton, as does the approaches used to calculate these costs. In most cantons, however, party costs are based on the value of the dispute. In non-monetary matters, party costs are often determined on the basis of time spent, as a lump sum within certain ranges, or at the discretion of the court. In most cantons, the amount of the party costs can vary depending on the complexity of the case, with higher costs for more complicated matters and lower costs for straightforward cases.
In some cantons, there are publicly available tools that allow for an accurate calculation of the procedural costs (i.e. court costs and party costs), so that the parties to civil proceedings can better predict the amount they can expect to pay or receive as party costs. In the Canton of Zurich, procedural costs can be calculated by entering the value of the dispute in the official fee calculator (Gebührenrechner), which can be downloaded from the following website: https://www.gerichte-zh.ch/themen/arbeit/hilfen/prozesskosten.html. In other cantons, however, there are only broad ranges within which the court can determine the court costs and party costs, usually based on the complexity and time intensity of the case.
The following table illustrates party costs for an ordinary proceeding (excluding family, labour or social law cases) with a dispute value of CHF 500,000 in selected cantons (excluding VAT). The table considers only the court proceedings, excluding any prior conciliation proceedings. In addition, no adjustments (e.g. surcharges for particularly complex cases or reductions for exceptionally straightforward cases) have been applied to the base rate:
Depending on cantonal law, the fee agreement between the party and its lawyer may also be considered when determining party costs. Such agreements, however, are generally not binding on the court when assessing party costs. Hence, the actual legal fees incurred may be substantially higher than the amount allocated from the court as party cost.
B. Differences to German law
In Germany, the lawyer's fee is determined either by the Law on the Remuneration of Lawyers (Rechtsanwaltsvergütungsgesetz or RVG) or by a fee agreement between the lawyer and the client. The RVG determines the lawyer's fee according to a structured and diversified system at the federal level based on the value in dispute. It applies if the parties have not concluded a fee agreement.
In addition, the RVG determines the legal fees to be paid to the successful party. In legal disputes, as in Switzerland, the unsuccessful party must normally pay the costs of the dispute, including reimbursement of the successful party's necessary legal expenses. This reimbursement, however, is limited to the statutory amount of the RVG, even if the prevailing party has agreed to a higher fee with its lawyer. In cases where both parties win in part and lose in part, the costs may be offset or shared proportionately.
For proceedings with a value in dispute of EUR 500,000 that result in a judgment, the regular lawyer's fees in the first instance amount to EUR 8,847.50 (procedural fee of EUR 4,600.70 and hearing fee of EUR 4,246.80) and in the second instance, if this also results in a judgment, to EUR 9,909.20 (procedural fee of EUR 5,662.40 and hearing fee of EUR 4,246.80). This shows that the RVG fees in Germany are significantly lower than the average cantonal fees in Switzerland.
The main differences in legal fees between Switzerland and Germany are as follows:
- In German court proceedings, RVG rates are minimum rates and, in the absence of an agreement between the client and the lawyer, they apply to the relationship between the client and his lawyer. In Switzerland, the cantonal tariffs have the sole function of calculating the costs of the parties as part of the legal costs awarded by the court.
- In Germany, especially in standard and simple cases, the lawyer and the client do not agree on special hourly rates but apply the RVG rates. Thus, in many cases, the actual legal costs incurred are identical to the amount awarded by the court as party costs, so that a fully successful party does not have to bear more legal costs but is fully compensated by the amount awarded by the court as party costs. In Switzerland, however, the costs that the court orders the unsuccessful party to pay as party costs are often lower than the actual legal fees incurred by the successful party.
- In Germany, the RVG tariffs apply at federal level throughout Germany, whereas in Switzerland there are different cantonal tariffs. This and the RVG fee structure make legal costs particularly transparent, whereas in Switzerland there is no such transparency.
- The RVG tariffs in Germany are considerably lower than the cantonal tariffs in Switzerland.
III. COURT COSTS
A. Switzerland
As a general rule, claimants initiating legal proceedings are required to pay court fees in advance, otherwise the court will not proceed with the case. Since 1 January 2025, these advance payments have been limited to a maximum of half of the expected court costs. Court costs consist mainly of the conciliation fee, the judgment fee and the costs of taking evidence. Generally, the court decides on procedural costs and also on court costs in the final decision ex officio.
The amount of estimated court costs depends on the value of the dispute and, like the party costs, is determined according to cantonal tariffs, which can vary considerably from canton to canton. As with legal fees, some cantons have specific calculation methods or tools that allow for an accurate estimation of court costs. In contrast, other cantons only provide broader ranges within which they determine court costs based on the complexity of the case and the time required.
The following table illustrates court costs for an ordinary proceeding (excluding family, labour or social law cases) with a dispute value of CHF 500,000 in selected cantons. The table below considers only the court proceedings, excluding any prior conciliation proceedings. In addition, no adjustments (e.g. surcharges for particularly complex cases or reductions for exceptionally straightforward cases) have been applied to the base rate:
The cantons allow adjustments to these fees. They may be reduced for simple cases or increased for particularly complex cases. In addition, the cantons of Aargau, Bern, St. Gallen and Zurich handle certain commercial disputes through the commercial court as the sole cantonal instance. The fees of these cases follow the same structure as first-instance procedures, but there is no second-instance court; appeals go directly to the Swiss Federal Court, saving the costs of a second instance proceeding. Furthermore, simplified and summary proceedings are generally associated with lower fees. In certain decision-making procedures, such as employment disputes, there are no court costs at all up to a dispute value of CHF 30,000. Special cost allocations also apply in family law matters, rent and lease disputes and social security cases.
In addition to the ordinary court costs, parties requesting certain evidentiary measures (e.g. an expert opinion) must advance the relevant costs. If both parties request the same evidentiary measure, the costs will be shared equally. If one party fails to pay its share, the other party may pay the full amount to ensure that the evidence is obtained. If neither party pays, the evidence will not be considered unless the court is obliged to establish the facts ex officio.
The court determines the allocation of court costs, usually on the basis of the "loser pays" principle. This means that the unsuccessful party pays all the court costs and both its own legal fees and those of the opposing party. If neither party wins outright, the costs are shared proportionally based on the outcome of the case. The court may, at its discretion, adjust the allocation of costs if the application of the standard rule would be unfair. Given its indeterminate nature, this principle should be applied with restraint. Examples include a significant economic disparity between the parties or the dismissal of a claim following a set-off defence where numerous unfounded counterclaims first had to be assessed. In addition, parties responsible for causing unnecessary costs may be ordered to pay those costs even if they ultimately win the case. In cases that are settled, the costs are usually shared equally, with each party paying 50% of the costs. This ensures a fair distribution of the financial burden in cases that are settled.
Since 1 January 2025, successful claimants are entitled to a reimbursement of the advance payment of court fees. This legal reform relieves claimants of the burden of recovering court costs from the unsuccessful defendant, as previously claimants had to pay court fees in advance with no guarantee of reimbursement and were responsible for recovering these costs from the opposing party if they won the case.
B. Differences to German law
In Germany, the amount of the court fees is determined by the German Law on Court Costs (Gerichtskostengesetz or GKG). Court costs consist of court fees and expenses, the first being calculated based on the value of the dispute. In contrast to the legal situation in Switzerland, where each canton has its own specific rules, the court fees in Germany are regulated uniformly in all federal states. This ensures that the same fee structure applies throughout the country.
The GKG contains detailed rules on how to determine the value of the dispute and sets out schedule of fees, which depend on the type of proceedings or instance. For example, if the value in dispute is EUR 500,000, the basic court fee is EUR 3,901. This basic fee is multiplied by an applicable fee rate, depending on factors such as the type of court and the outcome of the case. In a first instance case, the multiplier is 3.0, giving a total of EUR 11,703. For a second-instance case, the fee rate is 4.0, giving a total of EUR 15,604. If we compare these court fees shown in the table above, the median court fees in Switzerland are significantly higher than in Germany.
In civil litigation, the unsuccessful party is generally responsible for the costs of the legal proceedings. If a party has partial success only, the costs are – similar to the legal situation in Switzerland – shared proportionally between the parties. In certain exceptional cases, costs related to unsuccessful claims or defences can be imposed on the party that raised them, even if they win the main case. In appeal proceedings, the party filing an unsuccessful appeal generally must bear the costs.
IV. CONCLUSIONS
In conclusion, understanding the cost structure is crucial for potential claimants, particularly foreign clients, considering litigation in Switzerland. Swiss legal fees and court costs vary significantly from canton to canton, with factors such as the value of the dispute and the complexity of the case influencing the costs. While Switzerland follows a "loser pays" principle for court costs and attorney's fees, the allocation is not always straightforward, with courts having discretion to adjust costs based on specific circumstances. In addition, even if a party is completely successful in a Swiss court proceeding, the claimant must be aware that the court will not necessarily reimburse the full amount of the legal fees incurred, but only the amount calculated according to the relevant cantonal tariff. Experience shows that even the successful party often must pay a significant part of the costs.
By comparison, the German system offers a more uniform and transparent approach to court fees and legal costs across the federal states, with certain similarities, such as the requirement for advance payment of court fees. This makes it particularly important for German clients, who may expect a similar system in Switzerland, to obtain accurate information about costs in Switzerland. This is also because court costs and attorney's fees are significantly higher in Switzerland than in Germany. Regardless of the jurisdiction, parties to litigation should carefully assess the potential costs, including both legal fees and court costs, in order to make informed decisions about whether to proceed.
