Benjamin Schumacher has published an article in response to the Swiss Federal Council’s reform proposal for a partial amendment of the Swiss Civil Procedure Code (CPC).

The overriding goal of the Federal Council’s reform proposal, issued on 2 March 2018, is to enhance the access to justice. Cost of litigation, which is considered a major obstacle for the enforcement of substantive rights, is among the issues to be targeted by the reform.

The proposed set of measures includes a new duty for courts to make parties aware of commercial third party litigation funding (i.e. external funding provided by specialized companies – litigation funders – which pre-finance all costs of a dispute on time; if the case is won the litigation funder shall receive a pre-agreed share of the proceeds; if the case is lost, the funder bears all cost of the dispute). The Federal Council is convinced that this alternative form of financing can help overcome existing cost barriers in particular cases. For that reason, a judicial duty to inform is thought to raise the general awareness among litigants and legal representatives of alternative funding possibilities.

In his article, Benjamin Schumacher, who wrote his doctoral thesis about third party litigation funding and has in-depth experience in that field, critically analyses this proposed extension of the courts’ duty to inform.