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REVISION OF THE SWISS INHERITANCE LAW 2023

Following parliamentary debate, a new law of succession will come into effect in 2023 in Switzerland. The new legal provisions will apply to all estates of persons who die on or after January 1, 2023.

Today, the system provides, among other things, that the legal reserve allocated to a descendant is ¾ of his or her inheritance right; that of the surviving parents is ½ each; and the legal reserve of the surviving spouse or registered partner is 1/2 (art. 471 CC).

The major changes planned for 2023 are in the legal allocation of the hereditary reserves. Indeed, the reserve share of the descendants is reduced to half of the legal share (½), thus ¼ of the estate; and the reserve share of the surviving parents will be eliminated.

However, the decedent's legal partner will still be awarded ½ of the reserve. In addition, there is still no right to the estate for the cohabitant.

This new distribution of legal shares gives the testator greater flexibility in the distribution of his or her estate. Now, half of the total estate can be distributed freely by the testator, instead of ⅜ of the estate previously.

Implications for usufruct:  

Spouses/registered partners maintain the possibility of providing for the granting of a usufruct on the entire share of the estate devolving to the joint children. However, they can extend this advantage granted to the partner; indeed, they can now attribute half of the estate in full ownership to the spouse/registered partner (i.e. the available portion of ½ of the estate, instead of the ¼ currently) and the other half in usufruct (½ instead of the ¾ currently).

However, in the event that the spouse / registered partner remarries or enters into a new registered partnership, he/she loses the usufruct on the children's inheritance reserve. The latter become full owners of their share of the estate, which is no longer subject to a usufruct.

Couple involved in divorce proceedings:

As soon as divorce proceedings or the dissolution of a registered partnership are initiated, the protection of the inheritance reserve will cease, even before the divorce or registered partnership is finally pronounced.

For this purpose, it is sufficient that:

- a divorce proceeding has been initiated by joint petition, or

- the spouses have lived separately for at least two years, and

- one of the spouses dies, and

- that this deprivation of inheritance is provided for in the deceased's will.

Finally, the surviving spouse will legally lose:

- his or her reserved portion of the estate

- his or her rights resulting from dispositions of property upon death

- the gifts provided for in the marriage contract.

Inter vivos gifts:

Whereas the current law provides that a gift made by the testator after the conclusion of a contract of succession may be voidable only if it contravenes the provisions of the contract of succession or if there is an intention to prejudice the instituted heirs, the new law of 2023 will allow the contracting party to the contract of succession to object to dispositions upon death or liberalities between living persons without the need to prove that they cause prejudice to the contracting party.

This brings us closer to a restrictive practice in the freedom of the testator to dispose of his property. 

Furthermore, the reform modifies the order in which reductions of gifts can be made in the event of a violation of the legal reserve. Until the reserve is reconstituted, the order of reduction is as follows:

1.     Acquisitions on account of death resulting from the law

2.     Gifts in lieu of death

3.     Gifts between living persons

Clarity for Pillar 3a:

Pillar 3A pension assets will now be included in the calculation of reserves (for their surrender value) and will not be included in the estate.

This provision, which is already in force but vague at present, will be expressly written and clarified in the text of the law.

In conclusion, we are moving towards a modernization of the Swiss inheritance law. The Swiss Confederation fills its gaps in the field of inheritance law by means of standards that are already applicable in many other European countries.

Jacques DEGORS & Ilona ROUSSEL

Sources : ww.ubs.com / www.bdo.ch / arpr.ch / www.mll-news.com 

COMPENSATION OF VICTIMS' RELATIVES IN SWISS LAW, THE DIFFICULT QUANTIFICATION OF A HUMAN LOSS

MORAL TORT

In Switzerland, Article 47 of the Federal Act supplementing the Swiss Civil Code provides that "The judge may, taking into account particular circumstances, award the victim of bodily injury or, in the case of death, the family, fair compensation as moral reparation.

It appears from the practice of Swiss courts that this moral damage is assessed according to a two-stage process.

The Swiss courts therefore analyse successively :

 the objective seriousness of your injury

the elements specific to the case in question

An objective amount is thus allocated as an indication in a first phase and in a second phase, all the circumstances of the case are taken into account to adjust the basic amount, this last phase being more important in serious cases.

Phase 1: In order to calculate the basic amount to which a victim's next of kin may be entitled, the maximum insured earnings at the time of death, i.e. CHF 148,200 under the LAA (Compulsory Accident Insurance Act), must be taken into account.

https://www.swissriskcare.ch/sites/default/files/src_chiffres_cles_2022.pdf

When calculating such an amount, the aim of providing the injured party with a certain feeling of enrichment should only serve as an overall criterion, applicable in the same way to all injured parties, and making it possible to set the range within which the total compensation should be situated.

Thus, the Swiss courts have based themselves on the figures used in the literature, in particular the figures used by Hütte, which are most probably the closest to the current case law. A basic compensation of 35% of the share of earnings insured by the compulsory accident insurance is awarded for the death of a child (Guyaz Alexandre, le tort moral en cas d'accident:une mise à jour, SJ 2013 II p. 215 ss, 250 s.)

Therefore, in the case of a human death following a road accident, a parent would be awarded CHF 52,000 (i.e. 35% of CHF 148,200) as basic moral compensation.

Phase 2: Using the example of parents who have lost their child, the basic amount of CHF 52,000 could be increased to some extent, given the mitigating or aggravating circumstances in each particular case.

The fact of having directly witnessed the accident, the intensity of the bond between a mother and her deceased daughter, the pain caused by the loss of the child or the moral suffering resulting from the fact that no one was found guilty in the criminal proceedings, for example, are elements that may well be taken into consideration by the judges in order to increase the compensation.

However, this compensation must be fixed in a "fair" manner, thus leaving a wide margin of appreciation to the courts. As mentioned above, compensation is also assessed in comparison with similar situations and the amounts awarded in those cases.

Case law and doctrine take into account, among other things, the seriousness of the fault committed by the wrongdoer when determining the compensation. The latter should be considered only insofar as it has aggravated the claimant's psychological pain and made it even more difficult to accept the situation suffered.

In sum, there are ultimately as many grounds for awarding 100,000 francs as there are for awarding 200,000 francs or 1,000,000 francs for the same injury and it would undoubtedly be preferable for this type of decision to be taken directly by the legislator rather than left to the discretion of the judge.

ECONOMIC LOSS

Article 45 paragraph 3 of the Swiss Code of Obligations provides for damages for the loss of support resulting from the death of a loved one. It is necessary to estimate the hypothetical income that an individual would have obtained from his or her deceased loved one from the day of his or her death. In order to do this, it is necessary to examine several criteria: the amount of income, the proportion of this income that was spent on the relative, possible reductions and the duration of the support. If the support was given in kind (in the form of work, household help, care, etc.), it is possible to estimate its value, but this is more difficult to demonstrate in court.

In conclusion, when a loved one is lost, a certain category of individuals close to the deceased can claim their rights before a court to receive both compensation for the moral suffering experienced and the economic damage that follows the death.

It has been observed that the amounts awarded to relatives are small compared to what some have suffered, such as the loss of a child or parents. Only in exceptional cases has Swiss case law doubled the compensation for moral damages and prevented claims from being made for sums that are too high compared to the latter, at the risk of having claims rejected.

Today, therefore, it seems that this process is not very representative of the pain endured. The moral issue should probably be examined by the legislator in order to revalue the amounts awarded in the event of death and avoid this issue being left to the arbitrariness of a judge.

 

Jennifer Gaumann & Ambre Schindler

 

SCHOOL BULLYING: A COMPARATIVE LOOK AT CURRENT PATHWAYS

 1.    School bullying: a 21st century societal phenomenon

Bullying is generally defined as an aggressive, intentional act perpetrated by an individual or a group of individuals, repeatedly against a victim who cannot easily defend himself or herself.

More specifically, school bullying is characterized by three aspects: the repetition of a behavior, creating a relationship of domination and the existence of an intention to harm. It takes the form of aggressive behavior, whether verbal (threats, insults, lies, mockery), relational (exclusion), physical (beatings, racketeering, sexual harassment) or material (theft, damage, etc.). The effects on the young victim can be extremely harmful: dropping out of school, social isolation, anxiety, depression or somatization. In the long term, the victim of harassment can suffer significant consequences in his or her psychological and social development.

The main problem is the difficulty victims have in expressing their suffering. Therefore, fighting against school bullying requires first of all an awareness raising among students and school staff in order to avoid any lack of reactivity or minimization of the phenomenon.

2.    Different international approaches to a new form of harassment

● French law: the development of legislation criminalizing school harassment
In French law, harassment is punishable under the Penal Code (C. pén. art. 222-33-2-2). Acts of harassment in the school environment are therefore covered by this offence. The French Penal Code also criminalizes violence resulting from acts of hazing and hazing itself, incitement to suicide, as well as the dissemination of degrading images or invasion of privacy (C. pén. art. 223 ff). A right to continue one's schooling without harassment has even been enshrined in article 511-3-1 of the Education Code. However, despite the qualification of school harassment as a criminally reprehensible offence, no sanction is mentioned.
● The German case: the violation of the student's personality by the teacher
Unlike French law, German law does not directly provide for instruments to punish school harassment, but its constituent acts are nevertheless likely to be sanctioned by various provisions of the Criminal Code or by disciplinary measures.
The Oberlandesgericht noted that there is a duty of protection on the part of teachers towards pupils during school hours, as long as the latter are obliged to attend school. In the Ruling of the Oberlandesgericht Zweibrücken (Germany) of May 6, 1997, Az. 7O 1150/93), it was considered that the seriousness of the infringement justified the payment of moral damages.
● The Anglo-Saxon approach: the central role of schools
In the United States, in the absence of federal legislation aimed at specifically punishing harassment as such, including school harassment, there is some protection against acts of harassment with specific characteristics. Each state has anti-harassment laws or amendments. These laws have some common denominators, such as requiring schools to take action.
The United Kingdom also has no specific anti-bullying instruments, delegating to schools the task of protecting schoolchildren, including outside the school grounds. The imposition of sanctions in the event of reprehensible behaviour is possible without any obligation on the part of the schools in this respect, unlike in American state laws.
It can therefore be seen that, in these two examples, the school is in the front line of responsibility, whether because of the risk of action against it or the threat of administrative measures.
● Swiss law: a legal vacuum on the issue of school bullying
In Swiss law, school bullying is not subject to any specific provision. However, the doctrine generally tends to assimilate it to art. 328 of the Code of Obligations, which concretizes the protection of the employee's personality against harassment occurring in the workplace. In fact, the community bond on which this article is based also exists between students and other members of the school. It is based on the duty to attend compulsory school. A crucial distinction must be made between the obsessive dimension of harassment (or stalking) and school harassment as described above (ATF 5A_526/2009 of 5 October 2009, c. 5.3, SJ 2011 I 65). Taken separately, the acts of the schoolchildren may seem harmless, but taken as a whole, their repetitive nature is destructive for the young victims.
At the legal level, cantonal laws also provide for instruments to sanction the failure of pupils to perform their duties. Art. 115 al. 2 of the Law on Public Education of September 17, 2015 mentions that "any act of violence, in any form, committed by students in or out of school [towards teachers and fellow students] is prohibited."
In view of the different legal approaches put in place, it seems that school bullying in its legal aspect is very poorly regulated or even unknown in some legislations. Switzerland, being one of the latter, focuses its attention on making schools responsible. However, it is frequently observed that prohibitions of violence are only accompanied by light disciplinary or administrative sanctions. They are almost insufficient in a context of harassment involving vulnerable people. Thus, it is necessary to take a stand on the problem by putting in place a strict policy of prevention and adequate legal sanctions to prevent the perpetrators and bystanders of harassment from minimizing the problem.
This article does not aim to evaluate which system would be the best, but highlights the need for a legal qualification. Legislation specific to school bullying could help to better target the problem and ensure a minimum of legal security for victims.
Ambre Schindler & Jennifer Gaumann

FINALLY A TRUST IN SWITZERLAND![1]

The Federal Council is proposing, on behalf of Parliament, to introduce this new legal instrument into the Code of Obligations. At its meeting on 12 January 2022, it sent its draft for consultation.

The trust is an ancient legal institution under Anglo-Saxon law. Although not provided for in our legal system, it has been recognised in Switzerland since the entry into force, on 1 July 2007, of the Hague Convention on the Law Applicable to Trusts and their Recognition of 1 July 1985.

According to Art. 11 para. 1 of the Convention, a trust validly constituted under the applicable foreign law is recognised in the other States parties to the Convention.

Given the complexity and flexibility of this institution, which may take several forms and pursue different purposes, there is no single definition of a trust. At the international level, the Convention has proposed the following definition in Art. 2(1): "[...] the term "trust" refers to the legal relationships created - inter vivos or on death - by a person, the settlor, when assets have been placed under the control of a trustee for the benefit of a beneficiary or for a specified purpose.".

The trust is therefore an institution with three parties:

- the settlor, who may be a natural or legal person, is the one who transfers his property to the trustee

- the trustee is the person who formally holds the assets, who becomes the "legal owner" of them

- the beneficiaries, who for the sake of simplicity can be indicated as the economic owners of the trust property.

The trust may be constituted by inter vivos trust or by testamentary trust. It should be noted that the deed of trust is a unilateral act of the settlor, not subject to the acceptance of the trustee, and that the trust does not have legal personality, which distinguishes it from the institution of the foundation.

In Switzerland, trusts are an important asset planning instrument, particularly in the area of inheritance, to enable the transmission of assets over several generations.

In order to prevent Swiss clients from having to turn to foreign countries to set up trusts, Parliament has instructed the Federal Council, through motion 18.3383, to create the legal basis for the introduction of this institution in Swiss law.

If the trust were to be introduced in our country, it would be necessary to adapt the Code of Obligations and other federal laws, in particular tax laws, which would explicitly specify the rules to which the trust would be subject.

The consultation procedure opened by the Federal Council on 12 January 2022 will last until 30 April 2022.

For further information, please visit

https://www.admin.ch/gov/fr/accueil/documentation/communiques.msg-id-86746.html

 


[1] Inspired by the article of Stefano Rizzi: https://ambrosioecommodo.it/approfondimenti/finalmente-il-trust-svizzero-2/

Execution only contract and investment advice contract

In the banking relationship between the client and the service provider, three types of legal relationship can be identified under Swiss and European law: i) execution only, ii) investment advice, iii) management mandate.

What distinguishes them is the degree of involvement of the service provider on the one hand, and the degree of protection given to the client on the other.

An execution-only contract, which, as its name suggests, consists of the provider's sole execution of client orders, will not confer any particular protection on the client. Indeed, the Swiss legislator and, to a lesser extent, the European legislator consider that in order to keep this type of relationship simple, cheap and fast, it is up to the client himself to safeguard his interests.

On the other hand, in more complex legal relationships such as investment advice and management mandates, it can be observed that the greater the activity of the service provider, the greater the degree of client protection.

In the investment advice contract, the decision whether or not to carry out a transaction is taken by the client, but the provider can make suggestions and thus influence the client.

In the management mandate, by delegation from the client, the service provider replaces the client in the decision-making process and in the conclusion of transactions.

While the distinction between the management mandate and other types of banking relationships is clear, the differences between the execution-only contract and the investment advisory contract may be more subtle.

In both cases, the decision on which operations to carry out rests with the client. If an operation goes wrong, the question arises as to who is responsible for the consequences.

In the execution only contract, at least from the point of view of Swiss case law, the service provider is not obliged to ensure the general safeguarding of the client's interests (BGer 4A_369/2015 of 25, recital 2.3), nor is he obliged to assume a general duty to provide information, either about the orders given by the client, or about the likely development of the chosen investments and the measures to be taken to limit the risks (BGE 133 III 97 recital 7.1.1; BGer 4A_336/2014, recital 4.2). Nor does he have to verify the appropriateness of the transaction requested by the client, or its suitability in relation to the client's portfolio as a whole.

Exceptionally, the Swiss Federal Supreme Court has accepted the existence of a duty to warn on the part of the service provider, in particular when the service provider realises or should have realised that the client has not identified the risk associated with the investment he is considering, or in the case of a special relationship of trust developed in the context of a long-term business relationship between the client and the financial services provider (BGer 4A_369/2015, recital 2.3).

In the investment advice contract, Swiss case law notes that the service provider's duties to inform, advise and warn are not set out in general terms, but depend on the type of contract concluded and the circumstances of the specific case, in particular the client's knowledge and experience (BGer 4A_336/2014, recital 4.2.; BGer 4A_364/2013, recital 6.2). In particular, when the provider makes a recommendation about a particular security, he must be aware of several factors, including the client's personal financial situation, the degree of risk the client is prepared to take and whether the advice he gives also relates to the suitability of the investment envisaged (BGE 133 III 97, para. 7.2; BGer 4A_444/2012, para. 3.2).

In conclusion, in an execution-only contract the service provider's duty to inform is the weakest and, as a rule, the client himself is liable for his transactions. In contrast, the investment advice contract entails more obligations for the service provider and the latter may, under certain conditions, be liable for the damage suffered by the client.

From a public law perspective, the European and Swiss legislators have adopted the MiFID II Directive and the Financial Services Act (FinSA), respectively, in order to ensure greater transparency in the markets and enhanced consumer protection. These laws, which detail the information obligations of financial service providers, will be the subject of a future article.

In addition to our many years of expertise in financial matters, our firm also succeeded in obtaining the highest compensation in the world for claims against a major US financial institution following the collapse of Lehman Brothers.

Euroferry Olympia: 8 yars after the Norman Atlantic

When our firm undertook the legal defense of a large number of passengers on board the NORMAN ATLANTIC that caught fire on 28 December 2014, despite the satisfactory compensation we subsequently obtained for our clients, we said never again but unfortunately, history repeats itself.

Another Italian ship on the Adriatic line the Euroferry Olympia again caught fire on 18 February 2022 and at this moment at least 11 people are already missing while the ship is being towed on fire.  Responsibilities have not yet been assigned but it is certain that they are many and scattered in many directions.

The damage is enormous and multiple and the legal treatment of responsibility requires special attention, as in the case of the Norman Atlantic. Our office, in coordination with our associates, maritime lawyers in Greece and Italy, within the framework of our international organization Global Justice Network, with whom we have jointly handled the Norman Atlantic case, is at the disposal of those involved in this tragic accident for any assistance or information without any obligation or commitment on their part.  

International child abduction

Since the 1970s, the phenomenon of child abduction has grown. Globalization and developments in family law, in particular the generalized attribution of joint parental authority in the event of separation or divorce, have meant that this phenomenon has continued to grow in recent decades.

The Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction (hereinafter referred to as the HC80) is the main legal instrument in this field since it is currently binding on 100 States.

A study conducted by Prof. Nigel Lowe (Cardiff University) and Victoria Stephens found that under the HC80, 2,270 applications for return were made in 2015. The study went on to establish that: 73% of abductions were by the mother; proceedings ended with the return of the child in 45% of cases, of which 17% were voluntary returns and 28% were court-ordered returns; 14% of applications were subsequently withdrawn.

The recent increase in bi-national couples is unfortunately also a cause of the increase in the number of abduction cases.

Among the most common abduction situations are those where the custodial parent decides to move abroad (mostly to return to his or her country of origin) without the agreement of the other parent holding parental rights; or where the parent holding access rights decides to keep the children abroad at the end of the holidays. In these cases it is important to understand what legal means are available to enforce one's own rights.

The main purpose of the HC80 is to restore the status quo ante, i.e. to ensure the return of the child who has been wrongfully removed or retained, and to ensure that existing rights of custody and access in one Contracting State are respected in all Contracting States (Art. 1 HC80).

The procedure

The HC80 applies in cases of wrongful removal or retention of a child up to the age of 16 (Art. 4 HC80). The removal or retention is considered wrongful if it violates a person's right of custody under the law of the State of the child's habitual residence immediately before the removal or retention and that right was being effectively exercised at the time of the removal or retention (Art. 3 HC80).

The parent whose custody rights have been violated by the removal of the child may apply for return either to the Central Authority of the country of the child's habitual residence (immediately before the removal) or to the Central Authority of any other Contracting State, including the country where the child is located after the abduction (Art. 8 HC80).

The Federal Central Authority of Switzerland is the Federal Office of Justice. The Greek Central Authority is the Department for International Judicial Co-operation in Civil and Criminal Matters of the Ministry of Justice.

It is also possible to bring legal proceedings directly before the competent court without going through the central authority.

If the conditions (Art. 3(1), Art. 4 and Art. 12 HC80) of the Convention are fulfilled and if no exception (Art. 13 HC80) is applicable, the competent judicial authority must order the immediate return of the child (Art. 12(1) HC80). It should be noted that the judge will not rule on the merits of the custody right but exclusively on the return of the child.

Our firm, specializing in family law, is at your disposal for any questions or requests for assistance in this matter. Thanks to our network of lawyers in Switzerland, Greece, but also elsewhere in Europe and worldwide, we will be able to find a solution to your problems.

 

Road traffic accidents: awarding damages for homicide, personal injury and compensation for moral damages in Switzerland

In the event of a road traffic accident causing death and serious injury to others, in addition to criminal proceedings, victims or their relatives may also take civil action for various types of damages.

  1. Economic damages in the event of the death of a close relative

Article 45 of the Swiss Code of Obligations provides that in the event of homicide, compensation must cover the funeral costs (para. 1). If the death did not occur immediately, the compensation must include the costs of medical treatment, as well as the loss resulting from the inability to work (para. 2). Finally, if, as a result of the homicide, other persons have been deprived of their support, they must also be compensated for that loss (para. 3).

A supporter is defined as a person who, through regular and free services in cash or in kind, provides or would have provided all or part of the maintenance of another person. A distinction is made between two types of support: actual support and hypothetical support (4C.195/2001). In order to determine the amount of the latter compensation, i.e. the loss of support (Art. 45 para. 3 CO), it is necessary to estimate the hypothetical income that the deceased would have earned without the accident. The calculation of the damage resulting from the loss of support is different depending on whether the person was providing support in cash or in kind. The decisive moment for this calculation is the day of death (FCR 101 II 346). When the deceased's relative provides support in cash, the calculation is made considering several criteria: the probable income of the support, the proportion of this income devoted to the person supported, possible reductions and the duration of the support. If the same relative of the deceased provided support, not in money but in the form of work, the value of this support must be estimated. This is particularly the case for household work performed by the supporter. The calculation principles for household damage resulting from personal injury apply by analogy. The amount of compensation will be determined based on the individual case, which will be assessed by the judges on a case-by-case basis.

  1. Damages for personal injury

Article 46 of the Swiss Code of Obligations covers the costs of personal injury, the damage resulting from the inability to work, and the damage resulting from the loss of future earnings (paragraph 1). Personal injury means any damage to the victim's physical integrity (paralysis, amputation, muscular ailments, etc.) or mental health (neurosis, loss of memory, intellectual impairment, etc.). The concept therefore also includes somatic and psychological damage. Paragraph 2 of Article 46 CO provides for an exception to the principle that the decisive moment for calculating the damage is that of the judgment and allows the judge to reserve a review of the judgment.

Only the person directly affected by the perpetrator's conduct may claim compensation based on this article. The bodily injury must be of a certain gravity. Generally speaking, this is accepted when the injury is permanent (FCR 112 II 131). The case law accepts that this is also the case of a relative of the injured party who suffers a nervous shock that can be assimilated to a bodily injury.

The costs are the expenses that the injured party must incur because of the injury. They include the costs of treatment (ambulance, hospital, doctor, etc.), the costs of defending oneself through a lawyer and the costs of home care by relatives.

  1. Compensation for moral damages

Article 47 of the Swiss Code of Obligations allows the court to award the victim of personal injury or, in the case of homicide, the dependants of the deceased, an appropriate sum for moral harm. The relatives of the deceased have their own claim to compensation for the mental suffering they suffer because of the death. In this third and final part, we will focus on the case of the loss of a child in the event of an accident.

In principle, compensation for non-material damage in the event of the loss of a child gives rise to compensation for non-material damage, even if the victim had reached the age of majority and had already set up his or her own household. While the age of the victim does not in principle play a role, the case law sometimes holds that the parents' pain is greater when they lose their only child. According to FCR 112 II 118 (Hunter judgment), the law only allows damages to be awarded to the person directly affected by the unlawful act. Third parties injured indirectly and by ricochet do not have such a right. In particular, the Federal Court has stated that in the event of death, the list in Articles 45 and 47 of the Swiss Code of Obligations is exhaustive and that survivors cannot claim damages for the loss caused indirectly by the accident to the deceased's property (FCR 54 II 224). The judge must take account of the circumstances when deciding whether to award compensation for pain and suffering following a death. The death alone is not sufficient to award compensation for non-material damage to the relatives, nor is bodily injury alone. It is also necessary that the death causes them particularly severe suffering. Moreover, according to the Federal Court in its decision FCR 93 I 586, the moral damage is all the greater if the rightful claimant witnessed the death, if the deceased suffered, if the latter left his family in a precarious financial situation or if the perpetrator acted in a lowly or careless manner. In this context, the compensation must be assessed on a case-by-case basis, but we have found that it is generally around CHF 40,000.

In conclusion, victims of road accidents can invoke these provisions of the CO in order to obtain compensation for loss of support, bodily injury and moral damage, depending on the circumstances of the case. The amount of compensation will be determined by the judges on their own discretion. Victims also benefit from compensatory interest of 5% for each of these damages. In any case, the loss of a spouse is generally considered the most serious suffering, followed by the death of a child and the death of a father or mother.

By Jessica Baujard and Cécile Ledez, legal interns

The taxation of multinationals: towards harmonization after a global agreement

I- Presentation of the new tax

A novelty in the world of taxation: on July,2021, an agreement was reached at the Organization for Economic Cooperation and Development (OECD) concerning the harmonization of a global corporate tax. This was also confirmed by the end of October 2021 at the G20 summit  After negotiations nearly 130 states have agreed to reform the taxation of multinationals based on two pillars: on the one hand a new distribution of rights to tax that would no longer tax exclusively according to the location of the headquarters of the company. On the other hand, a minimum tax rate of 15% on profits would be introduced. This would affect companies with a turnover of at least 750 million euros, this reform is mainly aimed at GAFAM companies (Google, Apple, Facebook, Amazon and Microsoft).

Even if several countries considered as tax havens have approved the agreement, some countries do not hide their reluctance. This is the case of Ireland and Hungary, which have not signed the declaration and find the minimum rate too high compared to their applied rate.

As for Switzerland, the Federal Department of Finance has announced that it will join under certain conditions and is asking for recognition of the "interests of small innovative countries".

The consequence for these countries, including Switzerland, would obviously be economic.

This tax harmonization would be applicable to all multinationals, which would be taxed in the same way from now on, but this would not have the same economic repercussions for the countries that apply it. This agreement is also denounced, notably by the NGO Oxfam, because it would only benefit rich countries.

On the other hand, this agreement is welcomed by several countries, the French Minister of Economy, Bruno Le Maire, and the German Minister of Economy, Olaf Scholz, recognize the importance of this global agreement for a better tax justice. Indeed, it allows a better distribution of profits between the countries where these large companies make them and those where they are located.

II- Consequences of the new tax

The entry into force of such a measure is expected for 2023. In practice, the introduction of a minimum tax of 15% would allow the home country of the company to collect the tax in the case where the company is taxed at less than 15% in another country. For example, a German company taxed at 9% in Hungary would be required to pay 6% to the German state.

At the European level, this reform will prevent tax evasion, which would have cost European countries 80 billion in lost tax revenue by 2020.

In this sense, this agreement has repercussions for the states that have not signed it. As a result of the standardized tax rate, countries with lower taxes could suffer a strong relocation of companies that have no more tax interest in locating precisely in these countries.

Our firm specialized in tax matters is at your disposal for

any questions or requests for assistance on this subject.

Qualified Immunity and Civil Rights Claim in the U.S.

By Erwin Chemerinsky: Dean and professor of law at the UC Berkeley Law School

Qualified immunity is a type of legal immunity. The defense of qualified immunity protects "government officials from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." [Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982)].

Qualified immunity only applies to suits against government officials as individuals, not suits against the government for damages caused by the officials’ actions. Although qualified immunity frequently appears in cases involving police officers, it also applies to most other executive branch officials. This article presents the analysis of Professor Erwin Chemerinsky, dean of the UC Berkeley School of Law, from his August 2021 webinar about the legal framework of qualified immunity as interpreted by the U.S. Supreme Court.

I. Historical and background and context

42, United States, Code section 1983 “Lawsuits against those acting under color of State law violate the constitution and laws of the United States”. This law was adopted in 1871 as part of the Civil Rights Acts but is rarely used between 1871 and 1961. In 1961 this changed when the Supreme Court decided Monroe v. Pape. There the Supreme Court said that a state or local official could be sued for violating the Constitution, whether the person was following state or local law or violating state or local law. Before that, many courts have assumed that in order to say that a state official was under color of law, they had to show they were acting pursuant to government policy. Monroe v. Pape says whether it’s an authorized or unauthorized act, if the person is a state actor, working with a state or local government, their constitutional violations give rise to a lawsuit.

In 1971, in Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, the Supreme Court said that federal government officers could be sued for money damages directly under the fourth Amendment. Subsequently, the Supreme Court expanded that to actions against federal officers violating the fifth Amendment and also for violating the eighth Amendment. Lower courts extended this in other areas.

1983 is written in seemingly absolute language. It seems to be a strict liability statute. It says anyone acting under color of state law who violates the constitution of the United States is liable. There are no immunities that were mentioned in 1983 when it was adopted. There is one immunity now mentioned in 1983 for judges but that did not come until much later. Nor is there any other federal statute that creates immunity in such suits.

It’s important as we begin this discussion today to recognize that the law of immunity is entirely created by the Supreme Court. All governments officers who were sued for money damages had some kind of immunity. For some officials it’s absolute immunity. The court has said that for prosecutors performing prosecutorial tasks, legislators performing legislative tasks, judges performing judicial tasks, law enforcement testifying as witnesses, the president for presidential tasks. All have absolute immunity. They can’t be sued for money damages at all for the actions within the scope of these duties.

Apart from these officers that have absolute immunity, all other government officials when sued for money damages have qualified immunity. The Supreme Court is increasingly treated qualified immunity as a very substantial obstacle to civil suits for money damages.

II. The basic test.

I alluded to it coming from a 1982 case, Harlow v. Fitzgerald. Now the Supreme Court began formulating qualified immunity before this. Through a couple of decisions for example in the 1970s, the Supreme Court said that an officer would be liable if he either acted in an objectively unreasonable manner or if he acted subjectively in bad faith.

Harlow v. Fitzgerald, 457 U.S. 731 (1982).

This case changes that by saying qualified immunity is entirely an objective test. Officers performing discretionary functions, are liable if they violate clearly established law that a reasonable officer should know.

Bryce Harlow was a counselor to President Richard Nixon. Ernie Fitzgerald was an analyst at the Defense department who testified about costs overruns in building a transport plane. Nixon ordered Fitzgerald fired. Harlow did the firing, Fitzgerald sued saying it violated the First Amendment rights. The Supreme Court said in a companion case, Nixon v. Fitzgerald, that the president has absolute immunity. But the Court said, the high-level executive official who carried out the firing only had qualified immunity. The court articulated the test for qualified immunity. The Court said, if subjective bad faith was enough for liability, it would be too easy for suits to be brought and ultimately go to trial.

Ashcroft v. Al-Kidd, 563 U.S. 731 (2011).

“A Government official's conduct violates clearly established law when, at the time of the challenged conduct, ‘[t]he contours of [a] right [are] sufficiently clear’ that every ‘reasonable official would have understood that what he is doing violates that right.’ We do not require a case directly on point, but existing precedent must have placed the statutory or constitutional question beyond debate.” In this case, the Supreme Court reformulated the test of qualified immunity. This case involves a man Abdul Al-Kidd who is apprehended at Chicago O’Hare Airport as a material witness warrant. Turns out the government never intended to use it as material witness. He sued among others, the Attorney General saying that authorizing the use of material witness warrant violated his rights. The Supreme Court in anonymously ordered the case dismissed in the base of qualified immunity. The Court said that the officers performing a discretionary function were liable only if they violate clearly established law that every reasonable officer knows. The Court said that it has to be a right that is established “beyond debate”.

District of Columbia v. Wesby, 138 S.Ct. 577 (2018).

This case is one of the most recent formulations of qualified immunity by the Court. It was a Fourth Amendment case and the Court concluded there was no violation of it. You can see how the Supreme Court was taking a very robust expansive view of the scope of qualified immunity:

“Under our precedents, officers are entitled to qualified immunity under § 1983 unless (1) they violated a federal statutory or constitutional right, and (2) the unlawfulness of their conduct was ‘clearly established at the time.’ ‘Clearly established’ means that, at the time of the officer's conduct, the law was ‘sufficiently clear’ that every ‘reasonable official would understand that what he is doing’ is unlawfulIn other words, existing law must have placed the constitutionality of the officer's conduct ‘beyond debate.’ This demanding standard protects ‘all but the plainly incompetent or those who knowingly violate the law.’ To be clearly established, a legal principle must have a sufficiently clear foundation in then-existing precedent. The rule must be ‘settled law,’ which means it is dictated by ‘controlling authority or ‘a robust consensus of cases of persuasive authority.’ It is not enough that the rule is suggested by then-existing precedent. The precedent must be clear enough that every reasonable official would interpret it to establish the particular rule the plaintiff seeks to apply. Otherwise, the rule is not one that ‘every reasonable official’ would know. The ‘clearly established’ standard also requires that the legal principle clearly prohibit the officer's conduct in the particular circumstances before him. The rule's contours must be so well defined that it is ‘clear to a reasonable officer that his conduct was unlawful in the situation he confronted.’ This requires a high ‘degree of specificity.’ We have repeatedly stressed that courts must not ‘define clearly established law at a high level of generality, since doing so avoids the crucial question whether the official acted reasonably in the particular circumstances that he or she faced.’ A rule is too general if the unlawfulness of the officer's conduct ‘does not follow immediately from the conclusion that [the rule] was firmly established.”

 III. Immunity as an affirmative test.

Gomez v. Toledo, 446 U.S. 635 (1980). In that case the Supreme Court expressly held that qualified immunity is an affirmative defense. Now there’s many things that are important that flow from it being an affirmative defense. An affirmative defense has to be raised by the defense and its answer, or there has to be an effort by the defense later to file an amended answer.

This question of the burden of proof is one where there is disagreement among the lower courts. Some courts have held that the burden shifts to the plaintiff to show that the right allegedly violated was clearly established. See, e.g., Corbitt v. Vickers, 929 F.3d 1304 (11th Cir. 2019).

Other courts place a burden on the defendant. See, e.g., Slater v. Deasey, 789 Fed.Appx. 17 (9th Cir. 2019).

IV. The sequence of analysis.

In Saucier v. Katz 2001 case, the Supreme Court prescribed that when there’s a question of qualified immunity, first the court taking the facts should decide if there’s a constitutional violation. And second, if so, they should decide whether it’s a violation of clearly established law that every reasonable officer should know. There’s a virtue to this approach. Even if the Court in that case, on the latter finds qualified immunity, at least it would decide if there’s a constitutional violation, to guide future cases.

Eight years after Saucier v. Katz, in Pearson v. Callahan, 129 S.Ct. 808 (2009). The Supreme Court unanimously said that the two-step approach is not required. When a court is considering qualified immunity, it does not have to first determine if there is a constitutional violation before deciding whether there is clearly established law that the reasonable officer should know. So if a court wants to find qualified immunity without analyzing if there is a constitutional violation, it’s able to do so.

But there is a cost to doing this: if the courts don’t decide whether there is a constitutional violation, always decide based on qualified immunity, there is no constitutional violation for the future.

The case Sims v. City of Madisonville, 894 F.3d 692 (5th Cir. 2018). This is the fourth time in three years that an appeal has presented the question whether someone who is not a final decisionmaker can be liable for First Amendment retaliation. Addressing the first-step liability question is ‘especially valuable with respect to questions that do not frequently arise in cases in which a qualified immunity defense is unavailable.’ That is the case here. First Amendment retaliation claims do not arise in criminal litigation (as, for example, a Fourth Amendment claim often would), and this issue of individual liability would not arise in other civil suits, such as those against a municipality, in which qualified immunity does not apply. Because this is a question unique to section 1983 First Amendment claims brought against individual defendants, we conclude that clarifying the liability question is important to provide guidance to public employees who may find themselves on either side of the ‘v’ in these lawsuits that can raise important issues of whether employees who challenge corrupt governmental practices are protected in exercising First Amendment rights.” was very instructive. It pointed out how in several occasions an issue would come before the court in everyone they dismiss based on the latter question. But first we need to decide whether there is a constitutional violation, give guidance for the future.

V.  Application of the Harlow test.

 A. What law?

In Wilson v. Layne, 526 U.S. 603 (1999), the Supreme Court answers this question. This case involves the FBI and other federal law enforcement officials, taking reporters with them on private property while the government officials were executing search warrants. And the Supreme Court said that this violated the Fourth Amendment but then found that the federal officers were protected by qualified immunity. Indicates that clearly established law can be based on decisions of Supreme Court, controlling authority from that jurisdiction: Court of Appeals/highest court of state, law of other jurisdictions: consensus of persuasive authority.

District of Columbia v. Wesby, 138 S.Ct. 577 (2018). “We have not yet decided what precedents--other than our own-- qualify as controlling authority for purposes of qualified immunity.” There are dozens of instances where the Supreme Court has said that. This had led defendants to try to argue that only a Supreme Court decision can create clearly established law and overcome qualified immunity. So far, the circuits have consistently rejected that.

Irish v. Fowler, 979 F.3d 65 (1st Cir. 2020). In that case the first circuit says that precedents from other circuits can create clearly established law. It’s not just the decisions of the Supreme Court.

Cahoo v. SAS Analytics, 912 F.3d 887 (6th Cir. 2019). “To determine whether a constitutional right is clearly established, we must look first to decisions of the Supreme Court, then to decisions of this [C]ourt and other courts within our circuit, and finally to decisions of other circuits.”. That reflects an accurate statement of the law.

B. Does there have to be a case on point?

No: Hope v. Pelzer, 536 U.S. 730 (2002). Police guards are not protected by qualified immunity even if there is no case on point. In this case the police guards tied a prisoner in Alabama to a hitching post, left him in hot sun for many hours and without giving water. The prisoner got injured and sued the guards for a violation of the 8th Amendment. The Court of Appeals for the 11th Circuit said that it was cruel and unusual punishment but no case on point was identified so the guards got protected by the qualified immunity.

The Supreme Court held that a case on point is not necessary in order to overcome qualified immunity. Officers should have been on notice that this conduct was unconstitutional, even there though there are not cases on point finding it to be unconstitutional.

Taylor v. Riojas, 141 S.Ct. 52 (2020). The Supreme Court employed the same argumentation in this case for correctional officer despite the lack of case on point. In this case a prisoner in Texas sued the officers based on a violation of the 8th Amendment for unsanitary living conditions in a cell. The Court of Appeals for the 5th Circuit said that it was cruel and unusual punishment but no case on point was identified so the officers got protected by the qualified immunity. The Supreme Court overturned this decision reaffirming that a case on point is not necessary. As a matter of fact, any reasonable correctional officer should have realized that Trent Taylor’s conditions of confinement offended the Eighth Amendment, the U.S. Court of Appeals for the 5th Circuit erred in granting the officers qualified immunity.

Yes: City of Escondido, California, 139 S.Ct. 500 (2019). “[W]e have stressed the need to identify a case where an officer acting under similar circumstances was held to have violated the Fourth Amendment.... While there does not have to be a case directly on point, existing precedent must place the lawfulness of the particular [action] beyond debate.... Of course, there can be the rare obvious case, where the unlawfulness of the officer's conduct is sufficiently clear even though existing precedent does not address similar circumstances.... But a body of relevant case law is usually necessary to clearly establish the answer....” (quoting District of Columbia v. Wesby) Brosseau v. Haugen, 125 S.Ct. 496 (2004). Shooting a fleeing suspect who’s flight may harm others is not a clearly established use of excessive force. The Court held that because this case was on the “hazy border between excessive and acceptable force”

Brosseau did not violate the clearly established rightof freedom from excessive force.

Safford Unified School Dist. v. Redding, 129 S.Ct. 2633 (2009). School officials violated the Fourth Amendment in strip searching a seventh-grade girl on suspicion that she has prescription strength ibuprofen. However, school officials were protected by qualified immunity because there was not clearly established law at the time this occurred.

Ashcroft v. Al-Kidd, 131 S.Ct. 2074 (2011). The Attorney General is protected by qualified immunity when sued for money damages for improperly detaining an individual under the material witness statute.

Wood v. Moss, 134 S.Ct. 2056 (2014). Secret service agents were protected by qualified immunity when they moved anti-Bush demonstrators further and allowed pro-Bush demonstrators to be closer to the President.

Lane v. Franks, 134 S.Ct. 2369 (2014). A government employee’s First Amendment rights are violated when he is fired for truthful testimony given pursuant to a subpoena, but the defendant is protected by qualified immunity.

C.   The need for the right to be established a specific level of abstraction

Kisela v. Hughes, 138 S.Ct. 1148 (2018). Police officer Andrew Kisela is entitled to qualified immunity because his actions did not violate clearly established statutory or constitutional rights of which a reasonable person would have known.

City & Cnty. of San Francisco, Calif. v. Sheehan, 135 S. Ct. 1765 (2015). “The real question is whether, despite these dangerous circumstances, the officers violated the Fourth Amendment when they decided to reopen Sheehan’s door rather than attempting to accommodate her disability. Rather, we simply decide whether the officers’ failure to accommodate Sheehan’s illness violated clearly established law. It did not. To begin, nothing in our cases suggests the constitutional rule applied by the Ninth Circuit. The Ninth Circuit focused on Graham v. Connor, but Graham holds only that the ‘objective reasonableness’ test applies to excessive-force claims under the Fourth Amendment. . . That is far too general a proposition to control this case. ‘We have repeatedly told courts -and the Ninth Circuit in particular- not to define clearly established law at a high level of generality.’ Qualified immunity is no immunity at all if ‘clearly established’ law can simply be defined as the right to be free from unreasonable searches and seizures.” “[E]ven if ‘a controlling circuit precedent could constitute clearly established federal law in these circumstances,’ it does not do so here.”)

White v. Pauly, 137 S.Ct. 548 (2017). “Today, it is again necessary to reiterate the longstanding principle that ‘clearly established law’ should not be defined ‘at a high level of generality.’ As this Court explained decades ago, the clearly established law must be “particularized” to the facts of the case. Otherwise, ‘[p]laintiffs would be able to convert the rule of qualified immunity into a rule of virtually unqualified liability simply by alleging violation of extremely abstract rights.’”

Therefore, the more the Court wants law to be established in a very specific level of abstraction, the more qualified immunity functionally becomes absolute immunity.

 D.   Excessive force

Saucier v. Katz, 533 U.S. 194 (2001). In a civil rights case alleging constitutionally excessive force, the tests for qualified immunity and reasonableness are distinct; a finding of excessive force does not preclude a finding of qualified immunity.

Therefore, the Supreme Court reversed the Court of Appeals for the 9th Circuit and held that qualified immunity analysis must proceed in two steps. A court must first ask whether "the facts alleged show the officer’s conduct violated a constitutional right. Then, if a constitutional right was violated, the court would go on to determine whether the constitutional right was “clearly established”.

 VI.   Private actors

Wyatt v. Cole, 504 U.S. 158, 165 (1992). Private actors do not get qualified immunity defense.

Richardson v. McKnight, 521 U.S. 399 (1997). Private prison guards who are sued under Section §1983 may not assert the defense of qualified immunity.

They cannot be protected by the qualified immunity because it only covers the exercise of discretion by government officials.

Filarsky v. Delia, 132 S.Ct. 1657 (2012). A private contractor operating under a contract with the government may claim qualified immunity when sued under §1983.

Estate of Jensen by Jensen v. Clyde, 2021 WL 787451 (10th Cir. March 2, 2021). Private doctor who was employed by county on part-time basis, in providing medical services to inmates at county jail where he worked alongside the jail's officers and full-time staff, had ability to raise qualified immunity defense.

VII.  Changing qualified immunity?

Qualified immunity became a popular vocabulary especially because of the police cases. The question of abolishing qualified immunity has been raised and this would imply strict liability for officials. This discontinuance would increase the compensation for casualties. It would also enhance deterrence. However, this solution shows some skepticism and does not seem politically possible.

The main issue would indeed be a change that would mitigate the absolute nature of qualified immunity. It is important to remind that this qualified immunity does not come from the Constitution but from the Supreme Court interpretation of Section 1983. Therefore, the Congress could revise the immunity statute and change it by law enforcement.

In cases involving access to force by police officers, their liability could be imposed based on proofs of subjective bad faith or objective manners and thus to ensure that immunity does not apply to officials in some cases.

To conclude the case Marbury v. Madison reminds us that rights are meaningless without remedies. Fortunately, the Court has some remedies to counter the qualified immunity of officials through money damages to the victims.

Published with permission granted to us by author Prof. Erwin Chemerinsky Dean and Professor of Law at UC Berkeley Law school