News

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.

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.  

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.

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