In its decision of September 24, 2019[1], the Swiss Federal Supreme Court dealt with the question of whether an accredited court reporter can be excluded from attending court-led settlement discussions between parties in an ongoing court case. The Federal Supreme Court made it clear that there is no right for the press to be present during a court-led attempt to reach an amicable settlement between parties because this stage of the procedure does not aim at the judicial decision of the dispute. However, the Federal Supreme Court did not answer the question whether the public has a right to attend instruction hearings not solely aimed at reaching an agreement between the parties.

An accredited court reporter was granted permission to attend hearings before the Labour Court of Zurich in proceedings between a major Swiss bank and a former employee who had made claims of gender-related pay discrimination. Yet, the reporter was only allowed to be present during the main hearing but excluded from the settlement discussions that took place afterwards under the direction of the court.

When the court reporter complained, the Zurich Labour Court held that if one party objected to the presence of third parties during settlement discussions, the third parties had to be excluded. As the provisional assessment expressed by the court in settlement hearings is always non-binding and cannot be used in the further course of proceedings, the presence of the public or the press would contradict the object and purpose of such settlement hearings.

The reporter unsuccessfully appealed this decision to the Zurich Higher Court, which followed the Labour Court holding that a settlement hearing is a sub-form of an instruction hearing not expressly mentioned in Art. 226 of the Swiss Civil Procedure Code (CPC) and is neither open to the public nor the press. According to the Higher Court, this restriction applies in general without the need to check for exceptions and/or to balance the interests involved.

The reporter appealed the decision of the Higher Court to the Federal Supreme Court, which upheld the decision to exclude the reporter from the settlement discussions. In its decision, the Federal Supreme Court dealt in detail with the principle of public court hearings. According to the Federal Supreme Court, the prevailing opinion of legal scholars is that not all stages of the proceedings have to be public, but that Art. 30 para. 3 of the Constitution and Art. 54 para. 1 of the Civil Procedure Code only apply to procedural stages which form the basis for settling the dispute by means of a judicial decision.

The Federal Supreme Court emphasized that the purpose of settlement discussions is to settle a dispute amicably. In settlement discussions, the court mediates between the parties. Although the court may express a provisional assessment of the factual and legal situation, the proceedings will end without a court decision, but with a settlement between the parties if the settlement discussions are successful. For this reason, settlement discussions are not part of the decision-making process. This is illustrated by the fact that participation in settlement discussions is voluntary for the parties and that the content of the discussions is not recorded and may not be used as a basis for a possible court decision. The Federal Supreme Court concluded that settlement discussions that take place within this framework are not part of the court’s judicial activity and that for this reason there is no right of the public or the press to attend. Consequently, the lower courts did not have to weigh the interests involved and the exclusion of the journalist was therefore lawful.

In its decision, the Federal Supreme Court explicitly left the question unanswered whether it would be permissible to exclude the public or the press from instruction hearings in general, even if the instruction hearings were not solely aimed at conducting the settlement discussions. The Federal Supreme Court noted, however, that during such hearings, the facts of the case may also be supplemented or the main hearing can be prepared. The Federal Supreme Court thus implied that a general exclusion of the public or the press without weighing the interests of the parties to the proceedings and the public could violate the law.

Not surprisingly, the ruling of the Federal Supreme Court has led to numerous reactions in the press. In particular, it was argued that the exclusion of the accredited court reporter from the settlement discussions constituted a restriction of fundamental rights, which is only permissible when there is a legal basis and a prevailing public interest. In addition, the restriction has to be proportionate.

In fact, in two other landmark decisions, the Federal Supreme Court examined whether the exclusion of the press from court proceedings met the requirements for a restriction of the freedom of the press.[2] However, both cases concerned criminal proceedings, more specifically the court hearing and the oral communication of a decision, thus procedural steps which the press clearly has a right to attend, as they are undoubtedly part of the decision-making process.

In contrast, in the case at hand the Federal Court first examined whether the settlement discussions actually constituted a judicial activity of the court. Only if that was the case could there have been an interference with the freedom of the press.

As the Federal Supreme Court clarified, settlement discussions, even if they are conducted under the direction of the court, are not judicial activities. The attempt to reach an agreement is therefore not covered by the principle of publicity of court proceedings.[3] A prerequisite for this, however, is that the court-led attempt to reach a settlement takes place within the framework defined by the Federal Supreme Court: Thus, in settlement discussions, the court may only express a provisional assessment of the factual and legal situation with restraint and by reserving the formal decision of the dispute. Furthermore, the content of the settlement discussions may neither be recorded in minutes nor used as a basis for any decision by the court. In addition, the settlement discussions have to be voluntary and can only take place with the consent of the parties.

In its decision, the Federal Supreme Court focused on the principle of ne ultra petita that applies in most civil law disputes. In contrast to criminal proceedings, the parties in civil proceedings often have the possibility to close the proceedings by reaching an agreement. In accordance with this, the civil courts have the competence to try to reach an agreement between the parties at any time. If the parties are able to settle the dispute amicably, the proceedings are terminated without a court ruling. This is an essential difference to criminal proceedings, which also affects the principle of publicity of court proceedings and is one of the reasons why an interference with fundamental rights was denied in the case decided by the Federal Supreme Court.

Nevertheless, a number of issues remain unresolved. Civil courts can conduct settlement discussions at any stage of the proceedings. The law regulates the course and content of these negotiations only to a very limited extent. In practice, the judicial attempt to reach an agreement is not only handled differently from Canton to Canton, but also from court to court and even from judge to judge.

When conducting settlement discussions, the courts do not always operate within the framework for such discussions described by the Federal Supreme Court in the present decision. For example, in some cases, settlement negotiations are conducted against the will of the parties and/or the parties may be able to rely on the court’s assessment in later proceedings. Accordingly, each individual case must be analyzed to determine whether the settlement discussions are not actually a “step on the way to a court decision on the subject matter of the dispute.”[4] Failure to grant the press access to such discussions could result in a breach of the law. Returning to the question from the beginning, courts should only be allowed to exclude the media and the public from instruction hearings, if these hearings are exclusively set up to attempt reaching an agreement between the parties. If, on the other hand, instruction hearings serve as an opportunity for the parties to present their cases, the hearings form an integral part of the courts’ decision-making process as they may have a significant influence on the court decision. In these cases, the public and private interests in attending the hearing and the interest of the parties to keep the content of the hearings secret have to be weighed and an admission of the press to the formal parts of the hearing should to be granted.


[1]      Decision of the Swiss Federal Supreme Court (in German) in the case no. 4A_179/2019, selected for publication.

[2]      Decisions of the Swiss Federal Supreme Court 143 I 194 E. 3.2 ff. and 141 I 211 E. 3.2 ff.

[3]      The same is true for the conciliation procedure; see Art. 203 para. 3 Swiss Civil Procedure Code.

[4]      Decision of the Swiss Federal Supreme Court (in German) in the case no. 4A_179/2019, selected for publication.

Author

Dr. Martina Steiner is a member of Baker McKenzie’s Dispute Resolution Practice Group in Zurich. In 2017, she worked as an associate in the Geneva office for several months. Prior to joining the Firm in 2015, Martina worked at the cantonal courts and the public prosecutor’s office of Canton Nidwalden, as an attorney and law clerk. In addition, she gained courtroom experience and exposure to common law jurisdiction as a participant in the European Lawyers’ Programme at the Faculty of Advocates in Edinburgh, Scotland. Martina’s doctoral thesis on civil procedural law and her postgraduate degrees in mediation and forensics complement her working experience. Dr. Martina Steiner focuses on civil and criminal litigation. She regularly supports clients in pre-trial negotiations, advises on avoiding litigation or arbitration and provides counsel on improving clients’ positions in potential conflicts before courts and arbitral tribunals. Often, this involves cross-border issues. Besides litigation, Martina advises clients on all matters involving labor, employment and immigration law in Switzerland, including issues related to reorganizations, restructurings and collective redundancies.

Author

Fabienne Bretscher was a trainee lawyer in the Baker McKenzie Dispute Resolution team based in Zurich.