The New In-House Legal Privilege Legal Insight Series on the Revision of the CPC entering into Force on 1 January 2025: Part 1

On 1 January 2025, the revised Swiss Civil Procedure Code (CPC) will come into effect, introducing significant changes. We will be analyzing these changes in a series of concise articles, aimed at offering a clear and current understanding of these changes.

Swiss in-house counsel will gain legal privilege in civil litigations under the new Article 167a CPC. This change remedies the previous lack of protection for in-house legal communications, thus placing Swiss companies with international businesses on equal footing with their foreign counterparts, especially in Anglo-American legal systems. The new privilege applies if the company is registered in a commercial register, the in-house legal service is headed by a licensed lawyer, and the activities are within the typical area of expertise and activity of lawyers. Practically speaking, the new in-house counsel privilege will mostly play out in foreign civil litigations involving pre-trial discovery, rather than in Swiss civil litigations given Swiss civil procedural law's narrow grounds for seeking production of evidence by the opposing party.

The inclusion of inhouse legal privilege was mainly driven by the following key factors:

• Previously, Swiss in-house counsel did not enjoy the same protection as external lawyers, leading to disadvantages in legal disputes abroad, particularly in the U.S.
• The revision aims to provide legal certainty and protect the confidentiality of internal legal communications thereby encouraging and safeguarding open communication within Swiss companies.
• The change aims to ensure that Swiss companies are not placed at a disadvantage in foreign litigation by aligning Swiss law with legal systems that offer greater protection to inhouse counsel.

The legal privilege is particularly relevant for Swiss multinational companies for several reasons:

• U.S. procedural law mandates extensive pre-trial discovery, unlike in Switzerland, where disclosure is rare and documents must be precisely identified. U.S. courts often apply Swiss law, which previously lacked in-house privilege, to Swiss legal departments' documents, while protecting U.S. companies' correspondence. To address this disparity, Swiss law will now grant Swiss companies the right to refuse to produce evidence and to protect the correspondence of their in-house counsel. By protecting internal communications, the privilege further encourages employees to report issues and seek legal advice without fear of disclosure.
• It may help companies manage legal risks more effectively by ensuring that internal legal communications remain confidential.

This new privilege marks a significant step towards aligning Swiss law with foreign standards frequently encountered by globally active Swiss companies, providing better protection for Swiss companies in both domestic and international matters.