This country-specific Q&A provides an overview of Litigation that may occur in Denmark.
This Q&A is part of the global guide to Litigation. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/litigation-second-edition/
Published June 2019
What are the main methods of resolving commercial disputes in your jurisdiction?
The main methods of resolving commercial disputes in Denmark are court litigation and arbitration. Mediation have in recent years gained popularity, but solving commercial disputes these ways remain less prevalent. Additionally, it is not uncommon for the parties to resolve a dispute through negotiation either directly or with their legal representatives.
What are the main procedural rules governing commercial litigation?
The Danish Administration of Justice Act is the primary act governing the procedure of litigation, including commercial litigation. The Act governs the majority of the aspects of court litigation and for some areas in a rather detailed manner.
If the parties have agreed to settle the dispute in arbitration, the Danish Arbitration Act determines the procedural rules of the arbitral process. Due to the nature of arbitration, some of these rules may also be subject to the parties’ agreements. A popular arbitration venue for commercial disputes in Denmark is the Danish Institute for Arbitration, which have their own procedural rules for arbitration. The Danish Arbitration Association have also prepared guidelines for the taking of evidence in arbitration, which are commonly used.
What is the structure and organisation of local courts dealing with commercial claims? What is the final court of appeal?
The Danish local courts are structured in three levels. The principal rule is that all cases start in the district courts (in Danish: byret). From the district courts appeal can be lodged to the two High Courts (in Danish: landsret). The final court of appeal is the Supreme Court (in Danish: Højesteret) that almost exclusively reviews cases of general public importance or matters of principle.
Additionally, there is the Maritime and Commercial High Court (in Danish: Sø- og Handelsretten). In cases regarding EU trademarks and EU design, it is mandatory for the case to be heard at the Maritime and Commercial High Court. The Maritime and Commercial High Court does also have subject-matter jurisdiction in particular categories of cases, such as international cases where expertise in international business is important, unless the parties have agreed otherwise.
How long does it typically take from commencing proceedings to get to trial?
The time from commencing proceedings to get to trial varies for each case due to various factors, especially dependant on the complexity of the case and the extent to which the parties request expert evidence obtained. The average observation is that it takes between six months and two years from commencing proceedings to get to trial.
Are hearings held in public and are documents filed at court available to the public? Are there any exceptions?
As a principal rule, the hearings of civil cases are held in public where everyone has the possibility to appear and observe. However, the proceedings until the trial, including the written preparation and the preparatory meetings of civil cases are generally not public.
Judgments and court orders are available to the public. It is also possible to request access to a copy of the parties’ case summaries, and after the main hearing everyone has the right of access to certain of the parties’ procedural documents and the courts judgment. However, the right of access can be restricted if necessary due to, inter alia, a person’s private life or a trade secret. Even in such cases, the courts have to consider if the interests of the company can be protected with measures of anonymisation.
In regards to other documents of the case, such as pleadings, expert opinions and other available evidence, the courts can give everyone with an individual significant interest access to the documents. Here, the right of access can also be restricted in the interest of, inter alia, a person’s private life or a trade secret.
In addition, some judgments of general interest or leading cases are published in summary in various law journals that can be accessed online and in some instances against payment. Courts also publish some of the judgments on their web pages, but the publications often anonymizes the identity of the parties. It has for some time been debated whether there should be a public database where all judgments are published, but no such databases exists yet.
Arbitration cases are according to the Danish Arbitration Act not confidential, but the main hearing and the pleadings are generally not available to the public. A specific duty of confidentiality does, however, require an agreement between the parties or can in exceptional cases be imposed upon the parties by a confidentiality order from the tribunal.
What, if any, are the relevant limitation periods in your jurisdiction?
It follows from the Danish Limitation Act that the main rule is that a claim is time-barred after three years calculated from the earliest time the creditor could have demanded payment of his claim. The beginning of the three year-period can be suspended until the creditor obtains knowledge or should have known of his claim.
However, the Limitation Act also stipulates that in any event, the limitation of a claim is 10 years calculated from the day of the event that caused the damages, regardless of the creditor’s knowledge or constructive knowledge of his claim or the identity of the debtor. For special cases a longer limitation period apply, e.g. personal injury cases.
Bringing legal action against the debtor or entering into a suspension/tolling agreement is one of the various ways in which the limitation period can be suspended or prolonged.
What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
There are no general pre-action conduct requirements in Danish law. In relation to debt collection, however, it is a requirement for taking legal action that the debtor has received a letter of demand (in Danish: inkassoskrivelse) which contains all information necessary for the debtor to assess the claim and provides a minimum of ten days to make payment. Non-compliance may influence the court’s decision regarding legal costs.
How are commercial proceedings commenced? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
Proceedings are instituted by the filing of a writ of summons to the court. The writ of summons must include certain information, such as the names of the parties, the plaintiff’s claim, detailed submissions on points of fact and law made by the plaintiff in support of his claim, and the documents and other evidence on which the plaintiff intends to rely.
The court will then have the writ of summons served on the defendant or sent to the defendant’s legal counsel. Today, service can be done digitally. Upon service, the court will direct the defendant to file a statement of defence within a specified period of time depending on the size and complexity of the case.
How does the court determine whether it has jurisdiction over a claim?
Jurisdiction for the courts can be divided into subject-matter jurisdiction and territorial jurisdiction.
Regarding the competency of a court to hear cases of a particular type or cases, i.e. subject-matter jurisdiction, it is the principal rule that all cases are tried in the first instance by the district courts. Unless the parties have agreed otherwise, a party can request that cases of certain types, inter alia cases where business knowledge is of significant importance, are tried at the Maritime and Commercial High Court.
Moreover, if so requested by a party, the district court may decide to refer a case to the High Court in the first instance if the case consist of matters of principle or matters of general importance to the application and development of the law or has significant societal implications in general.
In principle, the court must ensure on its own initiative that it has territorial jurisdiction over the case. If the defendant does not object to the court’s jurisdiction and actively participate in the process, the court will in almost all cases consider itself to have territorial jurisdiction.
Choice of venue agreements between parties are with some exceptions generally accepted by the Danish courts, while for instance it is not possible to agree that a dispute shall be settled by the High Court or Supreme Court in the first instance.
How does the court determine what law will apply to the claims?
If there is an agreement between the parties containing provisions regarding choice of law, the court will generally apply the law agreed by the parties.
In absence of an agreement, the court will apply Danish private international law to determine the law applicable to the claim. Danish private international law distinguishes between claims in contract and claims in tort.
For claims based on contracts the Rome Convention determines the applicable law. The main rule is that the law of the country which the contract has a closer connection to should govern the contract. The contract is most closely connected with the country where the party who is to effect the performance which is characteristic of the contract has, at the time of conclusion of the contract, his habitual residence, or, in the case of a body corporate or unincorporate, its central administration. Exceptions apply, including for consumer contracts.
In tort cases the main rule is that the law of the country where the harmful action has taken place will apply in accordance with the “lex loci delicti” principle.
In what circumstances, if any, can claims be disposed of without a full trial?
If so requested by the defendant, certain questions can be carved-out for the courts to decide upon separately without a full trial, including formal objections regarding choice of venue, the question of the right plaintiff etc. If the defendant succeed in such an objection, this can lead to the claim being dismissed without a full trial on the merits.
If the plaintiff fails to attend a hearing or submit certain pleadings, the court can also dismiss the case without further proceedings or trial, i.e. there will be no judgment. If, however, the defendant has made a counterclaim at a court hearing at which the plaintiff was represented or in a written pleading served on the plaintiff, the case will continue in respect of the counterclaim if so requested by the defendant. The plaintiff may resubmit the claim if it is not time-barred or not possible due to any other reason.
If the defendant fails to attend a hearing or submit certain pleadings, the court will enter a default judgment in favour of the plaintiff to the extent that the plaintiff's claim is found to be justified on the basis of the statement of claim and any other information available to the court. The party against whom the default judgment has been given may within a short time limit, typically four weeks after the judgment, demand the case to be reopened.
What, if any, are the main types of interim remedies available in your jurisdiction?
As a main rule, the commencement of legal proceedings does not have suspensory effect. However, the courts can, if necessary, by way of a prohibitory or mandatory injunction order a person or a company to temporarily do, refrain from doing or tolerate certain actions.
An arbitration court can also, at the request of a party, order any party to take such interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.
After a claim has been commenced, what written documents must (or can) the parties submit and what is the usual timetable?
After legal proceedings are commenced by the plaintiff’s submission of the writ of summons, the court directs the defendant to file a statement of defence. This exchange of documents is the basis for the further process of the case.
Hereafter, the court will convene the parties to a preparatory meeting. At the preparatory hearing, the court must also – after consultation with the parties – determine the further process, including the time table, if possible.
Further submissions can be demanded by the court, including a statement of reply and statement of rejoinder. If one of the parties moves for a partial award on a separate objection, the parties can be ordered to submit pleadings on the specific question. The courts can also institute a process on the question of production of documents or regarding obtaining expert evidence. The court usually orders the parties to submit a case summary prior to the final hearing and in some cases the production of bundles containing the exhibits of the case as well as relevant legal material.
Legal proceedings are normally completed within six to eighteen months, but it varies depending on the particular circumstances of the case. There is no official maximum.
What, if any, are the rules for disclosure of documents? Are there any exceptions (e.g. on grounds of privilege, confidentiality or public interest)?
The court can, at the request of a party, require the other party to disclose documents which are available to the other party and relevant for the case and which the requesting party will invoke during the proceedings, unless the requested information would otherwise be excluded or exempted from the disclosure as a witness (see below, question 15). Non-compliance can result in adverse inference for the non-disclosing party.
The court can also, at the request of a party, require a third party to disclose documents which are available to him and which have importance for the proceedings, unless the information which will be provided would be excluded or exempted from the disclosure as a witness (see below, question 15). The court can deploy compulsory measures to ensure compliance from the third party.
The party who wants disclosure of documents must state the facts to be proved by the documents as well as the reasons that support the fact that the counterparty or the declared third party holds the documents.
Rules of confidentiality may prevent such disclosure, for instance legal privilege or the statutory confidentiality obligations imposed on banks and auditors, but in some cases – depending on the specific case – these privileges and confidentiality duties have been overruled by the courts.
How is witness evidence dealt with in commercial litigation in your jurisdiction (and in particular, do witnesses give oral and/or written evidence and what, if any, are the rules on cross-examination)? Are depositions permitted?
In court cases the witnesses give verbal statements whereas written witness statements often are used in arbitration. It is the principal rule that everyone is obliged to give statement in court as a witness and can be forced to do so in case they resist. Professional secrecy and other confidentiality obligations can exclude some individuals as witnesses. Furthermore, a witness who is related to a party can be exempted from giving statement and, similarly, if it exposes the witness or witness's related parties to the penalty of the law or harm to their safety or welfare or otherwise inflict significant harm on the witness or his related parties.
The party who has requested the witness starts the questioning, and hereafter the counterparty may engage in cross-examination of the witness, which is not limited to matters raised by the initial questioning. If the court finds it necessary, it can also ask the witness questions.
Leading questions are generally not allowed and the courts can interfere in the party’s questioning if necessary. Depositions are not used in Denmark.
Is expert evidence permitted and how is it dealt with? Is the expert appointed by the court or the parties and what duties do they owe?
In civil proceedings, a party may request the court to commission an expert report (in Danish: syn og skøn). The party requesting expert evidence will have to pay the costs of the expert until the court renders its judgment. The expert cannot make any legal assessments. The appointed expert will perform an inspection, assessment and answer the questions from the parties.
Additionally, expert opinions from the parties can generally be submitted if they have been obtained before the commencement of the legal proceedings, but not if they have been prepared after the legal proceedings have started, unless both parties agree.
Can final and interim decisions be appealed? If so, to which court(s) and within what timescale?
In Danish law, there is a distinction between appeal (in Danish: anke) and interlocutory appeal (in Danish: kære).
For final decisions in the first instance, the principal rule is that the decision can be appealed within four weeks. However, a High Court may refuse to hear an appeal if there are no prospects of reaching another conclusion than the district court, and the appeal does not concern fundamental legal questions or where no other reasons exist in general in favour of hearing the case before the High Court. Appeal to the Supreme Court requires permission form the Appeals Permission Board.
If the proceedings concern a claim of a maximum economic value of DKK 20,000, the judgment may be appealed only with the permission of the Appeals Permission Board which grants such permission to appeal if the case concerns fundamental legal questions or with reference to special circumstances otherwise.
Interim decisions subject to interlocutory appeal can be appealed within two weeks. In practice, most interim decisions are not appealable without permission from the Appeals Permission Board as orders and other decisions made by the court during the hearing or during the preparatory procedure are non-appealable without such permission.
What are the rules governing enforcement of foreign judgments in your jurisdiction?
If the foreign judgment is from a country outside the EU or the Lugano-countries, the judgment is only enforceable in Denmark if there is an agreement between Denmark and the country in question. In practice, judgments from courts outside the EU or Lugano-area are mostly not enforceable in Denmark.
Foreign judgments from countries which are member states of EU or from the Lugano-area are, with reference to the Brussels I Regulation and the Lugano Convention, generally recognised and enforceable in Denmark.
Foreign arbitral awards are according to the Danish Arbitration Act binding and enforceable in Denmark, regardless of the country in which it was made.
Can the costs of litigation (e.g. court costs, as well as the parties’ costs of instructing lawyers, experts and other professionals) be recovered from the other side?
The court will ex officio as a part of the judgement decide which party is to bear the costs of litigation. The unsuccessful party must usually compensate the opposing party for the costs incurred as part of the proceedings.
The amount of legal costs are awarded on the basis of a schedule which no longer reflects the actual legal costs. In reality, the party will only be able to recover part of the legal costs actually incurred. However, costs paid to the court, fees paid to the experts appointed by the court, expenses to witnesses and other expenses will mostly be fully recovered.
What, if any, are the collective redress (e.g. class action) mechanisms in your jurisdiction?
Uniform claims from several individuals can proceed as a class action. Usually joining the class action requires an active registration by every potential individual. The main requirement for bringing a class action is that the claim is uniform or fulfils a certain set of conditions ordered by the courts.
Class actions are conducted by a representative on behalf of the group. The representative can be a member of the group, an association when the action falls within the scope of the association's purpose, or a public authority authorized by law to do so.
What, if any, are the mechanism for joining third parties to ongoing proceedings and/or consolidating two sets of proceedings in your jurisdiction?
If certain requirements are fulfilled, the plaintiff may make more than one claim against the defendant in one action, and the defendant may submit counterclaims. In addition, more than one party may sue or be sued in one action, and each of the parties may add claims against third parties to the proceedings. The requirements of such consolidations are mainly that the court has jurisdiction, that all claims should be heard under the same procedural rules, and that none of the parties object or – in the event that a party objects – that the claims are sufficiently connected.
A third party may, by filing a writ of summons, join a first instance case as a party. The requirements of such intervention are mainly that the court has jurisdiction, all claims are heard under the same procedural rules, and the third party intends to make a counterclaim in respect of the subject-matter of the proceedings, or the third party’s claim is sufficiently connected with the original claim. Furthermore, a third party having a legal interest in the outcome of an action may join the proceedings in support of one of the parties.
Are third parties allowed to fund litigation? If so, are there any restrictions on this and can third party funders be made liable for the costs incurred by the other side?
It is possible for both the plaintiff and the defendant to use third-party funding. The phenomenon of equity fonds and insurance companies funding litigation against a share of the possible outcome of the case is still rare in Denmark, but there are on-going examples of such proceedings.
Although no legislation and precedent exists, we find it unlikely that third-party funders would be held liable for the costs as long as the arrangement has not been made with the purpose of avoiding adverse litigation costs.
What is the main advantage and the main disadvantage of litigating international commercial disputes in your jurisdiction?
The process of court litigation in Denmark is safe and ensures a high level of compliance with fundamental principles of due process. Additionally, the costs of litigation in Denmark are reasonable.
The main disadvantage of litigating commercial disputes in Danish courts is that resolving complicated disputes is time-consuming. Moreover, it should be noted that the discovery/disclosure rules in Denmark are not as extensive as in other jurisdictions.
What is the most likely growth area for disputes in your jurisdiction for the next 5 years?
An increasing number of major professional negligence claims, especially in relation to financial and legal advisors in M&A, more post-M&A disputes and GDPR disputes. Claims related to violation of securities law is another area to be mindful of.
Will be the impact of technology on commercial litigation in your jurisdiction in the next 5 years?
The court proceedings of the Danish courts continue to become more digitalized. However, litigating complex commercial disputes will in our opinion not be materially impacted by technology within the next 5 years but will depend on the essentials of litigation, inter alia, intimate knowledge of the facts of the case, wise tactical procedural decisions, credibility in the conduct of the case and convincing arguments.