This country-specific Q&A provides an overview of Litigation that may occur in Sweden.
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?
Arbitration is the preferred dispute mechanism for commercial disputes in Sweden. However, also the general courts decide a significant number of commercial disputes each year.
What are the main procedural rules governing commercial litigation?
The Swedish Procedural Code of 1942 provides for an adversarial (non-inquisitorial), oral trial proceedings; based on the principles of ‘orality’, 'immediacy' and 'concentration'. The first means that the relief sought, the legal grounds invoked, the statement of facts and the evidence on which judgments are to be based must be presented orally. The second means that such presentation must be made directly to the court and the third that the main hearing is to be arranged without interruptions. However, in commercial cases, written pleadings and evidence are often voluminous and the principles are not strictly upheld. At the main hearing, the court for example often refers to a written summary of the parties’ respective positions rather than requiring the parties to orally account for all circumstances invoked. To some extent the courts may also accept that the parties only refer to written evidence submitted to the court instead of presenting it in detail before the court.
To modernise the system and transform it to a procedural order of higher flexibility, a number of significant changes have been made in the course of the last years, including for example that witnesses are only heard in the district courts. Superior courts review video recordings of the witness examinations made in the district courts but do, with few exemptions, not administer new hearings of witnesses.
Arbitration in Sweden is governed by the Arbitration Act of 1999, last revised per 1 March 2019. The Arbitration Act governs all arbitrations seated in Sweden and applies both to domestic and international disputes with some specific provisions for international disputes.
What is the structure and organisation of local courts dealing with commercial claims? What is the final court of appeal?
Swedish general courts form a three-tiered system; district courts, courts of appeal and the Supreme Court. There are also specialised courts which determine disputes within specific areas, for example the Labour Court, the Environmental Court and the Patent and Market Court. More information on the Swedish court system can be retrieved at http://www.domstol.se/Funktioner/English/The-Swedish-courts/.
Leave to appeal is required for all appeals. Whilst the Supreme Court normally grants leave only for the purpose of establishing a precedent, the appellate courts will also give leave to appeal if there are or may be reasons to change the ruling of the lower court or if it is necessary to rehear the case in order to determine whether or not there is reason to change the decision of the lower court.
How long does it typically take from commencing proceedings to get to trial?
In less complex cases, the proceedings in a district court take approximately one year. In complex cases, it is not uncommon for proceedings to last two or three years. Proceedings in the courts of appeal and the Supreme Court are usually faster than district court proceedings.
Are hearings held in public and are documents filed at court available to the public? Are there any exceptions?
Court proceedings in Sweden are in general public. This applies to all briefs and other documents filed with the court as well as hearings, decisions and judgments by the court. However, documents submitted as evidence that contain sensitive information such as for example trade secrets may be protected as confidential by the court on a party’s request. If such confidential material is to be presented at a hearing, the public can be barred from attending those parts of the hearing.
What, if any, are the relevant limitation periods in your jurisdiction?
Time limitation is treated as a substantive law issue. The general rule is a 10-year limitation period from the date of the origin of the claim. The limitation period can according to the general rule be interrupted through, for example, a reminder, an acknowledgment or an initiation of legal proceedings whereby a new limitation period will start to run. There are however several exceptions from the general rule where claims are subject to shorter limitation periods and where it is often necessary to take legal action to interrupt limitation.
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 legal requirements on pre-action conduct. However, according to the Code of Conduct of the Swedish Bar Association, which governs the conduct of lawyers admitted to the Bar, the main rule is that legal action must not be taken unless the opposing party has first been given reasonable time to consider the claim. Consequently a letter before claim is normally sent.
How are commercial proceedings commenced? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
Civil proceedings are initiated by a plaintiff applying for summons. When the court is satisfied that the summons application meets the stipulated requirements as to form and content and is not manifestly unfounded, the court issues a summons requiring the defendant to respond to the claim within the time limit set by the court (normally two to four weeks from when the summons was served on the defendant). The summons must be served on the defendant, which is done by the court. If the defendant fails to submit a statement of defence with the court in a timely manner, a default judgment may be rendered against the defendant.
How does the court determine whether it has jurisdiction over a claim?
As a member of the European Union, Sweden is bound by Council Regulation (EC) No. 1215/2012 of 12 December 2012 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (the Recast Brussels I Regulation). Sweden has also ratified the Convention of 13 October 2007 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (the Lugano Convention). The Recast Brussels I Regulation stipulates which member state’s courts has jurisdiction in cases where one or more parties are domiciled in different member state. The Lugano Convention provides in principle the same provisions, which are applicable where one or more of the parties is domiciled in any of the European Free Trade Association (EFTA) member states.
Both the Recast Brussels I Regulation and the Lugano Convention stipulate that the parties may in a prorogation or forum selection clause designate the jurisdiction in which a dispute between the parties is to be heard. Chapter 10 of the Code of Judicial Procedure contains a corresponding provision.
How does the court determine what law will apply to the claims?
Private international law in Sweden is codified only in part, and consists of a combination of statute and case law. The statute law is for the most part aimed at giving effect to international conventions to which Sweden is a party. For example, as regards contractual disputes, Sweden is bound by Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (the Rome I Regulation) and as regards non-contractual disputes Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (the Rome II Regulation) is applicable.
The parties’ autonomy with regard to applicable substantive law is one of the main principles of Swedish law. Thus, the parties can normally agree on any law to be applied to a specific matter or agreement. However, there are also some Swedish mandatory rules that apply despite the choice of law, for example in competition and real estate law.
In what circumstances, if any, can claims be disposed of without a full trial?
The most notable situations are the following:
- The case is res judicata or subject to lis pendens.
- The court lacks jurisdiction to try the case.
- The court issues a default award.
The court must, on its own motion, consider whether the case is res judicata or subject to lis pendens as soon as any reason for that arises. A party can also raise an objection in this respect at any time during the proceedings. As regards a lack of jurisdiction, the court must consider whether it has jurisdiction on its own motion only in cases where another court may have exclusive jurisdiction. In all other cases (for example, when the underlying contract contains an arbitration clause), a party must assert that the court lacks jurisdiction. A party who wishes to raise this objection must do so the first time it is to respond. If a party has a legal excuse for not raising the objection on time, the party must present it as soon as possible after the excuse has ceased to exist. A party who fails to object within this time limit loses its right to object.
If a party has made an objection, the court must issue a separate decision thereon as soon as possible. If the court is contemplating dismissing the case based on the objection raised, the other party is always invited to reply to the objection. Both parties are also invited to submit statements if the court is contemplating dismissing the case on its own motion.
The court can also render a default judgment if the defendant does not submit its statement of defence within the time limit set by the court, provided that the summons has been served on the defendant (see question 8 above). Further, if the parties agree on a settlement they may at any time during the proceedings also request the court to issue a consent award, which then becomes enforceable.
What, if any, are the main types of interim remedies available in your jurisdiction?
If someone shows probable cause that he or she has a money claim, that is or may be subject to judicial proceedings (including e.g. arbitration), and if it is reasonable to suspect that the opposing party will take action to avoid payment of the debt the court may order the provisional attachment of money. Similarly, if someone shows probable cause that he or she has superior right to property and if it is reasonable to suspect that the opposite party will take action to conceal, substantially deteriorate or otherwise deal with or dispose of the property, the court may order the provisional attachment of that property.
In addition, the court may issue an order for any measures suitable to secure the applicant’s right. This requires that the applicant shows probable cause to believe that he or she has a claim against another that is or can be subject to judicial proceedings (including e.g. arbitration) and that it is reasonable to suspect that the opposing party, by carrying on a certain activity, by performing or refraining from performing a certain act, or by other conduct, will hinder or render more difficult the exercise or realization of the applicant's right or substantially reduce the value of that right. These measures that the court may order include for example a prohibitory injunction to carry on a certain activity or perform a certain action, an order to have regard to the applicant's claim, the appointment of a receiver or any other measure required to protect the claimant’s rights. All such injunctions and orders may be made subject to a default fine. Finally, in pending proceedings, the court may also order the interim restitution of specific property that the dispute concerns.
After a claim has been commenced, what written documents must (or can) the parties submit and what is the usual timetable?
The main stages in civil proceedings in the first instance are, in general:
- preparatory phase of exchanging written statements, i.e. application for summons, statement of defence and sometimes additional submission(s);
- a preparatory meeting where the court seeks to sort out any uncertainties in the parties’ respective positions and where a timetable is often set for the further proceedings;
- continued exchange of written statements including statements of evidence if these have not already been submitted and;
- the final hearing of the case. There is no generally applicable timeframe but the Swedish code of Judicial Procedure requires the court to set a timetable for the case and this is often done at the preparatory meeting, taking into account the views of the parties in this regard.
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 may, upon the request of a party, order anybody holding a written document that can be assumed to be of importance as evidence in a case to produce it. An application for production of documents must concern specific documents or categories of documents which can be identified by a specific evidentiary theme. There are exceptions to the obligation to disclosure, such as written communication between a party and a close relative; documents under legal privilege, e.g. attorneys, physicians, dentists, midwives, trained nurses, psychologists, psychotherapists, persons ordained to serve as a minister of the Church of Sweden or of a congregation other than the Church of Sweden, concerning matters entrusted to, or found out by, them in their professional capacity, and; information subject to the application of certain provisions of the Secrecy Act. Documents containing trade secrets are protected unless the court finds that there are extraordinary reasons for disclosure.
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?
A witness of fact must give his or her testimony orally, direct before the court and, as a main rule, under oath. Sometimes testimony may be given via video or telephone conferencing. The parties may not invoke written witness statements. The witness may bring personal notes but is supposed to speak freely and not to read out of any prepared statements. A witness of fact is always subject to cross-examination. There are no specific rules as regards cross-examination. However, the court shall reject questions that are manifestly irrelevant to the matter at issue, confusing, or otherwise inappropriate. Depositions are not used.
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?
An expert witness is normally appointed by one of the parties. Although the court also has powers to appoint experts, this rarely happens in a civil case. The main difference between a witness of fact and an expert witness is that prior to the main hearing, an expert witness shall produce a written expert opinion regarding the matters of which he or she is to give testimony. When the expert witness is appointed by one of the parties, essentially the same rules apply as regards a witness of fact. Following the direct hearing, the expert is subject to cross examination by the opponent side.
Swedish procedural law does not allow a witness to attend the hearing prior to giving testimony, which means that as a general rule experts are not heard at a witness conference. However, if the parties are in agreement with respect to how the experts shall be heard, this is usually accepted by the court.
Can final and interim decisions be appealed? If so, to which court(s) and within what timescale?
The final decision of a district court may be appealed, but generally leave to appeal is required for the court of appeal to review the district court’s judgment or decision. Other decisions may in general be appealed only in conjunction with an appeal against judgment or final decision, unless otherwise provided. Certain kinds of procedural or interim decisions may however be appealed separately, for example decisions to grant or reject an application for production of documents and decisions to grant or reject security measures.Decisions are to be appealed to the court of appeal within three weeks.
What are the rules governing enforcement of foreign judgments in your jurisdiction?
Under the Recast Brussels I Regulation, a judgment rendered in any other EU member state, which is enforceable in such state, shall be recognised and enforced in all other member states. A party seeking enforcement according to the Recast Brussels I Regulation must merely submit the judgment to the national authority handling enforcement in the form set out in the Recast Brussels I Regulation. If enforcement is sought in Sweden, the application for enforcement shall be submitted to the Enforcement Authority. The Recast Brussels I apply to judgments from EU-member states where the legal procedures started in the country of origin before or after 10 January 2015. Prior judgments are subject to its successor, Brussels I, requiring e.g. an application for declaration of enforcement (‘exequatur’).
With respect to foreign judgments and court decisions from non-EU member states, the Recast Brussels I Regulation is not applicable. As for countries within the EFTA, the Lugano Convention is applicable and contains, in principle, the same provisions as the Recast Brussels I Regulation. The EFTA member states are Iceland, Liechtenstein, Norway and Switzerland, but Liechtenstein has not ratified the Lugano Convention, and the Convention is thus not applicable to judgments rendered in Liechtenstein. One important difference to the Recast Brussels I Regulation, however, is that the Lugano Convention has not been amended in order to reflect the new rules abolishing the exequatur procedure. Hence, an exequatur procedure is still required under the Lugano Convention.
With respect to the close historical relationship and cooperation between the Nordic countries (i.e., Sweden, Norway, Denmark, Iceland and Finland), the Nordic countries have for a long time recognised judgments rendered in the other Nordic countries and allowed for their direct enforcement. In Sweden, the provisions in this respect are mainly contained in the Act on the Recognition and Enforcement of Judgments in Civil Cases Rendered in the Nordic States. This act is not restricted to judgments, but also applies to certain Danish and Norwegian promissory notes, decisions by the Finnish execution authority and Danish settlements. Enforcement may hence be sought directly, via the Swedish Enforcement Agency.
As for judgments rendered in non-EU or EFTA member states, there is no comprehensive regulation under Swedish international procedural law to be referred to in relation to issues of recognition and enforcement. Foreign judgments are only recognised in Sweden to the extent there is explicit legislation to that effect. There are a number of different statutes containing provisions dealing with enforcement issues of foreign rulings on different areas of the law. These statutes are based on international conventions and are thus only effective in relation to judgments rendered in countries that have ratified such convention. In this context it could be added that Sweden is a party to the New York convention and international arbitral awards are hence also enforceable in Sweden.
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?
According to the main rule, costs follow the event. Consequently, an unsuccessful party will normally be ordered to compensate the successful party for its litigation costs in full. In cases where neither of the parties is fully successful, the court will apportion the costs, taking into consideration the respective success of each party.
What, if any, are the collective redress (e.g. class action) mechanisms in your jurisdiction?
Class actions are available and may be used for any type of claim. However, since the Swedish Group Proceedings Act came in to force, only approximately 30-50 cases have been initiated (no official statistics exists). One of the reasons for this is, for example, that the Group Proceedings Act prevents an effective use of legal aid as most insurance companies have excluded class actions from the scope of the insurance cover.
However, in recent years several high-profile cases between groups of consumers and construction companies as well as financial advisers have been tried by the courts. In these cases, each consumer has pursued its own claim, formally as a separate case. In accordance with the rules for joinder contained in the Code of Judicial Procedure, all such claims brought simultaneously can be been joined into one single trial.
What, if any, are the mechanism for joining third parties to ongoing proceedings and/or consolidating two sets of proceedings in your jurisdiction?
If a person not party to the proceedings requests joint adjudication upon instituting an action, which concerns the same matter at issue, against one or both parties, the cases may be joined in one proceeding.
If a party, in the event that it loses the case, wishes to present a claim for damages, or a similar claim against a third party, such party may institute proceedings against the third party for joint adjudication with the main claim. Moreover, if a third party, by reason of the potential outcome of a pending case, wishes to institute proceedings of the kind stated in the first paragraph against one or both of the parties, such third party may institute this action for joint adjudication with the main claim.
Claims between the same or different parties may also be joined in one proceeding in situations other than those described above if the joinder benefits the examination of the claims.
The Code of Judicial Procedure also contains provision regarding third-party intervention in specific cases; however, these are rarely used.
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?
Third-party funding is allowed. A third party funding a trial is not a party and has no formal role in the proceedings. Normally, any third-party funding is kept secret from the court or the other party. As a third party funder is not a party, it may under no circumstances assume control of the litigation or otherwise participate therein unless the provisions regarding intervention as mentioned above apply. However, a third-party funder is likely to require extensive contractual obligations from the funded party to act in accordance with the funder’s wishes. There is no legislation or case law stating that third party funders can be made liable for the costs incurred by the other side. However, there is some case law stating that an owner of a company can be liable to pay the costs of the other party, if the company has been used only as a vehicle to circumvent the liability to pay the counter party’s costs.
What is the main advantage and the main disadvantage of litigating international commercial disputes in your jurisdiction?
Arbitration is the preferred dispute mechanism for commercial disputes in Sweden, and Sweden has a strong position as a venue for international arbitration. However, Sweden has advantages also as regards litigation in court. Sweden has a modern court system and international commercial disputes can be expected to be handed quickly and efficiently. One disadvantage of litigating in Sweden might be that court proceedings in Sweden are in general public.
What is the most likely growth area for disputes in your jurisdiction for the next 5 years?
We believe that one growth area for disputes in Sweden is damages claims based on competition law infringements (private enforcement). In December, 2016, the Swedish implementation of the EU Directive on Antitrust Damages Actions, the new Act on Antitrust Damages was enacted, with the purpose of facilitate for parties that have suffered from a violation of competition law to claim damages.
Will be the impact of technology on commercial litigation in your jurisdiction in the next 5 years?
Already today Swedish courts regularly use technical solutions in commercial cases. This includes requesting the parties to submit their briefs electronically and hearings and/or witness examinations taking place via video conference. Parties and counsels will likely use digital solutions to search, organise and analyse the documentation in larger litigation cases to a greater extent than is already done today, e.g. electronic discovery review software and software for linking witnesses, facts, evidence, and legal issues.