Major topics and issues of the Committee for Legal Affairs CLA

(as of December 2011)

  

The aim of the revision of legislation governing limited companies and public limited companies and financial reporting (08.011) is to bring company law up to date so that it meets the economy’s current needs. The proposal includes in particular improving corporate governance in order to strengthen the position of shareholders as the owners of the companies, to more clearly define the right to information and, in the case of companies that are not quoted on the stock exchange, to include a clause ensuring that information can be requested in writing. At the same time, the proposal lowers the threshold at which various shareholders’ rights can be exercised. Finally, the members of the board of directors will have to be elected each year by the Annual General Meeting of shareholders, and shareholders in companies that are not quoted on the stock exchange will have the right to demand information concerning the remuneration of senior executives. The second part of the reform programme comprises regulations concerning the structure of a company’s capital that are more flexible and consequently give the company more latitude in modifying its capital. The proposal also sets out a legal basis which allows electronic media to be used for preparing and running a General Meeting.
The federal popular initiative “Against excessive remuneration” (08.080) is intended to check remuneration of senior executives of public limited companies quoted on the stock exchange that is considered excessive. The initiative committee’s primary intention is to achieve its aim by reinforcing corporate governance. In addition, it aims to give shareholders more possibilities of influencing policy regarding the remuneration of senior executives. The Federal Council has submitted an indirect counter-proposal to parliament in the form of an additional message to the revision of the legislation on limited companies and public limited companies and financial reporting (08.011).
During the 2009 summer session, the Council of States as the first Council examined the proposed new version of the law on limited companies and public limited companies. Furthermore, it recommended that the popular initiative be rejected. During the 2010 spring session the National Council recommended the approval of both the popular initiative and its own direct counter-proposal. The CLA-S then drew up two new indirect counter-proposals (10.443). Proposal 2 differs from proposal 1 in that it also sets out specific regulations on shares and tax for extremely high remuneration. The Council of States approved both proposals during the 2010 winter session. It rejected the direct counter-proposal. During the 2011 winter session the National Council did not address proposal 2 for the second time; the proposal is refused definitively. The National Council approved proposal 1 during the 2011 summer session – with the differences that arose. These differences are now being ironed out.
Proposal 08.011, put forward by the Federal Council, also entails the total revision of legislation on financial reporting. The Council of States separated this part of the proposal from that governing companies and examined and approved it during the 2009 winter session (08.011 proposal 2). The National Council approved this proposal, with its own modifications, during the 2010 winter session. The differences are now being ironed out.
In the final vote held during the 2011 summer session, the Councils also approved a modification of the legislation on auditing (Art. 727 of the SCO) in a separate proposal (08.011 proposal 3).

09.086 n Brand Protection Act. Modification and “Swissness” proposal
The Federal Council put before parliament proposals for modification of the Brand Protection Act and a totally revised Coats-of-Arms Protection Act. The aim of the revision of the Brand Protection Act is to ensure the long-term conservation of the “Swiss brand”. New criteria should be set out to define clearly and precisely the geographical origin of a product. Regulations should be drawn up to stipulate who may use the designation “Swiss”, under what conditions and in what way. The new Coats-of-Arms Protection Act should stipulate that, basically, only the Swiss Confederation and its organs may use official coat-of-arms.
The issue was the focus of a preliminary examination by the National Council Committee. The Council is due to address the issue during the 2012 spring session.

05.445 n Parl. init. Constitutional jurisdiction
07.476 n Parl. init. The federal constitution as a standard for the application of legislation by the authorities
The National Council CLA approved a proposal concerning the implementation of both parliamentary initiatives which calls for the abolition of Article 190 of the federal constitution. This would entail the invalidation of the limitation of the verification of norms for federal laws. As with federal ordinances and cantonal decrees, their compliance with the federal constitution and international law could be verified by all official bodies at the time of application in concrete cases. The principle norm for verification would be the federal constitution as a whole. In conflicting circumstances, unlike current practice, the federal court would also give priority to basic rights not guaranteed under international law as well as to constitutional stipulations on the division of areas of competence between the federal and the cantonal authorities over a federal law.
The National Council approved this proposal during the 2011 winter session.

10.077 n Prosecution for Debt and Bankruptcy Act (PA). Company reorganisation
The Federal Council has submitted a proposal to parliament for the revision of certain aspects of the law on insolvency, aimed in particular at improving the procedure for winding up a company. There is no doubt that Swiss legislation on insolvency is adapted to the procedure for winding up a company, but it has certain weak points which would be eliminated under the Federal Council’s proposals.
The text put before parliament includes in particular the following changes: the new deferment period before a company is wound up will be similar to “Chapter 11” under US law and will no longer automatically lead to a company being wound up or declared bankrupt but may be granted as a genuine economic deferment; the postponement of a declaration of bankruptcy will be transferred from company law to the new Act in order to ensure that all types of companies can take advantage; creditors’ rights of joint decision-making during the deferment period before a company is wound up will be improved, in particular in order to protect them from over-hasty liquidation; the prerequisites for approving the winding up of a company will be eased, the guarantee that third-class creditors will be paid off no longer being considered essential; the proposal also includes a solution regarding long-term contracts; no legal action will have the power of revocation if the action in question has been carried out with the explicit endorsement of the authorities responsible for compulsory implementation; the right of lien of a lessor of commercial premises will be abolished; if a company is taken over, the new owners will no longer be obliged to keep on the entire work-force if the company in question has been declared insolvent; by way of compensation, the Federal Council proposes a compulsory social plan for companies that employ over 250 people and plan to dismiss over 30 of them and are not insolvent; in order to ensure that it is possible to successfully reorganise a company in the future, the privilege concerning outstanding VAT bills that was introduced on 1 January 2010 will be abolished.
The National Council did not address the issue during the 2011 autumn session; it is now being examined by the Council of States Committee.

11.039 n The Penal Code, the Military Penal Code and the Juvenile Penal Code. No statute of limitation for sexual and pornographic crimes involving children
The Federal Council put before parliament a draft modification of penal legislation in connection with the implementation of the popular initiative “No statute of limitation for sexual and pornographic crimes involving children” (Art. 123b of the federal constitution), which was approved by the electorate, when it becomes law. The enactment of the bill should guarantee legal security as well as the efficient and uniform application of Article 123b of the federal constitution by the prosecution services. The draft proposes that a new stipulation be added to the Penal Code (SPC) whereby no statute of limitation would apply in the case of offences under Article 187, para. 1, (sexual acts involving children), Article 189 (sexual coercion), Article 190 (rape) and Article 191 (sexual abuse) when children under the age of twelve are involved. In addition, such offences would not be subject to the statute of limitation only if they are committed by adults. Finally, the draft expressly proposes that no statute of limitation would apply to criminal offences which, on the day the electorate voted in favour of the initiative, fell under the statute of limitation.

11.070 n Swiss Civil Code. Parental custody
The aim of the revision of the Civil Code, as proposed by the Federal Council, is that joint custody of children would become the norm, regardless of the parents’ civil status, thus ensuring equal rights for fathers and mothers. Only in cases where the child’s interests need to be protected would one parent be given sole custody. Under the same conditions, a married parent may be denied custody today. In the case of a divorce, it is the job of the court to decide whether there are grounds for denying one parent custody; this task falls to a child protection agency in the case of an illegitimate child. At the same time, the draft gives the parent who is looking after the child the sole right to decide on daily matters and in emergencies. Additional measures set out in the draft address the issues of the child and the parent who has custody moving to a new location.

08.458 n Parl. init. Precise definition of scope of application of stipulations concerning covert investigations
This parliamentary initiative is based on a federal court decision dating back to 2008. Until then, a distinction was made in practice between “covert searches” and “covert investigations”, only the latter being governed by stringent legal prerequisites. In 2008 the federal court declared that the two were equal in the eyes of the law, which severely limited the scope of covert detection work. In particular, undercover police officers would no longer be able to infiltrate the drugs trade by making purchases themselves. The problem was aggravated by the abolition of the federal law on covert investigations when the Swiss Code of Criminal Procedure came into force, since the law was used as the legal basis for preventive covert investigations. Problems arose in particular with regard to investigations of “chatrooms”.
The National Council CLA has drawn up a preliminary draft for a revision of the Code of Criminal Procedure which should eliminate this unsatisfactory legal position regarding an area of competence which falls to the federal authorities. The preliminary draft was the subject of consultation between the end of May and the middle of September 2011. The Committee is expected to re-address the issue at the beginning of 2012.

10.444 s Parl. init. Swiss Code of Criminal Procedure. Regulations on records of statements
The Criminal Procedure Code stipulates that statements made to the police must be read back to the person interviewed or given to him or her to read before being signed by the interviewee. This rule, which is valid regardless of whether the statement is recorded on audio tape or not, can lead to a time-consuming procedure, particularly when a person is interviewed in a language not spoken in Switzerland or when the statement must not only be read out but also translated back into the interviewee’s mother tongue.
The Council of States CLA has drawn up the preliminary draft of an amendment to the Criminal Procedure Code under which, in order to speed up the procedure, interviews recorded on tape will no longer have to be read back to the interviewee before they are signed. The rule applies only to interviews before courts competent to try the case concerned. The Committee has passed the draft on to a limited group of interested parties for their opinions, and will most probably take the matter up again at the beginning of 2012.

11.067 Professional confidentiality for lawyers. Modification of procedural stipulations. Federal act
The aim of the bill submitted to parliament by the Federal Council, which proposes the modification of procedural stipulations concerning confidentiality within the legal profession, is to harmonise the inclusion of lawyers’ documents as proof in the various federal laws on procedure. The relevant codes on procedure would be modified to bring them into line with the rules set out in the Civil Code (Art. 160, para. 1, point b) and the Code of Criminal Procedure (Art. 264, para. 1). Both codes prescribe professional confidentiality for lawyers with regard to procedural matters. Correspondence with lawyers must not be handed over or may not be seized if it is in the possession of lawyers’ clients or third parties. This protection also extends to all objects and documents produced by lawyers in their professional capacity, regardless of when they were produced.