What is the meaning of that expression in Swiss law?
Most legal jurisdictions assign a special status to correspondence between lawyers as a means of facilitating the amicable resolutions of disputes. This makes it possible for the parties to speak freely and openly with one another while negotiating an out-of-court settlement.
In Switzerland, lawyers are prohibited from producing in court the following types of evidence:[1]
- documents or information exchanged with another lawyer in the course of settlement negotiations;[2]
- all other communications with another lawyer of which the confidential nature is clearly noted.
This rule of confidentiality in settlement negotiations is known in French-speaking Switzerland as “réserves d’usage”.
Marking any document with the phrase “sous les réserves d’usage”, in a clearly legible manner, constitutes an unambiguous indication that the document is of a confidential nature and thus prevents the other lawyer from making use thereof in court proceedings. Settlement offers, by contrast, are by their nature considered by law to have confidential status, even if they are not explicitly marked as such.
Any document produced in evidence in court proceedings in violation of this prohibition is considered inadmissible within the meaning of CPC Art. 152 (2).
It should be pointed out to foreign lawyers, however, that the Federal Supreme Court has ruled that, in Switzerland, this prohibition applies only to lawyers,[3] as it derives from the professional and ethical obligations to which they specifically are subject. The parties themselves are subject to a duty of confidentiality only if they have entered into a specific agreement to that effect under private law. A party that is not, or is no longer, represented by a lawyer, or who has not signed a confidentiality agreement, may thus produce in evidence any document received from the adverse party – even if marked “sous les réserves d’usage” – without its being declared inadmissible.[4]
The conclusion of a confidentiality agreement between the parties before commencing settlement negotiations is thus the most certain and effective means for making sure that documents exchanged in the course of settlement negotiations cannot be introduced into evidence in court proceedings in Switzerland.
What is the German equivalent of the French expression “sous les réserves d’usage”?
As examples of phrases that may be used to clearly indicate that a letter is to be understood as pertaining to settlement negotiations and thus, as confidential, the Zurich Bar Associations suggests “unpräjudizierlich”, “nicht für den Gerichtsgebrauch bestimmt”, and “ohne Anerkennung einer Rechtspflicht”.[5] The Swiss Bar Association suggests “unpräjudiziell” and “ohne jede Rechtspflicht” as further options. In order to avoid any ambiguity, Rolf Wyss, former president of the Zurich Bar Association’s Ethics Committee recommended a more complete formulation: “vertraulich, unpräjudiziell, nicht für den Gerichtsgebrauch bestimmt”.[6]
What are the English equivalents of the French expression “sous les réserves d’usage”?
In Great Britain, the “without prejudice rule” (or “without prejudice privilege”) prohibits the production in court of statements (written or oral) which have been made with the serious intent of reaching an out-of-court settlement to a dispute (“genuine settlement negotiations”).[7]
For the sake of clarity, use of the phrase “without prejudice” (or “WP”) is highly recommended, but is not, in and of itself, sufficient to “immunize” a document against its use as evidence. The exchange in question must necessarily have taken place within the context of a “genuine dispute” or “genuine negotiations”. Moreover, such explicit mention is not required, as any exchange considered to have taken place as part of “compromise negotiations” is automatically subject to this privilege.[8]
Swiss lawyers should take special note that in UK case law the “without prejudice privilege” is applied without regard to whether the statement in question was made by a party to the dispute or by their lawyer or to whether or not the party was represented.
The phrase “on an open basis” is used to express the opposite of “without prejudice”, indicating that the lawyers may freely produce the exchanges in question as evidence.
The phrase “without prejudice save as to costs” or “without prejudice except as to costs” is used to indicate that the lawyer who has written the letter may introduce it into evidence when arguing about the award of costs. It is worth noting, as well, that UK procedural law includes a provision concerning a specific category of settlement offers referred to as “CPR Part 36 offers to settle”, which must be kept confidential by operation of law until a judgement on the merits of the case has been handed down; they may, however, be taken into consideration in the awarding of costs.[9]
The phrase “without prejudice” should not be confused with the classification of a document as “privileged” (subject to professional secrecy; soumis au secret professionnel; dem Berufsgeheimnis unterliegend”, which means that the information contained in them is barred from disclosure to the other party).
The terms “off-the-record” or “confidential” may serve as an indication that there is a private law confidentiality agreement between the parties, but the case-law does not recognize documents so marked as having the same procedural status as those subject to the “without prejudice rule”. In the absence of an explicit agreement concerning them, or of a specific procedural rule applicable to them, such documents may thus be produced in evidence before a court of law.[10]
Finally, mention should be made of the expression “subject to contract“, which does not render a document inadmissible as evidence, but merely indicates that a proposal contained therein is not to be understood as a binding offer. This means that further negotiations are needed in order to reach an agreement and that it will become final only after a formal (written) contract has been concluded.
In short, the phrase “sous les réserves d’usage“, along with the German and English translations thereof, is a good illustration of the necessity for using exact terminology in legal writing. Before you have any document or settlement proposal translated, always make certain that your translators are aware of the potential ramifications of their work and, above all, that they fully understand the precise legal meaning of each term employed – both in the original and in the translated document.
[1] These rules have been recognized in the case-law of the Federal Supreme Court (e.g. ATF 140 III 6 consid. 3.1; ATF 114 II 473), which holds that these prohibitions derive directly from the lawyer’s duty of care as set forth in the Federal Act on the Free Movement of Lawyers, Art. 12 (a) (RS 935.61), as articulated, in particular, in articles 6 and 26 of the Swiss Code of Ethics (SCE) issued by the Swiss Federation of Lawyers (SFA).
[2] For a definition of correspondence considered as pertaining to settlement negotiations, see Zürcher Anwaltsverband, Info 2/90, Info 4/02, p. 6 et seq. and Info 2/05, p. 8 et seq.
[3] ATF 114 II 473.
[4] Théo Meylan, Revue de l’avocat 11/12/2019, p. 499 et seqq., argues, however, that when a lawyer sends a reply “sous les réserves d’usage” to a colleague who has already written to him “sous les réserves d’usage”, a de facto confidentiality agreement has been entered into by the lawyers in the name and on behalf of their respective clients.
[5] Zürcher Anwaltsverband, Info 4/02, p. 7.
[6] Zürcher Anwaltsverband, Info 2/05, p. 9.
[7] In the framework of alternative dispute resolution (ADR) efforts in international cases, the term “settlement privilege” is also found (Translex principles). In the United States, the matter is now governed by the very recently introduced “Rule 408. Compromise Offers and Negotiations”, included in the 2021 edition of Federal Rules of Evidence (implemented 1 December 2020) [Federal Rules of Evidence | Federal Rules of Evidence | US Law | LII / Legal Information Institute (cornell.edu)]. Previously, the common law rule against producing settlement offers in court had little practical effect in the United States, since any fact asserted in the course of discussions was excluded from such protection unless the party in question expressly stated in advance that it was speaking “without prejudice” or of matters that were purely “hypothetical in nature”. Under the new federal rule “all conduct or statements made during compromise negotiations” is now covered.
[8] Belt v Basildon & Thurrock NHS Trust [2004] EWHC 783 (QB)
[9] PART 36 – OFFERS TO SETTLE – Civil Procedure Rules (justice.gov.uk)
[10] Ashurst, Quickguides, English civil litigation, “Without prejudice”, June 18, 2021, QuickGuides – Without Prejudice | Ashurst