Mediation and ombudsman service under FinSA

Basis

The Federal Act on Financial Services ("FinSA") came into force on 1 January 2020. The FinSA stipulates that clients can seek a mediation procedure with a state-approved ombudsman for all disputes concerning legal claims between clients and financial service providers. For this purpose, financial service providers must join an approved ombudsman's office. The aim of the mediation procedure is to promote the alternative dispute resolution and thereby avoid time-consuming proceedings. This should also result in a decrease in the litigation expense risks.

The principles of the mediation procedure

The mediation procedure with the ombudsman's office is initiated by the request for mediation. Such a request is admissible if the following conditions are met:

  • The application must be submitted in accordance with the procedural rules of the ombudsman's office or on the form provided by the ombudsman's office.
  • The client must convincingly present evidence that he has previously tried to inform the financial service provider of his standpoint and has tried to reach an agreement.
  • The application must not be obviously abusive.
  • A meditation procedure on the same matter must not have already been carried out.
  • No conciliation authority, court, arbitration tribunal or administrative authority may have dealt with the matter or is currently dealing with it.

The mediation process must be straightforward, fair, fast and impartial. It must also be cost-effective or free of charge for the client. Furthermore, all statements made by the parties are confidential and may not be used in any other proceedings. The other party has no right to be given access to the other party's correspondence with the ombudsman's office. The procedure will be conducted in the national language chosen by the client (see art. 75 FinSA).

The ombudsman offices have no decision-making authority. However, if no agreement can be reached or if such an agreement appears impossible, they can provide their own factual and legal assessment (art. 75 para. 8 FinSA). Such an assessment serves as a proposal for the dispute resolution and has no legally binding effect. A mediation procedure according to art. 74 et seq. FinSA also does not exclude a civil lawsuit. However, after the proceedings have been conducted with the ombudsman office, the claimant may unilaterally waive the conciliation procedure pursuant to the Civil Procedure Code (art. 76 para. 2 FinSA). The mediation procedure is terminated by the ombudsman's office as soon as a conciliation authority, a court, an arbitral tribunal or an administrative authority is involved in the matter.

Duties of the financial service providers

  • Duty to affiliate (art. 77 FinSA): Financial service providers have an obligation to affiliate. They must join an ombudsman's office when they take up their operations at the latest. Financial service providers that are already operating must affiliate to an ombudsman's office within six months upon the approval of the first ombudsman's office by the Federal Department of Finance. The first ombudsman office was officially approved on 24 June 2020, i.e. financial service providers must join an ombudsman office by 24 December 2020 at the latest.
  • Duty to participate (art. 78 FinSA): Financial service providers are obliged to participate in the mediation procedure. They must comply with summons, requests for comments and enquiries from the ombudsman's office in a timely manner. The mediation procedure according to art. 74 et seq. FinSA is different from classical mediation because of the financial service provider's obligation to participate, whereas classical mediation is based on the principle of voluntariness and is therefore voluntary for both parties.
  • Duty to provide information (art. 79 FinSA): Financial service providers must furthermore inform their clients about the possibility of a mediation procedure. This obligation applies when entering a business relationship, when rejecting customers' claims as well as on request.
  • Financial participation (art. 80 FinSA): Financial service providers must pay financial contributions to the ombudsman's office. The contributions are calculated according to the causation principle.


Recognized ombudsman offices

According to art. 84 FinSA, the ombudsman offices require the approval of the Federal Department of Finance. The following ombudsman offices have already been approved:

We recommend the ombudsman’s office OFS Ombud Finanzen Schweiz, in which one of our legal partners, Dr. Balz Hösly, SBA Mediator, is acting as a mediator.

For a successful dispute resolution, the physical presence of the parties involved in the dispute is often an advantage. Nevertheless, it can be assumed that the newly formed ombudsman offices will also seek to make processes and procedures available to financial service providers in the FinTech sector, where dispute resolution is largely carried out via video calls and digitally. This can provide a high degree of convenience for "typical" clients of FinTech companies ("users"), who often are residents abroad and travel a lot.

October 2020 | Authors: Dr. Balz Hösly, Michèle Landtwing, Dschamila Jäggin

Your team