Anyone who wants to plan their estate with foresight often thinks about their home, their business, or the securities, jewelry, and assets they’ve acquired. Rarely do thoughts turn to the digital legacy one leaves behind. Yet, on average, Swiss people spend 5.7 hours a day online—a figure projected for the year 2025.[1] Email accounts, social media profiles, cloud storage filled with family photos, and digital assets such as cryptocurrencies have long been part of everyday life—which is why one’s digital estate should not be left to chance.

Death is analog, but our legacy has long been digital. For surviving family members, the complex “digital estate” often poses an insurmountable hurdle when login credentials are missing and global tech companies deny access. As your specialists in digital, data, and estate law in Central Switzerland, we shed light on the legal situation and show you how proactive planning can ensure that your digital legacy is managed according to your wishes and that your loved ones are spared unnecessary burdens.

THE LEGAL BACKGROUND: UNIVERSAL SUCCESSION MEETS THE DIGITAL REALITY

In principle, the legal situation in Switzerland is clear: in accordance with the principle of universal succession (Art. 560(1) of the Swiss Civil Code), upon the testator’s death, the heirs automatically and in their entirety succeed to all of the testator’s rights and obligations. This also applies to the digital estate:

• Hardware and local data: Ownership of devices such as laptops or smartphones passes to the heirs. The data stored on them (photos, documents) is regarded as an integral part of the devices and shares the same legal status.
• Contractual relationships: Contracts for subscriptions (e.g. Netflix), online services and cloud storage are also transferred to the heirs. They therefore also inherit the contractual rights, such as the right to access the data – and, unless otherwise stipulated in the contract, the obligation to pay also continues.
• Intellectual property rights: The rights to exploit copyright-protected works (e.g. photographs, texts, software code) are inheritable (Art. 16 of the Swiss Copyright Act).

In practice, however, enforcing these rights proves to be a complex and protracted process. The heirs face a number of obstacles:

1. General Terms and Conditions (GTC): Many international providers (particularly those from the USA) stipulate in their GTC that accounts are personal and non-transferable. The validity of such clauses is highly controversial under Swiss law. It can be assumed that Swiss inheritance law takes precedence over the providers’ contract law, similar to the ruling of the German Federal Court of Justice. However, enforcing these rights remains a complex process, particularly in relation to foreign jurisdictions.
2. Data protection and protection of personality rights: Providers often refuse access on the grounds of protecting the privacy of the deceased (post-mortem protection of personality rights, Art. 28 of the Swiss Civil Code) and that of their communication partners. The Federal Supreme Court has already held that a right to information under data protection law does not automatically pass to heirs where the sole purpose is to pursue claims under inheritance law. It remains to be seen whether post-mortem protection of personality rights is sufficient to enable surviving relatives to settle digital matters where the deceased has not made any arrangements.
3. Telecommunications secrecy: Email providers, in particular, are bound by strict telecommunications secrecy. The disclosure of the content of communications to third parties – including heirs – is a criminal offence and presents a significant obstacle.
4. Risk to heirs: If heirs attempt to gain access using guessed or discovered passwords, they risk prosecution for unauthorised access to a data-processing system (Art. 143bis of the Swiss Criminal Code). The Federal Supreme Court has made this unequivocally clear in a landmark ruling (BGE 145 IV 185) – at least with regard to spouses living apart.

THE SPECIAL CASE OF CRYPTOCURRENCIES IN AN ESTATE: WHERE CODE TAKES PRECEDENCE OVER THE LAW

Cryptocurrencies such as Bitcoin are legally classified as (intangible) assets and therefore form part of the estate. The key challenge here, however, is purely technical in nature: control over the assets depends exclusively on possession of the private key. Without this key, the assets are effectively and irretrievably lost to the heirs. A ‘zero-error tolerance’ applies here. If the cryptocurrencies are held on a trading platform, the contractual issues outlined above still apply.

If digital assets such as Bitcoin or Ether form part of the intended estate, this raises further complex questions regarding their safeguarding, valuation and distribution. What happens to crypto assets in the event of incapacity? How is access guaranteed for the heirs, and according to what rules is valuation carried out in a volatile market environment?

STRATEGIC PLANNING: HOW TO TAKE CONTROL

Given this complex situation, a proactive approach is essential. We recommend the following strategic steps:

1. Getting organised: The digital inventory

Draw up a comprehensive list of your digital platforms and assets: email accounts, social media profiles, cloud services, online subscriptions, domain names and crypto wallets. Make a note of the usernames, but keep the passwords in a separate, secure place (e.g. in a sealed envelope with a trusted person or a notary). It is important that a trusted person – or the executor (see point 3 below) – knows where this information can be found.

2. Facilitating access: Making use of technical and contractual measures

Many major providers (Apple, Google, Facebook/Meta) offer the option of appointing an “estate contact“. Following your death and upon presentation of a death certificate, this person will be granted limited access to back up your data or manage your account. Making this contractual arrangement whilst you are still alive is extremely effective and circumvents many obstacles under inheritance law. In addition, password managers with an ‘emergency access’ or ‘inheritance’ feature can be used.

A simple list of instructions is not sufficient. Your wishes must be set out in a legally valid form, namely in a handwritten will (Art. 505 of the Swiss Civil Code) or a notarised inheritance contract. In these documents, you should:

3. Ensuring legal certainty: provisions in a will

• Appoint an executor: Appoint an executor (Art. 517 et seq. of the Swiss Civil Code) and explicitly grant them digital powers. One possible wording is: “The executor is expressly instructed and authorised to review, manage and settle my digital estate. This includes, in particular, the authority to access all my online accounts, back up data, set profiles to memorialised status or delete them, terminate ongoing contracts, and secure and dispose of digital assets, including crypto-based assets.”
• Give clear instructions: Specify what is to happen to specific data or accounts (e.g. “My photo database should go to my daughter”, “My LinkedIn profile is to be deleted”, “My private emails are to be deleted without being read’). This helps to avoid conflicts amongst the heirs and to ensure that post-mortem privacy is respected.

4. Prevention rather than aftercare: the advance care directive to safeguard the ability to act in the event of incapacity

Last but not least, when planning ahead, it is important to bear in mind that a person may lose their capacity to make sound judgements – and thus their legal capacity – even before their death. If a loss of capacity occurs as a result of illness or an accident, and no arrangements have been made, the Child and Adult Protection Authority (KESB) will appoint a guardian to manage the person’s personal and financial affairs. Particularly in the case of complex digital assets, there is a risk here that this guardian may not possess the specific technical expertise required to manage cryptocurrencies adequately; or, in the worst-case scenario, access to the cryptocurrency may be lost forever. It therefore makes sense to appoint a competent trusted person or specialist who is familiar with how cryptocurrencies work.

To ensure this remains valid in the event of legal incapacity, a lasting power of attorney must be drawn up in accordance with Art. 360 et seq. of the Swiss Civil Code. This must be drawn up in the testator’s own hand – i.e. entirely by hand from start to finish – or be notarised. To ensure that a lasting power of attorney can be implemented, the civil registry office will, upon application, make an entry in its central database, including the location where the document is held.

THE CONTEXT IN THE CANTON OF LUCERNE

In the canton of Lucerne, the competent probate authority draws up an inventory ex officio following a death (§ 72 EGZGB LU). Clear provisions in a will and the appointment of a competent executor simplify this process considerably and ensure that your instructions are implemented swiftly and correctly in the digital realm, and that digital assets are not lost – or remain on the internet indefinitely.

CONCLUSION – DON’T LEAVE YOUR DIGITAL LEGACY TO CHANCE

Digital inheritance is not a technical issue, but a strategic one. Relying solely on the law often leads to a dead end. Only a combination of careful inventory-taking, making use of technical precautionary measures, and precise, legally valid testamentary provisions can guarantee that your digital sovereignty is preserved and your loved ones are protected. 

Do you have any questions, or would you like to make professional arrangements for your digital estate? We are here to support you as trusted partners. Please contact us to arrange a consultation.

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[1] https://www.srf.ch/news/schweiz/studie-zur-internetnutzung-schweizer-verbringen-im-schnitt-einen-viertel-des-tages-im-netz.

The termination of an employment relationship is rarely a purely legal matter. Particularly at senior management level, it also involves reputation, tact, and the question of how to structure a professional transition without leaving lasting damage. In this sensitive phase—before positions harden and disputes escalate—Swiss employment law offers considerable flexibility.

Two instruments are central in this context: termination with an offer of modified terms (Änderungskündigung) and mutual termination agreements. While the former is often perceived as a pressure tool, the latter enables a consensual, flexible, and often significantly more elegant solution.

Termination with Offer of Modified Terms: A Risk-Laden Instrument

From an employer’s perspective, termination with an offer of modified terms allows contractual conditions to be redefined unilaterally—by threatening termination if the employee does not agree. For employees, this typically presents a difficult choice: accept less favorable terms or face dismissal.

While legally permissible, this approach quickly approaches the boundaries of bad faith. Abusive scenarios are not uncommon, particularly where financial pressure is applied. For senior professionals, such terminations are therefore rarely the preferred route—they tend to signal conflict rather than alignment.

Mutual Termination Agreement: Structuring Instead of Escalating

In contrast, the mutual termination agreement reflects a modern separation culture. It is based on mutual consent and allows both parties to structure the end of the employment relationship in a tailored manner.

This approach is particularly suitable where trust has been weakened but the working relationship has not entirely broken down. It combines key advantages: planning certainty for the employer and a controlled, orderly transition for the employee.

In practice, the focus is not only on whether the employment ends, but on how it ends.

Release from Duties, Garden Leave, and Transition Phase

A key element is the period between negotiating and signing the agreement and the effective termination date. This phase offers significant flexibility.

• Immediate or phased release from duties allows the employee to explore new opportunities without ongoing operational obligations.
• Garden leave is frequently used at senior levels to disentangle sensitive roles while maintaining contractual duties of loyalty.
• Tailored handover arrangements help preserve institutional knowledge and mitigate reputational risks on both sides.

This phase is often decisive in shaping whether a departure is perceived as disruptive or as a professional transition.

Severance: More Than a Payment

Severance is often a central issue. Beyond the amount, its legal characterization is critical and has tangible consequences.

The decisive factor is the nature of the payment: whether it constitutes compensation for loss of employment, settlement of claims, or a discretionary benefit. This distinction directly affects

• social security treatment,
• tax classification, and
• the implications for unemployment insurance.

Care is required in drafting. Poorly structured agreements may lead to suspension periods under unemployment insurance rules if they create the impression that the employee contributed to or accepted the risk of unemployment.

Unemployment Insurance and Suspension Periods

For many individuals—including senior executives—unemployment insurance remains a relevant consideration. Authorities do not automatically treat mutual termination agreements as neutral.

Risks arise in particular where

• there is no objective justification for the termination,
• where the employee makes substantial concessions, or
• where the agreement resembles a “disguised dismissal.”

Careful structuring and clear justification of the agreement can help avoid or mitigate suspension periods, highlighting the value of early legal advice.

Pension Considerations

Occupational pension aspects are often underestimated. Depending on how the termination is structured, several questions may arise:

• Whether insurance coverage continues during a period of release from duties;
• how bonuses or severance payments are treated for pension purposes; and
• what options exist to maintain pension coverage.

These issues can have significant financial implications, particularly for individuals in their mid-forties and above with substantial accumulated pension assets.

Outplacement and Reputation Management

For senior professionals, future career positioning is a key consideration. Many termination agreements therefore include elements such as

• outplacement services
• coaching or executive search support, and
• coordinated communication towards the market and professional networks.

These “soft” factors are often as important as financial terms. They help ensure that the next career step is actively shaped rather than left to chance.

Conclusion: Timing Is Critical

The primary strength of a mutual termination agreement lies in its timing. It delivers the greatest value before a conflict escalates—not after. Once positions have hardened or legal proceedings are underway, the scope for constructive solutions is significantly reduced.

For qualified employees, this means that those who act early and understand their negotiating position can not only secure but actively shape their exit. For employers, it is a tool to minimize risk while demonstrating professionalism.

A well-structured termination agreement is therefore more than a contract—it is a strategic instrument for a smooth, discreet, and forward-looking transition.

Artificial intelligence (AI) has long been part of our everyday lives. AI has become indispensable in schools, universities and businesses. Given the rapid development of artificial intelligence and its increasing presence in everyday life, it is becoming increasingly important to examine its opportunities and risks.

On February 23, 2026, the Federal Data Protection and Information Commissioner and around 60 other national data protection authorites worldwide published a joint statement on AI-generated images. This statement marks an important step in the international discussion on privacy and data protection in the digital age.

Deepfakes and AI: Why Data Protection Authorities Worldwide Are Issuing Warnings

Data protection authorites have expressed serious concerns about systems that use artificial intelligence to generate realistic images or videos of identifiable individual without their consent. Such technologies carry a high risk of abuse, for example through the creation of non-consensual, intimate depictions (known as deepfakes). Childern and other vulnerable groups are particularly at risk of becoming targets of cyberbullying, sexual exploitation or identity theft.

Laws in Switzerland: Are AI-generated images permitted?

In many juristictions – including Switzerland – the creation or distribution of images that have not been created with consent can have criminal consequences. From a data protection perspective, that use of AI systems to create realistic images raises significant questions regarding the legality of data processing and the protection of privacy. Personal data my only be used if there is a legal basis for doing so or if the data subject has given their expressed consent. Companies offering such systems must ensure that appropriate technical and organizational measures are taken to prevent misuse and unauthorized processing.

Recommendations for working with AI

The joint statement by the data protection authorities sets out several key principles that all organizations should follow:

• Impementation of robust protective measures to prevent the misuse of personal data and the creation of non-consensual intimate depictions and other harmful content, especially involving children.
• Ensuring meanigful transparency regarding the capabilities of AI systems, the protective mechanisms implementet, permissible uses, and the potential consequences of misuse.
• Provision of effective and easily accesible procedures through which data subjects can request the removal of harmful content relating to them.
• Special protection for children and other vulnerable groups.

Conclusion: Techological progress requires responsibility

The risks posed by AI-generated images are global and require urgent regulatory action. While AI offers enormous opportunities, technological progress must not come at the expense of privacy, data protection and other fundamental rights.

Our law firm advises businesses on the legally compliant use of AI and on data protection issues. Please feel free to contact us with any questions regarding generative AI, data protection and your digitalisation projects..

A remarkable piece of Swiss cinema: «The Narrative» tells a story that moves, surprises, and resonates.

We are proud to have made a small contribution to this major project as legal advisors – and would like to thank the entire production team for their trust and for the appreciative mention in the film and at the preview screening.

This is a film that you don’t just watch, you experience. We congratulate the entire team on this successful work and wish them every success for the theatrical release on March 12, 2026!

There is hardly anything more unpleasant for tenants than being confronted with problems in their rented flat or house on a daily basis. Whether it’s a broken heater in winter, a dripping tap or a patch of mould on the wall – unfortunately, defects as those occur frequently and affect both short-term and long-term tenants, often regardless of how old the rental property is or what condition it is in.

The question quickly arises: Who is responsible for repairing the damage? Am I responsible as a tenant, or does the responsibility lie with the landlord?

This article explains what is legally considered to be a defect in a rental property and what rights and obligations both tenants and landlords have when it comes to rectifying these defects.

What is meant by a defect in the rental property?

A defect in the rental property exists if the flat or rented property is no longer suitable for the contractually agreed use or if promised features are missing. This means that the actual condition of the rental property differs from the condition that the landlord is obliged to provide according to the rental agreement or the law. A defect can refer to physical damage such as defective heating, leaky windows or mould, but also to the fact that promised features (e.g. particular quietness or certain amenities) are not present. The legal consequences of this depend, on the one hand, on the severity of the impairment and, on the other hand, on whether the tenant or a person for whom they are responsible is responsible for the defect (Art. 259a Abs. 1 OR).

Fault of the tenant

If the tenant is responsible for the defect, the landlord is not liable under Art. 259b ff. OR. Instead, the tenant may be liable for damages under Art. 97 OR.

Minor defects

In the case of minor defects – such as a burnt-out light bulb or a dripping tap – the tenant must pay for the repair themselves in accordance with Art. 259 OR. In practice, minor defects are generally considered to be damage costing up to around CHF 100–150.

Liability of the landlord

The landlord is also liable for defects even if he is not at fault or the tenant does not report the defect immediately. However, if the tenant fails to report the defect, he may be held liable for any consequential damage resulting from the delayed report. If a moderate or serious defect occurs that significantly impairs the normal use of the rented property, the tenant is entitled to the following rights under Art. 259a OR:

• Removal of defects – Art. 259b OR
• Reduction of rent – Art. 259d OR
• Compensation for damages – Art. 259e OR
• Deposit of rent – Art. 259 g/h OR

Removal of defects – Art. 259b OR

The landlord is obliged to remedy any defects that arise within a reasonable period of time. If he fails to do so, the tenant may – subject to Art. 259c OR – invoke the following rights:

• Extraordinary termination in accordance with Art. 259b lit. a OR – If there is a serious or at least significant defect, the tenant may terminate the rental agreement without notice. He does not have to set an additional deadline for the landlord to remedy the defect, since the landlord knows the defect and has failed to remove it.
• Substitute performance in accordance with Art. 259b lit. b OR – In the case of moderate defects, the tenant may remedy the defect themselves or have it remedied by a specialist and pass on the costs to the landlord.

In accordance with Art. 259c OR the right to have the defect remedied does not apply if the landlord provides a full replacement for the defective item within a reasonable period of time.

Reduction of rent – Art. 259d OR

The tenant may request a reduction in rent in the event of a moderate or serious defect. The courts apply a certain ‘materiality threshold’ in this regard. The impairment in the use of the rented property must amount to at least 5% or 2% in the case of a permanent impairment. The right to a rent reduction exists until the original, contractually agreed condition of the rental property has been fully restored.

Compensation for damages – Art. 259e OR

The landlord is liable for damage suffered by the tenant as a result of defects in the rented property.

Deposit of rent – Art. 259g/h OR

When renting immovable property, e.g. residential or commercial premises, tenants have the option of depositing the rent if the landlord fails to remedy any defects. The following conditions apply:

• There must be a defect that the landlord is obliged to remedy.
• The tenant must request the landlord in writing to remedy the defect and at the same time threaten to deposit future rent.
• A reasonable deadline must be set – the length of this depends on the cost of the repair and the urgency of the problem.

Important points regarding the deposit:

• Future rent can be deposited as long as the defect has not been remedied.
• The entire rent may be deposited, regardless of the severity of the defect.
• Payment is made to an agency designated by the canton.

Please note: Simply withholding the rent does not meet the legal requirements and results in the tenant being in default of payment.

Our law firm provides advice on tenancy law and the rectification of rental defects. Please feel free to contact us without obligation if you have any questions about tenancy law and the rectification of rental defects.

Switzerland is strengthening its claim to be one of Europe’s leading centres of innovation. ETH Zurich plays a central role in this as a driving force. Three recent developments emphasise the country’s technological potential and digital sovereignty (personal selection):

• the development of a publicly accessible large language model (LLM) for data protection-compliant AI applications,
• ETH’s participation in the Swiss Chip Fablab to strengthen national semiconductor expertise in the Dübendorf Innovation Park,
• and the initiative surrounding the ETH Earth Observation Centre in the Canton of Lucerne, which is providing targeted impetus in Central Switzerland.

All projects symbolise an innovation strategy based on scientific excellence as well as entrepreneurial scalability, sustainable infrastructure and regulatory foresight.

Digital sovereignty: The ETH large language model for public use

The LLM, launched by ETH Zurich, is the first AI technology to be tailored to Swiss legal requirements, multilingualism and the highest data protection standards. It is the result of a collaboration between EPFL and ETH Zurich and was trained on the ‘Alps’ supercomputer at the Swiss National Supercomputing Centre (CSCS). For companies, administrations and, in particular, SMEs that value data-secure processes, this opens up new possibilities in the areas of automation, information indexing and modern customer interaction – without having to rely on global cloud platforms. This development illustrates how technological progress and location policy can be combined. Switzerland is thus positioning itself as a pioneer for trustworthy and independent digitalisation in both the public and private sectors.

Semiconductor expertise in the heart of Europe: the Swiss Chip Fablab

ETH Zurich is also marking a milestone in the area of hardware and semiconductor development: the planned participation in the Swiss Chip Fablab in the Dübendorf Innovation Park will create a network that combines research, development and production at a geopolitically secure, reliable location. The aim is to strengthen the resilience of supply chains and establish independent semiconductor expertise – a key concern in times of global uncertainty. It does not serve as an alternative to AI processor chips, which are predominantly manufactured in Taiwan, but rather to develop highly specialised chips for applications such as energy, mobility, medicine or communication. The Fablab offers start-ups, established companies and international partners access to state-of-the-art infrastructure, support with regulatory issues and the opportunity for strategic networking.

New ETH hub for the canton of Lucerne: strengthening the region and promoting innovation

Thanks to the CHF 100 million donation from the Jörg G. Bucherer Foundation to the ETH, an earth observation centre is to be built in the canton of Lucerne. Emmen/Viscosistadt, Horw around the University of Applied Sciences or Hochdorf are being discussed, for example. This shows how the power of innovation can be strengthened in a targeted manner and promoted in a decentralised manner. Such an ETH hub creates new opportunities for companies and start-ups in Central Switzerland to enter into direct dialogue with research and teaching – and sends out a strong signal for the attractiveness of Emmen as a location for technology and innovation. The regional anchoring of technological excellence contributes to the broad development of innovation potential and the utilisation of synergies between science and business.

What does this mean for companies, investors and entrepreneurs?

For technology-orientated companies, investors and innovative entrepreneurs, new opportunities for collaboration arise, but also complex regulatory issues:

• How can AI solutions be integrated in a legally compliant and data protection-compliant manner?
• What legal requirements need to be observed when researching, developing and exporting sensitive technologies?
• How can innovation and compliance be optimally balanced in international competition?

As a boutique law firm from Lucerne specialising in data protection law, digital business models and commercial law issues, we assist companies, authorities and institutions with all the challenges of digital transformation. Our team supports you in all matters relating to data protection and IT projects, as well as in commercial law issues such as corporate governance, restructuring and M&A. We emphasise legally compliant innovation, regulatory compliance and pragmatic implementation. From data protection impact assessments and licence agreements to cross-company transformation, you benefit from our expertise in the digital and business environment.

Contact us for questions about digital business models.

Your expert for travel law

Whether it’s a cancelled flight, lost luggage or trouble with the tour operator – Julius Paulicka will stand up for your rights. As a specialist in travel law and a lawyer admitted in Switzerland and Germany, I know the stumbling blocks on holiday and will help you to assert your claims if the anticipation of your trip is spoilt.

Travelling from Switzerland – your rights know no bounds

Switzerland is strongly orientated towards European standards when it comes to regulating travel rights. Package holidays in Switzerland are governed by the Federal Package Travel Act, which is based on the EU Package Travel Directive. As a result, Swiss travellers benefit from comprehensive protection in the event of defects, service deviations and in the event of the tour operator’s insolvency. Individual travellers also benefit from clear claims in the event of defects and can demand compensation if the requirements of the Code of Obligations are met.

Flight rights – enforcement in Switzerland too

In the event of flight delays or cancellations and problems with baggage, Swiss consumers can often also rely on the EU Air Passenger Rights Regulation (EC No. 261/2004), as this is often applicable under bilateral agreements and in air transport – for example, if the departure takes place in Switzerland or an EU country. The case law of the Court of Justice of the European Union (CJEU) is also regularly taken into account by Swiss courts, as Switzerland has expressly recognised the primacy of international law within the framework of the Agreement on the Free Movement of Persons.

Competent advice on all travel law issues

As a specialist in travel law, I will help you to enforce your rights. Not with empty phrases, but with sound expertise, empathy and a genuine understanding of your situation, I will support you in

• Enforcing claims in the event of flight cancellations, delays or overbooking
• Assistance with lost or damaged luggage
• Travel defects and inadequate hotel services
• Disputes with tour operators, airlines and landlords
• Advice on and enforcement of refunds and compensation
• Drafting and reviewing travel contracts for individual and business travellers

Special features for Swiss travellers

Even though Switzerland is not a member of the EU, Swiss travellers benefit from the association with important EU legal acts in the area of travel and consumer protection. The application of European air passenger rights and the recognition of corresponding ECJ case law are an integral part of the Swiss legal framework in travel law according to the current interpretation.

Your advantage with a specialised law firm in Central Switzerland

• Personal support
• Quick response
• Comparative legal expertise Switzerland/EU for the optimal representation of your interests
• Absolute transparency and realistic assessment of the chances of litigation

Travel relaxed – I will take care of your rights in the event of a dispute. Contact me for a non-binding initial assessment.

Debtors should not be able to discharge their financial obligations through abusive bankruptcy. At its meeting on October 25, 2023, the Federal Council enacted the necessary amendments to the law and ordinances, in particular the Federal Act on Debt Enforcement and Bankruptcy, with effect from January 1, 2025.

As a result, the hurdles to freeing oneself from debts to the detriment of creditors have become higher. If the debtor is registered in the Commercial Registry, claims under public law will no longer be pursued for seizure but for bankruptcy from January 1, 2025. These claims include, for example, tax arrears, fines or outstanding state pension contributions. Companies are therefore exposed to an increased risk of bankruptcy. Art. 43 no. 1 and 1^bis SchKG, which excluded these claims from bankruptcy proceedings, will be deleted from the law.

This change has a major impact on companies and their creditors. This is because, unlike the previous procedure with loss certificates (‘Pfändungsverlustscheinen’), bankruptcy proceedings can put an end to a company’s activities. Only companies that are generally subject to bankruptcy are affected. Who is subject to bankruptcy is determined by Art. 39 para. 1 SchKG. Parliament justified the change by stating that debtors should no longer be able to misuse bankruptcy proceedings to avoid their financial obligations, such as salary payments or debts, and thus harm other people.

Private creditors benefit because the creditor who files for bankruptcy bears the costs. As the public sector is the most common creditor, private individuals can file their claim free of charge after the state has initiated bankruptcy proceedings. However, the deadline of 15 months for filing a bankruptcy petition must be observed. At the same time, this makes it more difficult for the authorities to enforce their claims, as they now have to go through the more complex bankruptcy proceedings.

The Federal Act on Combating Abusive Bankruptcy not only resulted in amendments to several laws, namely the Swiss Code of Obligations, the Debt Enforcement and Bankruptcy Act, the Swiss Criminal Code and the Federal Act on Direct Federal Taxation. As a result, the Commercial Register Ordinance and the Criminal Records Ordinance were also revised in order to provide the necessary implementing provisions for the implementation of the law.

From now on, bans on activities entered in the criminal register will be reported to the Federal Supervisory Authority for the Commercial Register, which will check whether a ban on activities is incompatible with entries in the commercial register. In addition, measures can be taken that go as far as deleting the person concerned from the commercial register. Furthermore, the cantonal tax authorities are obliged to notify the commercial register offices if a company has not submitted the annual financial statement required by law. These provisions strengthen cooperation between the authorities and prevent such companies from operating for long periods without keeping accounts and thus acting to the detriment of their creditors.

Presently there is no dedicated Artificial Intelligence (AI) legislation in Switzerland. Nevertheless, given the ever increasing adoption and use of AI tools in various sectors – in particular in finance, the risks associated with such systems would inevitably require thorough scrutiny.

To this end, the Swiss Financial Markets Authority (FINMA) has recently[i] published a set of findings and observations which take a risk-based approach defined from operational, data-related, IT and cyber alongside legal and reputational perspectives. The supervised entities would therefore need to identify, assess, monitor, manage and control the risks associated with their AI applications, either as an in-house development or outsourced, and to make sure these are aligned and reflected in their respective governance models.

Above all, FINMA highlights operational risks such as lack of robustness, correctness, bias and explainability, the risks associated with third party service providers as well as challenges in the allocation of responsibilities and accountability as the most compelling issues.

Once identified, the ‘materiality’ of the risks in question would need to be determined. In other words, to define whether a given AI application may carry a higher threshold in cases where it “…is used to comply with supervisory law or to perform critical functions, or when customers or employees are strongly affected by its results”.

From the perspective of date-related risks, it is apparent that incorrect, inconsistent, incomplete, unrepresentative or outdated data would undermine the credibility and effectiveness of an AI application. Therefore, certain measures would need to be put in place to ensure input data integrity and that the availability of and access to data is secured. On the other hand, FINMA refers to regular checks in order to detect data drifts, and to validation methods in order to guarantee ongoing quality of output data.

Lastly, it is noted that explainability of results would be critical for an effective assessment of an AI application, whereby the drivers of a given application and its behaviour under varying circumstances and conditions would need to be comprehensible even to non-experts such as clients, investors and supervisory authorities etc. For those applications carrying higher ‘materiality’, the results of an independent review forming an informed and unbiased opinion as to the reliability of the application in question would also need to be taken into account in the development phase of that application.

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[i] See here https://www.finma.ch/en/news/2024/12/20241218-mm-finma-am-08-24/.