In September 2020, after a more than three year proceeding, the Princely District Court ordered SwissLife (Liechtenstein) AG in a further judgment to compensate an investor for all damages and disadvantages in connection with a complex structured investment product marketed by SwissLife.

The structured investment product designed and sold by the legal predecessor Capital Leben consisted of a pension insurance policy of Capital Leben (now SwissLife), a foreign currency loan from a bank and various repayment vehicles from other providers.

The court concluded that the structured investment product was constructed in a manner that only under optimal conditions there was a small chance of getting out without suffering a loss.

The court also stated that no reasonably thinking person would conclude this product with such a relation of opportunities and risks.

Finally, the court also made clear that the internal relation and design of the structured investment product were so complex that even the court could not adequately grasp them without an expert witness.

The court therefore fully followed the plaintiff’s request to reverse the contract and ordered SwissLife (Liechtenstein) AG to reimburse all credit liabilities incurred by the plaintiff as a result of taking a foreign currency loan. Also the court also ordered the plaintiff to reimburse all own funds he invested with interest on it. Overall the plaintiff was awarded more than CHF 450’000. Finally, the court ordered the defendant to reimburse the plaintiff for all procedural costs.

The court also clarified that the claims asserted by the plaintiff cannot be time-barred, although more than 15 years had passed between the conclusion of the structured investment product and the filing of the lawsuit. The court held that the product designed by the defendant was so complex that only an expert opinion could reveal that it was defective at the root and that the probability of getting out without losses was extremely low.

The decision not only confirms and further specifies the previous case law on the liability for all damages arising from complex structured investment products our firm obtained in other cases. It also confirms the case law of the Supreme Court that in the case of complex investment products, the limitation period for claims only begins to run when an expert opinion is available from which the product’s defects and the resulting incorrect advice become apparent. Only then the investor has actual knowledge of the damage, the damaging party and the required causal connection.

The decision of the Princely District Court therefore shows that all investors, who concluded this complex structured investment product, can still today assert the damage they suffered from the total investment product. Since the cour considered the structured investment product to be defect at its root, the chances of a successful assertion of the claims are to be considered as very good.

Our law firm represented the plaintiff in this matter. The decision of the Princely District Court is not yet final.

10 | 2020