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Retrocessions: can a client claim them back from the bank?

In short

Yes, where the bank received them under a discretionary management or advisory mandate and the client did not validly waive them. The Federal Supreme Court holds that such payments belong to the client, and the ten-year limitation period runs from each receipt.

The principle

An agent must account for its management and hand over everything received by reason of it. Since 2006, the Federal Supreme Court has applied this rule to retrocessions and distribution fees paid to banks by third parties, including companies of the same group.

Waiver

The client may waive restitution, but only if fully and accurately informed: the existence of retrocessions, how they are calculated and their order of magnitude. A general clause in the bank’s terms is often not enough.

Time limit

The claim becomes time-barred after ten years, running from each payment received by the bank. It is therefore worth acting promptly and, where necessary, interrupting the limitation period while the file is reviewed.

This note is for general information only. It does not constitute legal advice and is no substitute for the review of a specific situation.

Legal questions

  1. Asset Recovery and EnforcementCan assets in Switzerland be frozen before a judgment has been obtained?Yes. The attachment provided for by the Debt Enforcement Act allows a creditor to have assets located in Switzerland frozen without prior notice to the debtor. The creditor need only show, on a prima facie basis, the claim, a statutory ground for attachment and the existence of the assets concerned.
  2. Asset Recovery and EnforcementHow can a foreign judgment be enforced in Switzerland?The judgment must first be recognised and declared enforceable in Switzerland. For a decision rendered in a State bound by the Lugano Convention, review is limited and the procedure swift; for other States, the Swiss Private International Law Act applies and its requirements are stricter.
  3. General and White-Collar Criminal LawCan a company be criminally convicted in Switzerland?Yes. Article 102 of the Swiss Criminal Code allows the company itself to be fined up to five million francs. For bribery, money laundering and terrorist financing, it is liable independently of any individual if its organisation failed to prevent the offence.
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