“To settle or not to settle, that is the question.”

Two parties to a claim in the civil law courts of Sweden, may settle at almost any time during the court process. Parties may settle during the pre-trial hearing (muntlig förberedelse), or prior to or even at the start of the main trial (huvudförhandling).

The courts often and regularly inquire with the parties about the possibility to settle the claim (förlikning)

Case synopsis: A claimant who sued his/her employer due to outstanding salary (olaga uppsägning och utebliven lön). The employer company had not paid the employees (claimants) salary for six months. The company had been severely hit due to covid-19 and refused to pay the salary.

Thankfully, the employee could apply for Rättshjälp (Legal Aid via the Legal Aid authority /Rättshjälpsmyndigheten). Legal aid was granted, and the claimant did not have to pay his/her own legal costs.

During the pre-trial hearing (muntliga förberedelsen), the judge was inclined to discover whether a settlement could be reached between the parties.

For the claimant, the offer of three months salary payment was presented, with the condition that the claim be settled without a trial.

The judges often stress the pros-and cons of settlement to parties, the cost efficiency of settling a claim in lieu of a prolonged trial, is often times the most attractive option for various reasons.

With that in mind, and a potential 1-2 year court process ahead, before seeing any money. The Claimant settled with the condition of payment within one month.

Unfortunately however, it turns out the employer (Respondent) was undergoing a bankruptcy (konkurs) process, and a new court process had to be started against former Board members privately, to make them personally liable to the claimant for the outstanding salary (solidariskt betalansvar). Aktiebolagslagen 2005:551 25 kap 18 §

Claimants may often be inclined to settle, usually since that means receive a proportion of the total amount, in a much less timely manner, saving time and money. However, the reality is that just because you settle does not mean for certain (100 %) that you will receive the money owed. If the court records the settlement in a judgement (stadfäst förlikning via dom), the judgement may be used as a “exekutionstitel” (claim foundation) via the Kronofogdemyndigheten, thus demanding payment from the Respondent.

For the above-mentioned reasons, it is imperative that you as the Claimant carefully consider the routes ahead in court, where a settlement for “part of the cake now instead of, maybe the whole cake in the future” might be more alluring to you. The reality is that decisions to settle are quite complex, all scenarios ought to be assessed alongside your legal representative.

More information/sources:

Legal AID (Rättshjälp) can be found here Ansök om rättshjälp – Sveriges Domstolar 

Do you have questions whether you fulfil the conditions to be granted Legal-Aid? Follow this link Har du rätt till rättshjälp? – Sveriges Domstolar

Do you have questions about the court-process in a civil law dispute? Tvistemål i domstol – Sveriges Domstolar 

Limited liability companys (Aktiebolag) whose Board members may face personal liability for the companys outstanding fees/money, in Aktiebolagslagen 25 kap 18 § Aktiebolagslag (2005:551) Svensk författningssamling 2005:2005:551 t.o.m. SFS 2021:543 – Riksdagen

Do you have questions about a potential claim? Feel free to contact our dedicated team. Contact AJ – Askari Juristbyrå – Askari Juristbyrå (askarijuristbyra.se)

Current affairs 2021-11-14