BRITISH INSTITUTE OF INTERNATIONAL AND COMPARATIVE LAW

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1 BRITISH INSTITUTE OF INTERNATIONAL AND COMPARATIVE LAW PROJECT REFERENCE: JLS/2006/FPC/21 30-CE THE EFFECT IN THE EUROPEAN COMMUNITY OF JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS: RECOGNITION, RES JUDICATA AND ABUSE OF PROCESS Project Advisory Board: The Rt Hon Sir Francis Jacobs KCMG QC (chair); Lord Mance; Mr David Anderson QC; Dr Peter Barnett; Mr Peter Beaton; Professor Adrian Briggs; Professor Burkhard Hess; Mr Adam Johnson; Mr Alex Layton QC; Professor Paul Oberhammer; Professor Rolf Stürner; Ms Mona Vaswani; Professor Rhonda Wasserman; Professor Mathijs ten Wolde Project National Rapporteurs: Professor Alegría Borrás (Spain); Mr Andrew Dickinson (England and Wales); Ms Esther Rivera (Spain Assistant Rapporteur); Mr Christian Heinze (Germany); Professor Lars Heuman (Sweden); Mr Urs Hoffmann-Nowotny (Switzerland Assistant Rapporteur); Professor Emmanuel Jeuland (France); Professor Paul Oberhammer (Switzerland); Mr Jonas Olsson (Sweden Assistant Rapporteur); Mr Mikael Pauli (Sweden Assistant Rapporteur); Dr Norel Rosner (Romania); Ms Justine Stefanelli (United States); Mr Jacob van de Velden (Netherlands) Project Director: Jacob van de Velden Project Research Fellow: Justine Stefanelli Project Consultant: Andrew Dickinson Project Research Assistants: Edward Ho Aniket Mandevia Floor Rombach Daniel Vasbeck 1

2 REPORT The Effect in the European Community of Judgments in Civil and Commercial Matters: Recognition, Res Judicata and Abuse of Process Sweden Professor Lars Heuman (National Rapporteur) Mr Jonas Olsson (Assistant Rapporteur) Mr Mikael Pauli (Assistant Rapporteur) Stockholm University School of Law S Stockholm Sweden 2

3 I. Judgments...5 A. The concept, form, structure and terminology of judgments... 5 B. The final determination and findings on issues of fact and law... 6 C. The binding character of a judgment... 7 D. Judgments that are capable of having preclusive effects... 8 II. Preclusive effects...14 A. Claim preclusion Existence and nature of claim preclusive effects Policies underlying claim preclusive effects Conditions for claim preclusive effects Invoking claim preclusive effects Exceptions to claim preclusive effects Claimant and Defendant Other participants Represented persons Persons connected to the Claimant, Defendant, and other participants Strangers...37 B. Issue preclusion The existence and nature of issue preclusive effects Policies underlying issue preclusive effects Conditions for issue preclusive effects Invoking issue preclusive effects Exceptions to issue preclusive effects Claimant and Defendant Other participants Represented persons Persons connected to the Claimant, Defendant, and other participants Strangers...38 C. Wider preclusive effects The existence and nature of wider preclusive effects Policies underlying wider preclusive effects Conditions for wider preclusive effects Invoking wider preclusive effects Exceptions to wider preclusive effects Claimant and Defendant Other participants Represented persons Persons connected to the Claimant, Defendant, and other participants Strangers...39 III. Preclusive effects of judgments within the Brussels/Lugano Regime...40 A. Recognition Judgments recognised Procedural aspects of recognition Exceptions to the rule (grounds for non-recognition) Effects of recognition

4 B. Claim preclusion within the Brussels/Lugano Regime Existence and nature of claim preclusive effects Policies underlying claim preclusive effects Law applicable to claim preclusive effects Conditions for claim preclusive effects The identity of claims in the Brussels/Lugano Regime The identity of parties in the Brussels/Lugano Regime Invoking claim preclusive effects under the Brussels/Lugano Regime Exceptions to claim preclusive effects under the Brussels/Lugano Regime Persons affected by claim preclusive effects...47 C. Issue preclusion Existence and nature of issue preclusive effects Policies underlying issue preclusive effects Law applicable to issue preclusive effects Conditions for issue preclusive effects Invoking issue preclusive effects Exceptions to issue preclusive effects Persons affected by issue preclusive effects...48 D. Wider preclusion (abuse of process/claims and issues that could or should have been raised) The existence and nature of wider preclusive effects Policies underlying wider preclusive effects The law applicable to wider preclusive effects Conditions for wider preclusive effects Invoking wider preclusive effects Exceptions to wider preclusive effects Persons affected by wider preclusive effects...49 E. Authentic instruments/court approved settlements IV. Preclusive effects of third state judgments

5 I. Judgments A. The concept, form, structure and terminology of judgments Please describe the typical concept, form, structure and terminology of judgments in your legal system. Summary: Swedish procedural law makes an important distinction between decisions (beslut) and judgments (domar). Decisions refer to procedural questions, eg questions of res judicata. A Swedish judgment essentially consists of two parts: the ultimate order (ie the operative part of the judgment) and the reasoning in support of the judgment. The judgment first sets forth basic information such as the name of the court, the date of the judgment, the court s location and the names of the parties and their counsel. The judgment s first page contains the ultimate order. Many judgments contain what is called a background which summarises the factual, and sometimes procedural, history of the dispute. This is followed by a statement of the parties claims (yrkanden) and legal grounds (grunder), and the parties further presentation of facts (sakframställan). The judgment then sets forth the court s reasoning and leads to a conclusion. The reasoning is usually detailed but limited to what the court deems relevant to reach its conclusion. Practice in relation to the degree of detail regarding the reasoning does not seem to have been directly influenced by the ECHR, nor has Sweden been found to have contravened its provisions in this respect. Full response: The Code of Judicial Procedure, Chapter 17, section 7 contains a provision regarding the necessary contents of a judgment. At the outset, it states that the judgment must be in writing and specify in separate sections the court, time, and place of pronouncement of the judgment, the parties and their attorneys or counsels. Additionally, the judgment contains an ultimate order. 1 This means the operative part of the judgment. Moreover, the judgment must set forth the following: the parties demands (the remedy sought) and objections, and the facts on which they are based; and the reasoning in support of the judgment, including a statement of what has been proved in the case. The section also provides that a judgment rendered by a superior court must, to the extent necessary, describe the judgment of the lower court. Finally, the provision states that if a party is entitled to appeal from a judgment or apply for the reopening of a default judgment, the judgment must state the steps he must take to do so. These are minimum rules for the contents of the judgment. Consequently, in practice, the judgment contains more than is provided for in this section. In other words, a judgment contains the name of the court, the date of issuance of the judgment, and the geographical location of the court. In addition, it always states the number of the case at issue, eg T The parties names (including personal identification numbers or registration numbers for legal persons) and addresses, and the names, titles and office addresses of their counsel are set forth on the first page of the judgment. The ultimate order, eg the court s position vis-à-vis the claimant s claim, is set forth on the first page. If the claim is denied, the ultimate order is very short. In such cases, the ultimate order usually states that the claim is denied. 1 The official translation of the Code of Judicial Procedure uses the term final judgment. (The translation can be found on the Swedish government s website: Bader Ginsburg & Bruzelius, Civil Procedure in Sweden Columbia University School of Law Project on International Procedure (Martinus Nijhoff, The Hague 1965), p 303 and Lindell, Civil Procedure in Sweden (2 nd edn Iustus förlag, Uppsala 2004), p 121 have translated domslut as ultimate order. 2 The letter T indicates that it is a civil case ( tvistemål ) and not a criminal case ( brottmål ). The combination of numbers indicates that it is the five hundred and first case submitted to the District Court during

6 An ultimate order granting a claim can take many different forms, depending on the claims in the case. 3 If the case concerns an obligation to pay money, it states that the defendant is obliged to pay SEK XX to the claimant. It is important to be precise in stating the ultimate order in performance actions in order to enable enforcement of the judgment. With respect to a declaratory judgment, the ultimate order can state that it is declared that agreement XX between the parties is binding or that A has title superior to B in property X. The ultimate order must also incorporate decisions on other issues, for example in respect of the litigation costs in the case. In addition to the ultimate order, many judgments contain a heading entitled Background. This is a short summary of the parties and their relationship, as well as the way in which the dispute arose. There may also be a description of the procedural history of the case. Both parties claims are usually set forth under a heading, as are each party s grounds for their claims. The parties detailed statements in respect of the course of events and the argumentation in factual and legal questions (but usually not questions of evidence) are presented under a separate heading entitled presentation of the facts in controversy (sakframställan/ utveckling av talan). Under the heading Reasoning in support of the judgment (Domskäl) the court usually first identifies the persons who have testified in the case. 4 The content of the testimony of the parties and the witnesses is also sometimes stated, in greater or lesser detail. The findings are then presented under this heading. In the findings, the court states how it evaluated the evidence and what was proven in the case. This is followed by a report of the court s assessment of the legal issues. Sometimes factual and legal questions are intertwined. The reasoning leads to a conclusion, which is repeated in the ultimate order (albeit sometimes with greater precision in the ultimate order). Generally, one can thus say that the reasoning in support of the judgment in a civil case is usually relatively detailed but the focus lies on that which the court deemed relevant. Thus, the court does not always address all of the allegations and interpretations advanced by the parties. The practice of drafting and provision of reasons for judgments does not seem to have been influenced by Article 6 of the European Convention on Human Rights. To the best of our knowledge, the European Court of Justice has not found Sweden guilty of deficient reasoning in support of the judgment in a civil case. 5 B. The final determination and findings on issues of fact and law How does the court's determination of a matter in your legal system relate to the findings on issues of fact and law on which this determination is based? 3 The court is bound by the parties claims in the case, see Code of Judicial Procedure, Chapter 17, section 3, which reads as follows: A judgment may not be given for something else or more than that properly demanded by a party. In cases amenable to out-of-court settlement, the judgment may not be based on circumstances other than those pleaded by a party as the foundation of his action. 4 All evidence presented in the case must if there has been a main hearing be identified in a separate protocol. 5 Cf Danelius, Mänskliga rättigheter i europeisk praxis en kommentar till Europakonventionen om de mänskliga rättigheterna (3 d edn Norstedts Juridik, Stockholm 2007), p 257 et seq. 6

7 Summary: Although in principle an analysis of the reasoning is unnecessary to interpret the ultimate order, one must study the parties claims and grounds in order to determine the subject of the dispute. An appellate court may re-adjudicate the lower court s findings of issues and fact and law and is therefore not limited to review of legal questions. Full response: As pointed out above, a Swedish judgment consists principally of two parts: the ultimate order and the reasoning in support of the judgment. In addition, the judgment first and foremost sets forth the parties claims and grounds of action. The basis of Swedish judgments is simple: legal force is determined by the ultimate order in light of the grounds for the claimant s case. In principle, one need not analyse the reasoning in support of the judgment in order to interpret the ultimate order. On the other hand, one must study the parties claims and grounds therefor (which are stated in the judgment) in order to determine the subject of the dispute. Specifically, many judgments pertain to an obligation to pay money, and in such cases the ultimate order is very short and simply says that [defendant s name] is obliged to pay SEK [XX] to [claimant s name]. If a judgment is appealed, the higher court is, in principle, free to readjudicate the conclusions in respect of issues of fact and law reached by the lower court. The higher court s adjudication is thus not limited to legal questions. In certain situations, it is possible for a higher court to decide a case on the documents, without any hearing. C. The binding character of a judgment Please describe the prerequisites for a judgment to have binding character so as to be capable of having preclusive effects in your legal system. Summary: A judgment becomes final once the period for appeal has lapsed and no appeal has been made. The lis pendens rule will bar a new litigation regarding the same matter at issue as long as there is a pending litigation. The first litigation is still pending if the judgment is under appeal. A final judgment may be set aside by means of extraordinary appeal (extraordinära rättsmedel) based on substantive defects (resning) or grave procedural errors (domvilla); however, a final judgment is presumed valid until reversed by a higher court. If a second judgment has been based on a first judgment which is later reversed, the second judgment may also be reversed via extraordinary appeal based on substantive defect. Full response: A judgment becomes final (i.e. has the formal status of res judicata) once the period to appeal has expired and none of the parties have appealed. If the judgment has been appealed, it will thus not be final in this sense. 6 However, it will have preclusive effects in respect of the rule of lis pendens, which entails that new litigation on the same matter at issue as the pending litigation may not be commenced. When the first litigation is subsequently concluded, new litigation at that point is not impeded by lis pendens but rather by legal force. Thus, in principle, the legal force effects of a judgment can be determined prior to issuance of the judgment. The lis pendens effect is comparable only to so-called negative legal force and not positive legal force (see introduction to section II regarding these terms). Consequently, lis pendens leads to a dismissal of a new case which pertains to the same matter at issue. This means that the court does not adjudicate the matter on the merits. A second judgment cannot be based on an appealed judgment since the latter has no legal force. However, it is conceivable that a final judgment may be set aside based on extraordinarily appeals rules (see section II A, 5). The issue here is one of relief for substantive defects and relief for grave procedural errors. Assume that a second judgment was based on a first judgment, but that the first judgment later was changed after exercise of an 6 On the other hand, judgments and certain decisions can be said in another sense to be binding even if they are appealed. Such a judgment in respect of payment liability can, to a certain extent, be enforced. In addition, it is possible for the court to decide that judgments can be enforced notwithstanding appeals (see Code of Judicial Procedure, Chapter 17, section 14). Moreover, interlocutory decisions can be enforced immediately. A higher court can, however, in certain cases, stay a judgment or decision. This temporarily freezes enforcement. 7

8 extraordinary appeal. (The case was perhaps re-opened due to a party s access to new evidence. 7 ) Then, also the second judgment can be subject to an extraordinary appeal, in light of the rules regarding relief for substantive defects. 8 In terms of the question of validity, the basic assumption is that all judgments are valid until they are reversed by a higher court. According to older law, a seriously deficient judgment could be seen as non-existent, ie as a nullity. Today, the main rule is the opposite. In a case in 1997, 9 the Swedish Supreme Court found that the fact that a court employee exceeded his authority may only in exceptional cases result in the decision being deemed a nullity. On the other hand, the Supreme Court found that a typical case of nullity is where the decision is invalid because it is rendered by a clearly unauthorised person. 10 Preclusion requires that the matter be tried on the merits. This entails that, eg, dismissal decisions based on the lack of jurisdiction of the court or a decision to dismiss due to withdrawal of the claim do not acquire legal force in respect of the matter at issue. On the other hand, the decision to dismiss acquires legal force in respect of the issue which led to the dismissal. 11 D. Judgments that are capable of having preclusive effects Please identify and describe (1) the types and characteristics of judgments in your legal system that are capable of having preclusive effect and (2) any types of judgments that are not capable of having preclusive effects. Summary: The scope of the preclusive effects is determined by what under Swedish law is called legal force (rättskraft). To determine the legal force of a judgment one must consider the relief sought and the grounds for it. In principle all judgments are capable of having preclusive effects. The two most important types of judgments are performance judgments (fullgörelsedom) and declaratory judgments (fastställelsedom). However, using another kind of categorization there are several other types of judgments or decisions capable of having preclusive effects: (1) default judgments from which an appeal can no longer be lodged; (2) partial judgments; (3) certain intermediate judgments (4) court-approved settlements; (5) liquidated damages judgments; (6) final decisions dismissing a case based on a procedural impediment (eg res judicata); and 7) decisions in summary litigation. Full response: Introduction Under Swedish law, legal force questions are resolved by comparing the issues which were determined in a final judgment with the issues which arise in a new case. The comparison primarily addresses the claims and grounds. Accordingly, legal force issues cannot be determined in an analysis solely of the claims in both cases. Different judgments are usually primarily broken down in terms of the different types of legally permissible claims. There are primarily three types of acceptable claims: performance claims, claims for declaratory judgment, and claims which address status issues. Referring to these types of claims, one speaks of performance judgments, declaratory judgments, and status judgments. The last form of judgment will not be addressed in detail since it pertains to issues outside of the scope of the Brussels Regulation. As will be made clear below, other categorisations are also used to distinguish between different types of judgments. Moreover, the court can render different types of decisions. Swedish law makes an important distinction between judgments and decisions. A decision refers to a procedural question (eg regarding res judicata). 7 Code of Judicial Procedure, Chapter 58, section 1, paragraph 1, point 3. See Fitger, Rättegångsbalken (Norstedts Juridik, Stockholm [this is a comprehensive commentary on the Code of Judicial Procedure in several volumes in a loose-leaf system]), 58:1. 8 Code of Judicial Procedure, Chapter 58, section 1, paragraph 1, point 3. Fitger, Rättegångsbalken, 58:1. 9 NJA 1997 C Fitger, Rättegångsbalken, 58:1. 11 Fitger, Rättegångsbalken, 17:11. 8

9 Swedish law requires that a claim be precise. 12 In addition, the court may not adjudicate anything other than, or more than, that which has been demanded. 13 This means that the ultimate order in a case granting a claim reflects a definitive claim. The legal requirements rendering a claim permissible can have a bearing on which legal force problems are brought about by different types of judgments. It is possible that certain judgments can give rise to legal force questions which are difficult to adjudicate, while other judgments can hardly do so. It is also possible that the legal force problems are not dependant on the type of judgment. Performance judgments According to the main rule, a performance action may not be brought until the obligation to perform is due. 14 A natural or legal person should not be subject to litigation until his failure to fulfil his or her obligation is manifest. 15 Performance actions refer to a liability to pay a sum of money or perform an act, eg a certain work (specific performance). Judgments ordering payment constitute the most common type of judgments. The ultimate order states the exact amount which has been assessed. However, the simplistic nature of the ultimate order does not exclude the possibility of res judicata problems. A performance action may also involve a claim whereby the defendant is to be prohibited from doing something or accepting something. 16 Sometimes such a judgment is called an injunction (förbudsdom). In a judgment granting an injunction, the court states the specific act prohibited to the defendant. It may be described in a more detailed way. The nature of the ultimate order then becomes more complicated. A legal force problem can arise if the plaintiff, as a result of a judgment granting or denying his action, again presents a claim seeking to prohibit the defendant from performing acts which are somewhat different from those described in the first claim seeking an injunction. The new litigation can be in respect of a more extensive or a limited injunction. The difference can be attributable to different time periods. An injunction can, in such cases, give rise to difficult legal force questions if the claimant seeks a new injunction. A judgment granting an injunction may be accompanied by a fine which will attach if the defendant does not comply with the judgment. A court may adjudicate a case where the dispute pertains to the question when a loan shall be paid. The claimant s case can be denied because the debt is not yet due for payment. The claimant may start new proceedings when the debt is due. Declaratory judgments According to the main rule, a declaratory judgment action relates to the question of the existence of a defined legal relationship 17 In a declaratory judgment, the court can determine, for example, whether the defendant is liable in damages or whether an agreement is valid or invalid. A declaratory judgment can, within the scope of the plaintiff s claim and the defendant s claims regarding interpretation, clarify the meaning of an agreement. The ultimate order then states whether a legal relationship (agreement) exists and the precise content of the legal relationship (the agreement). By virtue of his claim for declaratory judgment, the claimant can compel the court to take an explicit position on the legal relationship, for example in an action for interpretation of a contract or a tort action in which a declaratory judgment can establish the amount to be paid. A party cannot demand that the court render an opinion in its ultimate order regarding the existence of purely factual circumstances, for example that a defendant performed a concrete act which resulted in a specific loss. In this case, a declaratory judgment action must instead address a legal relationship, for example a duty to pay damages. (However, the judgment is not as opposed to a performance judgment enforceable.) The claimant can allege that the 12 Code of Judicial Procedure, Chapter 42, section Code of Judicial Procedure, Chapter 17, section Code of Judicial Procedure, Chapter 13, section SOU [Swedish Government Official Report] 1938:44, p SOU [Swedish Government Official Report] 1938:44, p Code of Judicial Procedure, Chapter 13, section 2. 9

10 damage-causing act as grounds and add that it includes a breach of contract by the defendant. This means that only the reasoning in support of the judgment will contain a statement of the court s findings of proven facts. This is very significant, since legal force is limited to the ultimate order. Under Swedish law, the reasoning in support of the judgment does not have legal force. A declaratory judgment can give rise to legal force problems not only when the claimant s action is granted but also when his action is denied. A judgment declaring an agreement invalid has res judicata effect. A declaratory judgment action can form the basis for a subsequent performance action (and then has so-called positive legal force, see Section II below regarding this term). Unlike arbitration awards issued in Sweden, a court s ultimate order cannot contain a statement regarding a specific factual occurrence or a specific loss. Proven factual circumstances can lead to many different remedies and it can be difficult to predict all of the different remedies which can be made available if a certain fact is certified with legal force in a judgment. 18 These legal force problems are avoided in Swedish civil litigation because a declaratory judgment action must refer to a specific legal relationship Default judgments Upon the claimant s motion, a court may issue a default judgment against a defendant if the latter fails to appear at a hearing or submit a written statement of defence. 19 Upon adjudication, the court assumes that the claimant s factual allegations are true unless they are clearly untrue. The claimant s action will be dismissed if there are no legal grounds therefor. 20 The court s adjudication is thus limited. 21 A default judgment enters into force if the defendant does not apply for reopening of the case within one month. 22 Default judgments which cannot be appealed any longer have the same legal force as normal judgments. Partial judgments When several claims are joined, the court may enter judgment on any of the claims separately (deldom), although litigation of the remaining claims is not terminated. 23 Such a judgment has legal force like any other judgment. If the respondent has raised a set-off claim against the claimant s claim, those two claims shall be adjudicated simultaneously. Intermediate judgments Sometimes there is a need to bifurcate the proceedings. A Swedish court has jurisdiction to do so under certain conditions. These kinds of judgments relate to so-called prejudicial questions threshold matters that must be resolved before other claims or issues can be determined. 24 An intermediate judgment (mellandom) is possible in three situations. If a declaratory claim is joined with a performance claim, it is possible to render an intermediate judgment regarding the declaratory claim. For example, this may occur when a landlord has lodged two claims against the tenant one regarding the validity of the tenancy agreement and another (ie the performance claim) regarding the obligation to pay rent for a certain period of time. Both the first and the second judgments have legal force Cf Heuman, Arbitration Law of Sweden: Practice and Procedure (Juris Publishing, New York 2003), pp Code of Judicial Procedure, Chapter 44, sections 2, 4 and 7 a. 20 Code of Judicial Procedure, Chapter 44, section 8, paragraph Code of Judicial Procedure, Chapter 44, section 8, paragraph Code of Judicial Procedure, Chapter 44, section Code of Judicial Procedure, Chapter 17, section Bader Ginsburg & Bruzelius, Civil Procedure in Sweden, p 275 et seq. 25 Code of Judicial Procedure, Chapter 17, section 5, paragraph 1. 10

11 An intermediate judgment may also refer to one of several grounds for the claimant s claim or one of several objections raised by the defendant. Furthermore, a court has the power to render such a judgment regarding a legal issue, such as a choice of law issue. 26 In these two latter cases, the intermediate judgment will have no res judicata effect outside of the litigation, 27 for example if the case is closed after the intermediate judgment is made and the plaintiff initiates new litigation claiming financial compensation, relying upon the intermediate judgment. 28 The Swedish principle of the restricted internal res judicata effect is based upon the view that the scope of legal force must not be beyond the parties possibility to foresee the consequences of the res judicata effect when a judgment regarding a certain issue may have several, and unpredictable, effects. 29 When the intermediate judgment is rendered the court will decide whether to allow immediate appeal and to stay the proceedings in the remaining parts. 30 Court-approved settlement If the parties settle, the claimant might withdraw his action. However, the court may confirm the settlement in a judgment where requested by both parties. 31 Such a judgment has legal force and may be enforced to the extent that it imposes obligations on the parties. If the settlement agreement is unclear, the judge should highlight this for the parties so that they can clarify the agreement. Where they do not do so, the judge can nevertheless confirm the agreement in a judgment. 32 This kind of unclear judgment can give rise to a legal force problem. The aforesaid is also true where the agreement contains different terms and conditions. If the defendant asserted a set-off claim, the judge should ensure that the settlement agreement makes clear that this claim falls within the scope of the judgment s legal force. If a third party has taken certain measures and signed the settlement agreement, the confirmation should not include the third party. Accordingly, the confirmed settlement has no legal force against a third party. 33 Liquidated damages judgments A contract clause may oblige a party to pay liquidated damages if it does not carry out a contracted obligation. A Swedish court has jurisdiction to order a party to pay liquidated damages in an amount stated in the claimant s claim. This is a performance judgment. If the contract does not provide for special sanctions in the event of breach of contract, a party may prefer to present a pecuniary claim. In practice, this is not possible in some situations, such as when the claimant moves a court to order the defendant to perform an action or to refrain from doing something. In such a case, the order must be backed up by sanctions. Upon the claimant s request, the defendant may be ordered to perform certain acts or to refrain from doing so under penalty of fine. If the defendant fails to comply with the judgment, a court may order the defendant to pay the fine to the government. In some cases, the claimant does not request a sanction and thus there is no such sanction incorporated into the judgment. There are no res judicata rules which prevent the Swedish Enforcement Authority or a court from attaching the sanction of a fine to the judgment. Thus, the plaintiff may apply for enforcement and the Enforcement Authority may order the defendant to comply with the court order under penalty of fine. Conditional judgments There is no legal rule regarding conditional judgments. Accordingly, it is not completely clear whether a court can encumber a party with an obligation under a certain condition, such as when it is difficult in the future to determine whether the condition is fulfilled. Consider the case where the claimant seeks rescission of an agreement. The seller often formulates its claim such that the defendant will be obliged to repay the purchase sum in return for the goods sold. If the claimant s claim is granted, the judgment does not mean that the defendant has an enforcement order 26 Code of Judicial Procedure, Chapter 17, section 4, paragraph In the literature this limited effect of the judgment has been called intra-procedural legal force (Fitger, Rättegångsbalken, 17:5). 28 Prop [Government Bill] 1989/90:71 p Fitger, Rättegångsbalken, 17:5. 30 Code of Judicial Procedure Chapter 17, section 4, paragraph Code of Judicial Procedure, Chapter 17, section Heuman, Kan parter göra en förlikning exigibel genom att låta en skiljeman stadfästa den i en dom?, Juridisk Tidskrift p 929 et seq. and Fitger, Rättegångsbalken, 17:6. 33 Fitger, Rättegångsbalken, 17:6. 11

12 which he can use to compel the other party to return the property he sold. 34 The defendant can commence action in new litigation, but it is simpler for him to assert a counterclaim in the first litigation to require the claimant to return the property sold in the event that the defendant is ordered to repay the purchase sum. Final decisions A court can terminate a case without going into the merits of the controversy. It can do so for different reasons. The court s decision is not designated a judgment but rather a final decision. According to its wording, the legal force rule applies only to judgments, not final decisions. Nevertheless, the rule can be applied analogously to certain decisions. If a court has dismissed a dispute due to a procedural impediment in a decision which cannot be appealed any longer, then it is final and binding. One example of such a decision is when the case is dismissed because the claimant lacks standing. If a claimant attempts to have a dismissed dispute readjudicated by commencing a new action, the court must dismiss the claimant s claim, making reference to the earlier decision to dismiss. Where an action is dismissed because of res judicata, such a decision on the res judicata issue has a res judicata effect. The question cannot be readjudicated because it has been decided in a binding way in the final decision. A plaintiff may withdraw its claim, for instance when the plaintiff predicts that it will lose the case. Then, the court will issue a final decision terminating the proceedings. A final order issued because the claimant has withdrawn his action does not prevent the claimant from commencing a new action. The defendant can prevent a second litigation by requesting that the first case be determined by a judgment. 35 Such a judgment will bar new litigation. If the defendant believes that he will prevail in the first litigation, he may prefer to have the case resolved once and for all. The judgment denying the claim prevents the claimant from commencing the action again, for example when he later acquires access to new evidence in support of his case. Summary litigation Cases in respect of undisputed claims can be resolved in a simplified manner by the Swedish Enforcement Authority (Kronofogdemyndigheten). If the defendant fails to contest the claimant s demands after the defendant has been served with the summons, an order of enforcement is issued. This has the same legal force as regular judgments. 36 Under Swedish law, the Enforcement Authority is not a court and, consequently, decisions issued by it do not fall within the scope of Article 1 of the Brussels Regulation. However, a separate provision in Article 62 of the Brussels Regulation makes clear that these Swedish decisions must be recognised in the same way as court judgments. 37 Decisions in respect of interim measures Swedish courts can enter decisions regarding different types of interim measures. 38 One example of this is a sequestration order which seeks to ensure enforcement of a future judgment for payment where there is a risk that the defendant will conceal its assets. In Sweden, this type of order is executed by the Enforcement Authority upon 34 NJA 1991 s. 173, and Heuman, Specialprocess (6 th edn Norstedts Juridik, Stockholm 2007) p Code of Judicial Procedure, Chapter 13, section Section 65, Injunctions to Pay and Mutual Assistance Act.. 37 Pålsson, Brysselkonvention, Luganokonventionen och Bryssel I förordningen (Norstedts Juridik, Stockholm 2002), pp 52 and 234 and, in respect of the Brussels Regulation, Article 34.2, p 243 et seq. 38 A decision in respect of an interim measure constitutes a judgment under Article 32 of the Brussels Regulation. A Swedish sequestration order can thus be executed in another member state under certain circumstances. It is difficult to see what is meant by a Swedish order in respect of an interim measure being recognised by a court in another member state. Even in an exceptional case where the claimant would need to acquire recognition of a Swedish order in a foreign court, the foreign court can, based on Article 37.1, stay the application as soon as the opposing party shows that he has applied for readjudication of the Swedish order. 12

13 application by the claimant. The court decision does not have any legal force. Upon a party s application, a decision granting or denying such an application can be readjudicated by the court which issued the order NJA 1993 s

14 II. Preclusive effects This part of the questionnaire is concerned with the effects of a judgment (including, for this purpose, any statement of the reasons given for a judgment) insofar as it restricts the ability of the participants in the proceedings in which it was given, or related or non-related persons, to bring or conduct later proceedings (whether or not forming part of the same action) as they would wish. In particular, this section is concerned with so-called rules of "res judicata" or their equivalent. References to "Claimant" are to the person seeking a remedy from the court, and references to "Defendant" are to the person against whom a remedy is sought. 40 The terminology used in this intended for guidance only and is not intended to exclude or restrict discussion of the legal concepts and terms which are relevant to your legal system. This section is not concerned with the evidential status of the record of judgment, nor with the value of judgments as a legal precedent for future cases (stare decisis), both of which fall outside the scope of this Project. For the purpose of drafting the questionnaire, a distinction has been drawn between "claim preclusive effects" (see Part II.A) and "issue preclusive effects" (see Part II.B). These are intended to be descriptive categories, the former (which might also be described as "same claim preclusion") embracing rules of preclusion affecting the raising of claims which a legal system considers to have been determined in earlier proceedings and the latter embracing rules of preclusion affecting attempts to re-open issues of law or fact which a legal system regards as having already been determined in earlier proceedings. A third category of "wider preclusive effects" has been used (see Part II.C) to accommodate rules of preclusion which are considered to fall into neither of these categories. Those co-ordinating the Project recognise, however, that different legal systems will approach the categorisation differently depending on how they define the concepts of claim and issue, and that terminology will vary (e.g. in England, reference is made to "cause of action estoppel", "issue estoppel" and to various other rules, including "abuse of process"). Rapporteurs are thus encouraged to be flexible and to fit their description of the law and practice of their legal system into the framework established below as they think most appropriate. A. Claim preclusion 1. Existence and nature of claim preclusive effects Are judgments in your legal system capable of having claim preclusive effects? Summary: In Sweden, the terms legal force and res judicata are to some extent used synonymously. Legal force can either be negative or positive. Negative legal force is also called res judicata and means that the first judgment prevents the initiation of new litigation on the same matter. Negative legal force is considered procedural in nature. The court will render a final decision (and not a judgment) dismissing the claim. Positive legal force means that a new judgment in subsequent litigation will be based on the legal relationship established in the first action. This is sometimes referred to as a judgment s prejudicial effect or substantive res judicata. Although this positive legal force bears some resemblance to issue preclusion, it is not issue preclusion in the strict sense. In order for an issue to gain positive legal force, the issue must have been part of the relief sought, ie the legal relationship must occur in the operative part of the judgment. The reasoning as such in a judgment has no legal force. In principle only declaratory judgments acquire positive legal force Although the preclusive effects are procedural in nature, one may argue that the preclusion may be substantive in nature as well, owing to the fact that the parties behaviour is influenced by a judgment. Full response: Introduction Generally regarding legal force In Swedish law, the terms res judicata and legal force (rättskraft) are, to some extent, used as synonyms. However, the term legal force can be said to be somewhat broader than res judicata (to which we will soon return). The Code of Judicial Procedure Chapter 17, section 11 on legal force, which can be said to be a type of general clause due to its imprecision, provides: 40 Thus, for example, a person named as Defendant in legal proceedings who advances a counterclaim should be treated as "Defendant" for the purposes of the main claim against him (including, for example, any true defence of set-off) and "Claimant" for the purposes of the counterclaim. 14

15 Upon the expiration of the time of appeal, a judgment acquires legal force to the extent that it determines the matter at issue in respect of which the action was instituted. A judgment also has legal force to the extent that it adjudicates a debt claimed as a set-off. A question thus determined may not be adjudicated again. Specific provisions apply to extraordinary appeals. Legal force in civil law cases is usually described with the help of three limitations. Firstly, one speaks of an objective limitation. This means that only the matter at issue ( saken ) falls within the scope of the legal force. 41 (However, the matter at issue can also include claims and causes of action which are never asserted in the litigation.) Secondly, legal force is limited in time. If new facts arise after the entry of judgment, such facts can result in the commencement of new litigation (doctrine of facta supervenentia). Finally, as a general rule, legal force does not apply vis-à-vis third parties, which is the subjective limitation. 42 With respect to the objective limitation on the judgment s legal force, one draws a distinction in Swedish law between negative legal force (negativ rättskraft) and positive legal force (positiv rättskraft). The distinction between claim preclusion and issue preclusion is not used in Swedish law. Furthermore, the moiety of positive legal force and negative legal force does not directly reflect claim preclusion and issue preclusion. Negative legal force which is also called res judicata means that the first judgment prevents the initiation of new litigation on the same matter at issue. The negative legal force has been described as procedural. 43 Accordingly, an action addressing the same matter at issue must be dismissed. The court will render no formal judgment but only a decision. This means that the proceedings will be terminated and that the court will not give the parties the opportunity to plead and present their cases. The term dismiss will in the following be used to describe such a decision (as opposed to a judgment, which grants or denies/rejects the plaintiffs claim). Both performance judgments and declaratory judgments have negative legal force. One usually says that in principle, only declaratory judgments can have positive legal force. 44 This type of legal force entails that a new judgment in a subsequent litigation will be based on the legal relationship established in the judgment of the first litigation. A common example of this is as follows. By virtue of a declaratory judgment, a claimant has been declared to have title to land superior to that of the defendant. The defendant later clears the forest on the property and the claimant seeks compensation for this in new litigation. The court must then proceed from the holding in the previous judgment in respect of the question of title. 45 Positive legal force can also sometimes arise as a consequence of performance judgments. This occurs in conjunction with the effect of legal force vis-à-vis third parties and in conjunction with readjudication as a result of facta supervenentia (see section II, 5 and 9). 41 It is important to notice that the same matter at issue is a juridico-technical concept. However, other translations of the Swedish expression saken (literally the thing ) are conceivable. Thus Lindell, Civil procedure in Sweden, p 124, uses the term subject matter, whereas Bader Ginsburg & Bruzelius, The Swedish Code of Judicial Procedure volume 15, The American Series of Foreign Penal Codes (Sweet & Maxwell Limited, London 1968), p 75, use the expression the particular matter concerning which the action was instituted. In the official Swedish version of the Brussels Regulation (article 27) the expression the same cause of action has been translated into samma sak (literally the same thing ). 42 Lindblom, Miljöprocess II (Iustus förlag, Uppsala 2002), p 510 et seq. 43 Bader Ginsburg & Bruzelius, Civil procedure in Sweden, p 307. The expression formal legal force was previously used to denote the fact that the judgment could no longer be subject to appeal. However, this expression is no longer in use, see Ekelöf, Rättegång III (7 th edn Norstedts Juridik, Stockholm 2006), p 175 footnote Lindell, Civilprocessen (2 nd edn Iustus Förlag, Uppsala 2003), p 323 and Lindblom, Miljöprocess II, p Ekelöf, Rättegång III, p

16 To some extent, positive legal force bears a resemblance to issue preclusion. However, it must be underscored that in order to acquire positive legal force, an issue must have been part of the remedy sought (ie the matter at issue ) in the first case. In other words, it is not sufficient that the first court only addressed the question as an element in its reasoning to arrive at its decision. Pursuant to Swedish law, the reasoning in a judgment has no legal force. 46 The term positive legal force may be somewhat misleading. 47 Instead, one often speaks of the judgment s prejudicial effect. One also speaks of the substantive effect of res judicata. 48 Certain authors have asserted that the question of the judgment's positive or prejudicial effect has nothing at all to do with legal force or procedural law but should rather be classified as the judgment's civil law significance. 49 Nevertheless, the majority of authors in the field of procedural jurisprudence see this as a question of legal force. However, the problem of systematically drawing distinctions between procedural law and substantive law can arise, particularly regarding the legal force of the judgment vis-à-vis a third party (see sections 9 and 10). The general interpretation seems to be that the provisions of Chapter 17, section 11 of the Code of Judicial Procedure only address negative legal force and that the judgment's prejudicial effect arises therefrom by analogy. 50 Moreover, the plain language of Chapter 17, section 11 of the Code of Judicial Procedure includes only judgments, not decisions. To a certain extent, however, res judicata rules are applied by analogy to certain decisions. 51 The nature of the preclusive effects Chapter 17, section 11 of the Code of Judicial Procedure contains only one legal consequence: The question thus determined may not be adjudicated again. This entails, first and foremost, that the court must dismiss a new claim regarding the same matter at issue. 52 Moreover, this provision can be deemed (by analogy) to provide support for the proposition that judgments can have positive legal force. One can also say that the decision itself influences the rights/obligations which formed the basis for the party's claim. Assume that a creditor claims that a debtor must pay a sum of money as a result of a loan agreement. The debtor contests the claim and alleges that he has already repaid. Regardless of whether the judgment grants or denies the claim, in the future, the legal relationship between the parties will be governed by the judgment. The judgment means that both the loan agreement and any payments have lost their judicial significance. 53 However, this effect, which can perhaps be called substantive, appears instead to result from the fact that the judgment cannot be readjudicated. 2. Policies underlying claim preclusive effects What are the policy considerations for the claim preclusive effect of judgments in your legal system? Summary: Claim preclusive effect is based on considerations of (1) party security (which may be likened to legal certainty); (2) public faith in the stability of judgments; and (3) judicial economy. Full response: 46 Ekelöf, Rättegång I (8 th edn Norstedts Juridik, Stockholm 2002), p 45 and Fitger, Rättegångsbalken, 17:11. In order to determine the remedy sought (ie the matter at issue) one must look at both the claim and the grounds alleged in the claimant's case. The court must, of course, address the grounds in the reasoning. 47 Ekelöf, Rättegång III, p Lindell, Civilprocessen, p This interpretation was advanced by Karl Olivecrona, see Ekelöf, Rättegång III, p 186 footnote Ekelöf, Rättegång III, p Fitger, Rättegångsbalken, 17: Ekelöf, Rättegång III, p Ekelöf, Rättegång III, p