Switzerland is a signatory to the Hague Convention on the Law Applicable to Traffic Accidents (Traffic Accidents Convention), concluded in The Hague, Netherlands, on July 4, 1971 and adopted by the Federal Council on October 4, 1985. The Convention entered into force in Switzerland on January 2, 1987.
Accordingly, pursuant to Article 134 of the Federal Law on Private International Law (IPRG), the Traffic Accidents Convention applies to claims arising from traffic accidents with an international context. The Convention's conflict of law rules are applied independently of the mutuality requirement; the Convention is also applicable when the law to be applied is not the law of a signatory state. The Convention contains only rules pertaining to the determination of applicable law, without laying down rules governing international competence and prerequisites applicable to the recognition and enforcement of foreign judgments. The Hague Convention has excluded from its scope of application all issues relating to rights of recourse.
Source: Metzler/Fuhrer/Festschrift NVB&NGF/2000
At the core of the Convention is the principle according to which the substantive law of the country in which the accident occurred (lex loci) is applicable. If, however, only one vehicle is involved in an accident and this vehicle is not registered in the country in which the accident occurred, the liability of the driver, keeper, owner, and all beneficial owners of the vehicle is assessed in accordance with the law of the country in which the vehicle is registered (lex stabuli or law of registration).
This applies to any injured passengers whose customary place of residence is not situated in the country in which the accident occurred. On the other hand, if their customary place of residence is situated in the country in which the accident occurred, the law of this country applies. Finally the liability with regard to injured parties located outside of the vehicle is also assessed in accordance with the law of the country of registration of the vehicle causing the accident, insofar as the injured party has his or her customary place of residence there.
In cases involving more than one injured party, the applicable law is determined for each party separately. The lex stabuli already referred to is also applicable when more than one vehicle registered outside of the accident country is involved in the accident, providing the vehicles are all registered in the same country. If this is not the case, and the vehicles involved are registered in different countries, lex loci applies.
For those individuals located outside of the vehicle who are involved in an accident, lex stabuli only applies if all these individuals along with the involved vehicles had their customary place of residence or location (vehicle registration) in the same country of registration.
The question remains which law applies to liability with regard to property damage. As concerns transported items belonging to the passenger, the law applicable to the passenger himself or herself is to be applied. As to other items transported in the vehicle, the applicable liability law is the law applicable to the vehicle owner. As a general rule, the law of the accident site is applicable to items located outside of the vehicle(s), unless the items in question are the personal property of an injured party to whom lex stabuli applies.
The concept of involvement in the accident needs to be considered, and this is a concept subject to interpretation. As concerns vehicles, any participation in the accident constitutes involvement. By contrast, a more narrowly defined concept applies to individuals located outside of the vehicle, on the presupposition that an individual can be considered to be a party incurring liability on account of the accident. Irrespective of the applicable law, liability is determined by reference to the traffic and safety regulations in effect at the site and time of the accident.
Injured parties possess a direct right of action against the insurer of the liable party insofar as they are entitled to exercise this right according to applicable law. If the applicable law of lex stabuli, as described above, does not provide for a direct right of action it can nevertheless be exercised if the law in effect at the site of the accident provides for this. If neither the lex loci nor lex stabuli provides for a direct right of action it can nevertheless be exercised if this is permissible according to the law applicable to the insurance contract.
A vehicle registered in Germany is involved in an accident in Switzerland in which no other vehicles are involved. In this case German law is applicable with regard to liability towards the passengers except for any passengers whose customary place of residence is in Switzerland. German law is also applicable with regard to liability pertaining to any items transported in the vehicle, except for items belonging to any passenger whose customary place of residence is in Switzerland. Swiss law is applicable to property damage sustained outside of the vehicle, unless the items in question are the personal property of an injured party whose customary place of residence is located in Germany. If another vehicle registered in Germany is involved in the accident, these same conditions apply unless the accident also involved individuals outside of the vehicle whose customary place of residence is not situated in Germany. Lex loci would be applicable in this case.