This country-specific Q&A provides an overview to Litigation laws and regulations that may occur in Norway.
What are the main methods of resolving commercial disputes?
The main methods of resolving commercial disputes which can not be solved amicably between the parties, are dispute resolution by the ordinary courts or by arbitration panels. The standard way will be dispute resolution with the ordinary courts, unless the parties have agreed dispute resolution by arbitration under a specific contract or for a specific dispute at hand. We also see a limited number of cases being resolved by private mediation when parties appoint one or more mediators to work to resolve the dispute outside the court system. It should be noted that all ordinary courts (apart from the Supreme Court) offer judicial mediation, which in many cases lead to a settlement when a case has been raised with the ordinary courts.
What are the main procedural rules governing commercial litigation?
Commercial litigation in the ordinary courts will be handled according to the Norwegian Dispute Act (the “Dispute Act”), see English translation https://lovdata.no/dokument/NLE/lov/2005-06-17-90. The purpose of the Dispute Act Section is to provide a basis for resolving civil disputes in a fair, sound, swift, efficient and trustworthy manner through public proceedings before independent and impartial courts.
In case arbitration is agreed for a specific dispute, the Norwegian Arbitration Act (the “Arbitration Act”), see English translation https://lovdata.no/dokument/NLE/lov/2004-05-14-25 provides for procedural rules for the arbitration case. The Arbitration Act applies to arbitration pursuant to agreement or statute irrespective of whether the parties are Norwegian or foreign. The Arbitration Act only applies to arbitration that takes place in Norway unless otherwise provided for in the act. The parties may agree specific terms applicable for the arbitration process.
What is the structure and organisation of local courts dealing with commercial claims? What is the final court of appeal?
Formally the main rule is that all commercial cases to be raised in first instance will have to start in a local conciliation board. However, there are some wide exemptions from the formal main rule. This means that in practice most of the commercial disputes are brought directly to one of the about 60 district courts that handle all disputes in first instance. Judgements from the district courts can be appealed to one of six regional courts of appeal. The Supreme Court is the final court of appeal. However, only a very limited number of cases are allowed for the Supreme Court. A case will typically be allowed if the Supreme Court finds that resolution of the case has principal interest as precedence.
Disputes to be resolved by arbitration are mostly resolved by ad-hoc appointed panels. The arbitration judgement may not be appealed, but it is possible to file a claim with the ordinary courts asserting that an arbitration award is invalid on basis certain limited reasons set out in Section 43 and 44 of the Arbitration Act (various material errors).
How long does it typically take from commencing proceedings to get to trial?
According to the Norwegian Dispute Act, the main hearing shall not be held more than six months after the date of submission of the writ of summons, unless special circumstances make a longer period necessary. Previously most district courts have been able to comply with this requirement, however with some exceptions. It should also be noted that this time limit has been significantly affected by the COVID-19 situation, which has led to many hearings being postponed and a back log with the courts. It is likely that this will have effect into 2021 and maybe further and mean that expected handling time will be longer than pre COVID-19. It should also be noted that in case of appeals there is normally a full new main hearing in the appeal court. Several of the appeal courts spend longer time from receiving the appeal to the date of the hearing than the district courts.
In arbitration cases there is no general guideline for when the hearing shall commence. This is normally either agreed between the parties or decided by the panel in the early phase of the arbitration process.
Are hearings held in public and are documents filed at court available to the public? Are there any exceptions?
Hearings in the ordinary courts are held in public unless the case is subject to specific confidentiality requirements under law. The public is entitled to access to court records, records of judicial mediation, judicial rulings and statements of costs. In addition, in cases that are not heard entirely in writing, the public is also entitled to access to written closing submissions from the parties, and evidence and supporting documents that are invoked at an oral hearing. This means that the pleadings from the parties to the court (including evidence submitted with the pleadings), is not public. The most relevant exception from public access for commercial disputes, allows the court to refuse access to documents that contain trade or business secrets.
The arbitration process and arbitration judgement is not confidential unless agreed for each arbitration.
What, if any, are the relevant limitation periods?
According to the Norwegian Limitation Act, the general rule is that claims will be time barred three years after the date the claimant first could have claimed payment. There are some exemptions from this. One important exemption is that if the claimant has not claimed payment because he did not have necessary knowledge of the claim or the debtor. In such a case, the claim does not become time barred until one year after the claimant got or should have got such knowledge. There are also some exemptions applicable for certain other types of claims. To avoid a claim being time barred, a dispute will have to be raised with the applicable court before the applicable time limit expires.
What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
Before a dispute is raised in first instance, the party shall give notice in writing to the person or persons against whom the action may be brought. The notice shall contain information about the claim and the grounds for the claim. It should be noted that non-compliance with this notice requirement, does not have any direct consequences for the non-complying party. Hence, the action raised will not be dismissed by the court if notice is not submitted. But such non-compliance may have impact on the court’s decision regarding award of legal costs.
How are commercial proceedings commenced? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
Commercial proceedings raised for the ordinary courts are commenced either by a complaint to the conciliation board or a writ of summons to the applicable district court. The complaint and writ of summons both have to be in writing. The complaint or writ is then served by the conciliation board or by the district court on the defendant along with an order to give notice of intention to defend. The defendant will then submit a defence and reply.
Arbitration cases are normally commenced by a notice of arbitration sent by one of the parties to the other party. The parties may have agreed specific terms for commencement under the arbitration agreement.
How does the court determine whether it has jurisdiction over a claim?
The court shall ex officio determine whether it is competent to assume jurisdiction. Generally, the court will examine the statement of claim to establish if anything therein indicates that the court does not have jurisdiction. If in doubt, the court will normally provide the parties an opportunity to argue their view on the court’s competence by separate submissions. The court may decide whether it is competent to assume jurisdiction by a separate decision before proceeding with the case as such or as part of its overall decision in the case. Particularly relevant in deciding jurisdiction is the 2007 Lugano Convention which applies as Norwegian law. In international matters, unless jurisdiction follows from agreement between the parties or by operation of law or application of international conventions or treaties, Norwegian courts are only competent to assume jurisdiction if the matter has “sufficient connection” to Norway.
How does the court determine what law will apply to the claims?
The court shall ex officio determine what law applies to the claims by application of Norwegian international private law principles on choice of law. If the issue is debated, it is procedurally handled in the same way as the jurisdictional question as described above under question 9. When deciding the question, the court will start by establishing whether the issue is decided by statutory law, customary practice or other firm rules. In deciding whether any firm rules apply, the court will also look to EU legislation such as the Rome I and Rome II regulations, even though not directly applicable under Norwegian law.
If no statutory law, custom or firm rules apply, the court will decide the question based on an overall assessment of to which jurisdiction the claim has the strongest or closest connection.
In what circumstances, if any, can claims be disposed of without a full trial?
A case raised with an ordinary court may for various reasons be disposed of without a full trial. First, the court shall reject the case it the court is not the correct legal venue for the matter. The correct venue may be another court in Norway or outside of Norway. If the parties have agreed to arbitration, the case shall also be dismissed from the court. The Disputes Act Section 1-3 requires that the dispute at hand constitutes a legal claim and further that the claimant must demonstrate a genuine need to have the claim decided against the defendant. These requirements are only rarely not satisfied. The court will also be entitled to dispose of the case without a full trial in case the defendant fails to submit the writ of defence or if one of the parties does not appear for the hearing.
In arbitration, there is a more limited scope for disposing without a full trial. It will be possible for the arbitration panel to terminate the process if required fees or guarantees of fees are not paid by the parties or if one party is not paying his share of the fees and the other party is requesting termination of the arbitration process (in which case the matter can be brought to an ordinary court).
What, if any, are the main types of interim remedies available?
The Dispute Act chapter 32-34 provides for two types of interim measures: arrest and preliminary injunctions. To secure pecuniary claims, arrest can be given in the debtor’s property or assets.
To secure a claim for other than the payment of money, a preliminary injunction may be requested. There are strict conditions to be satisfied for obtaining a preliminary injunction. The claimant needs (i) to demonstrate that conduct by the defendant requires an interim measure to avoid that an action or execution of a claim is considerably impeded, (ii) that the interim measure is necessary to avert a considerable loss or inconvenience, (iii) that the loss or inconvenience of the defendant is clearly not disproportionate of the interest of the claimant in having the interim measure granted and finally (iv) that the claim in respect of which the request is made is proven. A preliminary injunction can order the defendant to perform something, refrain from doing something or tolerate something, or can decide that an asset shall be taken out of the defendant’s possession and taken into custody or administration.
In case of arbitration, there is no interim remedies available to the arbitration panel under the Arbitration Act. A party will therefore have to seek basis for such under the Dispute Act.
After a claim has been commenced, what written documents must (or can) the parties submit and what is the usual timetable?
Pursuant to the Dispute Act, the parties should disclose all relevant evidence, including but not limited to documents. The exception is evidence being prohibited from disclosure, see response to q. 14 below. In arbitration there is no obligation to disclose all relevant evidence: the parties are obliged to “enlighten” the matter at hand. Both in litigation and arbitration the parties are free to submit evidence, however the courts may deny excessive evidence. Litigation and arbitration is fairly expedient in Norway and the parties should submit evidence as soon as practically possible. As the general rule the courts summon a preparatory meeting in which deadlines are set for submission of evidence and closing arguments. In arbitration the arbitrators aim at reaching agreed deadlines.
What, if any, are the rules for disclosure of documents? Are there any exceptions (e.g. on grounds of privilege, confidentiality or public interest)?
The main rule is that the parties are obliged to disclose all relevant evidence at their hand, however there are exceptions from this obligation. First, there are rules on prohibited evidence and immunity. This comprises certain governmental meetings, professional secrecy, client-attorney privilege and so forth. Secondly, certain evidence may be exempted from disclosure, if the court so decides. This may include business or trade secrets and illegally obtained evidence. In litigation the court, based upon a party’s request, may order the other party to clarify whether or not certain evidence exists and to disclose such evidence. In arbitration there is no similar rule, however the arbitrators or a party can ask the ordinary courts for assistance in obtaining evidence.
How is witness evidence dealt with in commercial litigation (and, in particular, do witnesses give oral and/or written evidence and what, if any, are the rules on cross-examination)? Are depositions permitted?
Litigation in Norway is based on the principle of “oral hearing”, which means that witnesses shall give their oral statements directly before the court. On request, the court can accept witness statements via phone or video. We have no tradition of using Affidavits. Unless agreed between the parties and the court, written witness statements may only be used if the witness appears in court available for cross-examination. There are no particular rules for cross-examination, however the court will intervene in the event of witness harassment. Witness depositions are rarely used, but is a mean to ensure that hostile witnesses actually appear, provided lawfully served 7 days in advance. In arbitration, witnesses may be called to an oral hearing. However, if the parties and the panel agrees, witness statements may be used.
Is expert evidence permitted and how is it dealt with? Is the expert appointed by the court or the parties and what duties do they owe?
Expert evidence is permitted. Expert witnesses are usually engaged by the parties. On rare occasions one or more experts is appointed by the court. The parties are allowed to submit an expert witness report, as long as the expert witness appears in court for cross-examination. All expert witness shall state that they have performed and shall perform their duties in a professional manner. The expert witness may be present during the entire hearing, as opposed to other witnesses which only can appear after they have testified (unless otherwise decided). The expert witnesses give statement as other witnesses but are also entitled to put forward questions to other witnesses and to bring their final remarks at the closing of the evidence. The rules are more or less the same in arbitration.
Can final and interim decisions be appealed? If so, to which court(s) and within what timescale?
All decisions can be appealed, save for purely administrative rulings. District court judgments and decisions can be appealed to the Appeal Courts, usually within one month. For interim decisions, the deadlines may be shorter. The right to appeal to the Supreme Court is restricted. Arbitral awards may, as the general rule, not be appealed.
What are the rules governing enforcement of foreign judgments?
It is set out in the Arbitration Act that an arbitral award shall be recognised and enforceable in Norway, irrespective of the country in which it was made. Norway is also party to the New York convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Final and enforceable rulings on civil claims rendered by a foreign state’s courts shall be final and enforceable in Norway if the ruling court was agreed upon by the parties for a specific action or for actions to arise out of a particular legal circumstance.
Civil claims that have been decided in a foreign state by way of a final and enforceable ruling passed by that state’s courts or administrative authorities or in-court settlement, shall also be legally enforceable in Norway to the extent provided by statute or agreement with the said state. Norway is party to the 2007 Lugano Convention which sets out that judgements rendered within the EU and EEA area shall be enforceable in Norway.
Can the costs of litigation (e.g. court costs, as well as the parties’ costs of instructing lawyers, experts and other professionals) be recovered from the other side?
The main rule is that the winning party is entitled to full compensation for all “necessary costs”, including fees to lawyers and other experts. However, the court enjoys considerable discretion in awarding costs and may exempt the other side if it had, in the view of the court, compelling grounds to test the case, e.g. because the case gave rise to significant doubt or the other side could not access relevant evidence until after the action was brought. Moreover, the court may take into consideration whether the winning party has rejected a reasonable settlement offer or whether the case being of great importance to the welfare of the other side. In addition, courts will in practice often have regard to differences in financial strength between the parties.
If the court does not find fully in favour of either party, the parties will usually be ordered to bear their own costs. However, the Disputes Act empowers the court to award costs in full or part to the party who the verdict is most in favour of, provided that the court finds that there are compelling grounds for doing so. In some exceptional situations, a party may also be awarded costs in full or part irrespective of the outcome of the case.
In awarding costs, the court exercises a necessity test. The courts are openly concerned with the level of litigation costs and a number of representatives of the judiciary have in recent years argued in favour of a stricter necessity test. In practice, at least in major and costly commercial disputes, parties will often experience that all costs incurred are not fully recovered even after a full win.
What, if any, are the collective redress (e.g. class action) mechanisms?
The collective redress available in Norway are class actions. A class action may be brought if (a) several legal persons have claims or obligations for which the factual or legal basis is identical or substantially similar, (b) all claims can be heard by the same court and according to the same procedural rules, (c) collective proceedings are the most appropriate method of hearing the claims, and (d) it is possible to nominate a class representative.
What, if any, are the mechanisms for joining third parties to ongoing proceedings and/or consolidating two sets of proceedings?
A main feature of the Disputes Act is to provide for cost effectiveness. Accordingly the act allows for wide possibilities for plaintiffs or defendants to act in concert, for third parties to join ongoing proceedings and also for consolidating two or more sets of proceedings.
In general, multiple plaintiffs may bring claims against multiple defendants in the same proceedings provided that (i) all claims fall under Norwegian jurisdiction, (ii) the court is the correct venue for one of the claims, (iii) each of the claims may be heard by the court under the same procedural rules, and (iv) the relationship between the claims support that they should be heard in the same case.
After proceedings have been instituted, either of the parties may include claims against a third party in the same proceedings, provided that the conditions set out above are met. However, exceptions apply if such joining of a third party would imply considerable delay or complicate the proceedings concerning the claims that have already been brought.
Third parties may also on their own initiative join as a party to ongoing proceedings if the conditions as set out in (i)-(iii) above are satisfied. Such third party will have to submit an independent claim for an order in the subject matter already brought before the court, or bring a separate claim which is so closely related to the original claim that it should to be decided in the same proceedings.
Different proceedings that raise similar issue, can be heard by the same court and according to the same procedural rules, may be consolidated for joint hearing and joint ruling.
Are third parties allowed to fund litigation? If so, are there any restrictions on this and can third party funders be made liable for the costs incurred by the other side?
There are no rules prohibiting third party funding in Norway. Litigation funding has traditionally not been a common feature in Norway. But in recent years a few professional funding entities have emerged and the market for litigation funding appears to be on the rise. There are no procedural rules which empower courts to order third parties to carry the legal costs incurred by the other side. It cannot be entirely ruled out that a funding party could be held liable for the other side’s costs in exceptional circumstances based on general principles of tort law, i.e. if the proceedings are considered manifestly ill-founded or an abuse of process. But that is yet to be seen.
What, in your opinion, is the main advantage and the main disadvantage of litigating international commercial disputes?
In general, we would say that we have a well-functioning court system with competent judges. Proceedings in the Norwegian court system is also cost and time effective, compared to many other commonly used venues in UK or US. As an illustrative example, our system does not allow for lengthy and resource consuming evidence discovery processes. Instead the Disputes Act provides for a more focused and effective process for production of evidence focusing on what is relevant for the dispute at hand.
A somewhat uncommon feature to mention is however that the main rule is that all evidence has to be presented before the court if the court shall be allowed to emphasise the evidence in their decision. As an example, we do not allow for written testimonies unless the witness also meet before the court for examination.
What, in your opinion, is the most likely growth area for disputes for the next five years?
In Norway, there has been a long tradition for ad-hoc arbitration, particularly related to the oil and gas and shipping sectors. We expect that ad-hoc arbitration still will be much used in Norway. However, the later years we have seen increased possibilities for institutional arbitration in Norway. The two main institutions are NOMA and OCC, and we see potential for increased use of these institutions in the coming years. Also as the COVID-19 virus has led to longer processing time in the ordinary courts, arbitration could be a good option for parties who desire a more effective and quicker process as an alternative to be facing delays in the ordinary courts.
What, in your opinion, will be the impact of technology on commercial litigation in the next five years?
All communication between the parties and the courts is already carried out via an online portal operated by the court and we expect that this portal will be further developed in the coming years and updated with new features. Many courts have also in the later years updated their video link equipment and we expect a development in the direction of an increased number of witness statements being given via live-link video instead of live in court, as this is both time and cost saving. A third development will potentially relate to recordings of the hearings in particularly first instance which is likely to ease handling of appeal cases.
How have the courts in your jurisdiction dealt with the COVID-19 pandemic and have you seen particular types of disputes arise as a result of the pandemic?
Naturally, many court hearings have been postponed due to COVID-19 and in the first weeks after the “lock down” was decided in Norway from March 12 2020, initially only defined prioritized matters were heard. However, within a very short period of time the courts have in our experience been able to adopt to the situation and have put in place a well-functioning system for digital hearings. We also see hearings held in alternative premises to reduce the COVID-19 risks. An increasing number of cases are carried out completely or partly digitally based on the consent of the involved parties. We have also seen an increased use of written proceedings where this has been considered expedient.