Litigation in Luxembourg

Luxembourg is a thriving commercial center and home to some wealthy people. No one complains about growing up in a rough part of Luxembourg. Or maybe they do, but they complain in the Luxembourgish language, and no one can understand them. And since there is so much about the country - and its system for commercial dispute resolution - that I wanted to understand, I was really grateful for the chance to speak with Nicolas Thieltgen, the managing partner of Brucher Thieltgen & Partners in Luxembourg.

Why should you continue reading this post about litigation in Luxembourg?

• You are very interested in learning about Liechtenstein but your eyesight is a little blurry right now.

• You want to read about the only two countries with x’s in their name and you have already read my post about Mexican litigation.

• You did grow up in the rough side of Luxembourg and you'd like to see some aspirational representation on this blog.

Nicolas Thieltgen is the managing partner of Brucher Thieltgen & Partners in Luxembourg. This interview has been lightly edited.

Can you tell me about the kinds of disputes you handle in your legal practice? 

As founder and managing partner of my law firm (Brucher Thieltgen & Partners – an independent full service law firm in Luxembourg), my management role represents an important part of my job, but I have kept litigation as a personal legal activity since it is a practice very dear to my heart.

I started my career as a litigation lawyer and I have always loved it. For me, it is the true heart of practicing as a lawyer for two reasons. Firstly because these legal issues require the most comprehensive and detailed response. We find ourselves in a deliberation, in a disagreement, and we really have to dig and get to the bottom of sometimes very complex issues. It is a really interesting and rewarding process. Secondly because I love debate and argumentation itself. I find it very intellectually stimulating and highly motivating. You have to try to convince, explain and seduce. That is a perfect summary of the three functions of a lawyer's speech: educate, seduce, and convince.

About the types of litigation I handle – it mainly relates to banking and financial disputes, an important topic in Luxembourg, and to corporate litigation, i.e. shareholder or liability disputes. I am of course still active in other types of litigation, such as real estate matters or purely contractual subjects, and I also do arbitration, but banking and finance litigation and litigation within shareholder companies are really my two preferred areas.

What type of clients do you generally represent in disputes?

It depends a bit on the subject I would say. In banking and financial litigation, clients are often banks, large companies, or professionals of the financial sector. But it could also be other types of professionals, such as asset managers or other financial market players.

When it comes to shareholder disputes within companies, or more broadly in commercial disputes, I work both for large companies and for shareholders. I am sometimes involved in cases with smaller companies such as well-known SMEs or Luxembourgish brands, or national and international companies, property developers, etc. It is much more cross-disciplinary I would say, and that is why this is so captivating and engaging. I like this diversity because we face different types of relationships: you cannot deal with a major institutional bank the same way you contact an entrepreneur who, within his company, has a conflict with shareholder clauses. These experiences bring a rich variety that is very interesting.

Besides Microsoft Office, what software do you use in your practice? 

We are interested - at least on a personal level - in any type of software that can help us and over which we have full visibility. In our firm, everyone uses artificial intelligence tools, for example for translation with Deepl. In terms of software, we work with a document manager like Imanage, which I find highly efficient going way beyond document and archive management. There really are a lot of features that I find extremely effective. And we also have our own time tracking system.

I always try to apply two basic principles when choosing a software: simplicity, i.e. I try to avoid having too many programmes covering too many different functions adding layers of complexity. The more we have specialised specific tools, the less people use them. For a software to be interesting, I personally have to benefit from using it, but all my colleagues have to benefit from it too. And the second point is transparency on how the software uses data. I need to know where it is stored and how it is used and secured. That, as a lawyer, is really the priority for me.

 I of course use ChatGPT and other AI tools from time to time, but I am going to break a myth right away as I do not use it to write legal opinions or conclusions, but rather to improve the wording I use, to test my thinking. I ask ChatGPT what it could put forward as a counter-argument to my point of view. Not everything that comes out of it is valuable but it is an interesting challenging tool. Litigation requires contradiction. My colleagues are happy to do this, but tools can also help. I still enjoy and prefer arguing within our team - and I am sure my colleagues do too: this is a very constructive opposition!

What books and websites do you use for legal research? 

We use the main national databases available in Luxembourg - a remarkable feature for such a territory (Larcier, Legitech). But we also refer to those of neighbouring countries: mainly French (Lexis Nexis, Dalloz) and Belgian (Larcier, Anthémis, etc). So we can benefit from a very rich blend and it is very interesting and instructive to find our way around this multiplicity of sources.

In terms of books, I have always been in charge of libraries in the law firms where I have worked. In Luxembourg, some older reference books are still interesting and relevant to consult and I love old books. I am keen on knowledge in general, and some of my colleagues often call me “Google.” I have been into this for 25 years and I still love it! I am therefore the Partner in charge of Knowledge Management for the firm and I really enjoy this job of handling resources and knowledge.

Image credit: https://lb.wikipedia.org/wiki/Geriichtsorganisatioun_(Lëtzebuerg)#/media/Fichier:Parquet_Luxembourg.jpg

Do you electronically file pleadings with the court?  Or must you send paper copies of them to the courthouse?

No, despite several e-justice projects in the pipeline or on their way to be adopted, Luxembourg is still in the early stages of electronic filing. Everything is still done on paper. This mass of paperwork leads me to say that our law firms have, in their secretariats, a real in-house print shop.

Does Luxembourg have specialized courts that only hear commercial cases?

There is no commercial court as such in Luxembourg, but there are dedicated chambers of the district court (the Tribunal d'Arrondissement) which only hear commercial cases, using either written or oral proceedings, to summarize arguments in a few words.

Who decides the facts in a commercial case?  Is it a judge or a jury? 

It is always a judge. Normally three judges are required and, in certain cases, a single judge in summary proceedings or in other very specific cases.

Generally speaking, how many pages are the complaints or initial pleadings you see in your work?

With regards to the length, I generally turn to between 15 and 50 pages for initial acts.

It is a relatively long document, depending on the complexity of the dispute. We always try to be concise, clear and precise. Nevertheless, you must not be afraid of complexity if you need to explain things clearly. You have to take a bit of time, produce some text but also provide images and legal design.

In my filings, I like to bring diagrams to better explain certain concepts. So I would say the documents are relatively long, but also because the cases we handle are quite complex.

Generally speaking, how long does it take for a case to go from complaint to judgment?

It varies greatly. In commercial proceedings, whether oral or written, it probably takes between 18 and 24 months to get a judgement.

Luxembourg’s specificity compared to France and Belgium is that there is not a set number of submissions to be exchanged when it comes to investigating disputes. The parties can file sets of conclusions as much as they like and the deadlines for concluding are not imperative so we can ask for extensions of time. This means that the investigation of disputes, at the time of the exchange of pleadings, can seem lengthy, especially as we could potentially sometimes find ourselves at the mercy of colleagues who would like to slow down the case.

However, as I have observed in comparison with other countries, once the examination of the case and the exchange of pleadings have been completed, the dates set for oral argument and the time taken to deliver judgment are relatively short. I would say about 2 months, under normal circumstances.

In the end we turn out with the same global timeframes as France or Belgium, which have longer procedural systems but where the investigation, the disputes and the changes will be shorter. On the other hand, they have longer timeframes for setting the case for argument and for taking the case under advisement.

Personally, I think the Luxembourgish system is beneficial because, as lawyers, it gives us more time to discuss, argue and exchange our views. Of course we need fast moving justice for it to be effective, I am totally convinced of that, but we must not overlook the passing of time which is crucial for a good justice. Immediate justice does not work. We need a degree of maturation in order to understand a problem, and it is the same for litigation to settle a case.

There are multiple languages spoken in Luxembourg. What language do the courts hold hearings and issue decisions in?

Hearings can be held in the three official languages of the country, i.e. French, German and Luxembourgish.

They are almost always held in French as this is the legislation language, with the exception of certain tax laws. French therefore remains the preferred language.

The parties appearing at the hearing may be heard in the language of their choice, but the pleadings are generally in French and the decisions are also handed down in French.

We are in a very interesting context because, in addition to these three languages, Luxembourg is a multilingual country by nature. This is one of Luxembourg's major advantages. In addition to the three administrative languages, the judges have a perfect understanding of English, and often Italian, Spanish and Portuguese. So there really is a great deal of linguistic knowledge and practice, which means that, for example, we do not need to translate documents in English. Theoretically, one of the parties may request a translation, as provided for by law, but in practice there is no such need as the judges speak English and can therefore understand perfectly well. In the handling of international disputes, this advantage saves a lot of translation costs and moves the proceeding forward much more quickly.

Generally speaking, how is evidence exchanged between the parties before trial?  Do you get to interview the opposing witnesses before the trial?

The parties can exchange and communicate documents in writing, in advance of the trial, but different procedural rules apply depending on the court or the topic.

And no, we cannot interview witnesses. Testimonials in civil matters consist of a hearing by the judge following a court decision, held in the presence of all parties.

If you win, does the other side reimburse your attorneys’ fees?

No. There is no such system as in Belgium or England, but there are various alternatives in place. First of all, the judge may, ex aequo et bono i.e. fairly, decide to award what is known as a procedural indemnity. This is an amount that he sets himself if he considers that one of the parties has either brought proceedings or resisted abusively, as it would be unfair to leave one of the parties to bear some of the costs of the proceedings. These amounts are relatively low in the case of major disputes, but they are still to be considered.

Secondly, there are the costs and fees (frais et emoluments). Costs are charges relating to the paper processing of the case, and fees relating to legal representation by a lawyer at the Court. These allow to cover certain expenses, depending on the importance of the dispute, but are also relative amounts. In principle, the unsuccessful party is in charge of these costs.

Finally, as in any case involving civil liability, if one of the parties has acted improperly, the legal fees that the other party has had to incur to defend itself may be an element of damage. The rules of civil liability then apply and fault needs to be proven, i.e. that the other party acted improperly in court, as well as a causal link that the legal fees were actually paid and were justified. Such legal debate can be quite complicated and it is why it is relatively rare because it also requires a great deal of transparency about how the line of defense was organised, which can be quite tricky.

Everywhere in Luxembourg is very close to the border to other countries. Do litigants often find it difficult to serve process or enforce judgments on litigants or witnesses because they are just outside of the jurisdiction?

No. There are no difficulties at all. Luxembourg is a cross-border and international country by nature, by essence. There is effective communication, and anything that is accurate abroad rises no difficulty in Luxembourg, and vice versa. We are all used to this and the country's professionals juggle with judgements that come from abroad, and our neighbors are also familiar with enforcing our decisions. Compared to many other jurisdictions, I think we have in Luxembourg a pretty good grasp on these mechanisms. It is an integral part of the way we operate, and we do it naturally: it is a need and a necessity for a country like Luxembourg.

Are the Luxembourg courts open to the public?  Can ordinary people watch a commercial trial? 

The Luxembourg courts are open to the public. It is therefore possible to attend a trial and hearings are public. However, pleadings are not published. Only oral hearings are open to the public, but very few people attend them, sometimes the press.

Do you believe that Luxembourg courts have a particular strength for resolving commercial disputes? How about a weakness? What are they?

Multiculturalism and internationality are naturally present in Luxembourg and it means that disputes involving people of all nationalities can be handled very well. As I have already mentioned, this is a particular advantage of this country in terms of language, to which must be added a certain expertise in business law disputes thanks to the importance of its financial centre.

The weakness ... this is undoubtedly a difficulty underlying to the country as well since all judges must be nationals, and therefore Luxembourgers. The pool of judges is necessarily restrained because the population of Luxembourg nationals remains limited, and potential judges represent a very small percentage of the population. I would therefore describe this as a challenge to fill all the positions of judges, who additionally have to be trained on complex matters. There is a much larger recruitment pool in more populous countries hence human resources are really a key topic for Luxembourg’s Justice. There are also other positions besides judges that need to be national, such as the court clerks. They have now created positions for referendaries, who carry out research and help judges prepare judgements, which are open to more nationalities but these positions require knowledge and practice of the three administrative languages (including Luxembourgish), which limits recruitment again while there are too few judges and a major international financial centre with its highly demanding scene.

How often do you go to the courthouse? 

During busy weeks, I could have to go four or five times a day because there can be pleading mistakes or rescheduling, … On other weeks, only once or twice, it depends ... and sometimes several weeks could pass by without having to travel to Court.

When you are there, do you need to wear a special robe or wig?

Yes, I have to wear a lawyers’ robe, except in the lower court which is the District Court (la Justice de Paix). I know that some people think it is a very old-fashioned outfit, but I would like to outline two thoughts about it.

Firstly it introduces some equity. It does not matter what brand your suit is or your shoes are, you are just like everyone else in the same dress. It removes any element of distraction or influence, and presents all parties on an equal footing.

Secondly, I think it allows us to better get into our role. When we are arguing a case, we are implacable. We are not harsh but we try to defend our clients' interests while respecting the courts and our opponents. Once we have taken off our robes, we can allow ourselves to adopt a benevolent attitude towards our colleagues and, let's say, leave behind what was said in court.

Maintaining empathic and respectful human relationships between colleagues, sometimes at odds with the intellectual harshness of the arguments presented, contributes to a better justice, because - as I always say - the courts are not war, just like sport is not a battle either. We are certainly in opposition and we are implacable once we are involved in the legal debate but, for the system to work, we also have to remain individuals and human beings, with a minimum of humanity and respect for each other. This can sometimes go as far as friendships, but there has to be a minimum of understanding for the system to work and for justice to be dispensed under the relevant conditions. To me, the robe makes us put on a uniform, a shell, another skin, and it allows us to step back, to take the right distance between ourselves and from the debate. That is important too! And what is said in the robe does not necessarily affect the rest of our relationships. What was said when I was in my lawyer’s uniform stays with it. That is the principle of freedom of argument.