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On 1 December 2023, the Screening of Foreign Direct Investments Act came into force. The new law makes it possible to prohibit foreign direct investments in Swedish companies. The law has been in force for just over six months and it is clear that the law has a very broad scope of application and that many activities are covered by what is defined as protected activity. However, as the law is relatively new, there is still no guiding practice, and there are many uncertainties surrounding its application. In this article, we summarise our experiences from the first months of the FDI Act.

The Foreign Direct Investment Review Act (the “FDI Act”) entered into force on 1 December 2023. The FDI Act allows the government-appointed review authority, the Swedish Inspectorate for Strategic Products (ISP), to review and, if necessary, prohibit foreign direct investments in Swedish so-called protected activity.

Protected activity is a broad term and it is divided into seven categories: 

The scope of the Act is broad and many activities are defined as protected activity, and investments in such activities may thus be subject to the obligation to notify the ISP. The obligation to notify applies regardless of the investor’s nationality or registered office, which means that investors with citizenship or registered office in Sweden and in the rest of the EU may also need to notify investments made in protected activity.

MSB decides what is an essential social services

New since the entry into force of the Act are the Swedish Civil Contingencies Agency’s (“MSB“, sv. Myndigheten för samhällsskydd och beredskap) regulations regarding which activities fall within the category of essential social services. Essential social services are one of the more extensive categories – if not the most extensive category – of protected activity.

As a general rule, for an activity to be classified as essential social service, the activity must either (i) have at least five employees or (ii) have an average annual turnover of at least SEK 5 million (based on the last three financial years) or, if the activity has been in operation for less than three years, an annual turnover of at least SEK 5 million in the previous financial year. MSB identifies a total of 16 different categories of activities as socially important, namely

The notification process: Assessment of protected activity and obligation to notify

The assessment of the obligation to notify is a two-step process: does the target company carry out protected activity and, if so, is the proposed investment subject to the obligation to notify? If the target company does not carry out protected activity, no further examination of whether the investment is covered by the FDI Act is needed. 

If, on the other hand, the target company is engaged in protected activity, it must be determined whether the investment is covered by the rules on notification. A notification must be made, inter alia, when

A notifiable investment must be notified before it is realised. The concept of realisation refers to the moment when an investor actually acquires influence over the target company. The timing of this may vary, but in any event, influence is deemed to have been acquired when some form of transaction has taken place between the parties. Thus, the parties may agree on the investment before the notification is made, but the completion of the investment should then be conditional on the ISP leaving the notification without action or approving the investment. Similarly, it may be possible to subscribe for shares prior to a notification or pending a decision, as long as the shares are not allocated or influence in the company is otherwise transferred to the investor.

However, in order for the ISP to be able to assess the investment, the notification must be made only at such a stage that there are conditions for the ISP to make an assessment of the circumstances surrounding the investment. A notification should therefore only be made when the investor can show that there is an agreement that the investment will be realised in the near future, e.g. through a so-called letter of intent.

After a complete notification, the ISP must decide within 25 working days to either leave the application without action or initiate a review. If the ISP considers that the investment needs to be reviewed, they have three months to issue a final decision (six months for special reasons).

If there is an obligation to notify under the FDI Act, the transaction process must take into account both the time required to prepare the notification and the time required to wait for a decision from the ISP. It is therefore important that the question of obligation to notify is raised early in the process prior to a potential investment. 

Obligation to notify applies unless the specific situation is explicitly exempted in the law

Even if the criteria for an obligation to notify under the Act are met, a notification is not required for the acquisition of shares acquired in a rights issue, as long as the acquisition is made in relation to the number of shares already owned by the investor. An investor who only subscribes for his/her pro rata right in a rights issue is thus not subject to the obligation to notify. If, on the other hand, an investor subscribes for shares in excess of its pro rata right and thereby acquires shares and votes in a company that engages in protected activity that meet or exceed the thresholds, the investor must notify the ISP.

Apart from this explicit exception, the law does not distinguish between different types of investments or transactions. An example is the reorganisation of the ownership of a company. If a transaction gives a legal or natural person a new influence or control over a company that carries out protected activity, it may need to be notified, provided that the investment meets the thresholds in the law. This applies even if the beneficial owner is the same. 

This means, for example, that a transaction from a natural person to a wholly owned holding company may also need to be notified if it reaches the thresholds, as the transaction involves giving the holding company a new influence in the protected activity. Such a transaction does not therefore need to be exempted from the scope of the Act.

If an exemption is not explicitly regulated in the law and it is thus clear what applies, an investigation should always be carried out to determine whether an investment is notifiable or not.

Isn’t it better to notify a transaction just in case?

The law does not provide for the possibility for investors to make a voluntary notification of an investment. In other words, an investor should not notify “just in case” or out of convenience in order to avoid having to decide whether a particular activity is a protected activity or not. If the parties are unsure whether an investment is notifiable, it is recommended to investigate the issue.

Consequences of violations of the FDI Act

The ISP may decide to charge a penalty fee to anyone who has failed to notify a notifiable investment, made an investment before the ISP has made a final decision or made an investment in violation of a prohibition. The penalty fee can be set at a minimum of SEK 25,000 and a maximum of SEK 100,000,000.

Should an investment take place despite the ISP having announced a prohibition, this means that the legal act becomes invalid. The parties are then not obliged to fulfil their obligations. If the investment has already been made when the ISP announces a prohibition, the general rule is that the parties’ contractual performance shall be reinstated, e.g. by returning property or money to the counterparty.

However, a prohibition does not necessarily mean that a contract concluded between the investor and the company that is the subject of the investment becomes invalid in its entirety. Parts of an agreement that have legal effects in other respects, such as a clause regulating what applies between the contracting parties if the ISP were to prohibit the investment, remain valid. 

Similarly, an agreement with a third party need not be invalidated. For example, if the investor has entered into a loan agreement with a bank to finance the investment, the agreement is valid regardless of the ISP’s decision – unless otherwise agreed.

The FDI Act and the path forward

The FDI Act has, and will continue to have, a major impact on many transactions. The law is still new, and many questions remain regarding its application, in particular regarding which activities should be considered protected activity. If there is uncertainty as to whether a transaction is notifiable, it is recommended that an investigation is carried out to avoid invalidating legal acts or incurring high penalties.

If you need help investigating whether a proposed investment is notifiable or help determining whether your company’s business is categorised as protected activity, Moll Wendén Law Firm can assist with this. We can also help you prepare a notification to the ISP when necessary.

In 2023, the number of bankruptcies in Sweden increased compared to previous years. The bankruptcy of a company does not only have consequences for the company and its employees, but also raises questions for those who in one way or another have a relationship with the bankruptcy debtor. If the bankruptcy debtor has caused damage to someone, the prospects of receiving compensation from the bankruptcy estate are generally low. It is therefore important to keep track of the possibilities for obtaining compensation for your loss. One such possibility is to make a claim directly against the bankrupt debtor’s insurance company.

Inflation and high interest rates have led to a tough business climate in 2023. According to the annual survey by the business and credit company UC, the number of bankruptcies during the year was at the highest level since the financial crisis in the 1990s. The Swedish recession is predicted to last until 2025 and there is uncertainty about when the bankruptcy trend will reverse.

The assets of the bankruptcy estate must be distributed among the creditors

When a company goes bankrupt, its assets must often be distributed among several different creditors. Usually, the assets of the company are not enough to pay all the debts. If you have a claim for damages against a bankrupt company, it can therefore be difficult to get compensation from the bankruptcy estate for the damage.

However, many business insurance policies include liability insurance that can be claimed if the company has caused damage to someone. However, if the insurance compensation is paid to the bankruptcy estate, the compensation may be distributed among several creditors and not only to the person who has been harmed by the company.

Claimants can benefit from the bankruptcy debtor’s liability insurance policy

Normally, only the policyholder can decide whether to use the liability insurance, but once the company has gone bankrupt, the injured party has a right of his own. It is possible for an injured party to make a claim directly against the bankruptcy debtor’s insurance company in order to use its liability insurance.

This means that you can go directly to the bankruptcy debtor’s insurance company and hopefully get the damages paid out that way. One advantage is that the insurance compensation goes directly to the injured party instead of being divided among the creditors of the bankruptcy estate.

As a general rule, the injured party has the same right to insurance compensation as the bankruptcy debtor

The main rule in the case of bankruptcy of the insured is that the injured party should not be in a better or worse position than the insured. This means that the injured party will have the same right to insurance compensation as the contract gives the insured, unless otherwise provided by law or insurance conditions.

Therefore, as a general rule, any legal loss for the insured also affects an injured party making a direct claim. However, exceptions in the insurance terms and conditions and other limitations on insurance compensation, will also apply to the injured party.

Check the terms and conditions of the other party’s liability insurance

It is not uncommon for insurance conditions to require that a claim be reported within a certain period of time. It is therefore important to try to ensure that a notification of the claim to the insurance company is made in due time in order not to lose the right to insurance compensation.

It may therefore be a good idea, when making a claim, to encourage the other party to notify the claim to their insurance company, or to notify the insurance company of the claim as soon as you become aware of the other party’s bankruptcy.

Check and require that your counterparty has a liability insurance

When concluding a contract, it is relevant to check whether counterparties have liability insurance and the conditions for this. This will make it easier to calculate any risks, enable you to act more quickly and hopefully obtain compensation for any damage in the event that the counterparty goes bankrupt.

Liability insurance with the counterparty gives you greater security. In some cases, it may also be appropriate to include a clause in the contract with the counterparty requiring such insurance, for example in the case of large or long-term projects.

The Supreme Court (HD) has granted leave to appeal on the issue of whether internet sales of alcoholic beverages with delivery from Denmark to consumers in Sweden is in violation of the Swedish alcohol monopoly. Since the Patent and Market Court and the Patent and Market Court of Appeal in their decisions reached different conclusions, and in light of the fact that a number of companies conduct such sales in Sweden, it must be considered important that HD clarifies the legal situation.

Since 2007, through the so-called Rosengren case,  it has been allowed for private individuals to bring alcoholic beverages from other EU countries into Sweden through private imports, provided that the alcohol is intended for personal use.

HD decided in December 2022 to grant leave to appeal on the issue of whether the sale of alcoholic beverages on the internet, delivered from Denmark to consumers in Sweden, constitutes retail sales in violation of the Swedish alcohol monopoly. The parties to the case are Systembolaget on the one hand, and two companies that are part of the same group, a Danish subsidiary and a Swedish parent company, on the other.

The examination of the issue is urgent because it has become increasingly popular with private imports of alcoholic beverages via the internet to consumers in Sweden and there are a number of different companies that provide the service. Systembolaget has initiated another similar action against such a company, where the case has been stopprf by the Patent and Market Court of Appeal pending the hearing of this case in HD until further notice.

Legal starting points in the Alcohol Act and the E-Commerce Act

A given legal starting point is that according to the Alcohol Act (2010: 1622) there must only be one company for the retail trade of alcoholic beverages, namely Systembolaget. No other company may trade in alcoholic beverages in Sweden.

In this case, however, the e-Commerce Law[1], which implements the  e-Commerce Directive[2], also becomes relevant . The aim of the Directive was to remove certain legal barriers that were considered to hamper the development of e-commerce and to ensure the free movement of, inter alia, such services within the EEA. However, e-commerce law also applies when services are provided to states outside the EEA, giving it a broader scope than the directive.

The law and the directive enshrine the so-called country of origin principle. According to HD’s practice, this principle must be interpreted as meaning that it is the law of the country where the provider of the service is established that applies to the services. This also applies in cases where the services are wholly or partly targeted at recipients in another state within the EEA. Where a service provider is established according to the e-commerce act is assessed based on where the business activity is carried out.

However, the Directive allows a Member State in certain cases to take action against a service provider established in another Member State that wholly or mainly directs his activities towards the territory of the first Member State. The aforesaid is  applicable provided that the place of establishment has been chosen with a view to circumventing the legislation which would otherwise have applied to the service provider if it had been established in the first Member State.

The Patent and Market Court announces a prohibition under penalty of a fine

The Patent and Market Court found, in light of how the e-commerce business is organized, that the Danish subsidiary is established in Sweden. This is due to the fact that the marketing and provision of the business has in principle been aimed exclusively at consumers in Sweden and that a prerequisite for being able to order alcohol has been that the consumer has an address in Sweden. Furthermore, the Danish subsidiary’s main workforce has consisted of people who are also active in the Swedish parent company. In addition, it is the subsidiary that, through Swedish customer service, handled the right of withdrawal, complaints and contact with customers.

The Court held that it was not sufficient for the subsidiary to be registered in Denmark and for its warehousing to take place in Denmark for the place of establishment to be considered to be there. Against this background, there was no precondition for applying the country of origin principle regarding the subsidiary’s provision of services and Swedish law would apply to the company’s marketing without prejudice to what Danish law prescribes.

Regarding the subsidiary’s marketing, the Patent and Market Court found that the sales on the company’s website constituted marketing and that the marketing was unfair because it gives the impression, among other things, that the company’s sales are legal under the Alcohol Act.

Against this backdrop, the Court also needed to examine the compatibility of the Alcohol Act with EU law. When considering Article 37 TFEU, the Patent and Market Court found that the Alcohol Act does not violate EU law and referred to previous practice by the Court of Justice of the European Union.

Finally, the Court imposed fines on both the Danish subsidiary and the Swedish parent company because the Court held that there is no clear dividing line between the respective companies. This meant that the marketing of the business was banned, which in practice entails a ban on the companies from conducting sales of alcoholic beverages in Sweden. The penalty was set at one million crowns.

The Patent and Market Court of Appeal dismisses Systembolaget’s action

The Patent and Market Court of Appeal came to the opposite conclusion and found that the companies did not use improper marketing by marketing alcoholic beverages for sale to consumers in Sweden.

Initially, the court noted that it is clear from the terms of purchase and order confirmations that it is the Danish subsidiary that is responsible for the website and that it is with the subsidiary that customers enter into the purchase agreement. The court found that it was shown only that it was  the subsidiary that had been the party that entered into agreements with the customers.

Furthermore, the Patent and Market Court of Appeal found that it was undisputed that the subsidiary has been registered and has had its registered office in Denmark since the company’s inception. In addition, the company has had its inventories for alcoholic beverages and at least one employee in Denmark. Based already on these circumstances, the Patent and Market Court of Appeal held that the subsidiary is established in Denmark. According to the court, there were no circumstances that showed that the subsidiary is also established in Sweden. Nor did the court consider that there was an investigation that showed that the subsidiary was a dummy corporation and that the company’s operations were actually managed by the Swedish parent company.

The Patent and Market Court of Appeal found that it had not been shown that the subsidiary’s establishment in Denmark constituted an improper circumvention of Swedish legislation that is to be judged as an abuse. This is in the light of, inter alia, the fact that the Court of Justice of the European Union has ruled that it does not constitute an abuse of EU law to form a company in a particular Member State in order to be subject to more favourable legislation.

Through the provisions of the E-Commerce Act, the Patent and Market Court of Appeal found that the company has the right, without prejudice to Swedish rules, to provide the service to recipients in Sweden. Thus, the provisions of the Alcohol Act must not restrict the free movement of the subsidiary and the sale must therefore be allowed.

Finally, the Court pointed out that the provisions on retail trade in the Alcohol Act do not cover sales abroad to consumers in Sweden. The Court held that there were no circumstances showing that the subsidiary engaged in illegal retail trade in Sweden, such as through, for example, the fact that the delivery of the alcoholic beverages had been included in the sale.

In summary, the Patent and Market Court of Appeal found that the companies had not used improper marketing by marketing alcoholic beverages for sale to consumers in Sweden and therefore dismissed Systembolaget’s action in that regard.

The Supreme Court plans to take up the case in April

As described above, the first instance and the second instance have come to different conclusions in the examination of the case. Although the decision of the Patent and Market Court of Appeal applies until further notice, it can be stated that the legal situation will be unclear until HD has issued a judgment. The fact that the Patent and Market Court of Appeal opened up for an appeal to be heard by HD shows the importance of the issues, not least for the parties in the case, but also for other commercial actors and private individuals. According to the timetable drawn up by HD, the presentation or main hearing is planned to be held at the end of April 2023.


[1]  Act (2002:562) on electronic commerce and other information society services.

[2] Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market.

According to the GDPR, standard contractual clauses can – somewhat simplified – be used  to  support the transfer of personal data between the EU/EEA and a third country. However, the clauses usually need to be supplemented by other technical protection measures, such as advanced encryption. It is the European Commission that develops or approves standard contractual clauses and they are available on the Commission’s website.

They were last updated on the 4th of June 2021, and companies that are still using old standard contractual clauses (older than the 4th of June 2021) need to update to a new version by the 27th of December 2022.

The standard contracts play a large and important role for the Swedish construction industry. At the same time, the current form of the agreements has received some criticism, partly because of the ambiguity that certain provisions entail in practical application. In the autumn of 2016, a revision began, which is still pending. The issue of cost changes during ongoing contracts is one such part that, given the events of the past year, would have needed clarification.

The standard agreements AB 04 and ABT 06 and its predecessors have been of great importance to the Swedish construction industry. They have long been a starting point for the agreements concluded for construction, civil engineering and installation contracts. However, in the almost 20 years since the standard contracts began to be applied, criticism has been aimed at their content, in particular at the ambiguity of certain provisions and a lack of adaptation to dispositive law. In the autumn of 2016, a revision of the standard agreements began with the aim of clarifying these issues and updating the provisions in the light of changed and new conditions.

The first step in the revision has come a long way

The revision work is carried out by representatives of employers, contractors, installer companies and consultants and is led by the Construction Contract Committee (BKK). The work is still ongoing, but BKK says that the work is well underway. However, negotiations are ongoing on certain issues and it remains, among other things, to agree on how annual turnover discounts should be handled in the upcoming standard agreements, an issue that, according to BKK, has proven to be particularly difficult to solve.

Once the parties have agreed on a fully negotiated draft, the draft will be the subject of an open consultation round that is intended to last about three months. After that, a final preparation of the comments received and a final anchoring with BKK remains before contracts can be issued. There is no set date yet for when the consultation round will begin, but it is not expected to begin before the turn of the year 2022/2023.

The management of unforeseen cost increases is often solved through SCB’s Construction Index

One issue that we hope will be clarified in the new standard contracts is how unforeseen cost increases on, for example, materials and other supplies will be distributed between the parties. It is an issue that has received widespread attention over the past year and the standard agreements currently in force do not provide the guidance requested by the parties. It is currently clear that an “unforeseen” and “material” impact on the cost of the contract may cause a change in price, but it does not follow directly from the regulations how they are to be applied.

There is also no comprehensive case law indicating when the criteria are met, but this has largely had to be resolved through intensive negotiations between the parties in each case. A tendency that we have seen is also that the parties try to avoid ending up in the difficult-to-apply rules by increasingly stipulating in new agreements that the contractor’s remuneration should be index-regulated, often through the application of the Construction Index, which today is determined by the Statistics Authority SCB.

However, in October 2022, Statistics Sweden made a policy decision meaning that the authority intends to wind down its index assignments, including the determination of the Construction Index. Given the increased use of indexation that we have seen during the year, we understand that the decision has raised some concerns in the industry. In any case, Statistics Sweden will provide the Construction Index throughout 2023, but what will happen next is not yet clear. It thus remains to be seen whether Statistics Sweden will make a final decision on decommissioning, whether the Construction Index will subsequently be determined via a new supplier and whether this affects the applicability of and the construction industry’s attitude to the Construction Index.

The Swedish Transport Administration’s position on possible indicative

In November 2022, the Swedish Transport Administration announced a decision that attracted attention. The authority decided to adopt a guide on how the authority, based on AB 04 and ABT 06, should handle increased costs in ongoing contracts in order to achieve an equal handling of claims for compensation from its contractors. The Swedish Transport Administration’s guidance states that compensation must be paid for the part of the cost change that exceeds 2.5 percent of the contract amount. The regulation for the cost increase is made at the end of the contract, but the Swedish Transport Administration opens up an opportunity to handle cost increases during the contract period through on-account payments.

It is important to continue to monitor the issue of unforeseen cost increases

The revised standard agreements, which hopefully contain long-awaited clarifications, are thus delayed further. For the time being, the question of cost increases in ongoing projects must be handled based on the ambiguities that exist. However, we can probably expect some influence from the position of the Swedish Transport Administration, Sweden’s largest employer. Regardless of whether the Swedish Transport Administration’s decision is in line with how AB 04 and ABT 06 should really be interpreted, it can contribute to the development of an industry practice that can provide some stability pending clearer agreements. Hopefully, a clarification about the Construction Index will also come soon.

2022 has been a turbulent year and the turbulence will probably continue in 2023, but 2023 is hopefully the year when we get answers to some of the questions that have been asked during the past year.

Read more in the following articles

AB 04/ABT 06 chapter 6 § 3 and price increase – when can the agreed price be adjusted?

Construction index and cost increases in the construction industry

As of October 1, 2022, the new rules are applied in the LAS, which in several places has been described as the largest labor law reform in modern times. How big a change that will mean in practice, however, remains to be seen. In any case, what is clear is that the new rules will mean increased administration for many HR departments. Two important news in LAS that you as an employer need to keep track of and think strategically about are clarified in more detail below.

Faster “in-LASing” for fixed-term employees

By replacing the form  of  general fixed-term employment with special fixed-term employment, the  starting distance to a permanent employment is half as long as before. Already after 12 months of work during the last five-year period, the special fixed-term employment is transformed into a permanent one.

If a special fixed-term employment is entered into after 1 October 2022 and the employee has previously had a general fixed-term employment, the employee may count time in the general fixed-term employment from 1 March 2022. In practice, this means that a person who has had a general fixed-term employment contract from 1 March 2022 to 1 October 2022 and then receives a special fixed-term employment after 1 October 2022 with the same employer, receives seven months of “free” employment to speed up the conversion to a permanent contract. A fixed-term employee who has worked for at least nine months over a three-year period also has priority to a new fixed-term employment contract.

Something that can be easy to miss is that a person who has three or more short-term fixed-term employment contracts during the same month, may count the interim period as employment time. Three single working days in a month can thus become one month’s period of employment. This rule may involve an additional rotation of on-demand staff.

Greater opportunities for employers to select staff in the event of a shortage of work

In the event of dismissal due to lack of work, the employer must take into account the rules on rotation based on the employees’ period of employment with the employer. Before the new LAS entered into force, employers with a maximum of ten employees could exempt two employees who were considered to be of particular importance for the continuation of the business. The new LAS extends this possibility. This means that all employers, regardless of the number of employees, now have the opportunity to exempt up to three people before the order of rotation is determined.

If the employer makes use of the exemption option, no new exceptions may be made during the next three-month period. Thus, from the time the first dismissal was made, a three-month block applies that prevents the employer from making more exceptions, regardless of whether you choose to exempt one or three people. It is not possible to “save” their exemptions for the next round of job shortage layoffs.

As before, it is up to the employer to decide who is of particular importance for the continued operation and who should thus be exempted. From a strategic perspective, one should not exclude someone who would still have had a safe place in the order of succession even if the person is of particular importance for the continued operation.

In summary, the new rules on special fixed-term employment mean that employers need to have a clear system for monitoring fixed-term employees’ seniority and conversion dates right from the start. Due to the new exemption rules in the event of redundancies due to lack of work, which means new opportunities for all companies regardless of size, care should also be taken to consider which employees are of particular importance to the business to ensure that important key competence remains in the company.

Published 17/10 at 12:29, updated 25/10 at 13:01.

The recent cost increases for materials and goods affect both ongoing contracts and any contractors’ ability to bid for new projects. Although the standard agreements AB 04 and ABT 06 contain rules for managing the allocation of risk regarding unforeseen cost increases, the provisions are currently difficult to apply and there is no guiding case law for how they should be interpreted.  Since the standard agreements do not provide a clear answer to whether, when or how a price adjustment should take place, some choose to manage and balance the risk based on ongoing price increases by agreeing on indexation, for example by using the Construction Index.

Indexation means that the parties use an index, a kind of comparative figure, to calculate a change in cost between two points in time. Advice on how to reason when designing an indexation is increasingly requested, by both employers and contractors.

Why index?

Indexation allows the parties to a construction contract to adjust the contract price or other agreed prices against changes in an agreed index. The purpose of indexation is to maintain the transaction entered into by the parties at the time of signing the contract despite the fact that the conditions have changed. This means that neither party should gain from indexation, but no one should lose out by applying the pricing model. The application of an index is no guarantee that the contractor will be covered for its entire increased cost, but should normally be both labor-saving and decrease the risk of litigation, which benefits both parties.

Construction Index

The construction index is one of several indices that can be applied in cost regulation in construction contracts. The index contains a large number of index series (litera) which are also divided into main, sub and base groups. In order to create indexation that closely follows changes in costs, consideration should be given to dividing the contract pice into different head, sub- or base groups so that the regulation reflects as far as possible the type of contract in question.

For the purposes of application, the index of each main or sub-group’s base month (tendering month) are compared with the index of the month in which the work is performed. The settlement takes place on a monthly basis and any delays can be taken into account, with the exception of delays that occur between the giving the tender and the start of construction, which the parties may specifically regulate. In case of uncertainty about the calculation, the parties can advantageously use  the application regulations for the Construction Index.

The construction index is often described as an impartial and objective tool since the index figures are set by Statistics Sweden. Although the method for regulation has been developed by representatives from both the employer’s and the contractor’s sides (the Committee for Construction Index, appointed by  the Construction Contract Committee (BKK)), Statistics Sweden’s determination of the index figures takes place in consultation with representatives of the contractor’s side (Byggföretagen and Installatörsöretagen). 

Objectivity has been called into question in view of the fact that point figures are determined on the basis of price data collected from suppliers and industry leaders rather than transaction data. For example, a report from the Swedish Competition Authority states that  the Authority has not been able to assess whether the Construction Index corresponds to the actual cost trend for building materials. The Authority also pointed out that price information obtained from market participants can be questioned because the actors could act in their own case and report a higher price information to Statistics Sweden in order to be able to request a higher price for their goods at the negotiating table. The Swedish Competition Authority therefore currently recommends that broader indices be applied.

Whether the risks identified by the Swedish Competition Authority are real are currently unknown and Entreprenadindex has had a broad impact in the construction industry. Among others, the Swedish Transport Administration, one of Sweden’s largest and thus a leading employer of contracts, makes extensive use of the Construction Index, (see, for example, Information to the Swedish Transport Administration’s suppliers about handling cost increases or Cost regulation in contracts).

Alternatives to Construction Index

However, the parties to the construction industry may choose to index prices based on other indices, such as the Building Cost Index for Buildings (BKI) or the Consumer Price Index. The Building Cost Index for Buildings (BKI) measures the change in contractor’s cost and the developer’s cost for production factors in housing construction such as materials, wages, machinery, transport, etc. while

The Consumer Price Index (KPI) measures the prices that consumers actually pay in the domestic market and gives an average based on a number of representative products whose price information has been obtained directly or indirectly from stores in Sweden.  

Our view is that neither the BKI nor the KPI give a true and fair picture of how the prices of building materials develop and that they are therefore as a general rule less suitable for regulation in a construction contract.

However, there is freedom of contract, which is why other contractual solutions for changing the agreed price due to cost increases are also possible. Reservations in tenders to private employers can be made, for example, for the price to be renegotiated or adjusted if the cost of a certain material changes in a certain agreed manner. There are also mixed forms between fixed price and current account.

Update: Statistics Sweden makes policy decision on Construction Index

On 8 October 2022, Statistics Sweden made a policy decision meaning that the authority intends to phase out its index assignments, including the Construction Index. A decision on decommissioning is expected at the end of 2022 and Statistics Sweden will, in connection with a possible decision, provide information about a decommissioning plan.

In any case, Statistics Sweden will provide the Construction Index throughout 2023. What happens next is not yet clear and it remains to be seen whether Statistics Sweden will make a final decision on decommissioning, whether the Construction Index will then be determined via a new supplier and whether this affects the applicability of and the construction industry’s attitude to the Construction Index.

In the construction industry, there is a great interest in finding common solutions to handle ongoing price changes. If you have questions about the design of an indexation or other questions about construction law – please contact us!

In recent years, the real estate industry has demanded more environmentally innovative legal solutions. Not least, the demand is about introducing contractual terms to ensure that tenants operate in a sustainable way in their use of properties.

The issue of sustainability has become increasingly prominent in most industries in recent years. This is partly due to an increasing environmental awareness in the business community and partly to the fact that consumers are increasingly demanding sustainable solutions. The real estate industry is no exception. So-called green leases and sustainability clauses in leases have become increasingly common and more in demand, by both consumers and companies.

Green agreements lead to discussion about ambitions

There is little doubt that sustainability is an important and relevant issue in the construction and real estate industry. Part of the industry’s environmental impact is due to new constructions and renovations, as these require a large amount of materials and energy. At the same time, the actual use of the premises and homes accounts for another part of the environmental impact. There is therefore reason for landlords to guide their tenants in a more sustainable development.

The industry organization Fastighetsägarna has recently developed so-called green leases for its members. These are largely based on an exchange of information between the tenant and the landlord, such as that the parties must reconcile their environmental ambitions with each other and jointly develop action plans to reduce the property’s environmental impact. The green leases also contain some more specific requirements, such as contractual terms stating that the party responsible for electricity subscriptions must choose renewable electricity or that waste sorting must be complied with and made possible.

Re 100 contract clause and mobility houses examples of sustainability in practice

A number of years ago, IKEA, in collaboration with the Swiss insurance company Swiss Re, launched an initiative to get the world’s largest companies to choose renewable electricity. This cooperation resulted in a contractual clause called RE 100, which has become an increasingly common feature in the signing of rights of use. We see a clear upward trend in the number of clients who want to enter into agreements containing RE 100 clauses or equivalent.

When it comes to urban development, smart and environmentally friendly parking solutions have become an increasingly used feature. A mobility house can largely be used and adapted in any way, e.g. with a car pool and / or bicycle pool with electric and box bike and traditional parking. The mobility buildings should be able to quickly and easily adapt to changing needs in the city.

In the real estate industry, there is a great interest in contributing to a more sustainable development. If you have questions about contractual clauses relating to sustainability or other questions about property law – please contact us!

The Swedish Authority for Privacy Protection (IMY) is now initiating a review of a bus company following complaints from the union. The bus company has monitored the driving behavior of bus drivers in order to achieve a more environmentally conscious driving behavior. The mapping involves personal data processing and therefore needs to take place in accordance with GDPR.

Sometimes a company’s sustainability work can encounter difficulties from unexpected directions. The Authority  for Privacy Protection (IMY) has chosen to initiate a review of a bus company that monitored bus drivers’ driving behavior following a complaint from the union. Among other things, speed, energy consumption and braking have been mapped with the aim of achieving driving behavior that is both environmentally friendly and traffic safe.

Mapping of driving style involves processing of personal data

An issue for consideration is that this mapping in practice means a personal data processing, which means that the EU’s General Data Protection Regulation (GDPR) becomes applicable. With this comes a battery of obligations that the employer needs to fulfill. The employer needs, among other things, to explain how the personal data processing is carried out, the purpose of the processing, state a legal basis and manage storage times, and fulfill the obligation to provide information.

In the present case, IMY has initiated the supervision by sending a list of 13 questions that the employer has to answer. For an employer who has not already taken height for personal data processing even before it began, it can be extremely difficult to heal the shortcomings afterwards when the supervisory authority is standing with one foot inside the door.

It is important that data is not used for purposes other than the original purpose

It is true that an employer may have legitimate purposes for measuring employee performance. Planning, organizing, leading, following up and quality-assessing the work of employees, as well as measuring individual performance, belongs to the category of personal data processing that is normally allowed for private employers in accordance with good practice in the labor market.

However, it is generally prohibited to use compilations of such data for any purpose other than the original purpose. It is therefore conceivable that data collected on driving behaviour for the purpose of mapping the energy consumption of the business may not be used for salary setting or grounds for dismissal.

Sometimes there is clear support in collective agreements for a certain personal data processing, either through an obligation or right that belongs to the employer. Even if the personal data processing in question is itself supported by collective agreements, the employer still needs to fulfill the obligation to provide information under the GDPR to its employees.

The purpose of these rules is to create predictability for the employees. Job performance mapping should never come as a surprise to the employee. Therefore, it is important that all employers establish a privacy policy for employees. This is a policy that is often overshadowed. Companies generally meet the requirement to have a public privacy policy for customers on their website, but how companies process their employees’ personal data internally is just as important from the perspective of the GDPR.

Secure that your next sustainability project is compliant from a GDPR perspective, to ensure that personal data processed within the framework of the project is fair and predictable for your employees.

At the UN summit in the autumn of 2015, the countries of the world adopted Agenda 2030 and 17 new global goals for sustainable development. The goals and their sub-goals cover several dimensions of sustainable development in the form of economic, social and environmental sustainability. Public procurement and sustainable public business can contribute to the fulfillment of several of the global goals. One of the sub-goals, 12.7, is about promoting sustainable methods of public procurement.

Through public procurement, it is possible to reduce environmental impact, promote innovation and social sustainability, reduce costs and, not least, create increased awareness of environmental and sustainability issues. Contracting authorities can, for example, set requirements regarding the choice of materials, energy performance and emissions in order to contribute to sustainable development. One way to identify what requirements and conditions can be set is for the authority in its needs and market analysis to investigate what sustainability risks exist in a particular industry and in what way the procurement can minimize these risks. Below are some examples of sustainability aspects that can be taken into account in procurement.

Furthermore, contracting authorities may impose contract performance conditions requiring suppliers to perform, for example, certain social services under the procurement contracts.

Until today, sustainability in public procurement has in principle been voluntary for the contracting authority. Chapter 4. Section 3 of the LOU today states only that a contracting authority ought to take into account, among other things, environmental considerations. However, the report En skyldighet att beakta vissa samhällsintressen vid offentlig upphandling (Ds 2021:31) proposes that a requirement be introduced for contracting authorities to take into account the climate, the environment, human health and animal welfare in procurement. The proposal is proposed to enter into force on 1 July 2023.

If the proposals become a reality, sustainability aspects will become even more important than they are today and companies thus have a lot to gain from developing sustainable, long-term and strategic business models. Something that is already very common in procurements is requirements for quality and environmental management systems. Ensuring that the business, for example, is certified according to ISO or some equivalent certification body is therefore a measure that many companies would benefit from taking today. Furthermore, there are a number of proposals within the EU for stricter rules regarding certain products, etc. regarding the environment.

It is not only the Riksdag and the EU that regulate the area of sustainability, but also the government and authorities can decide on various regulations, ordinances and mandatory provisions in the area. This makes the area important even at the micro level.

Moll Wendén stays continuously updated on these issues and is happy to help you adapt your business to the increasingly high demands of the future on sustainable public business.

If you want to promote sustainability and sustainable development, public procurement is an excellent smorgasbord. If you have any questions, please contact lawyer and partner Catharina Piper, who is currently writing a book on sustainable public procurement that is likely to be published in 2023.

Sustainability work in the construction industry

The increased focus on sustainable development in recent years has also left its mark on the construction industry. Nowadays, requirements for environmental certification of construction projects are the rule rather than the exception and many developers impose such requirements in all construction projects. Environmental certification systems or environmental classification, as it is also called, are used to measure and communicate the environmental performance of buildings.

We are often asked what different environmental classifications mean for the contractor’s commitment in the individual project and how the contractor should act to meet the requirements.

Benefits of environmental certification

Environmental certification aims to reduce the environmental impact of buildings and is not only a cost for the developer and contractor. It also brings business benefits. Contractors who have knowledge of the process have a greater opportunity to compete in and win more tenders. For property managers, this can mean lower operating costs, and certificates can provide good publicity for all parties involved. Experience of environmental certifications also facilitates companies’ CSR work.

What environmental certifications are available?

Internationally, there are more than 100 different environmental certification systems. In Sweden, the following three are most common: Swedish Miljöbyggnad, British BREEAM and American LEED. Sometimes European GreenBuilding is also used to assess the energy performance of a building.

Swedish Miljöbyggnad is adapted to Swedish regulatory requirements, which means that it is well suited for Swedish construction projects. The certification system focuses on three different areas: energy, indoor environment and choice of materials. The certification shall be followed up with a verification of the building’s performance after it has been in operation for three years.

The international counterparts, BREEAM and LEED, cover significantly more areas and also provide scope for setting higher environmental requirements. One advantage of these certifications is that they are internationally comparable. At the same time, these systems impose higher demands on both the developer and the contractor, who must familiarize themselves with a regulatory framework that is partly adapted but not created according to Swedish standards. The actual application for certificates is made to the organization that manages the respective environmental certification system. More information about the certification process can be found at the Sweden Green Building Council (SGBC). The process results in a final rating that differs between the different systems. 

How should the developer act?

For a developer who plans to environmentally certify his contract, it is important that clear requirements are set out in the contract documents.

The tender specifications must contain regulations that specify the responsibility of the contractor for certification and any verification, as well as instructions on how the contractor should fulfill its obligations. AMA AF 21 contains codes specifically dedicated to environmental certification, see AMA AFC.2232 and AFD.2232 respectively. In the regulations, the developer should, among other things, specify which environmental certification is to be carried out and how far-reaching the contractor’s responsibility is.

In order to lead the work with environmental certification, the developer should already at the program stage appoint a manager within the project organization with experience and knowledge of the current certification system.

What should the entrepreneur consider?

Environmental certification imposes a number of requirements on how the contractor should act in the construction project. The scope of the requirements depends, among other things, on which environmental certification system is applied, but also on the level to which the requirements refer. In addition, the responsibility is affected by whether the contractor should only be responsible for certification or for both certification and verification.

The certification requirements govern both the design work and the execution of the contract, and may include requirements for how installations should be designed and what materials may be used.

If the certification work is neglected at an early stage, it may mean that costly changes have to be made later.

Both the designer and the construction contractor must be involved in the certification process. The form of contract – turnkey or construction – therefore affects how far-reaching the contractor should have for certification and any verification. In a turnkey contract, where the contractor is responsible for both design and construction, the contractor must take responsibility for meeting environmental requirements early in the process, while in a construction contract it should be done in dialogue with the developer, who is responsible for the design.

The requirements placed on the contractor in the individual project depend on how the contract documents are designed. In negotiated construction contracts, the contractor should take advantage of the opportunity to participate in the formulation of the requirements in order to clarify the responsibility and distribution of the same. However, in both negotiated and publicly procured contracts, it is important to communicate with the developer – in writing – and find out what expectations of certification and ratings exist.

The contractor should also ensure that the contractor is given the opportunity to meet the requirements. For example, if the contractor is responsible for subsequent verification, the contractor must be given access to information on the performance of the building after the contractor has delivered and no longer has access to the work.

For the contractor, the certification process requires a lot of administrative work. The contractor must describe and document how the set requirements are met. Documentation of material selection is particularly important. If the contractor is also responsible for verification, the commitment involves additional work.

Conclusion

The process of environmental certification is complicated and when problems or questions arise, for example regarding how contracts should be designed or which party is responsible for a certain part of the certification process, legal expertise may be required. Moll Wendén’s specialists in construction law have a strategic approach that prevents protracted disputes and facilitates our clients’ projects. If you have questions about, for example, design or compliance with environmental certifications, you are most welcome to contact us.

This text has been prepared for information purposes only and should not be construed as legal guidance.

Since 1 May 2022, a new Consumer Sales Act applies. A number of changes have been made that companies active in the consumer market need to be aware of. Digital content and digital services in particular have been given a lot of space in the new law.

The new Consumer Sales Act also covers contracts where consumers – instead of payment – provide personal data in exchange for digital services. For example, when consumers in connection with registering accounts on social media provide e-mail addresses and other personal data, which can then be used for marketing purposes.

In order for the law to apply to such situations, it is required that the company does not only process the personal data to comply with a legal requirement or to fulfill other obligations in the contract with the consumer.

The changes are based on two EU directives: the Goods Directive and the Digital Directive. The aim of the Directives has been to create and improve a more comprehensive consumer protection in the purchase of goods and in contracts for the supply of digital content and digital services.

The new Consumer Sales Act covers digital services and content

A new feature is that the Consumer Sales Act now covers contracts for digital content and digital services – without these being linked to a product. Digital content means something that the consumer has access to in digital form. For example, computer programs, apps, music and video files, digital games and e-books.

A digital service enables the consumer to create, process, store or access data in digital form. It may also involve exchanging or interacting with data in digital form uploaded or created by the consumer or by other users of the service. Examples include video or audio sharing, online gaming or word processing, offered in a cloud-based computing environment or social media.

The consumer’s right to information and updates of the product

In the new sales act, a requirement is set stating that information must be given as regards the compatibilty of the product. Regarding contracts for digital content and digital services, the company shall ensure that the consumer is informed about and provided with the necessary updates. If the company does not comply with these obligations, there is sales law defect and penalties can be imposed by the consumer.

In order for the company to avoid liability for lack of updates, two main things are required:

The company is normally obliged to inform about and provide updates to the consumer for at least 3 years. If the contract for the digital content or service runs continuously, as is the case, for example, with subscription services, such as streaming services, the obligation applies during the term of the contract and can therefore be longer than 3 years.

Defects in goods and extension of the time limit for reversing the burden of proof

Another change is that there is an explicit requirement that a product must meet both subjective and objective requirements. Subjective requirements are what the parties have agreed on, while objective requirements are what the consumer can reasonably expect – the characteristics that are normal for products of the same type.

As a starting point, it is the consumer who must prove that a defect is one for which the trader is responsible – that is, that the defect is original. However, the reversal of the burden of proof means  that the company must prove that the goods were not defective when the consumer received them, for a certain period after delivery. The new law extends the period within which fault can be presumed to be original from six months to two years.

For digital services and content, different time periods apply. In the case of single supplies of digital content and digital services, the reversal of the burden of proof is one year. If, on the other hand, it is a continuous supply, it applies for the duration of the contract.

Disclaimers have also been further restricted by the new Consumer Sales Act. References to an item being sold “as is” or general disclaimers will no longer limit the liability for defects to any great extent.

The new consumer law regulations require companies to adopt new routines and develop their compliance work. When questions and problems arise, legal expertise may be required.

Moll Wendén’s lawyers are experts in business law and have a strategic approach that prevents protracted disputes and facilitates our clients’ projects. You are welcome to contact us.

This text has been prepared for information purposes only and should not be construed as legal advice.

During the spring, the Swedish Tax Agency published a memorandum with proposals for significant adjustments to the current provisions of Mervärdesskattelagen regarding voluntary tax liability for VAT when renting out premises.

Rental of premises and other leasing of real estate is, as a general rule, exempt from taxation. However, a landlord may choose to become voluntarily liable to pay tax for such rental and add output VAT to the rent. The voluntary liability regime thus entitles the lessor to deduct input VAT on the costs incurred by him in renting out premises.

Under the current wording of the provisions on voluntary tax liability, several conditions must be met for a landlord to become voluntarily liable to tax. One such condition is that the tenant must conduct activities subject to VAT or be entitled to a refund. The Swedish Tax Agency has now proposed a relaxation of certain conditions, which entails expanding the possibilities for voluntary tax liability for renting premises. The main features of the proposed amendments are:

The business community has long demanded changes to current regulation in accordance with the Swedish Tax Agency’s proposal because current regulations are not considered to be adapted to today’s business models and entail increased costs for companies. In addition, potential tenants, who do not carry out activities subject to VAT, have difficulty finding premises, while landlords who wish to be subject to voluntary tax liability have empty premises. If the rules are adjusted in accordance with the Swedish Tax Agency’s legislative proposal, this will probably lead to a more flexible local rental market for both the landlord and the tenant.

Do you have questions about what applies when renting out premises, or do you want to know more about tenancy law or real estate law in general? Contact us.

Customers and employees leave while you are suspecting a leak of company secrets. What can you as an organization do to prevent the damage?

Trade secrets and other important information are an important resource for organizations today. In order for something to count as a trade secret in the sense of the law, the information must be about business or operational relationships that are kept secret and that cause harm to the company if the information is disclosed or becomes available to external partners.

A misappropriation of trade secrets can be costly and, in the worst case, lead to the closure of your own business. It can therefore be crucial how to act in case of suspicion of an attack or a leak.

Protecting yourself in the event of a leak – act both short and long term

When the company notices that its trade secrets have been attacked, the situation is usually already a fact. Customers leave, employees resign – and the company is left with its fixed costs. A first step is to get an overview of the situation.

With the help of IT forensic expertise, it is possible to map current and former employees’ activities, such as email conversations, document management, connected USB sticks and whether the computer has been connected to external servers. The overview makes it possible to assess the extent of the intrusion and leakage, as well as what should be prioritized during the collection of evidence. An experienced counsel can also see which issues may become later problems, or which parts of the evidence gathering should be handled with particular care.

Apply for an intrusion investigation

If the trade secret also constitutes a copyright-protected work, the company can apply for a so-called intrusion investigation under the Copyright Act. An intrusion investigation is equivalent to a search or a dawn raid and serves as a civil law evidentiary security measure. The purpose of the intrusion investigation is to safeguard the applicant’s copyright and prevent its exploitation. It is the district court that, on application from the rights holder, decides whether an intrusion investigation should take place. It is then the Swedish Enforcement Authority that executes the decision.

In order for the district court to make an intrusion investigation, the applicant must prove that it is reasonably believed that the other party has infringed a copyright that belongs to the applicant. The documents sought must also be presumed to be relevant to the investigation of the infringement. In addition, the reasons for the intrusion investigation must outweigh the inconvenience that the measure causes to the opposing party, i.e. that a proportionality assessment must be carried out. Finally, the applicant must provide security for the potential damage suffered by the counterparty, usually in the form of a bank guarantee.

Reduce the harmful effects of the attack

The next phase is about reducing the harmful effects of the attack. Although there is the possibility of demanding contractual penalties or damages from the attacker, it does not help the company here and now. Neither damages nor contractual penalties are paid voluntarily, in which case it is usually necessary to initiate legal proceedings that can take several months or years. If the company’s finances bleed within months, it does not matter that you have guaranteed damages within a couple of years.

Instead, the top priority must be to ‘stop the bleeding’, that is, to prevent the attacker from continuing to misuse trade secrets in the short term in the course of his business. This can be done by means of an interim penalty injunction.

A person who has attacked a trade secret may be prohibited by the district court from using or disclosing the trade secret under penalty of fine. An injunction application should be made on an interim basis, that is to say, the prohibition should remain in force until the court has made a final decision. The applicant must then show that there is probable cause that the trade secret has been attacked and there is a reasonable fear that by continuing the attack the defendant will detract from the value of the trade secret. A corresponding possibility for copyright-protected works can be found in the Copyright Act.

Dealing with theft of trade secrets is about working in both the short and long term at the same time. In the short term, the measures concern the gathering of evidence and the interim prohibition (with fines). In the long term, the measures are aimed at cost recovery in the form of claims for damages.

The deteriorating security situation in the world may pose challenges for contracting authorities and entities. For a couple of years now, the provisions of Säkerhetsskyddslagen have had to be taken into account in public procurement, especially in certain circumstances. In addition, in April 2022, it was decided to impose further EU sanctions on Russia.

In order to be covered by the Säkerhetsskyddslagen, it is sufficient that an actor, such as a municipality or region,  to some part conducts activities that are of importance to Sweden’s security. This may involve, for example, essential activities in sectors such as energy supply, food supply, infrastructure and healthcare. If a contracting authority is covered by Säkerhetsskyddslagen, both Säkerhetsskyddslagen and the Procurement Acts must be taken into account in the procurement (so-called security-protected procurement). 

In certain cases, a protective security agreement must be concluded with a supplier. Such an agreement shall contain the requirements on the supplier that are necessary to meet the security protection requirements. Before drawing up procurement documents, it is therefore important to carry out the required protective security analysis in order to be able to assess which security protection requirements are necessary and proportionate in the procurement.

Prohibition as regards awarding and performing contracts with certain operators

As a general rule, the EU’s fifth sanctions package now prohibits, in the case of procurements above the thresholds, the award of contracts and, as of 11 October 2022, the performance of contracts with:

  1. Russian citizens or natural or legal persons, entities or bodies established in Russia.
  2. Legal persons owned directly or indirectly by an entity referred to in paragraph 1 of more than 50 %; All stages of the ownership or group structure shall be taken into account.
  3. Natural or legal persons, entities or bodies acting for, or on behalf of, an entity referred to in paragraphs 1 to 2; Includes agents, agencies or contractors, but also decoy schemes and other schemes aimed at trying to circumvent sanctions.

The prohibitions also apply to subcontractors whose capacity is used in the procurement if they account for more than 10% of the value of the contract. The fact that a supplier covered by paragraphs 1 to 3 may not be awarded a contract shall mean that its tender must be rejected (after the supplier has been given the opportunity to be heard). The non-performance of a contract with a supplier covered by paragraphs 1 to 3 means that the contracting authority may no longer fulfil any of its contractual obligations, such as payments.

According to the Procurement Authority, call-offs from framework agreements are in most cases covered by the sanctions, while the conclusion of the framework agreement itself, on the other hand, as a general rule is not covered by the prohibition on awarding contracts. Anyone who violates the sanctions can be sentenced to a fine or imprisonment under Lagen om vissa internationella sanktioner.

Issues that procurement authorities and entities need to consider before procurement:

  1. Is it a procurement that requires a protective security analysis?
  2. Are there any suppliers/subcontractors in ongoing procurements or contracts already concluded that fall under points 1-3? Is it possible to change subcontractor? Is it possible to cancel the contract?
  3. How should future procurement documents be formulated in response to the sanctions?
  4. Should the sanctions be extended to apply as grounds for exclusion also to procurements below the thresholds?

Since judgment C-311/18 – popularly known as Schrems II – the risks of third-country transfers of personal data have been high on the agenda. Work is currently underway on a new agreement in principle to enable transatlantic transactions linked to data.

The risks of third-country transfers have become something of an elephant in the room when it comes to GDPR compliance. Since the European Court of Justice in the famous judgment C-311/18 (Schrems II) rejected the Privacy Shield agreement regarding transfers of personal data from the EU to the US, it became more difficult to conduct business overnight.

Difficult to guarantee protection of sensitive personal data at present

The lack of legal certainty regarding how US intelligence collected bulk data from EU citizens’ personal data, without som much as a court order on reasonable suspicion, can be compared to bottom trawling. So it wasn’t just the ugly fishes that were caught, but also honest people’s digital traces got caught in the net.

Following the vacuum caused by Schrems II, the European Data Protection Board (EDPB) has issued recommendations (1/2020) for companies wishing to take measures to ensure compliance with third country transfers. It is a 48-page document that describes a rigorous six-step process which, to say the least, places high demands on due diligence and resources, including for investigating legal conditions in third countries. This burden appears to be almost unduly burdensome for companies, especially in the SME segment.

Since US companies are market leaders in cloud services, information retrieval services and communication services, this naturally has enormous consequences. In 2022, for example, the City of Stockholm has refrained from introducing Microsoft 365 because an investigation has assessed that US intelligence legislation means that cloud service providers cannot provide sufficient guarantees for the protection of sensitive personal data. In addition, the popular analysis tool Google Analytics has been banned in several EU Member States, including Austria. A Swedish decision is likely to be expected shortly.

Work underway on new agreement in principle

Running a business without Microsoft’s, Google’s or Amazon’s services seems almost impossible in today’s global and digitized business climate. Therefore, the flame of hope has been lit considerably since the European Commission and the US recently announced that an agreement in principle has been reached on a new framework for the protection of personal data when transferring from the EU to the US.

It is clear that, at least according to the parties, the agreement should limit the scope of the intelligence activities on the basis of the principle of proportionality, and that the intelligence should be reviewable, and rejected, by judicial review with binding authority. However, the content of the agreement has not been made public, and the European Commission has flagged that negotiations will continue. At present, work on translating the agreement in principle into a de facto binding agreement between the parties is in full swing.

Thus, if the parties want to avoid a disappointing Schrems III ruling, substantial sacrifices will have to be made on the American side regarding the scope of its intelligence activities. Both the EU and the US have several reasons for securing this agreement, namely about 9 500 billion reasons, since that is how many SEK transatlantic commerce turns over annually.

These are troubled times in the construction industry and a number of employers are hesitant about whether they dare to call off phase 2 of a collaboration contract that has begun.  But what happens to the design and other documents that have been produced during phase 1 if the employer chooses not to call off phase 2?

Construction projects that involve a number of uncertain factors or are difficult to define before procurement is sometimes carried out in the form of collaborative contracting (partnering). A common arrangement is then that the employer and contractor jointly carry out the preparatory work and define the project before the final decision on whether the project is to be implemented is taken by the employer. Contractually, collaboration contracts are therefore often divided into two or more phases, usually meaning that the design takes place during phase 1 and that the execution takes place during phase 2 after separate call-offs.

If the employer decides not to call off phase 2 at all, or wishes to postpone the decision on call-off until the market has stabilized and therefore does not call off phase 2 within the prescribed time, the choice of standard agreement and the regulation of the transition between the phases of the parties’ agreements determine who owns and is responsible for the contract documents.

Our experience is that the employer in the collaboration agreements takes unnecessary risks and fails to regulate in the agreement what is the actual main issue – the employer’s right to freely use the assignment results from phase 1 and choose if, how and when the contract is to be carried out. The contractor, on the other hand, makes the mistake of not securing compensation under phase 1 that covers the cost of the work done and the liability if phase 2 is not obtained.

The parties often agree that the standard agreement for consulting services, ABK 09, shall apply to phase 1 (the design), that the standard agreement for turnkey contracts, ABT 06, shall apply to phase 2 (the execution) and that the contractor’s liability according to ABT 06 during phase 2 shall also include a responsibility for the documents produced during phase 1, without the limitations imposed by ABK 09. Taken as a whole, however, the contractor acts as a turnkey contractor with responsibility for both design and execution, and the parties sometimes agree that ABT 06 shall apply to both phase 1 and 2.

ABK 09 during phase 1

ABK 09 is intended for use in consultancy assignments that include the production of documents. The standard agreement therefore contains provisions that regulate the employer’s right to use documents and the consultant’s responsibility for them.

ABK 09 chap. 7 § 1 states that the employer, unless otherwise agreed, has the right to use and copy the reported assignment results only for the purpose intended by the assignment. The commentary on the provision further states that it is important that the parties clearly state the purpose of the assignment. The employer thus gets a right to use the assignment result (drawings) to build, for example, the house that is intended by the assignment to the consultant; and this does not require a particularly explicit agreement that the employer will be allowed to build according to the drawings. Use beyond the purpose requires the consultant’s consent.

If ABK 09 is applicable as a standard agreement for phase 1, the employer is thus entitled to use the design for the intended purpose. What the intended purpose is must be assessed on the basis of what is stated in the contract, but the employer can normally use the documents to carry out the contract for which the design was carried out and the contractor is not entitled to any further compensation unless it is expressly stated in the contract. However, if the employer changes the conditions for phase 2, for example by replacing the contractor once phase 2 is called off or if a change/reduction in the scope of the contract occurs, the question arises as to what is covered by the “intended purpose”.

ABT 06 during phase 1

ABT 06 is not intended to be applied in cases where the contractor only performs the design. ABT 06 therefore does not contain as extensive a regulation regarding the right to use documents as ABK 09. In ABK 09 there is an entire chapter dedicated to “The right to the result of the assignment”, but ABT 06 contains a scant regulation regarding the employer’s right to use documents produced by the contractor. 

ABT 06 gives the employer the right to use documents relating to the contract for changes and management of the object. However, it is unclear whether this provision can be used as a basis for an employer to have the right to use documents produced during the design phase to carry out the contract in its entirety. Furthermore, it can be noted that this rule does not explicitly refer to the purchaser but to  the owner or user of the project. This means that the right under the rule ‘follows the house’, i.e. it is a contract in favour of a third party. Furthermore, it is unclear how the term “project” is to be understood in this context since it is not defined in the definitions in ABT 06.

Additional concerns arise if ABT 06 is the applicable standard contract for both phases 1 and 2 and the project is terminated after the design stage. Usually, a final inspection is carried out and the contract is handed over after approval at the final inspection. At the final inspection, however, the inspector must not check the contractor’s design, but only the physical end result. Since there is no physical end result after phase 1, the parties must agree that in the event of a termination, the “contract” shall be considered delivered in another way (see ABT Chapter 06, Section 7, Section 12). Furthermore, it is not entirely clear how ABT 06’s liability rules should be applied in cases where the contractor has only submitted design documents.

The importance of clear contract regulation

Neither ABK 09 nor ABT 06 thus contains a clear regulation of what applies when the parties choose to interrupt or “pause” their cooperation after the design phase (phase 1). An agreement for a “phased” partnering contract therefore always needs to be supplemented with a regulation of the transition between the two phases and the situation that phase 2 is not called off within the agreed deadline or not called off from the contractor who carried out phase 1.

Given the current market situation, it is particularly important that both the employer and the contractor carefully consider the risks and, in the agreement regarding phase 1, secure rights and compensation respectively in the various scenarios that may arise.

It can be expensive for an employer to have an employee who is ill for several short periods. For a manager, it is sure tempting to request a sick certificate from an employee from the first day of illness, a so-called first day certificate. What does the legislation look like here? Is it always permissible to demand this from an employee? Let’s find out what applies.

An employer must pay sick pay from the first day of the employee’s inability to work due to illness and the following thirteen calendar days of the sick leave period. According to new rules from 2019, the employer must make a qualifying deduction from sick pay. This deduction shall correspond to 20 percent of the sick pay.

First-day certificate possible for special reasons

If there are special reasons, the  employer can, according to Sjuklönelagen, request an employee to submit a sickness certificate from day one – so-called first-day certificate. Special reasons for a first-day certificate can be, for example, repeated and short illness occasions or extended control in connection with rehabilitation. It is also good to know that it is possible to agree on first-day certificates through collective agreements. This then replaces the provisions of Sjuklönelagen.

A decision on a first-day certificate shall be in writing and the duration shall not exceed one year. If the company is bound by a collective agreement, there may be a requirement to negotiate the issue of first-day certificates. Therefore, do not miss to check what is stated in your collective agreement, if you have any.

Individual assessment must be made at first-day certificate

It is not possible to introduce a general requirement for all employees, or, for example, for a specific department to submit first-day certificates, but the employer must carry out an individual assessment. It is not allowed to require first certificate as a punishment of an employee. An employer may also not use its right to require first-day certificates in an arbitrary or otherwise improper manner, as this may be considered contrary to good practice in the labour market.

In some cases, the employee may have an acceptable reason for not being able to show a medical certificate, for example, if the employee has tried but not succeeded to get a doctor’s appointment. This may also apply if the employee – due to the illness – has not been able to get to a doctor. An example is if the employee is affected by winter vomiting disease. Failure to submit a first-day certificate may ultimately lead to dismissal for personal reasons, as the absence is then considered unlawful.

Information that needs to be in the sickness certificate

The sickness certificate may be required to state the extent to which the ability to work is reduced and the length of the period of sickness. The certificate itself does not need to contain any detailed information about the illness the employee suffers from. However, the certificate must contain a clear description of the employee’s condition and symptoms. In addition, there must be a description of how the problems affect the ability to work.

If a medical certificate is incomplete or does not contain sufficient information for assessing the impairment of working capacity, the employer does not have to approve the medical certificate.

For obvious reasons, the sick certificate contains sensitive information about the employee, so make sure that your handling of the sick certificate complies with the GDPR. The employer has the right to withhold sick pay if the illness is not proven from the first day.

As it is common to have long waiting times for health centers – which are not actually obliged to issue sick certificates either – it is recommended that employers offer employees an opportunity to contact an occupational health service or a private doctor in the event of future illness. The employer should cover the costs of the first day certificate.

Summary

IPR is the abbreviation of Intellectual Property Rights. The concept mainly concerns patents, trademarks, copyrights, design rights and company names. As a company the importance of being able to survey and control intellectual property rights can not be exaggerated as part of a general business strategy.

The legislation concerning intellectual property rights serves different purposes. One important purpose of the legislation is to stimulate creative efforts. Another purpose is to provide companies and products with the possibility to distinguish themselves on the market. A third purpose is to protect invested time, money and knowledge as part of underlying intellectual efforts.

IPR Management affects the value of the company

Patents and trademarks represent an increasing share of companies’ assets. The globalisation of business has led to the harmonisation of intellectual property rights, e.g., within the EU. The value of a company’s intellectual property rights is largely determined by how well managed the IPR portfolio is. The management of these rights is called IPR Management. The concept covers everything from the company’s development of the product portfolio and the establishment of licensing and confidentiality agreements to the design of the image of the company that is conveyed to the outside world.

IPR Management is basically about managing intellectual property rights in a way that optimizes their value – and thus the value of the company.

The design of the individual company’s IPR Management is influenced by the focus of the business, geographic markets and competition in the industry. Common to all companies is the need for a structured management of intellectual property rights.

Treat your “IPR leaks”

IPR Management should be as natural as inventory management routines. In both cases, the purpose is to get an overview of the company’s own assets, in the present and in the longer term. However, IPR is not just about assets. Equally important is that the company gains insight into its possible shortcomings in the area.

IPR Management should be as natural as inventory management routines.

In this way, any “IPR leaks” can be sealed. A well-developed IPR Management also includes knowledge of the status of competitors in the field. In a world where intellectual property rights are gaining more and more space and importance, there is an increased risk that one’s own company will infringe on the rights of competitors, which often does not go unpunished.

Part of the business strategy

In the longer term, IPR Management, as a natural part of the company’s business strategy, forms the basis for both crucial decisions and business relationships with the outside world. A structured and comprehensive presentation of a company’s intellectual property rights is of great value in discussions about financing, mergers or divestments.

However, inability to present an overall picture of the company’s IPR portfolio, or ambiguities about intellectual property rights, is perceived as uncertainty. The same applies to assessments of the unlawful use of the company’s rights and claims of infringement by competitors. How these issues are dealt with is often decisive for the outcome of the negotiations.

One step ahead of the competition

Actively managing your company’s IPR portfolio is a resource-intensive work that must be carried out continuously. Therefore, it is important to use your own resources as efficiently as possible. With the help of goals and guidelines that have been formulated in other contexts, it is often possible to draw conclusions about which intellectual property rights the company needs. There are also a number of consultants who specialize in different components of IPR Management, such as PR agencies and law firms.

The business knowledge within the company can thus be supplemented with external expertise in law and technology, in a way that meets one’s own needs. This creates good conditions for your company to achieve the goal of a well-developed IPR Management: to stay one step ahead of the competition.

In December 2020, the Government commissioned the National Land Survey (Lantmäteriet) to investigate the conditions for introducing a general stamp duty obligation on the acquisition of real estate through, among other things, property formation. In the spring of 2022, Lantmäteriet has published a report with proposals for the introduction of a stamp duty obligation for the acquisition of real estate through property formation measures, similar to the stamp duty that arises when acquiring real estate through, for example, purchase or exchange.

Under the current rules, stamp duty is payable on the acquisition of immovable property (or leasehold) through, inter alia, purchase or exchange. For legal entities, the current stamp duty rate is 4.25 percent of the value of the acquired property. For tenant-owner associations and natural persons, the stamp duty rate is currently 1.5 percent. The value on which the tax is calculated is determined by comparing the purchase price with the property’s assessed value in the previous year. The higher of these two values is considered to be the value of the acquired property and the starting point for the stamp duty calculation.

The trigger for stamp duty to be paid on acquisition – i.e. the purchase or exchange – is that the application for title deed is granted. In the case of acquisition of immovable property through property formation measures, such as property regularisation and splitting, the application for title deeds should not be made, which is why stamp duty is avoided at the same time. Against this background, the National Land Survey proposes in its report that the stamp duty obligation be extended to also include the following property formation measures: (i) land acquisition followed by property formation, (ii) property regulation acquisition and (iii) splitting acquisition.

Land acquisition followed by property formation

Through property formation, a property acquired by purchase or exchange can be combined with a property for which the buyer already has title deeds. The acquisition is then followed by an application for either land regularisation or divestment with subsequent merger instead of application for title deed.

Once the property formation measure has taken place, the added property is covered by the existing title deed, which is why stamp duty does not arise under current law. In these cases, the initial acquisition is taxable but the event that triggers stamp duty, i.e. the granting of title deeds, never occurs when the acquisition is accompanied by a subsequent property formation action.

In order to extend the stamp duty liability to include property formation after a taxable acquisition, Lantmäteriet therefore proposes that tax liability should arise when information about property formation is registered in the land register.

Property regulation acquisitions

Property regulation refers to the transfer of immovable property from one or more properties to one or more properties. If the transferring real estate and the acquiring real estate are owned by different persons, an acquisition takes place which, according to current law, is stamp duty-free. Lantmäteriet therefore proposes that such acquisitions should be subject to stamp duty and that flat-rate tax should apply, whereby the tax should be based on the market value reduction of the transferring property in the transaction.

However, Lantmäteriet proposes a general tax reduction in order to limit an inhibiting effect on appropriate property regulations. For natural persons, this shall mean that taxation shall only take place on the part of the value that exceeds SEK 1,000,000 and for legal persons SEK 350,000.

In the case of a property regulation acquisition, no documentation is usually prepared that can be used for taxation in the ordinance. Lantmäteriet touched on the issue of how data should be collected and who should be subject to the obligation to provide information, but did not make any concrete proposals on how the issue should be handled, saying only that this should be investigated separately.

Splitting acquisition

Splitting a property means that the property is divided into several lots that can then form their own properties or be included in other properties through property formation measures. Under the current rules, a splitting acquisition is tax-free in the case of a so-called sham splitting. A sham splitting causes a jointly owned property to be split, after which one of the co-owners is allocated a larger ownership in the property in the form of a bigger splitting lot than he had in the original property.

Lantmäteriet proposes that splitting acquisitions should be subject to stamp duty and that the tax rate should be calculated on the market value of the share of the splitting lot that has been acquired. Furthermore, Lantmäteriet proposes that the same type of tax reduction as proposed for property regulation acquisitions should apply to the splitting acquisitions. In this situation, too, Lantmäteriet identifies the need for a special investigation to determine how the procedure for collecting taxes should be carried out.

What can be expected going forward?

Lantmäteriet’s report does not indicate a proposal for a date for the introduction of new rules.  Lantmäteriet estimates that the relevant authorities need one year to prepare organisational measures as a result of the new law.  Furthermore, Lantmäteriet believes that there is a need for further investigation before the proposal can enter into force, which gives an indication that implementation and entry into force will take more than a year.

Lantmäteriet also discusses the need for transitional provisions and proposes that new rules be applied to acquisitions where an application for property formation has been received after the entry into force of the proposal’s provisions.

Our comments

The question of a general stamp duty on the acquisition of immovable property through property formation measures has previously been raised, but postponed for various reasons. However, the proposal now submitted seems to bring the rules on stamp duty closer and closer.

In the event that Lantmäteriet’s proposal results in new legislation, both legal and natural persons can expect increased costs in connection with the acquisition of real estate. New legislation will also have an impact on the possibility of achieving an appropriate division of real estate, in particular with regard to forestry and agriculture and in inheritance cases.

Finally, a consequence of the new regulations is expected to be an increased flow of applications for property formations and also long processing times at Lantmäteriet before the entry into force.

Do you have questions about what applies to real estate transactions and property formation measures, or do you want to know more about real estate law in general? Get in touch with our specialists in real estate. You can reach them via the links below.

Russia’s invasion of Ukraine has brought human suffering and a humanitarian catastrophe that concerns us all. The war has caused a lot of civilians leaving their homes, trying to escape the war, and the situation is described by the UNHCR as the fastest growing refugee crisis in Europe since World War II.To support the people affected, we have chosen to give a donation to UNHCR. UNHCR provides emergency aid to several places in Ukraine which includes food, water, information and safety.

To support the people affected, we have chosen to give a donation to UNHCR. UNHCR provides emergency aid to several places in Ukraine which includes food, water, information and safety.

Moll Wendén has declined clients and assignments from companies based in Russia / Belarus and does not intend to accept such assignments in the future.

Limited liability companies and economic associations with a calender year are currently facing their annual general meeting. As the Parliament voted for the reintroduction of lagen om tillfälliga undantag för att underlätta genomförandet av bolags- och föreningsstämmor on February 23, 2022, the flexibility increases. The temporary “Stämmolagen” applies from the first of March to the last of December 2022. The Swedish Corporate Governance Board has also reintroduced its specific implementing rules due to COVID-19.

“Lagen om tillfälliga undantag för att underlätta genomförandet av bolags- och föreningsstämmor” came into effect on April 15, 2020. The temporary law was time-limited and ceased to apply on December 31, 2021. On the government’s proposal, the parlimant has now decided on February 23, 2022, to reintroduce the temporary “Stämmolagen”.

The temporary “Stämmolagen” increases flexibility and participation

Many limited liability companies and economic assoications have their annual general meeting soon, as ordinary general meetings of companies and associations must be held no later than six months after the end of each financial year. The temporary “Stämmolagen” increases flexibility for limited liability companies and economic associations as they once again have an enhanced opportunity to use proxies and postal voting at meetings. Company and association meetings can once again be entirely held without physical attendance. The reintroduction of the temporary “Stämmolagen” entails the following for limited liability companies:

The reintroduced temporary “Stämmolagen” is in effect from March 1, 2022, to December 31, 2022. The increased possibilities provided by the law can therefore be utilized in all meetings held from the effective date. This also means that it is possible to convene a meeting in accordance with the temporary “Stämmolagen” if the earliest possible meeting date is on or after March 1, 2022.

The proposition for the reintroduction indicates that the law, during its previous application period, led to increased participation at association meetings. The proposition further indicates that the Ministry of Justice is working on analyzing the issue of introducing permanent rules regarding, among other things, digital meetings.

The specific regulations of the Collegiate are reintroduced

The Swedish Corporate Governance Board also announced on February 25, 2022, that the specific implementing rules due to COVID-19 have been reintroduced and will be in effect throughout 2022. This means that

The provisions of the Collegiate’s regulations do not affect the board’s and CEO’s obligation to be prepared to provide information to shareholders and make necessary decisions at the general meeting.

Increased costs, liquidity problems and labour shortages are possible effects of the war between Russia and Ukraine. If you, as a party to an ongoing or upcoming contract, fear that the war may affect your project negatively, you should raise the issue for discussion with your employer or contractor at as early a stage as possible. Public employers should consider providing for indexation of the fixed prices demanded in the tender documents.

During the morning of February 24, 2022, Russia’s regular army entered Ukraine, officially marking the onset of war. This development suggests the need for the construction industry to assess the impact on ongoing and planned projects. The effects of the war on the Swedish construction industry have not yet become apparent, and it is challenging to foresee how the Swedish construction sector will be affected.

Possible consequences for the Swedish construction industry

Unfortunately, it is conceivable that issues with resources such as labor, delivery of goods, materials, and raw materials may arise. This due to delays, hindered production, and the recall of foreign labor for military service in their respective home countries.

For the Swedish construction sector, the most likely consequences of the war in Ukraine appear to be delayed deliveries and a shortage of personnel due to disrupted supply chains and recalled staff. The war in Ukraine also entails the following risks:

Identify risks and establish action plans

Contractors and employers should individually and collaboratively assess the disruptions risks posed by the war in Ukraine on ongoing projects and establish action plans to mitigate the identified risks. The Swedish standard contracts AB 04 and ABT 06 impose a mutual obligation on the employer and the contractor to communicate circumstances relevant to the project to the other party. The contractor typically needs to inform the employer in writing about known circumstances and conditions that affect costs and/or timeline for the contractor to be eligible for additional compensation and time extensions due to contract disruptions.

Specifically regarding fuel price increases

Recent significant increases in fuel prices in general, particularly diesel prices, have led to substantial cost increases for many construction projects. These increases are partly linked to Russia’s invasion of Ukraine.

Price changes in diesel fuel might completely jeopardize a project’s profitability in some cases. The standard contract includes a regulatory mechanism in AB 04 chapter 6 § 3, allowing a party to request a change in the agreed price if the cost change is due to any of the following:

In the case of increased diesel costs, theoretically, all three points above can be invoked to support a price increase. However, it must be emphasized that the party requesting the price change must demonstrate a causal relationship between the cost change and the claimed grounds.

Causal relationships are crucial

Any contractor who wants to use the diesel price increase for a change in the agreed price under AB 04 chapter 6 § 3, due to events like the war in Ukraine (point 2 above), must be able to establish a causal link between the war in Ukraine and the increased material cost.

For the third point, abnormal price changes concerning materials, the cause of the price change matters less. Instead, what matters is the deviation from the norm.

When dealing with a general market price increase for specific materials, it is generally more advantageous to invoke the third point (abnormal price changes concerning materials). Points 1 (government actions) or 2 (war or crisis) can be applied when there is a clear cause for the price increase, especially when the additional costs are specific to the construction project rather than part of a general price increase.

Assessment of the degree of unpredictability and impact

A price change also requires that the cost increase has been unforeseeable and has significantly affected the entire cost of the project.

The provisions in AB 04 and ABT 06 do not directly indicate what constitutes a “significant” impact on the cost or when a cost change can be considered “unforeseeable”.

There is also no extensive legal precedent specifying when the criteria are fulfilled. However, these matters have been addressed in an older legal case that established a fixed percentage for price change at 4.8 percent of the contract sum for the requirement of significance to be met. The case dates back to 1978, and it’s likely that, considering how much the construction market has changed since the seventies, it lacks relevance for today’s situations.

The assessment of significance is based on the total cost of the project. Apart from the 4.8% percentage mentioned in older practices, there is still a lack of guidance regarding when a price change should be considered significant. Within the legal discourse, there are differing opinions on whether the assessment of significance should be based on the industry’s overall conditions or if it’s the individual project’s economics that are crucial in determining what should be considered significant. However, a common understanding seems to be that the requirement for significance shouldn’t be set so high that the contractor operates at a loss on the project. Given this background, the legal situation can be considered unclear.

That the cost change is unforeseeable further implies that the contractor, during the submission of the bid, had no reason to calculate with the cost. Significant and abnormal price changes can, according to the legal case above, in themselves result in a cost change being considered unforeseeable. However, the judgment does not provide more direct instructions on how an anticipatable price increase should be calculated.

Important to notify the counterpart about changes

The provisions regarding price changes do not include an obligation to provide notice. However, from other rules in the standard contracts, it is evident that the parties have a duty to promptly inform the counterpart about significant changes. Under Swedish law, there is also a general duty of loyalty for parties in contractual relationships, which prescribes care for the counterpart. Therefore, an obligation to provide notice likely exists even when invoking a price change.

In ongoing construction projects, the contractor should therefore always promptly notify the employer about any potential price changes to ensure that a cost increase can be asserted. In future projects, a regulation concerning the right to price changes in the projects can establish predictability for both parties and reduce the risk of disputes.

Price changes can be managed through index regulation

Our experience indicates that it is common to include specific conditions about price changes in framework agreements and individual construction contracts with long durations – typically spanning several years.

Given the recent global events beyond the parties’ control, such as the Covid-19 pandemic and now the war in Ukraine, resulting in significant price changes over a short period, it is becoming increasingly common for parties to choose to regulate price changes, particularly in contracts with shorter durations. This is accomplished by having the employer stipulate index regulation of fixed prices in the specifications, or by the contractor including provisions in their bid regarding index regulation of fixed prices.

When, after assessing the scope of the work to be carried out in the construction project, a well-structured price adjustment model is developed – based on appropriate indexes (litera) under the Construction Index, for example – the bidder’s/contractor’s possibility to make unilateral risk assessments (and risk markups) for unforeseen future price changes is restricted (when offering fixed prices). This results in increased predictability in the project.

If you, as a party involved in an ongoing or future construction project, fear that the war in Ukraine might negatively impact your project, you should raise the issue for discussion with your employer or contractor as early as possible. Public employers should consider stipulating index regulation of requested fixed prices in the specifications to minimize the risk of bidder

As of the 1st of January 2020, the Swedish Data Inspection Authority (SW: Datainspektionen) changed its name to the Privacy Protection Authority (SW: Integritetsskyddsmyndigheten, abbreviated to “IMY”).

As a result of the name change, it is high time to review any privacy policies and other personal data-related documentation where references to the Swedish Authority. The main reason for this is that the General Data Protection Regulation (GDPR) explicitly obliges data controllers to provide information that a person may turn to a supervisory authority to request a judicial review (see, for example, Article 12.4 GDPR).

On the 1st of January Henric Stråth became partner of Moll Wendén Law Firm. Henric has worked at Moll Wendén since 2014 and is one of our specialist within Mergers and Acquisitions (M&A). His main focus is acquisitions and investments as well as corporate law and securities law.

We are glad to welcome Henric Stråth as a new partner starting January 1st 2021. Henric has skills and experience that both clients and coworkers appreciate greatly. We are looking forward to a continued and fine collaboration.

Stefan Wendén, Managing Partner at Moll Wendén

The Swedish Work Environment Authority calls you and wants to do an inspection of your work environment. This could make any employer faint, so I took a few minutes to interview my colleague and specialist on work environment law Louise Strömberg on what to do when the Work Environment Authority knocks on the door.

Thomas: I imagine this is not an uncommon situation for you, as you address work environment issues on a daily basis. What would be your first recommendation to employers who have been approached by the Work Environment Authority?

Louise: First of all, most often the Work Environment Authority informs in advance of their visit. And they are also helpful, meaning that they tell you how to prepare for the visit. Sometimes, they want to highlight a specific aspect of the work environment. Now, the organisational and social work environment aspects are in focus. Also, during 2020, the Work Environment Authority will have a specific focus on business sectors such as e-commerce and elderly care.

Thomas: Okay, so there is no need to panic. I suppose the best way to prepare is to map out how you work with the work environment, gather the documents you have and conclude what needs to be drafted?

Louise: That’s right. A useful approach is to go through the systematic work environment process wheel – that is Investigation, Risk Assessment, Measures, Control and then back to Investigation. There are really helpful guides on the Work Environment Authority’s website.

Thomas: What would you say would be the trickier parts – to be precise where you could easily go wrong – based on your experience with working with these processes?

Louise: The organisational and social work environment could be challenging, as the employer may need to adopt a completely different way of work to combat negative stress and mental illness. In this respect, one needs to think outside the box and challenge old practices.

Thomas: What is the usual outcome of an inspection?

Louise: In connection with the inspection, the inspector describes how he or she perceives the working environment and what is lacking. Shortcomings will later be described in writing in an inspection notice, which you need to address. Often, the inspector adds recommendations.

Thomas: Thank you for sharing your thoughts on this. If you would summarize your recommendation in one sentence, what would that be?

Louise: Well, that would be: Don’t panic, be structured, use the Work Environment Authority’s website as a resource – and give me a call if you need guidance. Additionally, remember that the inspections are aimed at strengthening the employer’s own ability to prevent risks, so why don’t make the most of the situation and level up your systematic work environment process? Every employer can do better, and this approach will surely be rewarding in the end.