In this edition of Thommessen Dispute Update, we highlight key developments from Q3 2025 in Norwegian litigation and arbitration – with direct relevance for international stakeholders involved in the Norwegian legal landscape.
Sign up for our newsletter
Thommessen's dispute resolution team sends out a newsletter every quarter with the latest updates in dispute resolution and arbitration, so you can easily stay informed in the field.
- Here you can sign up to receive the next edition directly in your inbox by checking the box for "dispute resolution".
Guarantee law - effect for guarantor of judgements against the debtor
On 22 October 2025, the Supreme Court delivered an important judgment clarifying when a claim – in this case a claim from a contractor against an employer – shall be binding and not subject to any independent examination in a later case against a guarantor. The Supreme Court found that the District Court's judgment of no liability for the employer was binding and not subject to further review in the case against the guarantor.
The dispute arose from a design- and building contract for a coffee processing facility between Vestby Næringspark AS and AF Gruppen Norge AS ("AF"). The parent company of Vestby Næringspark, NorgesGruppen ASA, provided a parent company guarantee. Upon completion, a final account dispute emerged, particularly relating to claims for additional compensation and time extensions, under the widely used Norwegian standard contract NS 8407, which contains an eight-month limitation period from the date of takeover.
The District Court ruled in favor of the employer because the contractor had failed to take legal action to interrupt the limitation period of eight months. The contractor (AF) then pursued the same claims against NorgesGruppen, as guarantor. The question was whether the District Court’s judgment that acquitted the employer had binding effect (res judicata) to the benefit of NorgesGruppen as guarantor. If so, the court cannot re-assess the contractor's claims against the employer in the related case against the guarantor.
The Court of Appeal concluded that the guarantor could be held liable even if the employer had been finally acquitted in the District Court. The Supreme Court disagreed and ruled in favor of the guarantor on this point.
Section 19‑15 of the Norwegian Disputes Act provides that a judgment as a main rule is binding on the parties only. However, a judgment may be binding also on others. This exception would in this case apply if the guarantor “would be bound by a corresponding agreement” between the employer and the contractor.
The starting point is that the guarantor can invoke the same objections as the principal debtor may invoke against the guarantee claim, including expiration or limitation. However, the guarantor's (NorgesGruppen) liability is derived from, and corresponds to, the debtor's (Vestby Næringspark) liability towards the creditor (AF). Therefore, an agreement between the employer (Vestby Næringspark) and the creditor (AF) that had been similar to the District Court judgment that had ruled in favor of Vestby Næringspark, could have been invoked by the guarantor to its benefit. In brief, the point is that that the guarantor's liability is not greater than the debtor's underlying liability. Therefore, the Supreme Court found the final judgment between NorgesGruppen and AF was binding to the benefit of the guarantor. The Court of Appeal’s judgment was therefore set aside.
The Supreme Court judgement provides guidance on when a judgment may have binding effect (res judicata) for third parties, and is particularly relevant for guarantors and other parties with such derivative liability.
What it takes for the Supreme Court to depart from its own precedents
On 28 November 2025, the Supreme Court, sitting in Grand Chamber, handed down two judgments determining of the so‑called capitalization rate in expropriation of forest properties. The question of a capitalization rate arises when compensation for lost use value of property is to be paid as a single lump sum. The Supreme Court concluded — in line with its earlier case law — that the capitalization rate should be 4 %.
The appellant had argued that there were grounds to depart from earlier Supreme Court practice. In the judgment, the Supreme Court makes general statements about what is required for it to depart from its prior case law. Summarized, it is relevant whether;
"there has been a change in the rules, that new expert knowledge, professional development or changes in societal conditions provide grounds for departure, or that case law is not based on a sufficiently broad and thorough assessment … there must also be an overall assessment of whether earlier case law should be departed from."
In these cases, the Supreme Court found that there were no grounds to depart from its earlier practice. It was not decisive that the capitalization rate for personal injury cases had been set by regulation at a lower rate. In the Supreme Court’s view, no new expert knowledge, professional development, or changes in societal conditions of decisive importance for the standard rate had been invoked, and the case law was based on a sufficiently broad consideration of various factors.
It is to be expected that later case law will refer to this Supreme Court judgment in arguments about whether there is room to depart from earlier Supreme Court practice.
- The judgments can be read in Norwegian here (HR-2025-2364-S) and here (HR-2025-2365-S)
Security for legal costs in cases with foreign parties
On 29 October 2025, the Supreme Court issued a ruling clarifying important questions regarding security for legal costs when foreign companies appeal a civil judgment.
Three foreign companies appealed a judgment from the Court of Appeal to the Supreme Court in a civil case against a Norwegian citizen, A. The opposing party A demanded that the companies provide security totaling NOK 2.94 million for possible liability for legal costs — covering the proceedings in the Supreme Court, the Court of Appeal, and the District Court. The key question was whether security for legal costs could also be required for the earlier instances other than the Supreme Court.
The Supreme Court referred to a section in the Norwegian Dispute Act which allows requiring foreign parties to provide security for legal costs when they appeal a case. This provision applies only if the appealing party does not have residence in Norway, and it covers only possible costs in the relevant instance — in this case the Supreme Court.
A requirement to provide security for costs in the Court of Appeal can be raised before the Supreme Court only if the foreign party was the respondent in the Court of Appeal and therefore could not previously have been ordered to provide such security. That was not the situation here, since the foreign companies had lost in the first instance and were appellants in the Court of Appeal.
The Supreme Court ordered the three foreign companies to provide security of NOK 1 million for possible legal costs in connection with the Supreme Court proceedings. The requests for additional security covering the Court of Appeal and the District Court were dismissed as the conditions for such security were not met.
The ruling clarifies when a party may require a foreign party to provide security for potential legal costs.
No one-month time limit for institution of proceedings after a case is discontinued by the Norwegian Conciliation Board
On 31 October 2025, the Supreme Court issued a ruling clarifying time limits for bringing a suit after cases have been discontinued by the Conciliation Board. The Supreme Court held that a one-month time limit for bringing an action does not apply following the discontinuance of a case in the Conciliation Board.
The Norwegian Disputes Act provides that some civil cases are to be dealt with in the Conciliation Boards, in particular where the disputed amount is less than NOK 200,000. The Conciliation Board may render judgment in some cases, but may also discontinue the proceedings if it is unlikely that the case is suitable for further treatment in the Conciliation Board. The latter is common in commercial disputes.
The Norwegian Tax Administration filed a claim with the Conciliation Board in Eidsvoll against the Norwegian citizen A in summer 2023. After an unsuccessful mediation attempt in December 2023, the Conciliation Board discontinued the proceedings on 13 December 2023. On 9 December 2024 — roughly eleven months later — the Tax Administration brought an action against A in the District Court. A sought dismissal, arguing that Section 18-2 of the Norwegian Dispute Act establishes a special one-month time limit for bringing suit after the Conciliation Board has discontinued a case.
The Supreme Court noted that a court shall dismiss a new action between the same parties concerning a claim that is already the subject matter of a pending lawsuit – so called lis pendens. Section 18-2 of the Norwegian Dispute Act, that A relied on for his case, determines when the effect of lis pendens begins and ends. For decisions to discontinue Conciliation Board proceedings, that effect ends when one month has passed since the Conciliation Board discontinued the proceedings without a writ having been sent to the court.
In consequence, the Supreme Court held that Section 18-2 of the Norwegian Dispute Act only regulates when the lis pendens effect ceases. The provision cannot be read as establishing a one-month deadline for bringing suit to the District Court after discontinuation in the Conciliation Board. The appeal was therefore dismissed.
This ruling is unsurprising, but it provides a clear clarification of time limits for commencing proceedings after discontinuation in the Conciliation Board. Usually, the key thing to remember in Norway is that limitation (time-bar) rules may require a party to protect its claims by filing a writ before the District Court within one year.
Can court proceedings continue if one of the parties goes bankrupt?
On 8 November 2025, the Supreme Court issued a ruling clarifying when a party may have a genuine need to obtain a judgment against an opposing party that has gone bankrupt during the course of court proceedings. As a general rule, such a need will rarely exist if the opposing party goes bankrupt during the proceedings.
The background was a dispute between Pelagia AS and Meso AS. Pelagia claimed that Meso, by mooring the fishing vessel MS Mokstein at a public quay adjacent to Pelagia’s property in Austevoll, had infringed their property and shore rights. The District Court and Court of Appeal ruled in favour of Pelagia. Meso appealed, but after the appeal was heard, Meso went bankrupt. The company was then struck from the register, and the vessel was abandoned abroad by the bankruptcy estate.
The key question before the Supreme Court was whether Pelagia still had “legal interest” pursuant to the Norwegian Dispute Act – a genuine need for a judgment – on whether Pelagia’s rights had been violated. The law requires such a need to exist during the entire course of proceedings, and not just in theory or principle.
The Supreme Court found that the need was present when the case started, but that this changed after Meso’s bankruptcy and dissolution. The case then ceased to have any direct significance. Although a judgment could have had theoretical or principal interest in relation to similar disputes in the future, such an indirect interest in legal clarification was not enough. The appeal case was therefore dismissed.
Employment law: time limit for legal action when claims are expanded in dismissal cases
On 20 October 2025, the Supreme Court clarified that the eight-week time limit for legal action under Section 17-4 of the Working Environment Act also applies where a lawsuit against a former employer is later expanded to challenge the validity of the dismissal.
The case concerned an employee (A) who had held a part-time position as an environmental therapist in a municipality since 2009 and later worked full-time from 2016. From 2017 to 2024, there were ongoing issues concerning working hours and periods of absence, and various accommodations were attempted. The situation deteriorated, leading to repeated warnings and formal follow-up measures. From March 2023, A was on 100% sick-leave, and A was later dismissed on 14 February 2024.
A sued the municipality for damages within the six-month deadline provided for such claims by Section 17-4 of the Working Environment Act. Before the main hearing, A sought to expand the claim to include a ruling on the wrongfulness of the dismissal. However, a claim of this nature must be submitted within eight weeks of dismissal, according to the same provision.
The Supreme Court held that since A’s claim regarding wrongful dismissal would have been dismissed if it had been filed together with the original damages claim, the same applies when the claim is added later. Because the eight-week time limit had been exceeded, the wrongful dismissal claim was rejected.
Reduction of liability for recourse claims brought by insurance companies
On 22 October 2025, the Supreme Court considered whether a municipality’s liability for a recourse claim brought by an insurance company should be reduced. The Supreme Court concluded that there was no basis for reducing the municipality’s recourse liability to the insurer.
Rana Municipality rented a house for housing refugees. A subtenant caused a fire by leaving a pot to boil dry, seriously damaging the house. The insurance company paid approximately NOK 8.3 million under the home owner’s insurance and sought recourse from the municipality, which under the lease agreement was liable for damage caused by subtenants.
The District Court ordered the municipality to pay over NOK 7.2 million. The Court of Appeal assessed the owner’s loss at NOK 5.2 million but held that the municipality’s liability should be reduced by 50%.
The Supreme Court assessed whether the municipality’s liability should be reduced under Section 2-14 of the Tenancy Act. The starting point is that damages shall correspond to the economic loss caused by the breach of contract, insofar as the loss could reasonably have been foreseen as a possible consequence of the breach. Nevertheless, liability may be reduced if full compensation would be unreasonable considering the size of the loss compared to similar cases. The Supreme Court held that the provision on reduction of liability sets out a narrow exception requiring that full liability be unreasonably onerous for the liable party.
The loss was a foreseeable consequence of negligent dry-boiling and not outside what normally occurs in similar situations. It was also relevant that the subtenant was not highly culpable – he had shown ordinary, not gross, negligence. The municipality’s financial situation did not warrant reduction, and this was not altered by the fact that the tenancy concerned the settlement of refugees. That the claimant is an insurer does not in itself justify reduction, and the municipality’s lack of insurance possibilities was not decisive.
The judgment provides guidance on when liability for damages or recourse liability may be reduced. The starting point is that the injured party is entitled to full damages. The fact that the recourse claim is brought by an insurance company has limited significance in assessing whether liability should be reduced.
