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Italy

Author: Eleonora Rajneri/ Cristina Poncibò

I. Factsheet

Scope

The Italian Parliament recently introduced a comprehensive reform of the rules governing class actions with Law no. 31 of 12 April 2019. This Law, which was published in the Official Gazette on 18 April 2019, will exclusively apply to unlawful conducts carried out after it goes into effect on 19 April 2020. In the meantime, the provisions currently in force continue to apply.

The new law expands the scope of application of the current rules, determining that whoever has 'individual homogeneous rights' (not only consumers and users) can bring a class action to seek collective redress or restitution against all companies or providers of public services.

However, in the current system, there is no general collective redress mechanism.

Sectoral: Consumer, Competition, Financial Market, Product Liability and Administrative (Actions against public authorities.)

Problems/Incompatibilities with the Recommendation

Cultural resistance of Italian lawyers and judges to promote the azione di classe. Law no. 31 is prepared to provide material incentives that could considerably enlarge the ongoing application of class actions in Italy. Nevertheless, the new rules could also cause potential misuse of the mechanism by promoting opportunistic behaviours and obscuring the management of cases. Since not only will claimants be more likely to bring class actions against companies and public service providers, but their ability to join a class action after a favorable decision on the merits may display a crucial risk to defendants. In other words, the new law unveils an aspect of uncertainty for defendants.

Standing (Para. 4-7)

The Law no. 31 grants the right to bring a class action to whoever holds 'individual homogeneous rights', rather than to consumers and users only. The new class action regime can be influential to safeguard a wide range of contractual or non-contractual rights that are beyond consumers' protection. Under the new laws, class actions may be commenced by each and every class member, as well as non-profits or associations whose statutory purposes.

Consumer

Consumers have the standing to file a suit individually or through associations which they provide with a mandate.

For a consumer organisation to have standing it must fulfil a set of stringent criteria. Including that it must have been active for at least 3 years and have a specified level of membership. Additionally, it must be able to show that it has the financial resources to pursue the given class action.

Administrative

Individuals with a direct interest corresponding to a situation legally protected and associations protecting the interests of its members

Problems/Incompatibilities with the Recommendation

Strict standing rules for organisations means there are few who are actually authorised to bring collective actions.

Admissibility (Para. 8-9)

Admissibility is decided upon at the first hearing of the claim.

Admissibility criteria: Art. 140-bis Consumer Code states: 'the court establishes if there is a conflict of interest if the main claimant can adequately represent the interests of the class, and if the rights of the proposed class members are homogenous'.

Administrative

The claimant is obliged to send the public body a written warning prior to the commencement of the claim. This must be filed at court.

Information on Collective Redress (Para.10-12, 35-37)

Dissemination of information about claims is carried out via consumer organisations.

Problems/Incompatibilities with the Recommendation

There is no national registry and very limited information is available on collective redress issues.

Funding (Para. 14-16)

Third-party funding not used in Italy.

Public funding is available to any person whose income falls below the set financial threshold of EUR 10,766.33 per annum.

Problems/Incompatibilities with the Recommendation

In general, there are few sources of private funding and consumer organisations lack sufficient resources. Funding is one of the biggest obstacles for bringing collective proceedings in Italy.

There is no obligation on the parties to disclose their source of funding.

Cross Border Cases (Para. 17-18)

Italian Law permits the participation of foreign claimants.

In order to initiate an action, a claimant must first file a complaint with the civil trial court in the capital of the respective region where the corporation's headquarters is based.

Expedient procedures for injunctive orders (Para. 19)

There is no specific regime for obtaining interim orders. This is governed by the ordinary laws of civil procedure. Where there are justified grounds of urgency, the action for an injunction shall be conducted pursuant to Articles 669-bis to 669-quaterdecies of the Civil Procedure Code.

Efficient enforcement of injunctive orders (Para. 20)

The new law no. 31 extends the scope of application of the collective injunctive relief, granting standing to whoever has the interest to inhibit and/or avoid reiteration of acts and behaviours detrimental against multiple individuals or entities. With the injunctive order, the competent court may also order the publication of the injunction, the payment of penalties in case of non-compliance with the order, and possible measures capable to eliminate or mitigate the effects of the ascertained infringements.

However, currently, there is no regime specific to the enforcement of collective procedures and this is governed by the ordinary laws of civil procedure.

The deadline for compliance is set out in the order and a fine of between €516 and €1,032 may be imposed for each day of delay in complying.

Opt-In/Opt-Out (Para. 21-24)

Opt-In only. This is seen as being in line with Italian constitutional principles and rules of civil procedure.

Collective ADR and Settlements (Para. 25-28)

There is no court-mandated settlement procedure.

There is no judicial supervision of the settlement procedure.

A settlement is not binding on the non-consenting class action participants and there is no requirement that a settlement must be made available to or cover all the participants in the class action other than the parties to the settlement themselves. Costs (Para. 13) The loser pays principle applies, although, the final allocation of costs is determined by the court.

Problems/Incompatibilities with the Recommendation

The costs of collective actions as compared to individual actions is one of the main barriers to claimants commencing actions.

Lawyers' Fees (Para. 29-30)

Lawyers and clients are free to enter into fee agreements, under which, fees can be based on a percentage of the amount of compensation awarded in a case.

The law prohibits arrangements where the lawyer's fees comprise a share of damages awarded to the successful claimant.

Problems/Incompatibilities with the Recommendation

Courts do not have any power to review fee agreements.

Prohibition of punitive damages (Para. 31)

Extra-compensatory damages are not available.

Skimming off/restitution of profits

Consumers may obtain restitutionary damages/account of profits.

Collective Follow-on actions (Para 33-34)

It is possible to rely on an administrative decision in a subsequent collective action under Art 140bis

The interplay between injunctions and compensation across all sectors

Not possible to seek an injunction and compensation in a single action

It is possible to rely on an injunction in separate follow on proceedings under Article 139/140.

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