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Italy

Author: Eleonora Rajneri/ Cristina Poncibò

III. Sectoral Collective Redress Mechanisms in Italy

A. Consumer law

1. Scope

Art. 140-bis establishes that consumers with homogenous interests have a right to file the azione di classe against a private corporation in three different cases: a) breach of contract; b) unfair or anticompetitive commercial practice; c) and product or service liability.

It is important to note that before Law 27/2012 came into force, Art.140-bis was only applicable to "product liability". In 2012, the law widened the scope of causes of actions and indicated that even a company providing services, which does not meet the proper qualities, can be sued.

2. Procedure

a. Standing

Consumers may act individually or through associations to which they provide a mandate. In order to initiate an action, the plaintiff must file a complaint with the civil trial court in the capital of the respective Region where the corporation's headquarter resides. Once the pleading is filed, both the defendant and the public prosecutor must be notified. The public prosecutor will then be able to participate in the first stage of the proceedings and advise (ask is not specific enough here, maybe suggest/advise) the court to admit or deny the class action.

b. Opt-in; opt-out procedure

The opt-in mechanism of the azione di classe is very different from the opting-out process of FRCP Rule 23. According to Art. 140-bis, if a consumer wants to be bound by the court's decision, he must join the class and file his documentation listing the elements of fact and law on which his claim is based. Nonetheless, joining the class does not imply that the party will directly participate in the proceedings, and, for this reason, he will join the class without the representation of a lawyer.

A consumer may also decide not to opt-in. In this case, he will be able to file a separate individual action. Furthermore, if he joins the class and, subsequently, the lead plaintiff decides to settle with the defendant, he can refuse to be bound by this settlement and regain his individual power to sue. When a consumer decides to take part in the class, he is renouncing his right to act individually against the same defendant on the same facts at issue. In addition, after the term established by the court, no further azione di classe involving the same parties and concerning the same facts may be filed.

c. Competent court

The plaintiff must file a complaint with the civil trial court in the capital of the respective Region, where the corporation's headquarter resides. The Trial Civil Court will sit in chambers.

The decree-law also introduces the Companies Court. This is not a special court but an expansion of the existing specialised sections of courts (which have jurisdiction over intellectual property matters). They will be referred to as sections "specialised in company matters" and will have jurisdiction over copyright matters, cases concerning the azione di classe, and company matters (i.e. actions between shareholders, actions regarding the transfer of holdings, shareholders' agreements, challenges to shareholders' meeting resolutions, liability actions, etc.). Also relevant are; public works, services, and supply contracts with European relevance involving an undertaking as a party.

d. Participation of foreign plaintiffs

The participation of foreign plaintiffs is possible, but rarely used because the Italian jurisdiction is often perceived as inefficient.

e. Certification criteria

During the first hearing, the court will evaluate if the filing consumer has an actual interest in the class. After verifying the plaintiff's right of standing, the judges will focus on the admissibility of the action. The court will then evaluate the merits of the case, and establish if there is a conflict of interest, if the main plaintiff can adequately represent the interests of the class, and if the rights of the proposed class members are homogenous.

Law 27/2009 replaced the "identity" requirement in the original version of Art. 140-bis with "homogeneity."

Therefore, if consumers want to file the azione di classe they do not need to have identical interests; homogenous rights would suffice.

It should be noted that Art. 140-bis does not specify what "adequacy" means. Therefore, Italian courts have interpreted this element and held that a promoter can represent the interest of the class if he shows to possess two following requisites: 1.) he must have the economic and organizational means necessary to bear the publication's costs of the ordinance admitting the action; 2.) he must be able to face the expenses of a possible merits stage.

f. Main procedural rules

At the end of the certification stage of the proceedings, if the action is considered inadmissible, the court determines the legal costs of the lawsuit that the unsuccessful party has to bear (unless the judge decides to allocate the expenses among the parties).

On the other hand, if the action is declared admissible, the court will specify the requirements that every consumer should fulfil to be part of the class and set the rules for preliminary investigation. More importantly, it will order the publication of the ordinance at the expense of the plaintiff, and will establish a term within which every consumer interested in the action may opt-in. Parties will be able to appeal the court's decision within 30 days of notification. The appellate body will then re-evaluate the claim and issue a judgment within 40 days. If the appellate court does not overturn the decision of the lower court, the merits stage will begin.

Finally, please note that the azione di classe is a proceeding made available to a group of consumers to jointly bring a claim against a defendant. However, once the term set by the court to bring the action has lapsed, no further class actions may be brought against the same entity based on the same grounds (this is the principle of Ne Bis in Idem).

g. Evidence/ discovery

The ordinary rules of Italian civil procedure are applicable. There are no specific provisions in this regard.

h. Multi-stage process

The action is a single-stage process.

3. Available remedies

The trial court analyses in detail the merits of the proceedings. Hence, if the judges find the defendant liable, they will decide the amount of compensatory damages that each consumer deserves, otherwise they will establish a general uniform criterion. According to Law 27/2012, the parties will have ninety days to reach an agreement, and, if they have not, the court will establish the amounts due. At the end of this stage, the court will also decide the action legal expenses that the unsuccessful party should bear. The decision can be challenged in the Court of Appeal and subsequently in the Court of Cassazione, otherwise it will become enforceable after 180 days from its publication.

There is no provision for punitive damages under Italian Law.

4. Costs

The general principle "who loses bears the costs" that is stated under Art. 91 of the general rules of Civil Procedure applies to the action.

5. Number of claims

It is difficult to determine the number of azioni di classe filed to date because there is no official registry for these lawsuits. However, we estimate that approximately forty-five actions were filed before the Italian Court. In this regard it might be useful to look through this web page: http://www.registroclassaction.it Here are listed some of the ongoing lawsuits or the class actions that have been announced.

6. Particularities/Problems if mechanism is used in cross-border cases

It has not been used in cross-border cases.

7. Critiques regarding the system

The azione di classe has not had a significant impact on litigation in Italy. Indeed, in spite of expectations, a limited number of class actions have been filed so far and, among those, the Courts have declared only a few to be admissible.

Several reasons may explain why the azione di classe has not been very successful in the Italian context.

Firstly, it is worth noting that, under article 140-bis, funding the litigation is left entirely on the initial plaintiff. Secondly, the leading plaintiff can be sentenced to pay attorneys' fees and further damages if the class claim is found non-admissible in the preliminary phase, and ordered to publicise the non-admissibility decision at his own expense.

Another reason can be found in the difficulty of meeting the "homogeneity of rights" test (one of the requisites for the class to be admitted), particularly in respect of actions brought for product related damages.

B. Competition law

Art. 140-bis of the Italian Consumer Code establishes that consumers with homogenous interests have the right to file the azione di classe against a private corporation in three different cases, including unfair or anticompetitive commercial practices. Accordingly, please refer to the details provided under section Consumer Law.

C. Financial market law

Art. 140-bis of the Italian Consumer Code establishes that consumers with homogenous interests have the right to file the azione di classe against a private corporation in three different cases, including breach of contracts. Please refer to the details provided under section Consumer Law.

Companies that provide financial services could possibly be subjected to detrimental consequences under the azione di classe. Although some commentators have raised doubts as to the feasibility of applying the azione di classe statute to victims of financial fraud, the majority admit that the statute, as written, can be applied to financial damages. Therefore, the azione di classe may be brought against investment services companies that have entered into contractual relationships with consumers using standard form contracts, such as policyholders and non-professional investors. However, it is still controversial in legal scholarship whether an issuer can be subject to the azione di classe brought against it by holders of its financial instruments, since such circumstances would lack the element of use or consumption of a good or service.

D. Product liability law

Art. 140-bis of the Italian Consumer Code establishes that consumers with homogenous interests have the right to file the azione di classe against a private corporation in three different cases, including product liability. Please refer to the details provided under section Consumer Law.

E. Other areas

1. General description

The restoration of the correct development of the public function is the ratio of the Legislative Decree of 20 December 2009 No. 198 (also, "D.Lgs. 198/2009"), issued to implement the legislative delegation contained in Law No.15 of 4th March 2009. The latter has introduced into the Italian law system the institution of public collective action against the public administration (also "P.A." or the "Administration").

2. Scope

The possibility of pursuing the collective action against the P.A. is permitted only if citizens and addressees of functions and services, complain of inefficiencies of Administration due to the failure to comply with the deadlines provided for the adoption of a required administrative act, service, or shoddy quality standards of the latter.

The main goal of the collective action towards the P.A. is, therefore, the promotion of a kind of external judicial control on the compliance of the Administration with the levels of quality, cost effectiveness and timeliness imposed on them. The action stimulates, in practice, the performances of public action for the benefit of whole community.

The action can be brought when there is a lesion of the interests of a plurality of users, or a breach of the qualitative and economic standards for public services, or a violation of the contractual terms for these services, or a failure to adopt an administrative act.

3. Procedure

a. Standing

The pursuit of the action is provided for people that have a direct interest, concrete, current and corresponding to a situation legally protected.

b. Opt-in; opt-out procedure

Opt-in procedure.

c. Competent court

The plaintiff must file a complaint with the administrative courts.

d. Participation of foreign plaintiffs

The participation of foreign plaintiffs is possible, but rarely used.

e. Certification criteria

The claimant is obligated, prior to the commencement of the action, to send to the Administration a preventive warning - with which he reveals the collective claim - in order to allow the P. A. to repair the defects complained of.

f. Main procedural rules

The ordinary rules of administrative procedure apply.

g. Evidence/ discovery

The ordinary rules of administrative procedure concerning evidence apply.

h. Multi-stage process

The action is a single-stage process.

4. Available remedies

After the judgment, the public officers, responsible for the negligence, may be subject to administrative and civil proceedings.

The P.A. has to comply with the sentence against it (if the latter continue to be unfulfilling), according to the principles of administrative process. There is no provision for punitive damages under Italian law. It is important to point out, for the sake of completeness, that the action expressly prohibits actions for damages against the public administration.

5. Costs

The ordinary rules of the administrative process apply with respect to the costs.

6. Number of claims

4.

7. Particularities/Problems if mechanism is used in cross-border cases

None.

8. Critiques regarding the system

Since its inception, this action was questioned for its practical constraints, especially in consideration of the absence of an effective compensatory mechanism against the public administration.

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