An interesting evolution of Italian case law may be around the corner. By ruling No. 9978 of 16 May 2016, the First Civil Division of the Italian Supreme Court left to its First President the decision on whether the Joint Divisions should finally resolve a long-standing issue, i.e., the enforceability in the Italian legal system of foreign decisions ordering the payment of punitive damages. According to the judges of Piazza Cavour, the time has indeed now come to move beyond the approach of consolidated case law, which is against recognising punitive damages in the Italian system based on two key arguments: on the one hand, the concept of ‘internal public order’ and, on the other, the traditional concept of civil liability.
An interesting evolution of Italian case law may be around the corner.
By ruling No. 9978 of 16 May 2016, the First Civil Division of the Italian Supreme Court left to its First President the decision on whether the Joint Divisions should finally resolve a long-standing issue, i.e., the enforceability in the Italian legal system of foreign decisions ordering the payment of punitive damages.
According to the judges of Piazza Cavour, the time has indeed now come to move beyond the approach of consolidated case law, which is against recognising punitive damages in the Italian system based on two key arguments: on the one hand, the concept of ‘internal public order’ and, on the other, the traditional concept of civil liability.
To demonstrate that such a narrow approach should be reviewed, the First Division first analysed the principle of ‘public order’, which traditionally encompasses “that set of principles which, turned into or inferable from imperative rules, govern the legal system and contribute to characterising the ethical and social structure of the national community at a given historical moment (see Supreme Court, No. 3881 of 1969 and No. 818 of 1962, the latter ruling out that the principle should be understood in international, abstract or universal terms)”.
Currently, reference is primarily made to ‘international public order', “which is to be understood as that set of principles underpinning a national legal system at a given historical moment, based however on the need to protect those fundamental human rights which are common to different legal systems and can first be inferred from the systems of protection set up on a higher level than ordinary statutes (see, inter alia, Supreme Court Nos. 1302 and 19405 of 2013, No. 27592 of 2006, No. 22332 of 2004, No. 17349 of 2002, No. 2788 of 1995)”.
From this perspective, therefore, according to the Supreme Court judges, the North American concept of punitive damages should not, in principle, be stigmatised as contrary to the fundamental values of the international community: “theoretically, this could be the case only if awarded damages were to be considered actually excessive, based on an assessment that as a matter of fact takes into account the ‘circumstances of the case and the legal system of the Member State of the court seised’".
To prove the validity of such argument, the judges of the First Division provided an overview of the main views expressed by foreign courts: “the German Federal Constitutional Court (24 January 2007, in JZ, 2007, 1046) and the Spanish Supreme Court (13 November 2001, No. 2039/1999) held that awards of punitive damages are not automatically contrary to public order; the French Supreme Court (No. 11-23871 of 7 November 2012 and No. 90-13303 of 1 December 2010) likewise held that punitive damage awards are contrary to ordre public only insofar as they are actually excessive”.
In light of this, the Supreme Court judges also underlined in their decision how the concept of civil liability has evolved.
Indeed, in the Italian legal system, the right to claim damages for infringement of subjective rights has always been regarded as being intended to restore the property sphere of the injured party, by awarding it a sum of money aimed at removing the consequences of the damage suffered (restorative and remedial purpose). By contrast, the right to damages has never been considered as having a punitive connotation and purpose, disregarding the actual damage suffered by the holder of the infringed rights (punitive and deterrent purpose).
The First Division emphasises the need to overcome the approach that denies the punitive and deterrent purpose of damages.
Such a change of view would reflect “the dynamic or multi-purpose nature of the civil liability system, with a view to globalisation of legal systems in transnational terms, which requires circulation, and not fragmentation, of norms throughout different legal systems”.
This approach can be inferred from various elements, such as the recent decision of the Supreme Court that emphasises “the ‘shared characteristics’ between punitive damages and astreintes, which latter do not imply any incompatibility with public order”; the same legal commentators “observed that the also-punitive purpose of non-pecuniary damage relief was not disregarded during the preliminary work for the Italian Civil Code, in respect of particularly serious offences against the legal system". Furthermore, there is statutory evidence “of the fact that damage relief serving a non-restorative, but a basically punitive, purpose has already been introduced in our legal system”.
The judges of the First Division then concluded with a final consideration, aimed at confirming that relief in the form of damages may already have, somehow, from an Italian law viewpoint, a punitive component beside the restorative and remedial purpose, namely: «when a tort adversely affects a person’s property, the boundary between compensation and penalty tends to blur, as the determination of the quantum is to be based on percentages, tabular indexes and equitable judicial decisions, which do not exactly reflect the damage suffered by the injured party. A recent Supreme Court decision, No. 1126 of 2015, identifies in the “gravity of the offence” an “unquestionably relevant requisite element for calculating non-pecuniary damages”».
As it can be seen from the above, an important evolution of the approach by Italian courts to such an issue seems to be around the corner.
This decision of the First Division of the Italian Supreme Court is already real evidence of growing and notable attention being paid by Italian courts to the evolution of jurisprudential trends in other jurisdictions and, even more so, of their increasing effort to guarantee effective judicial protection of fundamental human rights, whatever jurisdiction it comes from, acknowledging the need – in a more and more interconnected world – to regard national systems as increasingly ‘transnational', paying attention to globalisation, albeit still keeping a cautious eye on excesses.
We will see and, of course, keep you up to date.