Procedurei Types of action available
Pursuant to Article 140 bis of the Italian Consumer Code, (private) class actions can be brought to seek legal relief in case of breach of the following rights, which are now required to be simply 'homogeneous' and no longer 'identical':
- contractual rights of a class of consumers towards the same professional defendant, these rights deriving also from standard terms and conditions, and mass contracts;
- rights arising from product liability, even in the absence of a direct contractual relationship with the manufacturer. In particular, reference must be made to the damage arising from defective or dangerous products as regulated by Articles 114 and following of the Consumer Code. It is worth mentioning that, in the case of defective goods, the manufacturer's liability is widely considered by Italian case law as a 'strict and objective liability' and, therefore, the consumer merely has to prove the existence of the damage, the causal nexus between the damage, and the use of the product and the fact that the product resulted as defective during its use, while the producer has the burden to prove that the defect of its product did not exist when the product was put into circulation or that there was no fault or negligence from its side; and
- rights to compensation for the damage suffered owing to unfair commercial practices and anticompetitive behaviour.
Although, so far, most of the cases relate to unfair trade practices and financial contracts, most commentators consider that environmental law should be covered by the Class Action Law, despite the subject not being expressly indicated in Article 140 bis of the Consumer Code.
Limitation periods are the same as ordinary civil actions (i.e., five years for torts and 10 years for contractual liability).ii Commencing proceedings
Pursuant to new Article 140 bis of the Consumer Code, consumers and users that have suffered damage are entitled to bring a class action lawsuit. Such a lawsuit may be brought individually by the consumer, as a party of the relevant damaged class, or through associations to which the consumers have granted proper delegation of power or through a committee in which the consumers participate. Any association may be delegated, provided that it is registered in a special register held by the Ministry of Industry or, lacking such registration, is deemed by the court to be sufficiently representative of a class of consumers in a given market.
Consumer associations are not entitled to bring class actions on their own.
Other consumers or users that intend to join a class action that have already been initiated can do so without the need of a counsel for the defence. Such joining involves the waiver to start any individual lawsuit grounded on the same claim as that of the joined class action.
Both the defendant and the public prosecutor have to be notified of the complaint. The public prosecutor will then be able to take part in the first stage of the proceedings and recommend that the court admit or dismiss the class action for reasons of public interest.
According to Article 140 bis, if a consumer is willing to benefit from the court's decision, he or she is required to join the class and file the relevant documentation supporting his or her position (e.g., the invoices or tickets proving he or she bought a certain item), listing the factual elements and legal grounds on which his or her claim is based. Nonetheless, joining the class does not imply that the party will directly participate in the proceedings, and, for this reason, he or she is not required to be assisted by a lawyer.
A consumer may also decide not to opt in. In this case, he or she will be allowed to file a separate individual action. Furthermore, if he or she joins the class and then the lead plaintiff decides to bargain a settlement with the defendant, he or she can refuse to be bound by it and regain his or her individual power to sue.
As to overseas claimants, nothing in Italian law prevents them from joining the action, pursuant to the same provisions applicable to Italian and EU consumers.iii Procedural rules
Class action lawsuits fall under the jurisdiction of the court located in the main city of the region where the company is based (with some exceptions) and are handled by a panel of three judges of the tribunal, no matter what the value of any single (or aggregated) claim.
At the end of the first hearing, the court rules on the admissibility of the lawsuit. In particular, the lawsuit shall be declared inadmissible if:
- it is prima facie clearly groundless;
- there is a conflict of interest;
- the judge believes that the individual rights indicated in the class action are not homogeneous; or
- the proponent does not appear to be capable of properly protecting the interests of the relevant class.
In the past, this has proved to be a crucial stage of the class action and most actions were rejected at that moment, particularly on the point of homogeneity, as opposed to the identity of positions of the consumer plaintiffs. The purpose of the first reform of 2012 was just to make it easier for the class actions to be admitted, but this is still a serious hurdle to overcome.
In that respect, two main positions have been taken by the Italian courts. The first, stricter one, maintained by the Court of Milan by the decision issued on 8 November 2013, stated that only the breaches caused by a single event may be considered 'homogeneous' for the purposes of the Class Action Law. In contrast, the Court of Venice (decision issued on 12 January 2016) interpreted the concept of homogeneity as a mere similarity; this means that the class can be considered as homogeneous on condition that the damages are caused by the same behaviour, even if this is not (necessarily) the same event that actually caused all the breaches. Clearly, the interpretation of the Court of Milan implies a substantial limitation of the applicability of the class action. That said, even in the lack of precedents of the Court of Cassation (see below), it seems that the interpretation of the Court of Venice may prevail, as the recent decision of the Court of Milan in the Samsung case declared the admissibility of the class on the assumption of the homogeneity of the behaviours.
At the end of this first stage of the proceedings, if the action is considered inadmissible, the court will rule on the legal costs of the lawsuit that the losing party will have to bear. It is worth noting that, while the decision stating the inadmissibility can be challenged before the court of appeal, the decision issued by the latter cannot in turn be challenged before the Court of Cassation.
According to the recent decision issued by the Joint Chambers of the Court of Cassation Court on 1 February 2017, the class action is just one of the possible ways for the consumers to enforce their rights, so the decision of the court of appeal does not prevent the consumers from seeking compensation for the damage suffered following the ordinary procedural rules. According to the Supreme Court, while the inadmissibility declared by the court of appeal prevents the consumer plaintiffs from restating another class action under the same structure, other consumers are still entitled to put forward a class action based on the same grounds. The Supreme Court also highlighted that the consumers who initially promoted the (inadmissible) class action would be able to join the said new class action, once it is finally admitted. This decision has been criticised by many commentators, in light of the crucial role played by the preliminary stage for scrutiny of admissibility, where most of the class actions started as of 2010 have been stopped over past years. Owing to the features of the Italian legal system, in the absence of judgments issued by the Court of Cassation, there will be no chance to have a clear and final interpretation of the Class Action Law and namely of the criteria set forth to identify the homogeneity of the consumers' positions, a concept still subject to divergent interpretations of the courts of merits. In fact, even though in the Italian legal system the precedents of the Court of Cassation are not automatically binding (stare decisis) on the lower courts, it is without doubt that they have great influence on all territorial courts.
Coming back to the class action proceedings, if the action is admitted, the court will specify the requirements that every consumer should fulfil to join the class. Most importantly, it will order the publication of the decision at the expenses of the plaintiff, and will establish a term within which any consumer may opt-in.
Parties will be able to challenge the court's decision within 30 days of notification. The appellate body (the competent court of appeal) will then re-evaluate the claim and issue a judgment within the following 40 days. If the court of appeal does not overturn the decision of the first instance court, the merits phase will begin.iv Damages and costs
During the merits stage, the court goes through and analyses the merits of the case. Hence, if the judges find the defendant to be liable, they will rule on the amount of damages that each consumer deserves or indicate general uniform criteria. According to Law No. 27 of 2012, the parties are granted 90 days to reach an agreement on the above; failing this, the court will quantify the amounts due. Consistently with the opt-in mechanism, consumers who did not join the class are not bound by any agreement.
Punitive damages are not allowed under Italian law.
At the end of this stage, the court will also rule on the legal costs that the losing party should bear. The decision can be challenged before the court of appeal and, subsequently, in the Court of Cassation.v Settlement
Any possible settlement reached during the proceedings is binding only on the consumers who have joined the action and expressly accepted the settlement.