This paper offers a systematic interpretation of art. 96, third paragraph c.p.c. concentrating on the grounds wherein the judge may make award: what subjective element is required? The conclusion is that bad faith or negligence is necessary. Later, the “punitive – not indemnity -‐ nature of the award made in the terms of art 96, third paragraph c.p.c. is highlighted.
SUMMARY: 1. The new provision under the third paragraph of art. 96 c.p.c. -‐ 2. The profiles of the third paragraph of art. 96 c.p.c. and comparison with the first paragraph. -‐ 3. The problem of identifying sanctionable conduct in the terms of the third paragraph of art. 96 c.p.c. taking action or defending in bad faith or negligence: -‐ 4. The criminal nature of the award.
1. The new provision of the third paragraph of art. 96 c.p.c.
The third paragraph of art. 96 c.p.c. foresees that «in any event, when pronouncement is made in the terms of art. 91 in respect of costs, the judge, even as a matter of course, may also sentence the losing party to payment for the benefit of the adversary party of an equitably determined sum».
Immediately, from a first reading, the provision appears somewhat enigmatic: and this both in respect of what (little) it says, and what (much more) on which it is silent.
Indeed, the addition (in the terms of art 45 of the law dated 18 June 2009, no. 69 by which the ritual code was replaced anew) of the new paragraph requires an effort of interpretation that, if applied solely to its lean wording, would without a doubt lead to no useful result.
It appears worthwhile to me therefore to take up the challenge of attempting to reconstruct a meaning for those words that is acceptable at the very least: and for this purpose, attention must be widened from the third paragraph of art. 96 c.p.c. to a plurality of provisions. It appears necessary in other words to conduct a systematic interpretation.
In particular, I believe that it is necessary firstly to consider the connection that applies between the third and the first paragraph of art. 96 c.p.c. and, secondly, the function of the third paragraph of art. 8 96 c.p.c. in setting a series of provisions that include, in addition to 96 itself, articles 88, 91 and 92 c.p.c.
2. Theprofiles of the third paragraph of art. 96 c.p.c. and comparison with the first paragraph.
It is necessary to proceed in stages: firstly, as has been stated, it is necessary to understand the relationship between the first and the third paragraph of art. 96 c.p.c. fully.
The third paragraph foresees that the judge may, when pronouncing upon the division of expenses of suit on the basis of general principles as set forth under art. 91 c.p.c., sentence even as a matter of course the losing party to payment for the benefit of the adversary party of a sum determined on the basis of equity.
The profiles that characterise this provision can therefore be discerned essentially in the following.
Positively, i.e. in respect of what the provision states: (a) the initiative of the award is thoughtfulness, although later the sum that is its subject is awarded for the benefit of the adversary party in suit.
Negatively, i.e. in respect of what the provision does not say: (b) a determination of the conduct that is subject to sanction is completely lacking; (c) it is set forth that the award is subject to qualification by way of equity by the judge, but no criterion of determination is indicated, nor are maximum or minimum limits for the award set.
For a direct comparison to be made, it is worthwhile recalling that under the first paragraph of art. 96 c.p.c. it is set forth that the judge, upon the plea of a party, may sentence the losing party who has taken judicial action in bad faith or negligently, to indemnification of the injuries suffered by the party found to be victorious, in addition to reimbursement of costs. It is worthwhile underlining that in this case the initiative of the party intending to obtain an award of an indemnification kind is required.
Without prejudice to the fact that aggravated liability set forth under the first paragraph of art. 96 c.p.c. has it peculiar traits the objective grounds provided by losing the case by the party against whom the sentence is pronounced, and the subjective one of bad faith or negligence of the same party, it must be stated that in respect of further profiles in specific cases, these are the ones that are typical of liability ex art. 2043 of the Civil Code and indeed, in the prevailing view it is felt that the first paragraph of art. 96 c.p.c. adds a special hypothetical case of extra-‐contractual injury.
The grounds for the award of damages arising from a so-‐called frivolous suit, and thus above all the subsisting of a injury and a causal link between conduct and the actual injury, must be specifically proven. Quantification of damages set forth under the first paragraph is therefore bound up, according to the general rule with the extent of the injuries actually suffered by the victorious party as a consequence of malicious or gravely negligent trial conduct held to by the losing party, who has acted or defended judicially whilst being aware of the groundlessness of the demand made or the defence offered.
3. The problem of identifying the sanctionable conduct in the terms of the third paragraph of art. 96 c.p.c.: action or defence in bad faith or negligence.
In the third paragraph of art. 96 c.p.c., completely lacking – as was pointed out above – is any identification of sanctionable conduct.
Well, it is from the very taking of due note of this lacuna that it is necessary to commence: specifically, the issue that must be faced with greatest urgency is whether or not the award can be pronounced solely against the party who has acted or defended in judgment in bad faith or negligence.
In my view, the idea of anchoring the award set forth under third paragraph of art. 96 c.p.c. to the grounds – as set in the first paragraph – of action or defence in bad faith or negligence is much to be preferred. In this manner at least the result of the award being tied to conduct identifiable ex ante would be achieved, not being confused with the mere ‘objective fact’ of losing the case.
By way of proof of the soundness of this theory, the argument can be drawn from the fact that the new provision was placed not in a new article (a 96 bis c.p.c. could have been imagined perhaps), but rather in the framework of art. 96 itself: and thus, titled “aggravated liability”, brings us back in its first paragraph to the specific cases that are relevant.
From this perspective, the conduct consisting of acting or defending in judgement in bad faith or negligently is presented as the framework of the entire rule, the common denominator of the -‐ for the rest so different – hypothetical situations contemplated in the first and last paragraphs.
In order to set out the pathway of interpretation that has been thus followed, it could in other words be said that, having taken due note of the significant lacuna present in the third paragraph in respect of the conduct deemed to be punishable, this is for this effect ‘imported’ from the first paragraph: the grounds of bad faith or negligence are thus incorporated to add ‘vertically’ to the new hypothetic situation.
What had just here been described appears to me in effect to be the only plausible solution before the insidious legislative silence.
4. The criminal nature of the award.
It is now necessary to ask oneself whether the award foreseen under the third paragraph of art. 96 c.p.c. is of an indemnity or a criminal nature.
In this regard, it needs to be observed that, if differentiation were not imagined in respect of the nature of the action contemplated in the first and third paragraphs, admitting that we find ourselves before a duplication of the respective functions would be inevitable: i.e. if the idea is accepted that the last paragraph also leads to an award of damages, its presence within art. 96 c.p.c. would display as it sole reason for existing the fitness of offering a supplementary route featuring, essentially, the fact of being taken from the usual onus of proof, through which indemnification for injury consequent upon the frivolity of trial conduct can be obtained.
In reality, however, it must not be forgotten that excluding the profile represented by sanctionable conduct, in respect of all other matters, the specific cases set forth under the first and the last paragraphs of art. 96 c.p.c. are to be deemed distinct from one another. In both cases it is necessary to find oneself before an aggravated liability, which arises when there is conduct featuring bad faith or negligence: however, from this ‘common trunk’ two forms of liability branch out for which awards of a different kind are foreseen. Specifically, in the new hypothetical case of a frivolous suit, handing down of an award strictly by way of a sanction is foreseen, which has nothing to do with the extra-‐contractual wrongful act.
The rationale underlying the provision of the last paragraph is not one of allowing reinstatement of a economic situation existing prior to the injuring event (and so in accordance with the ‘proper’ function or our civil process), but rather one of applying a sanction that operates above all as a deterrent against the future reoccurrence of conduct of the same type, and deemed to be intrinsically injurious from the political and legal standpoints.
The function that the award fulfils has a connotation that can be called ‘in the public interest’ to the extent that which this award is able to induce associates in general to a certain behaviour (or at least, avert the opposite).
It is substantially an award that has as its subject ‘punitive damages’.
In the sense of the award foreseen under third paragraph of art. 96 c.p.c. being unyielding within the traditional structures of civil liability moreover, it appears to me that the consideration can be called to mind that the sum of money must be “equitably determined” by the judge.
It would be a mistake to think that here application art. 1226 of the Civil Code arises here in the matter of equitable assessment of the injury: indeed all reference to injury and the problem of proving it is lacking. We are indeed not dealing with achieving a quantification of the prejudice suffered, but rather with establishing an adequate sanction for malicious or gravely negligent behaviour. For this very purpose, this kind of power of equitable determination is attributed to judge.
Now let us reflect on the opening words of the new paragraph: «in any event».
These do express detachment as compared to what goes before, but specifically the pause refers to the principles of civil liability as set forth under the first paragraph. In a certain sense, it can be seen that we have common grounds in the conduct adopted in bad faith or negligence (otherwise the new provisions would not have been placed within a rule in respect of aggravated liability), but in another sense, with these same words, it can be noted that in the third paragraph the power to apply the punishment is attributed to the judge, irrespective of the circumstances that the behaviour of the losing party has caused injury and that this has, obviously, been demonstrated by the party suffering it.
The innovative extension of the rule introduced into our civil cases is therefore, from the dogmatic and systematic standpoint, undeniable: it must be concluded, in sum, that in our civil cases an action with a punitive function is now contemplated, and is entrusted to the care of the judge and meeting a publicly characterised interest.