The Italian government has enacted a Decree containing urgent measures to reform the Italian civil judicial
system and to deal with the backlog of pending cases.
Published in the Italian Official Gazette on September
12, 2014, the Decree officially entered into force on
September 13, 2014. Within 60 days of publication, the
Italian Parliament must convert the Decree into law;
otherwise, it will retroactively cease to be effective.
During the conversion process, the Parliament could
make amendments to the text of the Decree.
Decrees are issued by the government in cases of
necessity and urgency. In the present case, according
to the Decree’s explanatory report, it was necessary
and critical for Italy to reduce the duration of Italian
court proceedings in order to put an end to its violations of the “reasonable time” requirement for a fair
trial set forth in Article 6(1) of the European Convention
on Human Rights. Moreover, the government aims to
transform the Italian justice system from a burden
on the country’s growth to a driving force to assist in
resolving the nation’s economic crisis.
The new measures are designed to reduce the workload of Italian courts by diminishing the average time
required to obtain a decision in civil cases. This would
make Italy a more attractive country for foreign investment and work toward the ultimate goal of accelerating
Italian Government Proposes Civil Justice System Reforms2
Jones Day Commentary
• The introduction of written affidavits to accelerate the
hearing-of-witnesses phase (Article 15);
• Reductions in the periods during which Italian courts are
closed in summer, judicial deadlines and hearings are
suspended, and judges take holiday leave (Article 16);
• An increase in the interest rate applicable to pending
legal proceedings to limit the use of vexatious litigation by debtors as a means of delaying payments
(Article 17); and
• Measures directed to simplify enforcement proceedings
and make them more effective (Article 18–20).
Referring Pending Civil and Commercial Court
Cases to Arbitration (Article 1)
Under Article 1 of the Decree, the parties to pending first
instance or appeal court cases that have not yet reached the
decision phase—provided that such cases do not concern
rights that cannot be disposed of (e.g., labor, pension, and
social security disputes)—may jointly request the judge to
refer their dispute to arbitration. Once the judge verifies that
the dispute is eligible for arbitration, according to the requirements, he or she orders the transmission of the relevant file
to the president of the board of the local bar association
(“Consiglio dell’Ordine degli avvocati”).
The arbitrators are chosen either by the disputing parties,
or by the bar president, from lawyers who have been members of the local bar for more than three years and who have
not been subject to disciplinary measures. The proceedings
then continue before the arbitrators, without prejudice to the
effects already produced by the claim brought before the
court (i.e., the interruption of statute of limitations, etc.). The
award rendered has the same effects as a court judgment, as
provided for by Italian arbitration law.
As regards appeal cases referred to arbitration under Article
1 of the Decree, Article 1 paragraph 4 of the same Decree
provides that the award shall be issued within 120 days; otherwise, the appeal proceedings must be resumed before the
relevant court in the next 60 days. If appeal proceedings are
not so resumed, the proceedings are declared extinct and the
first instance judgment becomes final. The appeal proceedings also need to be resumed if the award has been annulled,
within 60 days after the annulment decision became final.
Finally, Article 1 paragraph 5 of the Decree provides that the
Ministry of Justice may issue regulations to reduce arbitrators’ fees in the above-mentioned cases and that, unlike what
happens in traditional arbitral proceedings, the parties would
not be jointly liable for the fees due to arbitrators.
The provision, in essence, enables parties to a commercial
dispute to opt out of lengthy court proceedings in order
to have their dispute decided more quickly by arbitrators.
Moreover, it gives an active role to Italian lawyers, who will
act as arbitrators more often. Arbitration proceedings before
a panel of lawyers acting as arbitrators would, in the government’s opinion, be less expensive than conventional arbitration proceedings.
Settlement Negotiation Assisted by Legal Counsel
Article 2 of the Decree introduces the so-called “settlement
negotiation assisted by legal counsel,” or “assisted negotiation,” by allowing the parties to attempt to amicably resolve
their dispute before referring it to litigation or arbitration.
According to the same article, the negotiation agreement
is an agreement by which the parties agree to cooperate in
good faith to amicably resolve their dispute with the assistance of their legal counsel.
The negotiation agreement, to be concluded in writing, must
specify the term within which the amicable solution should
be reached, which may not be shorter than one month, and
must describe the matter in dispute, which may not concern
rights that cannot be disposed of. Lawyers have an ethical
duty to inform the client of the possibility to opt for assisted
negotiation as a means for resolving their dispute.
Moreover, according to the Decree, assisted negotiation is a
mandatory prelitigation step in certain types of disputes, i.e.,
most consumer protection disputes, damages caused by road
and marine accidents, and collection matters not exceeding
€50,000. In general, if the invitation is refused or not accepted
within one month, the mandatory step is deemed satisfied. The
fact that a negotiation attempt has not been made could either
be objected ex parte or ex officio by and during the first hearing. If the negotiation has not started, the judge grants the parties 15 days to invite the other party to negotiate.3
Jones Day Commentary
Pending the mandatory negotiation phase, the parties may
always obtain interim measures. Furthermore, assisted negotiation is not a mandatory step for a number of special proceedings, including, inter alia, injunctive proceedings, preemptive
technical expertise directed to settle the dispute, opposition
against enforcement proceedings, in camera proceedings,
and, in actions for damages in criminal proceedings, which
may be directly initiated by the interested party.
Under Article 4 of the Decree, the judge may negatively
evaluate a party’s refusal to opt for assisted negotiation and
could take this conduct into account when deciding on the
allocation of legal fees.
The settlement agreement obtained through the assisted
negotiation is immediately enforceable and amounts to a title
for levying execution. The legal counsel involved in the negotiation have the power to certify the authenticity of the signatures and that the agreement complies with mandatory rules.
Should the same legal counsel enforce the agreement that
they contributed to form, they would incur an ethical breach
of the lawyers’ code of conduct.
Under Article 8 of the Decree, the statute of limitations—which
is usually interrupted by a judicial/arbitral claim—would now
also be interrupted from the date of the invitation to conclude
an assisted negotiation. From the same date, forfeiture is also
prevented only once.
By means of the assisted negotiation, the government introduces a new alternative dispute resolution method, adding
it to mediation, which is already an option for parties to civil
and commercial disputes and a mandatory prelitigation step
in specific types of proceedings.
In the assisted negotiation,
a primary role is again entrusted to the involved lawyers, as
opposed to mediation proceedings, where a specific mediation entity and a mediator are involved. In the case of voluntary mediation, the lawyers’ involvement is optional.
Measures to Improve the Efficiency of Italian Civil
Within Section IV of the Decree, Article 13 narrows down the
cases in which the judge has the power to order that each
party bear its own legal fees and procedural expenses. In
fact, some Italian judges tend to make extensive use of such
power, thus encouraging potential losing parties to bring proceedings as a dilatory tactic and causing unjustified damages to the winning party. Hence, Article 13 now provides that
legal fees and procedural costs will always be borne by the
losing party; a judge can order that each party bear its legal
fees only if both parties partially lose the case, if the legal
issue in dispute is new, or if there has been a variation in the
relevant case law.
Another measure introduced to accelerate civil proceedings is the provision under Article 14, in which the judge, after
hearing the parties at the first hearing, could ex officio order
that a case brought before him as “ordinary proceedings” be
transformed into “summary proceedings” according to Article
702bis ff. of the Italian Code of Civil Procedure, if he finds
that the case is not complex and does not require a lengthy
taking-of-evidence phase. In such summary proceedings,
instead of granting the parties three terms of respectively
30, 30, and 20 days, and adjourning the case to a hearing
set many months thereafter (which amounts to the standard
course of the taking-of-evidence phase), the judge invites the
parties to point out at the same hearing the evidence upon
which they intend to rely, including documents and contrary
evidence. Upon request, the judge may invite the parties to
do so at a following hearing, granting only a 15-day term for
indicating direct and documentary evidence and a 10-day
term to indicate contrary evidence.
Considering that to date, only the inverted process was possible (i.e., only summary proceedings could be transformed
into ordinary, lengthier proceedings), this measure seems to
be a step in the right direction in terms of accelerating the
civil judicial process.
Moreover, with the aim to further accelerate and simplify the
taking-of-evidence phase, Article 15 of the Decree contains a
provision introducing for the first time in Italy the possibility
for parties to produce written witness statements (similar to
the affidavits used in common law systems or to the attestations under Article 200 ff. of the French Code de procedure
civil). In line with the government’s intention to grant lawyers
with a primary role in the reorganization of the judicial system, lawyers themselves have the power to identify the witness and obtain his or her declaration, an authority that was 4
Jones Day Commentary
traditionally entrusted to the judge. Nevertheless, the judge
may always order that the person who provided the affidavit
be heard as a witness in court.
Article 16 of the Decree was added by the government just
before the Decree was published in the Official Gazette on
September 12, 2014. Such provision reduces the summer
period during which Italian Civil courts are closed, hearings
are suspended, and judicial terms/deadlines stop running.
This period, which previously ran each year from August 1
to September 15, now will run from August 6 to August 31.
Moreover, pursuant to this provision, judges’ annual holidays
are reduced from 45 to 30 working days.
The Italian national association of judges reacted negatively
to this measure, claiming it is merely symbolic and would not
have the effect of reducing the duration of civil justice matters.
The government has a contrary opinion in this respect. It will
be interesting to see any developments occur during the conversion of the Decree into law by the Parliament (if finalized).
Measures Directed to Protect Creditors and
Simplify Enforcement Proceedings and Make
Them More Efficient
Section V of the Decree contains the government’s proposals
for measures directed at protecting creditors and measures
directed at simplifying enforcement proceedings.
Article 17 of the Decree proposes that the legal interest rate
be increased up to the highest rate applicable to late payments, under the relevant European Union legal framework
on fighting late payments, from the date legal proceedings
are initiated, provided that the parties have not agreed on a
different interest rate. This measure is directed at preventing
lengthy civil proceedings from becoming a means for debtors to obtain a “discounted loan,” given the applicability, to
date, of the low legal interest rate pending litigation.
The government also proposed measures directed at reforming Italian enforcement proceedings, which are infamously
characterized by a low recovery rate and a lengthy time
for collection. One of the most relevant bottlenecks in the
enforcement process is that each enforcement procedure,
no matter the probability of success, automatically receives a
docket number and is assigned to a judge upon request of the
court bailiff who dealt with the relevant foreclosure (“pignoramento”). Automatically registering the large inflow of enforcement cases, a considerable number of which are abandoned
due to the low prospect of satisfaction, was an inefficient use
of clerks’ time and other court resources. Therefore, Article
18 of the Decree introduces a provision that obliges the interested party, i.e., the creditor, to request that the enforcement
case be assigned a docket number and thus assigned to a
judge, by submitting an ad hoc request (the so-called “nota
di iscrizione a ruolo”) by electronic means.
Moreover, when the debtor has no personal assets but has
one or more credits vis-à-vis third parties that owe money
(i.e., employers, banks that hold the debtor’s current account,
etc.), Italian law provided that the relevant enforcement proceedings be brought before the judge of the third party’s
domicile (Article 26 of the Italian Code of Civil Procedure).
Therefore, if there were more than a single third party, and
if they all had a different domicile or place of business, the
creditor should have brought as many enforcement proceedings as the number of third parties, each before the relevant
local judge. Given the inefficiency of this system, Article 19
of the Decree now modifies Article 26 of the Italian Code of
Civil Procedure, providing that the judge of the place where
the debtor has its domicile is competent, except when the
debtor is an Italian public entity (in order to avoid overloading
the courts of the cities in which Italian public entities typically
have their headquarters, i.e., Rome and Milan). Therefore,
in most cases, an interested creditor could bring a single
enforcement proceeding vis-à-vis all third parties, which,
according to another measure introduced by the Decree, will
be able to provide their declaration (that they owe money to
the debtor against which the enforcement proceedings are
brought) via registered mail or by electronic certified email,
without having to provide such declaration in court at a specific hearing fixed by the judge, bearing all associated legal
costs and expenses.
Furthermore, Article 19 of the Decree introduces the possibility, with the authorization of the judge and during the
foreclosure phase, for court bailiffs to use electronic means
and browse through digital registers and online databases
searching for attachable assets owned by the relevant debtors. This measure, which boosts the search powers of court Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be
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bailiffs, is intended to put Italy in line with the most developed European standards in this area and to make Italian
enforcement proceedings more efficient and effective. In
this respect, the Decree also contains measures directed at
further motivating court bailiffs by connecting the amount of
their remuneration to the sums, or to the value of the assets,
that they were able to find and seize.
Moreover, according to a new measure contained in Article
19 of the Decree, the enforcement judge may issue an order
extinguishing enforcement proceedings in advance as soon
as it appears, based on the judge’s evaluation, that the
creditor would not obtain reasonable satisfaction from such
In the light of the above, it appears that the Italian government is focusing on the reform of the judicial system in order
to boost the country’s economic development and increase
the level of foreign investment. In addition to the civil area, the
government is also working on new measures to be applied
to criminal justice, with the overall goal of halving the backlog
of pending cases.
In any event, the contents of the present Decree must still be
confirmed by the Italian Parliament during the law conversion
process. The amendments and fine-tuning that may be made
during the conversion process must be closely monitored,
along with the practical effects of the introduced measures.
For further information, please contact your principal Firm
representative or one of the lawyers listed below. General
email messages may be sent using our “Contact Us” form,
which can be found at www.jonesday.com.
1 The Decree also contains, inter alia, measures directed to simplify
the procedure to obtain a divorce (Arts. 6 and 12) and the procedure
to transfer judges from one office to another (Arts. 20), as well as
measures directed to monitor judicial activities and the other dispute resolution methods for statistical purposes (Arts. 11 and 19).
These measures are not analyzed in the present Commentary.
2 See Art. 824bis of the Italian Code of Civil Procedure, providing
that: “…the award has the same effects of the judgment issued by a
court judge.” Moreover, a decision of the joint divisions of the Italian
Supreme Court recently underlined that the arbitrators’ activities
have jurisdictional nature and may thus substitute for the functions
of a court judge (see Italian Supreme Court, joint divisions, October
25, 2013, no. 24153, in Diritto & Giustizia, December 17, 2013).
3 See Italian Legislative Decree, March 4, 2010, no. 28, recently modified by Law Decree 21, June 21, 2013, no. 69, concerning mediation finalized to the conciliation of civil and commercial disputes.
According to the recent changes to such law, attempting mediation is a mandatory prelitigation step in condominium disputes, real
estate, division of property, inheritance matters, family disputes,
lease and loan-for-use matters, medical liability, libel and insurance,
and banking and finance contract disputes.
4 To date, employers still had to render such declaration in court at a
hearing fixed by the judge for this purpose.