Due to the worsening of the economic crisis, in 2011 the competent bodies of the EU adopted the EU Directive no. 2011/7/UE (“Directive”) for the purpose of making more severe at EU level the fight - already started with the EU Directive no. 2000/35/CE - against default payments in commercial transactions.
The term given to Member States for the implementation of the Directive expires on March 16, 2013.
Italy has implemented the Directive by means of the Legislative Decree no. 192/2012, published on the Official Gazette no. 267 of November 15, 2012 (“Decree”) which amends and integrates the Legislative Decree no. 231/2002 (implementing, in turn, the EU Directive no. 2000/35/CE).
The Decree will enter into force on November 30, 2012 and will apply only to commercial transactions closed starting from January 1, 2013.
Scope of application of the Decree
The commercial transactions falling within the scope of application of the Decree (this has not changed compared to the Legislative Decree no. 2002/231) are “all contracts, regardless of the nomen iuris, among private enterprises or private enterprises and public administrations which provide for – in an exclusive or prevalent way - the supply of goods or services against the payment of a price”. Professionals are included in the definition of entrepreneur. Contracts with consumers should be excluded.
New is the definition of “public administration”. The new definition – according to the intention of the Directive - should lead to the application of the Decree also to contracts entered into for the implementation of public works (including the project phase) where the defaults in the performance of the payments by the principal (public administration) are creating material problems to contractors. The relevant associations of contactors have asked the competent Ministry to finally confirm application of the Decree to public works.
Main changes to the Legislative Decree no. 2002/231
In drafting contracts falling within the scope of application of the Decree, entrepreneurs have to pay special attention to the clauses concerning, in particular: (i) the terms of payment; (ii) the rate of the default interest; and (iii) the reimbursement of the costs of recovery.
In this connection the main changes introduced by the Decree to the Legislative Decree no. 2002/231, can be summarized as follows:
- The increase by 1% (from the current 7% to 8%) of the spread which has to be applied to the reference interest rate in order to form the legal default interest rate;
- In the contracts between private enterprises, the parties can derogate to the legal default interest rate, bearing however in mind that: (i) the clause which excludes entirely the application of default interest is considered seriously unjust for the creditor and, as a consequence, is null and void; and (ii) if is deemed “seriously unjust for the creditor”, the clause determining the default interest rate at a level lower than the legal default interest is declared null and void by the competent judge. Default interest is due from the day after the expiration of the term agreed for the payment (or, missing an agreement on the point, at the expiration of the legal term for payment). No default notice is required;
- In commercial transactions involving public administrations, no contractual derogations to the legal default interest rate seem to be permitted;
- The legal term for payments provided for by the Decree is 30 days. In the contractual relationships between private enterprises, the parties can agree on terms of payment shorter or longer than 60 days. Terms of payment longer than 60 days are subject to a “seriously unjust for the creditor” assessment (and, should the assessment be positive, the judge declares the clause concerning terms of payment longer than 60 days, null and void); moreover the clause has to be specifically approved in writing;
- In the contractual relationships where the debtor is a public administration, the contractual term for payments cannot be longer than 60 days (special – more beneficial to the debtor - rules apply to public entities supplying health assistance). The contractual clauses derogating the legal terms of payment (not longer than 60 days though) have to be: (i) specifically approved; (ii) proved by means of a written agreement; and (iii) grounded on the nature or on the scope of the agreement as well as on the circumstances existing when the agreement is entered into;
- The creditor is entitled to the recovery of the internal costs sustained for the recovery of the credit. Such costs are fixed at Euro 40, save that the creditor can prove higher costs and damages due to the default (which costs can include the legal costs for the assistance in the recovery of the credit);
- Clauses included by the parties in the contracts which govern: (i) the terms of the payment; (ii) the rate of the default interest; and (iii) the reimbursement of the costs of recovery, in terms different from the regulation contained in the Decree, are null and void if same are “seriously unjust for the creditor”. The Decree indicates some criteria which can be used by judges in evaluating whether or not the derogating clause can be considered “seriously unjust for the creditor” (e.g., whether or not the derogating clause represents a serious diversion from the commercial standard in breach of the principles of good faith and correctness, the nature of the goods and the service supplied, the existence or not of objective reasons supporting the derogation);
- The clause inserted into contracts which excludes entirely the application of default interest is to be considered seriously unjust for creditors and, consequently, null and void;
- The clause which excludes the reimbursement of the costs of recovery is presumed to be seriously unjust for creditors (the interested party can prove the contrary).