Product safety and liabilitySafety and environmental
What are the most relevant automotive-related product compliance safety and environmental regulations, and how are they enforced? Are there specific rules for product recalls?
At European level, the most relevant automotive-related environmental regulations are: Directive 2007/46/EC (establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles), as subsequently amended and supplemented by Commission Regulations (EU) 2017/2400, (EU) 2017/1347, (EU) 2017/1151,(EU) 2017/1154, (EU) 2018/1832 and (EU) 2019/318); Regulation (EC) 715/2007 (on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles - Euro 5 and Euro 6 - and on access to vehicle repair and maintenance information), as subsequently amended and supplemented by Commission Regulations (EU) 2017/1151, (EU) 2017/1154) and Regulation (EU) 2018/858; Regulation (EC) No. 443/2009 (setting emission performance standards for new passenger cars as part of the Community’s integrated approach to reduce carbon dioxide emissions from light-duty vehicles); and Regulation (EU) No. 510/2011 (setting emission performance standards for new light commercial vehicles as part of the integrated approach to reduce carbon dioxide emissions from light-duty vehicles). Regulation (EU) 2018/858 (on the approval and market surveillance of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles) will repeal and substitute Directive 2007/46/EC with effect from 1 September 2020.
Against the above background, in Italy, Legislative Decree No. 285/1992 (the Italian Highway Code) and Presidential Decree No. 495/1992 (the Regulations implementing the Italian Highway Code), in turn implemented by a number of ministerial decrees, set forth the technical specifications that must be fulfilled by motor vehicles in order to obtain the type approval by the competent department of the Italian Ministry of Infrastructure and Transport.
Under Ministerial Decree of 28 April 2008 (specifically issued to implement Directive 2007/46/EC):
- the Ministry may refuse to grant the EC type approval if it finds that a vehicle, system, component or separate technical unit, although in compliance with the required prescriptions, presents a serious risk to road safety or seriously harms the environment or public health (article 8.3);
- the Ministry that has granted an EC type approval shall take the necessary measures (including, where needed, revocation of the EC type approval) in order to ensure compliance with the type it has approved if it finds that new vehicles, systems, components or separate technical units provided with a certificate of conformity or bearing an approval mark do not actually comply with the approved EC type (article 30.1); and
- a manufacturer that has obtained an EC type approval is required to recall vehicles already sold, registered or put into service if one or more systems, components or separate technical units fitted to the vehicle, whether or not duly approved in accordance with Directive 2007/46/EC, present a serious risk to road safety, public health or environmental protection, and to immediately inform the competent authority that issued the relevant EC type approval. (article 32.1).
In principle, non-compliance with applicable law requirements is per se punished with administrative sanctions, unless the event constitutes a crime, which is to be assessed on a case-by-case basis depending on the specific factual circumstances.Product liability and recall
Describe the significance of product liability law, and any key issues specifically relevant to the automotive industry. How relevant are class actions or other consumer litigation in product liability, product recall cases, or other contexts relating to the automotive industry?
Italy has a fairly strong tradition in product liability litigation, particularly since the adoption, in 2005, of Decree No. 206/2005 (the Consumer Code, which incorporates previous Italian laws implementing Directive 85/374/EEC and Directive 2001/95/EC). Product liability law is particularly significant to the automotive industry, given the large number of components (eg, braking systems, airbags, seat belts, etc) that might in theory be subject to manufacturing or design defects and because of the gravity of the risks in the case of defective parts.
Product liability litigation in the automotive sector can also be particularly complex, in light of the fact that consumers or users generally tend to direct their claims to the manufacturer, which, in turn, might need to involve in the litigation suppliers or manufacturers of the allegedly defective components.
As regards recalls - regulated by articles 104 to 107 of the Consumer Code (implementing the General Product Safety Directive 2001/95/EC) - the automotive industry has long been one of the most affected generally. However, according to the European Rapid Alert System (RAPEX), in 2018, Italy submitted only 5 RAPEX alerts for ‘motor vehicles’ (three passenger car-related and two motorbike-related). In all five cases measures were taken by the respective manufacturers by recalling the products from end users.
Class actions have been allowed in Italy since 2010 and they have never represented an actual major risk for automotive manufacturers in Italy. Indeed, there were strict conditions for a class action to be considered admissible (and, thus, be decided on the merits) and this has historically discouraged consumers and consumer associations from relying on the class action system. Up until now, based on publicly available information, very few class actions have been filed against motor vehicle manufacturers. By way of example, recently, Altroconsumo - one of the most prominent and active Italian consumer associations - started: (i) a class action against Volkswagen regarding the emission tests, (ii) a class action against Volkswagen for a specific version of one of its passenger cars and (iii) another class action against FCA for a different type of passenger car. All mentioned lawsuits are grounded on the companies having declared different emissions or fuel consumption values than the actual ones (even through the ‘defeat device’), which led the plaintiffs to claim damages ensuing unfair practices, which unduly impacted the consumers’ choice (see question 10).
Because it did not turn out as an effective dispute resolution mechanism, unlike with other countries, a reform of the Italian class action law (aimed at removing some of the current obstacles) had long been envisaged and discussed. Following years of gestation, the Italian class action reform was approved on 3 April 2019. Its key features include:
- a broader scope of application, thereby class actions can now be brought for the enforcement of ‘homogeneous rights’ of anyone claiming damage redress caused by businesses;
- a long opting-in window whereby individuals can join the class action even after issuance of the decision on the merits;
- new figures in the class action management (ie, a ‘common representative’ of the class who will manage the merits and the subsequent enforcement phases on behalf of the individual class members;
- a success fee for the attorneys of the winning party and for the common representative of the class.
The new class action law (Law No. 31 of 12 April 2019) will enter into force on 19 April 2020, 12 months after its publication in the Official Journal. It will apply to illicit conducts occurred after its entry into force; the class action regime currently in force will be applicable to conducts taking place up until then.
Another form of collective action, also modified by this year’s reform, is the ‘collective action for injunctive relief’. This action is aimed at obtaining a court ruling:
- inhibiting any conduct that is detrimental to the interests of multiple individuals or entities (whereby this action is defined collective);
- ordering appropriate measures to correct or eliminate the harmful effects of the assessed violations; and
- possibly ordering the publication in the media of the injunctive relief.
The court may also establish a sum of money to be paid as a penalty for each day of delay in case of non-compliance.