Following the demands of some Italian Courts, the Italian Constitutional Court has issued a judgment on the debated question as to whether Article 139 of the Private Insurance Code (as implemented by the Ministerial Decree of April 2012) setting the amount of compensation for non-pecuniary damage in the event of road traffic accidents is compatible with the Italian Constitution.

Non-pecuniary damages is a specific category of Italian law referring to those damages which are due to both the physical injuries and the mental distress of a damaged party (i.e. damage that is not financial or property damage). The Private Insurance Code (derogating to the general principles of the Italian Civil Code), sets the parameters which national courts must respect when quantifying the compensation for damage to health payable by the insurer, with limited regard to motor accidents leading to minor physical injuries (up to 9 per cent of disability).

Doubts had been raised in relation to the consistency of this specific set of rules with the provisions of equality set out by the Constitution, considering that these specific parameters (aimed at lowering liquidation costs for insurers) would only apply to non-material damage caused by motor accidents. Persons suffering other damages, although compensated under a different class of business, would not be subject to the same parameters.

In its judgment (dated October 30, 2014), the Italian Constitutional Court considered that there is no violation of the right to equality because the standard mechanism for quantifying the damage (pursuant to Article 139) grants to the judge the ability to adjust the amount of compensatory damages in consideration of the damage actually suffered by the injured party.

This judgment is in line with an earlier judgment (dated January 23, 2014) in Case C-371/12 of the Court of Justice of the European Union, which established that the Private Insurance Code is compatible also with relevant EU Directives.