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Litigation

Court system

What is the structure of the civil court system?

Italy’s civil court system is divided into three levels: the tribunals, the courts of appeal and the Supreme Court of Cassation.

There are 140 tribunals, 26 courts of appeal (one per region with some regions having more) and one supreme court.

Tribunals

Each tribunal hears cases in its geographical catchment area, usually where the defendant resides. Cases include monetary claims valued at more than €5,000 (claims of less than €5,000 are heard by justices of the peace) and claims with an undetermined value.

Tribunals have exclusive jurisdiction for claims of enforcement, false or fraudulent lawsuits, status and capacity of people, honorary rights and some tax matters.

The tribunal’s jurisdiction is governed by article 9 of the Italian Code of Civil Procedure (CPC) and it has divisions specialising in family law, bankruptcy, labour and enforcement proceedings.

In 2012, more than 20 specialised ‘companies court’ tribunals were set up to handle claims related to commercial and corporate disputes.

They have jurisdiction over matters including intellectual property, copyright, and disputes and compensation related to EU antitrust rules.

Companies courts also have general jurisdiction over disputes involving limited companies, cooperative companies, European companies and branches of foreign companies with a permanent establishment in Italy.

The companies courts are composed of judges with the appropriate expertise to ensure timely proceedings.

Courts of appeal

The civil division of the courts of appeal hears appeals from the 140 tribunals. Each court of appeal is divided into different divisions, each of which has at least five judges and handles claims on specific disputes (family matters, labour matters, corporate and commercial matters, etc). Cases are assigned to a panel composed of three judges who decide on grounds of merit and law. In some specific cases, the court of appeal hears the case as a judge of first instance (appeals against awards, exequatur of foreign judgments and other specific cases).

The Supreme Court of Cassation

Italy’s Supreme Court is the highest court in the civil system. It hears appeals from the appeal courts and, in limited cases, may hear appeals directly from the tribunals.

Unlike the lower courts, the Supreme Court does not rule on the merits of the case. It is, for that reason, known as the ‘judge of the legitimacy’ (ie, it decides on points of law rather than the merits). Cases are assigned to a panel composed of five judges and the Public Prosecutor is also involved when provided by the law.

In order to reduce the number of appeals to the Supreme Court, the sixth division of the Supreme Court has been appointed specifically to filter appeals and reject those that do not comply with the rigid rules. Hearings are generally held in private, without oral discussions, but in limited cases the Supreme Court may decide to hold a public hearing.

Judges and juries

What is the role of the judge and the jury in civil proceedings?

The role of the judge is generally passive rather than inquisitive. Judges can order litigants to file specific documents or they can appoint an expert if cases require technical, medical or scientific input.

Juries are not involved in civil actions.

The tribunal’s civil cases are generally heard by a single judge, but in specific cases they must be heard by three judges: the president, the reporting judge and the assistant judge. These cases are ruled by article 50-bis of the CPC and may apply when the public prosecutor is involved, in most companies court proceedings, in some bankruptcy claims and in a few other cases.

The judges are selected by a public, competitive examination.

Limitation issues

What are the time limits for bringing civil claims?

The limitation periods are laid down by the Italian Civil Code (article 2934 et seq). Generally, the limitation period is 10 years from the day on which the right of claim can be enforced. In tort law, the claimant has five years from the day the event occurred to claim its rights.

There are limitation periods of five years or less for company matters, broker rights and other specific matters.

Parties cannot agree to suspend the time limits. The Civil Code rules the only specific case of suspension admitted by law (article 2941, 2942 et seq of the Civil Code).

Nevertheless, the time limits can be interrupted as ruled by article 2943 of the Civil Code.

Article 2943 of the Civil Code states:

Prescription is interrupted (1073(6), 1310(1)) by service of the paper by which judicial proceedings are commenced, whether on the merits or for conservation or enforcement.

It is also interrupted by actions instituted in the course of judicial proceedings (2945(2)).

Interruption is effective even if the court to whom the action is submitted lacks jurisdiction.

Prescription is interrupted by any other act capable of placing the debtor in default (1219, 1957(4)) and by a duly served document whereby a party, in the presence of an agreement to arbitrate or an arbitration clause, declares to the other party his intention to institute arbitration proceedings, lays down his claim and proceeds, in his own behalf, with the appointment of the arbitrators.

The prescription is interrupted also by the acknowledgment of the right by the person against whom such right can be enforced (article 2944 of the Civil Code).

As result of interruption a new time limits period begins.

Furthermore, according to article 2945 of the Civil Code:

If interruption has occurred by reason of one of the acts indicated in the first two paragraphs of Article 2943, prescription does not begin to run until the judgement in the action becomes final.

If the proceedings are ended by discontinuance, the interruption is unaffected, and the new time limit of prescription begins to run from the date of the act which caused the interruption.

In the case of arbitration, prescription does not run from the time when the document containing the request of arbitration is served up to the time when the award settling the dispute is no longer subject to appeal or the decision rendered on the appeal becomes res iudicata.

Prescription is also interrupted by service of the paper by which the assisted negotiation and the mediation are commenced.

Unavailable rights are not subject to prescription (article 2934, second paragraph, cc).

Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

There are no pre-action exchanges of documents or pre-action orders. Nonetheless, in some specific cases, it is mandatory to introduce an assisted negotiation or a mediation before issuing proceedings, otherwise the action before the court cannot commence. In other words, lawyers must advise the parties that it may be possible to solve the matter through an alternative dispute resolution (ADR) mechanism.

Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Civil proceedings are generally commenced through the notification of a writ of summons or the statement of claim. Notification can be through the bailiff or by certified email to subjects with a specific, certified mailbox. (It is mandatory for companies and lawyers to have a certified mailbox.)

Within 10 days of the notification, the claimant must register the proceedings with the court, obtain a number identifying the proceedings, and serve all documents attached to the writ of summons.

Labour and family law

Labour law, family law proceedings and interim remedies are normally commenced by the filing of the writ of summons and attached documents to the court. A judge will then set a hearing date by decree. The claimant must notify the defendant (within the time frame assigned by the judge) with the issued writ of summons and the judge’s decree.

Efficiency

In recent years, the courts have improved their handling of caseloads.

In particular, Turin has been so successful that the Ministry of Justice is hoping to apply the model to all courts. The former president of the Court of Turin is working with the Ministry on a system to ease capacity issues and allow judges to pronounce sentences in a timely manner.

Mandatory assisted negotiation and mediation have also been introduced to try to reduce the number of proceedings brought before the courts.

Timetable

What is the typical procedure and timetable for a civil claim?

Claimants

Civil proceedings are begun by notifying the counterparty of the judicial citation act. After notification, the claimant must register within 10 days by filing with the Registrar of the court of first instance. The file must contain the document served with a litigation proxy and other required documents.

The judicial citation act must include, inter alia, the summons to the party to appear at a set hearing and the warning to the defendant to join the case at least 20 days before the hearing to avoid failing to comply with the provisions of law. It must propose procedural and substantive objections that are not ascertainable by the judge, and it must put forward counterclaims and call upon third parties.

From the day of the notification of the citation act and the first appearance at a hearing, no less than 90 free days must pass if the place of the notification is in Italy and 150 free days if one is abroad.

In urgent cases, the claimant may request that the president of the court cut the time frame in half.

Defendants

The defendant, upon receipt of the notification of the citation act, must appear before the court at least 20 days before the initial hearing on the date set by the summons. The defendant must register a file at the Chancery, containing the act of appearance in court and response, with the copy of the notified summons. The defendant must propose the procedural objections and merits, claims and counterclaims, and supply documents relating to the case, or the intention to sue a third party.

If the defendant has to pursue only mere defences (ie, does not have to propose procedural and substantive objections that are not ascertainable by the judge, put forward a counterclaim or sue a third party), he or she may appear directly at the hearing.

At the first hearing, the judge will verify the regularity of the right to response and, if requested, may give the parties an additional 30 days to file pleadings for the clarification and/or amendments of the applications, a further 30 days to respond to questions or produce documents, and another 20 days for additional evidence.

The judgment

The judge will then decide whether to conduct a preliminary investigation or fix a hearing date for the final clarification of the questions. At the outcome of this hearing, the case is held in the decision, and parties will be assigned deadlines (60 + 20 days) for filing the final acts.

The term to file the decision is 30 days if the Tribunal’s decision must be filed by only one judge, 60 if the panel is of three. For labour proceedings the term is 15 days. In any case these terms are not peremptory.

Ideally, the first instance judgment should be available within two years.

Case management

Can the parties control the procedure and the timetable?

The parties have to comply with the procedure and timetable provided by the CPC, but they cannot control the timetable. Regarding case management, the decision is left to the court unless compulsory terms are provided by the CPC.

Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

Pending trial, documents served with the defence are held by the court and remain with the court until the judgment. If the complete file is not available in the court when the final decision is made, the claim is declared inadmissible.

The lawyers, the courts and the arbitrators must preserve all legal documents for three years after the decision has been issued or the matter has ended, pursuant to article 2961 of the Civil Code.

Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

Declarations or certification released by a public official are considered privileged evidence if they are not declared false after a special proceeding.

Opinions issued by in-house lawyers or third parties can be shown in court but not admitted as evidence.

Legal exchange of correspondence regarding a settlement agreement and correspondence between legal entities expressly referred to as confidential cannot be shown in court. This is sanctioned by article 28, first paragraph of the Forensic Code of Law 2014 (the Code of Conduct for Italian Lawyers), which has been in force since 16 December 2014.

Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

Prior to trial, the parties do not exchange any documents.

In exceptional cases of urgency (for example, if there is a well-founded fear that a witness may be about to die) parties may request that evidence be taken before the trial begins, or request to verify the status of the sites or the quality or condition of things, and may require a prior technical assessment or judicial inspection.

Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

Normally, witnesses give oral evidence only. In rare cases, and only if the parties agree, the judge can ask the witness to give written evidence, answering a series of questions posed by the parties and admitted by the judge. The legislature has expressed a wish to introduce compulsory written evidence to try to speed up the proceedings, but to date has not succeeded.

Experts appointed by the parties or by the judge give written evidence and, if necessary, the judge can ask the appointed expert for oral clarification on issues.

Interim remedies

What interim remedies are available?

Specific interim remedies available include the conservative or preventive seizure of assets and the judicial seizure, as stated in articles 670 and 671 of the CPC.

The conservative remedy is similar to a freezing injunction used to freeze the assets of the defendant, if specific conditions are recurring. The judicial seizure can be used to freeze assets where possession or ownership is controversial on trial. It is used when both claimant and defendant assume to have rights (possession or ownership) over the assets disputed.

Furthermore, interim remedies (such as a prohibitory injunction) are available in cases where, pursuant to article 700 CPC, the case is prima facie strong and there are reasonable grounds to believe there is a real risk of impending and irreparable damage in a manner that the rights disputed could be prejudiced by the time necessary for the proceedings to be completed.

All of the interim remedies can be requested before proceedings begin or while they are under way.

Remedies are available in foreign proceedings if the remedies need to be enforced in Italy.

Search orders cannot be granted by the civil courts, as the remedy is available only in criminal proceedings.

However, if there is an urgent need to admit evidence before the judgment, it is possible to resort to the preventive measures specified in question 10.

Remedies

What substantive remedies are available?

Punitive remedies are not available, but the Supreme Court, in examining a case on the recognition of foreign judgments involving punitive damages, has considered the issue of particular importance. The Supreme Court has asked the Sezioni Unite (the enlarged board of the Supreme Court of Cassation) to determine whether foreign judgments involving punitive damages are in conflict with the principle of public policy (Cass, 16 May 2016, No. 9978).

The pronouncement of the Sezioni Unite, published on 5 July 2017, No. 16601, stated that a foreign judgment involving punitive damages can be recognised by an Italian court if the foreign sentence has been pronounced in the foreign legal order according to rules that ensure specific assumptions of conviction, the foreseeability of the conviction and the quantitative limits. If these conditions are fulfilled, to recognise the exequatur it must evaluate only the effects of the foreign act and if those effects are compliant to Italian public policy.

Enforcement

What means of enforcement are available?

The main enforcement means are:

  • forced seizure of movable property, which can be executed through a court officer by directly assigning the debtor’s assets which will subsequently be disposed of, or through the attachment to a third party (ie, by notifying the bank at which the debtor has an active account or securities deposited, or with the employer of the creditor or any other person who is liable to the debtor);
  • forced seizure of real estate, which occurs through the registration of seizure on real estate being executed and the subsequent sale of the assets carried out by a person delegated by the judge;
  • insolvency procedures; and
  • a court order to carry out obligations or the destruction of that which was done in violation of an obligation not to do something (article 614 CPC).

Public access

Are court hearings held in public? Are court documents available to the public?

All hearings to discuss the case are held in public under penalty of invalidity, but in particular circumstances the judge may arrange for an in-camera hearing.

After the recent reform introduced for the proceedings before the Supreme Court the rule now is that all the hearings are held in camera, except when a relevant case of law must be decided and other few cases.

All the hearings held in camera can only be attended by the lawyers and the parties involved.

Trial documents are not accessible to the public. The judgments and decisions defining the judgment are made public by filing with the tribunal’s chancellery.

Costs

Does the court have power to order costs?

The law provides that the judge shall penalise the party who has been unsuccessful in recovering litigation costs under article 91 of the CPC.

In the event of a mutual loss, or in the event of a new aspect of the matter or a change of case law in relation to matters of concern, the costs may be partially or wholly offset (article 92 of the CPC).

When questions are set out, the party must always request that the other party pay the compensation and bear the costs of litigation.

At the outcome of the trial, the parties are required to file their expenses by quantifying the fees and indicating the costs incurred, but the judge is not bound by the quantification.

To clear the expenditure, the judge applies the forensic parameters established by a special ministerial decree, which varies according to the type of dispute and the value.

Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

The only admissible agreements regarding the payment of fees between a lawyer and his or her client are those provided for in article 25 of the Forensic Code of Law 2014 (the Code of Conduct for Italian Lawyers).

The legal fees agreement is free and may be based on:

  • time rates;
  • flat rates;
  • agreements on one or more businesses;
  • fulfilment and time of the activity execution;
  • single stages or performances or the entire activity;
  • percent basis on the value of the business; and
  • how much the receiver of the performance can benefit and not only on a strict asset basis.

Litigation financing practices by a third party are not forbidden, even though there are some limitations in law such as the prohibition of a contingency fee between a lawyer and his or her client.

Litigation financing practices in Italy were not widespread in 2017.

Insurance

Is insurance available to cover all or part of a party’s legal costs?

Yes, insurance coverage is available to cover the legal costs of the insured party and the opponent’s costs as decided by the judge.

It is also possible to stipulate an agreement on management of the litigation. In such a case, the insurer assumes the right and the obligation to conduct the dispute or settle it.

Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

Class action was introduced with Italy’s Consumer Code (Law No. 99/2009), which has been in force since 1 January 2010.

Class action can be introduced to protect the following rights:

  • contractual rights of consumers and users who pay for the same undertaking in a homogeneous situation, including contracts signed by standard forms or templates;
  • homogeneous rights concerning those of end users of a product, irrespective of the signing of a contract; and
  • rights resulting from incorrect commercial practices or anticompetitive behaviour.

This action is intended to ascertain the responsibility of the firm, producer or supplier and, consequently, to obtain the compensation of damages or refunds.

The action can be introduced by single or multiple rights holders represented by a consumer association or a committee. Those interested in joining an existing class action can file a formal act of adherence, according to the opt-in system, without having to give a mandate to their own lawyer.

Once the action is proposed, the judge will evaluate the admissibility.

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

Italy’s new rules of appeal did not have unanimous application until the decision of the Sezioni Unite, published on 16 November 2017, No. 27199, which finally clarified that the notion of specificity of the grounds of appeal (punishable by inadmissibility) implies a full and clear challenge of well-identified passages of the judgment under appeal and the arguments in fact and law that support it, by contrast to the reason of the sentence appealed. It has also been confirmed the judgment of appeal is a mere revision of the first proceedings.

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

In civil and commercial matters, foreign judgments are recognised in Italy without the need for any proceedings, provided that certain requirements are met by the law (article 64 of Law 218/1995 on the Reform of the Italian System of Private International Law).

However, in the case of non-compliance with the measure or challenge of the recognition of a foreign measure or of a voluntary act of jurisdiction, or when it is necessary to enforce execution, the party who has interest may apply for recognition of the requirements to the judicial authority for a ‘judgment of enforcement’.

Some of these requirements and formalities may not be necessary in the presence of international agreements with foreign states or European Union countries.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

It is possible to admit evidence of a measure issued by a foreign judge that is executed by a decree, issued by the territorial jurisdiction of the appeal court.

It is also possible to admit evidence that is not foreseen by Italian law, provided that it does not conflict with the principles of the law.

Arbitration

UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

The arbitration discipline is not based on the UNCITRAL Model Law, but some institutions, such as the Milan Chamber of Arbitration, may provide arbitration services based on the UNCITRAL model at the parties’ request.

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The arbitration agreement must be in writing and set out the matter of the dispute. For the arbitration clause and the non-contractual arbitration agreement the written form is not required for the validity of the act, but only for the purposes of evidence.

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

If the arbitration agreement contains no information about the number or choice of arbitrators, the party summoning may, by means of an appeal, request that the president of the competent court appoint three arbitrators.

An objection may also be made by appeal to the president of the tribunal (article 815 of the CPC).

Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

Parties may choose arbitrators but the number must always be odd. So, if the parties have indicated two arbitrators, a third arbitrator must be appointed by means of appeal to the president of the tribunal, or the parties may agree on the manner of indicating the third arbitrator.

There is, however, a special, mandatory discipline for appointing corporate arbitrators. In most cases the arbitration clause in the companies’ articles of association must provide that the appointment of the arbitrators be carried out by a third party, external to the company. If this provision is not fulfilled the arbitration clause is null and void.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

The law provides that the parties may establish procedures in the arbitration agreement, or by a separate act, before the start of arbitration. The procedures must include the rules and language that arbitrators must follow. In the absence of such an indication, the arbitrators may regulate the conduct of the judgment in the manner they consider most appropriate, without violating the rigorous respect of the principle of the right to be heard between the parties, namely ‘giving reasonable and equivalent defence possibilities to the parties’ (article 816 of the CPC).

The arbitrators must comply with basic requirements laid down in individual rules of the arbitration proceedings, such as the rule governing the requirements of the award or the prohibition on issuing precautionary measures outside the cases provided for by law.

Court intervention

On what grounds can the court intervene during an arbitration?

An ordinary judge does not have the power to intervene in proceedings. If any issues arise that cannot be dealt with or decided in the arbitration proceedings, a judge will address the matter.

Interim relief

Do arbitrators have powers to grant interim relief?

Arbitrators cannot issue seizures or other precautionary measures. Equally, the prevailing opinion is that arbitrators are excluded from issuing preventive measures.

The only exception to this rule is allowed in corporate arbitration, where arbitrators have the power to suspend the shareholders’ resolutions. There is only one exception: if the claim is for a resolution regarding a false balance-sheet, only the tribunal can suspend it, according to the Supreme Court to date.

Award

When and in what form must the award be delivered?

If the parties to the arbitration agreement, or prior agreement to the acceptance of the arbitrators, have not set a deadline for the award, the arbitrators must render the award within 240 days of the acceptance of the appointment. That period may be extended by the parties, by written declaration or by the president of the court, at the request of the parties or the arbitrators. Unless otherwise agreed by the parties, the term is extended by 180 days and for no more than once in certain specific cases, for example, if evidence must be admitted.

The award is passed by a majority of the votes with the participation of all the arbitrators and is drawn up in writing. The content of the award is governed by article 823 of the CPC.

Appeal

On what grounds can an award be appealed to the court?

The award may be challenged before the courts of appeal on formal aspects of the award and of the proceedings, but the objection on the grounds of law can only be admitted if the parties expressly provided for it in the arbitration agreement. Knowledge of this rule is fundamental and should be borne in mind when the arbitration agreement is concluded. If the agreement does not include the possibility of challenging the award on grounds of law (where, for example, the breach of a substantive rule occurred) the award would not be open to challenge on those grounds.

The court of appeal judgment can be upheld before Italy’s Supreme Court of Cassation. It may also be overturned by the Supreme Court on grounds of law.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

In order to execute the award in the territory of the republic, it must be declared enforceable by a decree issued by the tribunal in which the seat of the arbitration is based.

Before issuing the decree, the tribunal merely confines itself to establishing the formality of the award.

In order to effectively declare a foreign lawsuit in Italy, however, it is necessary to obtain a decree of the appeal court in which the other party resides. The president of the appeal court has established the formality of the award or declares by decree its effectiveness in the territory of the republic, with an exception in cases where the subject matter of the award cannot be the subject of arbitration according to Italian law, or if the award contains provisions contrary to public law.

Costs

Can a successful party recover its costs?

The parties may decide that they do not require the arbitrators to rule on the allocation of costs among the parties and that they will either divide the expenses and remuneration of the arbitrators or that one party will bear the costs.

Alternatively, litigants may request that the arbitrators decide on how the costs must be allocated among the parties, which will be decisive and may only be challenged on appeal.

Alternative dispute resolution

Types of ADR

What types of ADR process are commonly used? Is a particular ADR process popular?

In order to reduce litigation, two different procedures for out-of-court settlements of disputes have been introduced: mediation and assisted negotiation, the application of which in some cases is mandatory before bringing the matter before the judge.

In any case, before commencing a proceeding, lawyers must advise parties of the possibility of solving the matter by ADR.

Requirements for ADR

Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?

Mediation, carried out by an impartial third party, is designed to reach an amicable settlement.

It may be optional or set out by the judge, in which case it becomes mandatory before the commencement of proceedings.

Assisted negotiation, on the other hand, is an agreement by which parties agree to resolve the dispute amicably with the assistance of the lawyers.

Assisted negotiation may be compulsory (and, in this case, it becomes a condition for action) or optional.

It is compulsory for damages arising from the movement of vehicles and boats; in applications for payment of any sum less than €50,000; and in respect of transport contracts.

Miscellaneous

Interesting features

Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

In the last few years, the Ministry of Justice has introduced the online civil trial process. This system fully operates in the tribunals, appeal courts and Supreme Court, enabling lawyers, experts and witnesses to:

  • create a digital signature and file their own legal actions or reports with the relevant court;
  • receive notifications from the court at their certified email addresses; and
  • obtain full access to information and electronic acts regarding their own civil cases.

At the same time, judges and their staff can manage and plan duties, activities and documents related to assigned proceedings. They can also create digital signatures and file their decisions, building up a local jurisprudence database.

The goal of the system is to save time and money, improve case management and increase transparency and workload monitoring.

Moreover, citizens and private companies can access local jurisprudence while financial institutions and banks can obtain insolvency status information easily.