Italian Parliament Set to Expand Scope and Effect of Class Actions
- 19 ottobre 2015
On June 3, 2015, after its initial presentation to Parliament in 2013, the Italian Chamber of Deputies finally approved a groundbreaking bill on class actions in Italy. If approved by the Senate, this bill will significantly expand the scope and impact of consumer class actions.
Class Actions Have Had Limited Impact on Businesses So Far
Class actions were first introduced in Italy in 2008 for the stated purpose of increasing consumer protection. A new article 140-bis in the Consumer’s Code (Legislative Decree no. 206 of 2005) was introduced. However, since then, despite several subsequent amendments of the initial text, class actions have been used sparingly and have represented a tool of very limited use for consumers.
Indeed, the number of class action proceedings has been significantly below initial expectations. Based on available data, only one proceeding has been concluded with a decision favorable to consumers, and the damages awarded were very low.
Pro-Consumer Class Action Reform
The main obstacles to the widespread use of class actions in Italy in their current form are: lack of clear rules on the admissibility of a class action and the absence of the punitive damages.
The main goal of the new bill is to provide a more complete and precise instrument in order to make use of class actions by consumers easier and more certain, thanks to a clearer legal framework. The bill, now under the examination of the Italian Senate, will directly insert a new section, made up of 15 articles, at the end of the Civil Procedural Code in which all the phases of class actions proceedings will be described in detail: from prerequisites for their commencement, to appeals, etc.
The most important differences in the new provisions now under review by the Senate of the Republic
First, the proposed legislation provides that a class action can be commenced by a member of a “homogeneous class”, with or without the assistance of an association. Instead, according to the current provisions, the plaintiff must be a consumer, a user or an association representing a collectivity of consumers or users. As a result, the “new class action” would be open also to claims other than (i) contractual liability; (ii) product liability; and (iii) unfair competitive behavior or unfair commercial practices (as per the current provisions). Hence, for instance also tort claims will be included.
Second, the preliminary assessment by the judge on admissibility of a class action has now been confirmed. However, in order to provide for a clear timeline, the law sets mandatory deadlines to regulate the length of the entire proceedings as well as the steps required of each of the parties (for instance, the request to adhere to the class action).
Under the new provisions, also the procedure for liquidating damages will be subject to specific rules. Indeed, it will be managed by a judge appointed by the Tribunal and by a representative of the consumers adhering to the class. Upon receipt of all requests to adhere to a class action, the respondent may challenge the facts proposed by the class adherents. Thereafter, a plan encompassing a solution for each adherent is to be prepared by the common representative, and the delegate judge, after having eventually rejected, approved, or amended the plan, will issue a decision that is enforceable for each adherent.
Lastly, all procedural steps, including the writ of summons and the final judgment, must be made publicly available in a special section created on the website of the Ministry of Justice.
Even though the bill may be subject to additional amendments, the class action as set forth in the new section of the Civil Procedural Code is another instrument expanding class action trying to make it more in line with the model already in force in the United States.
The bill will likely be approved in a relatively short timeframe and should not be subject to substantial amendments.
More information on the proceedings is available at the following link.