Although so far the Supreme Court has taken this position only in the clearly delineated category of cases involving non-pecuniary damages, its new orientation reveals a general move toward damage compensation reform. The aim would be to make compensation more predictable and more in line with the principle of legal certainty. A more reliable and uniform system would benefit businesses operating in many sectors that currently are forced every year to disregard poorly quantified figures to manage potential disputes whose outcome is often unpredictable. The impact on legal risk management would cut across many areas and impact various business sectors, including the online sector. Indeed, the prominence and centrality of the online sector, heightened further during the pandemic, have driven an increase in legal issues and potential claims brought against online businesses and intermediaries.
The Milan Charts as a quasi-normative source
For more than ten years the Milan Charts have been used as a “quasi-normative” source for the compensation of non-pecuniary damages. The Supreme Court’s decision of June 7, 2011, No. 12408, famously identified the Milan system as the parameter to be used to quantify damages in this category in a consistent and standardized way. This represented an attempt to overcome the differences that had been recorded in case law and to ensure uniformity of judgement throughout the country. That specific decision regarded a matter of compensation for biological damage due to health impairment suffered by a living person, but the principle was subsequently considered applicable to a case of harm suffered due to the death of a family member or loved one (for ease of reference, hereinafter “parental damages”) as well.
However, the two cases are different, and the Milan Charts have never been accurate enough when it comes to establishing damages for the death of a relative. In fact, they merely provide a minimum and a maximum amount, with a rather wide range (for example, for the death of a spouse the compensation may range from EUR 168,250 to 336,500) and do not indicate any specific criteria for determining the value to be compensated. Instead, determination is left to the equitable assessment of the judges in charge based on the merits, resulting in less uniform and predictable judgments.
For these reasons, using the Milan Charts for settlement of parental damages encountered considerable opposition.
The Court of Cassation’s opinion on the Milan Charts
After affirming that any deviation from the parameters of the Milan Charts could be considered a violation of the law in the judgment on the merits,[2] the Court of Cassation repeatedly intervened to align the criteria proposed by the Milan Charts with those of the Rome Charts. As of today, the latter are the only available system with a point-based structure, and for this reason Rome Charts proponents have been arguing for some time that the Rome Charts method should take precedence over that of the Milan Charts.
The Supreme Court has even acknowledged that there is room for “customization,” if necessary, even when using a range-based structure such as that in the Milan Charts. In doing so, the court recognized the autonomy of moral damage with respect to biological damage, which is represented by negative impact on daily activities and the dynamic-relational aspects of the life of the injured party. According to the Supreme Court, this is “ontologically different from so-called subjective moral damage, understood as the inner suffering of the subject as a result of the impairment of his or her right.”[3]
The Supreme Court added that deviation from the monetary values in the Milan Charts is permissible if the judge on the merits provides strong reasoning to justify the decision, and only on the condition that in light of the circumstances of the case the compensation is lower than it would have been based on the tables.[4]
In this decision, the Court of Cassation also noted that since moral damages (including parental damages) cannot be ascertained at a medical-legal level, they cannot be predetermined. In a second decision, the Court of Cassation stated that the main issue with the Milan Charts is that they assess biological damage and moral prejudice using automatic methods, without offering any evidence for them.[5]
The Supreme Court decision of April 21, 2021, No. 10579
In the recent decision of April 21, 2021, No. 10579, the Court of Cassation made explicit reference to the changes that Law 124 of 2017 made to Sections 138 and 139 of the Insurance Code (Legislative Decree of September 7, 2005, No. 209) by introducing the notion of “significant impact on specific dynamic-relational aspects” for the purposes of “tailoring” non-pecuniary damages. The amended version of Sec. 138, according to the Supreme Court, contains “normative confirmation” of the principle of the autonomy of moral damage with respect to biological damage, since moral damage (i) cannot be subject to medical-legal assessment; and (ii) represents a state of mind of inner suffering that completely disregards the dynamic-relational events of the injured party’s life (although it could influence them).
With this decision, the Court of Cassation encouraged a method that would yield more predictable decisions and more schematic evaluation of the circumstances that normally affect the level of seriousness ascribed to the damage (e.g., whether other relatives survive, age of the deceased). Practically speaking, the mechanism would work by assigning a coefficient to each circumstance. On the contrary, the Milan Charts do not assess damage based on points, but merely identify wide ranges of value within which a judge may operate when setting the award for damages. Additionally, the Supreme Court finds that range too wide, which means the criteria for judges are too loose.
The reply of the Court of Milan and the last word from the Supreme Court
The Court of Milan responded to the criticisms of the Supreme Court in decision No. 5947 of July 7, 2021, admitting that its chart should be amended. Yet while the Court of Milan announced the revision of the Milan Charts in accordance with the guidance of the Court of Cassation, it also said that it would be appropriate to keep using its system during the transition period, though adequate and analytical grounds for the parameters used to specify compensation within the Milan Charts ranges should be provided.
The July 7 decision states that “work has already begun on drawing up a new chart that meets the innovative ‘point’ parameters identified by the Supreme Court.”
However, the Court of Cassation recently offered a sharp rebuke to the Court of Milan. In its decision of September 29, 2021, the Court of Cassation upheld an appeal of a judgement that quantified the damage suffered by two parents for the loss of their fetus on the basis of the criteria provided by the tables of the Court of Milan (tables that, among other things, provide as a parameter-example the loss of a child born alive). According to the Court of Cassation, the damage is in a twofold dimension and the two parts do not overlap. There is the matter of the inner suffering possibly experienced, on a moral subjective level, when the loss of the relative is perceived as part of their inner experience, and then, additionally and separately, suffering that may be reflected in dynamic-relational terms.
In light of the new elements provided by Sec. 138 of the Insurance Code, the Court of Cassation established the principles upon which any chart must be based if it is to achieve “just” compensation. In fact, in the settlement of parental damages the Court acknowledged the need to rely upon a chart “that, in addition to the adoption of the point criterion, envisages carrying over the average point value from previous instances, and includes a breakdown and listing of the relevant factual circumstances, including, to be indicated as indefectible, the age of the victim, the age of the survivor, the degree of kinship and cohabitation, as well as the indication of relevant scores, with an opportunity to take corrective measures regarding the final amount due to the specifics of the situation.” That chart, at least as the sets of charts stand now, would be the Rome Charts, not the Milan Charts.
At the end of its analysis, the Court of Cassation referred the case to the Court of Appeals of Turin to quantify the damage by applying those principles.
Concluding remarks
As anticipated, although the decisions cited above mostly refer to sector-specific issues, they reveal a trend on the part of the Court of Cassation toward establishing a uniform approach to the quantification of non-pecuniary damages, despite the fact that the legislature is still hesitant to do so. This is a trend that we hope will soon extend to other sectors, and one that has the potential to change radically the way companies manage risk related to potential litigation.
The Court of Cassation is to be applauded for its initiative. It is seeking to bring order to a field that is highly important, yet affected by a serious lack of predictability and legal certainty. Hopefully the legislative intervention the court seems to be suggesting will be forthcoming.
[1] Decision issued on September 29, 2021, No. 26300.
[2] See decision of November 21, 2017, No. 27562.
[3] Decision of November 14, 2019, No. 29495.
[4] Decision of May 6, 2020, No. 8508.
[5] Decision of November 10, 2020, No. 25164.
