sabato, Luglio 13, 2024
Litigation & Arbitration

The new Italian class action

1. Introduction

Discussions on class actions and collective redress mechanisms began in Italy in the early 90s, following the initial success of the US experience. However, the first model was introduced in the country only in 2010[1]  Such collective procedure was based on an opt-in system and presented a limited scope of application, protecting exclusively consumers’ and users’ interests. Its use so far has been, unarguably, rather limited.[2]

Today, instead, a reformed model is expected to come into force and bring major changes. Initially approved in April 2019, by means of law 31/2019, its enactment was first scheduled for April 2020 and, very recently, moved to November 2020, in order to allow the setting of the necessary online platform. The peculiarities of the model are the following.

2. The new title VIII-bis from the Civil Procedural Code

Its regulation is no longer provided in the Italian Consumer Code, but, rather, in the Italian Civil Procedural Code, with the insertion of the new Title VIII-bis (“Dei procedimenti collettivi”) and its articles 840bis-sexiesdecies.

3. The scope of application

The scope of application of the model is the protection of “individual homogeneous rights”, both by means of compensatory (in the form of a declaration of the defendant’s liability, of damage compensation or restitution of undue payments) and injunctive relief. It is, in any case, granted the possibility of individually pursuing such rights. The main difference with regards to the 2010 procedure, hence, is the extension of the areas of law involved: collective proceedings can now be used not only by consumers and users, but also by other relevant stakeholders affected in a similar way by the same act from the same defendant. For example, victims of environmental damage, product liability, data breaches and health treatments are now permitted to join their claims in a single, common lawsuit: it can be said, in general, that the present reform opened the door to non-contractual liability, too.

4. Standing and competent court

Standing is given both to no-profit organisations or associations (which should necessarily include in their statutory objectives the protection of the harmed rights and be enrolled in a specific public register held by the Ministry of Justice) and, alternatively, to single class members. The competent court is the chamber of the tribunal specialised in corporate matters of the place where the defendant has seat. The trial follows the so-called “summary judgment” proceedings and can be divided in three phases.

5. The eligibility phase

First, there is the eligibility phase, at the end of which the court should issue a decision on the admissibility of the claim, in no more than 30 days from the first hearing (unless there is a suspension because of ongoing proceedings before an independent or administrative authority concerning the same facts). Grounds for a declaration of inadmissibility are: the application being manifestly unfounded; a lack of homogeneity among the individual rights; a claimant’s conflict of interest towards the defendant; the claimant’s inadequacy to represent and protect the rights of the class. Interestingly, they are rather similar to those from the US class action. Should the application be rejected for any of these reasons, it can still be relaunched in case new factual or legal circumstances arise. On the other hand, should the court declare it admissible, the decision is published on the specific Ministry-held website before the next 15 days and, thus, opening the door for the second phase (without prejudice to the defendant’s possibility to appeal 30 days within the date of the decision). All claims filed in the 60 days after the publication on the website are brought together with the first, already-declared admissible one, whereas, after that deadline, claims based on the same facts and towards the same defendant aren’t allowed anymore.

6. Merits on causation phase

Once the application is deemed eligible, the second phase (“merits on causation”)[3] starts. Its main feature is the time set by the court – of minimum 60 days and maximum 150 days from the date of publication on the website – in order to permit adhesion to the class to anyone holding homogenous rights. This stands on the opt-in principle, which, in continuity with the 2010 model, is still the adopted system, thus requiring individuals to explicitly join in order to be part of the class. The application to join is handled on the website, thanks to web-forms, where relevant documents to prove the belonging to the class can be uploaded, too. Moreover, the aim of this phase is to reach, by means of various preliminary activities (such as technical assessments) and disclosure of data, a second decision, this time on the merits of the claim, granting or rejecting its application. Any appeal to this decision should be lodged within 6 months.

7. The liquidation phase

In case of a positive decision towards the class, the third phase starts, during which the court awards compensation by means of a specifically-appointed common representative of the class. The latter should be considered a public official and, therefore, must satisfy the same requirements as a bankruptcy trustee and who is in charge of drafting a redress plan for liquidation of every harmed individual’s claim. Moreover, the court’s decision should determine a violation of homogenous individual rights from the defendant and defines the characteristics of those rights, in order to allow future class members to join. In fact – and this is one of main amendments of the reform, following the French “two-stage” example and the so-called “only-benefits” doctrine –, since November 2020, Italian victims of mass damage will be able to join the proceedings as members of the affected group even at a later stage, when responsibility of the defendant has already been proved and, therefore, when it is already possible to calculate how much compensation they will receive. The period of time allowed for opting-in will be, here as well, between 60 and 150 days from the publication. It is, hence, expectable to have much more members of the class joining the proceedings, knowing that they can count on a positive outcome and a certain redress. To this regard, appropriate measures in order to raise publicity on the matter are expected to be set by the court, in addition to the publication on the official Ministry website. Within 120 days from the expiry of the period to join, the defendant will have the opportunity to contest all the individual applications. Due to a non-challenge principle, facts and applications not specifically challenged by the defendant will be considered proved. Finally, after a few more deadlines in order to allow an exchange of observations and information, the court will reject or grant all the individual joinder applications by decree.

8. Settlement

As to settlement, it is interesting to note that the new model requires the court itself to propose, when possible and until the first oral hearing, a settlement agreement to the parties, in consideration of the value of the dispute and the eventual presence of simple and fast legal questions. In any case, settlement agreements will need to be approved by the court, hence granting them enforceability alike court decisions, and will need to be noticed to all class members, in order to give them the opportunity to challenge it and eventually even opt-out (within 15 days).

9. Costs

As to costs, instead, considerable reductions have been implemented by the present reform. On one side, for example, technical consultants’ fees, when required, are to be anticipated by the defendant; on the other, in case of successful outcome for the class, reimbursement of the class common representative’s fees, of attorney fees and of legal costs is provided.

10. Attorney fees

Last, with specific regard to attorney fees, quite surprisingly, the new reform introduces the element of partial contingency fees, as a sort of premium award for lawyers based upon the number of members and the overall amount of compensation granted to the whole class. This element is rather interesting since, on one hand, it potentially sets an important incentive for lawyers to pursue collective claims and, on the other, it doesn’t reserve the economic burden to the class, thus partially depriving it of its due compensation, but instead, charges the cost on the potentially losing defendant.

11. Conclusions

In sum, several aspects seem to put the new Italian reform ahead in the search for an efficient collective redress mechanism, although only its concrete application will tell how successful and effective it can be.

 

[1] M. Gaboardi (2019). New Ways of Protection of Collective Interests: the Italian Class Litigation and Arbitration Through a Comparative Analysis, Journal of Dispute Resolution, University of Missouri.

[2] https://www.ilsole24ore.com/art/la-class-action-apre-nuovi-fronti-AClbx2F; https://www.ilsole24ore.com/art/i-tre-fattori-che-frenano-class-action-all-italiana-AC3VbFFB?refresh_ce=1

[3] As referred to in S. Biglieri, III, ii (2020), .

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