Although a class action procedure exists in Italy, it is little used. Consumers and users who have “homogenous” interests may bring a class action against a business defendant to protect a wide variety of contractual and other rights. However, a lack of clarity as to the meaning of “homogenous” and questions regarding the interest to be protected has meant that class actions have been quite uncommon in Italy.
That may change when a new law, substantially reforming class actions in Italy, comes into force in April 2020.
What forms of collective actions are permitted in this jurisdiction and under what authority?
In Italy, consumers (consumatori) or users (utenti) can jointly bring a claim against the same defendant in a single action: the “Italian class action”.
However, the Italian class action differs from the United States equivalent in several aspects. First, only “consumers” or “users” whose rights are “homogeneous” may file a class action. Secondly, the Italian legislator has introduced an opt in mechanism, by which the judgment will only bind those consumers/users who are party to the proceedings (see below).
Class actions in Italy may be filed only against business entities, such as corporations or other legal entities acting within the scope of their business and are aimed at protecting a wide variety of contractual rights, as well as torts.
In particular, pursuant to Article 140 bis, paragraph 2 of the Legislative Decree n. 206 of 6 September 2005 ("Consumer Code"), consumers/users who have “homogenous” interests have the right to file a class action against the same defendant for damages arising from: (i) a breach of contract; (ii) unfair or anti-competitive trade practices; and (iii) product or service liability (regardless of a direct contractual relationship).
Who may bring them?
A class action can be filed by any member of the class, i.e. any user or consumer, either individually or represented by a valid committee or association of consumers, which must be duly empowered by the class members themselves (the “promoter” of the action). According to Article 3 of the Consumer Code, the “consumer” is “any individual who is acting outside trade, business or profession purposes”.
If the class action is declared admissible after the first hearing (see below), the judge will specify: (i) what requirements must be fulfilled by the consumer/user in order to opt in; and (ii) the time limit by which every consumer/user must opt in, which, under Italian law, shall be no longer than 120 days from the publication by the judge of the relevant ordinance admitting the class action. The ordinance shall be published in order to allow everyone potentially interested to opt in.
The participation of a consumer in the class action necessarily implies the waiver by that consumer to his right to bring an individual claim (and any individual claim by that consumer brought outside the class action will be rejected by the competent Italian court).
Opt in or opt out?
Opt in. As noted above, the judgment only binds the original promoter of the action and the members of the class who opted into the class action within the relevant statute of limitation.
Other consumers/users who did not opt in but whose rights were breached by the defendant do not directly benefit from the decision. However, they may still commence individual proceedings against the same defendant (although they cannot start another class action against it on identical grounds).
Admissibility hearing: at the first hearing, the judge must evaluate the admissibility of the class action (this step is similar in content and scope to the class certification process under US law).
The class action will be considered inadmissible if: (i) the claim appears to be manifestly groundless after a preliminary review by the court; (ii) there is a conflict of interest; (iii) the rights of the class members are not homogeneous; or (iv) the promoter of the action cannot adequately represent the interests of the class.
Judge or jury?
Judge. There is no jury in legal proceedings in Italy.
What relief may be obtained?
The obtainable relief extends to a declaratory judgment on the defendant’s liability, compensation for losses and restitution of any undue payment.
Punitive damages are not available.
How are such actions funded?
According to Article 140 bis, paragraph 8 of the Consumer Code, if the class action is considered inadmissible, the court will immediately rule on the legal costs.
On the other hand, if the claim is declared admissible, the judge will not rule on the legal costs and expenses until the end of the first instance phase. The general principle is that the losing party must pay the legal costs of the winning party. However, there can be exceptions to this general rule (for example, if the judge believes the case to be complex, he/she may decide that each party should bear its own costs or may decide that the losing party must pay a proportion of the costs of the winning party). The judge will also rule on the amount of legal fees to be reimbursed to the winning party (if any). Even though different judges may have very different approaches on the matter, they usually tend to order the repayment of only a low proportion of the legal fees incurred (so that the winning party is de facto often not able to recover in full its legal costs).
Is pre-trial disclosure available?
There is no general discovery or pre-trial witness depositions in Italy.
Likely future scope and development?
On 3 April 2019, the Italian Parliament approved Law n. 31/2019 (the “New Law”) which substantially reforms class actions in Italy, with potentially significant consequences for national litigation.
The New Law will permit class actions to be brought against companies and entities providing public services or utilities, for misconduct perpetrated whilst carrying out their respective business activities. The class action procedure was originally only available to consumers and users but will be extended under the New Law to include anyone who claims to have suffered damages as a result of a violation of “homogeneous individual rights” by the same qualifying unlawful conduct.
The New Law will enter into force on 19 April 2020 and therefore it is not yet possible to assess its impact. However, it is clearly aimed at making the bringing of class actions easier:
- The entitlement to bring a class action has been extended considerably, with each member of the class, as well as associations and organisations, able to sue the perpetrator of the unlawful conduct.
- Claimants now have two opportunities to join the action: after the declaration of admissibility of the claim and after the decision upholding the class action.
- The New Law brings several advantages for claimants, particularly in terms of cost reduction.
All these circumstances are likely to increase the number of class actions. In addition, the New Law could significantly affect the behaviour of public and private companies that might potentially be sued in a class action by claimants injured by their conduct. In this respect, the New Law could have a deterrent effect. Indeed, should they lose a case, defendants to a class action could face huge financial penalties, both in terms of payment of compensation for widespread damage and the fees due to the common representative and the claimants’ lawyers.
We will update this website when the New Law comes into effect.