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. The class action must be declared admissible by the court before it may proceed and prospective members of the class will have no more than 120 days in which to opt in to the claim.
However, a lack of clarity as to the meaning of “homogenous” in this context and questions regarding the interest that is to be protected by the action (a collective interest or individual consumer interests) mean that class actions are quite uncommon in Italy.
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?
Article 140 bis has been modified by article 6 of Law Decree no. 1 of 24 January 2012, ratified by Law no. 27 of 24 March 2012 ("2012 Reform"), under the heading “Rules to make class actions effective”.
In particular, the 2012 Reform has replaced the wording “identical rights” with “homogeneous rights”, which is a wider concept. Previously, the courts usually adopted a restrictive interpretation of identical rights, declaring inadmissible any action where the class members’ rights for which protection was sought were not “identical”.
Nevertheless, the Consumer Code, as amended by the 2012 Reform, does not provide any basis on which the judge can evaluate this requirement of homogeneity (whether it relates to the facts of the case, the remedies sought or both), so that it is difficult for consumers/users to know when they can appear before the court as members of a “class” whose rights are “homogeneous”. The judge will need to determine the matter on a case by case basis.
In addition, following the amendments made by the 2012 Reform, Article 140 bis now refers to the protection of “collective interest”. However, it is not clear how such an interest should be protected within a system where class actions are directed to protect each of the consumers’ individual rights, rather than their collective interests.
Lastly, Article 140 bis does not provide for a “class counsel” to prosecute the action on behalf of the class members, as in the U.S.
In the light of these limitations, class actions are quite uncommon in Italy.