Types of class action mechanisms. General characteristics

The class action mechanism also functions in Italy, although it currently serves only to protect consumers’ rights. The institution of class action was introduced into the Italian legal system in 2007 as a result of an amendment to the Consumer Code (Codice del consumo) implemented by the virtue of Article 140 bis. This provision allows consumers to pursue precisely determined claims against entrepreneurs (azione di classe). Article 140 bis of the Consumer Code came into force on 1st January 2010 and was subsequently amended in 2012.

The Italian solution is based on the opt-in model. Consequently, only those who join the action may participate in the proceedings. In a decision on admissibility of examining the case in group proceedings, the court determines premises to be met by the consumer who wants to join the proceedings and the time-limit during which one is allowed to do so.

The judgement issued in the case is binding for all those who brought forth the class action or joined the group at the further stages of the proceedings. Those who did not join the group may pursue their claims individually, however, they are not allowed to bring a subsequent class action based on the same basis against the same entrepreneur.

Class actions are examined by courts in capital cities of the Italy’s individual regions.

The premises of admissibility and the procedure

The Italian legal system adopted a sector limitation of the category of cases which may be examined in group proceedings.

Group proceedings may be conducted on behalf of consumers in the three following categories of cases: (i) infringement of contract cases, including the infringement of the provisions of a contract which follow from standard clauses or standard terms, (ii) compensatory claims following from unfair commercial practices or anti-competitive practices, (iii) claims related to liability for a product.

Only a legal person or a natural person conducting economic activity may be a defendant.

In turn, a consumer, and more specifically: a consumer or user (consumatore o utente) have the capacity to bring forth a class action. An action may also be brought forth on behalf of such a person by an authorised community organisation, whereby in such a case the organisation does not obtain the status of a party to the proceedings (it is the person represented by such an organisation that still remains a party to the proceedings). As a rule, it is the organisation’s task to provide the injured group members with organisational and financial support.

In Italian group proceedings no mandatory representation by a professional legal counsel is required. Group members and community organisations acting as consumers’ attorneys ad litem may autonomously appear in the proceedings. Only organisations registered in a public record or recognised as representatives under Italian law are entitled to act in the class action proceedings on consumers’ behalf.

During the first hearing in the case, the court decides on the admissibility of a statement of claims – the court performs the so-called certification (giudizio di admissabilita). The statement of claims is admissible when it jointly meets the following premises:

  1. it is not clearly unfounded,
  2. there is no conflict of interest (e.g. between the person representing the group and the group members or between the representative and the sued entrepreneur),
  3. the nature of the rights pursued in the statement of claims is homogeneous, although the legislator does not explain this term; in 2012 the premise of homogeneity replaced the more restrictive premise of the “identicalness” of the rights which had initially been introduced to Italian legal system,
  4. the representative is capable of proper representation of the group’s interests (the legislator does not explain this term again, however, the case law assumes that this premise occurs when the representative entertains financial and organisational capabilities essential to bear the costs of publication of the decision on certification and stands guarantee for reimbursing the defendant with the costs of the proceedings in the case of failure).

Italian law does not, however, provide for any requirements concerning the minimum number of members of the group. Group proceedings in Italy may be initiated as an individual case and then be supported by the further parties – while the above- mentioned prerequisites are met.

In a decision on the admissibility of group proceedings, the court determines the characteristics of the rights (claims) which may be pursued in the given proceedings, indicates the manner of announcing the ongoing proceedings, and determines the time-limit for joining the group. The court indicates the procedural rules under which the proceedings (especially evidentiary proceedings) will be prosecuted at the next stage. The time-limit for joining the group by other consumers must not be longer than 120 days as of the date of the publication of the announcement. This publication may be announced via: the press, websites, or any other chosen manner.

The type of relief (legal protection) that can be obtained (court decision)

In the case of allowing the statement of claims in group proceedings, the court determines the entrepreneur’s liability and orders the entrepreneur to pay group members damages in a specific amount to the group members (it may also only determine the criteria determining the calculation of the amount of compensation). When it is impossible to precisely determine the amount of damages, the court sets the time-limit (which must not be longer than 90 days) in which the parties are to reach a settlement specifying the amount of damages. Where no such settlement is reached, the court determines the damage amount at its own discretion. Italian law allows only for damages compensating the damage actually incurred, therefore awarding the so-called punitive damages is excluded.

Costs and manner of financing the proceedings

The courts decide on the costs of group proceedings following general rules. In principle, the losing party is bound to reimburse the winning party with the equivalent of these costs. On the other hand, where the claimant’s claims are allowed in part only, the court may apply a rule according to which each party bears the costs of its participation in the proceedings, with the proviso, however, that the costs of the media announcement on the admissibility of group  proceedings are charged to the claimant.

Generally speaking, it is a representative of the group who is bound to bear the costs of the proceedings, although they may demand the so-called “fees for joining in” from the group members.

In Italy the so-called contingent fee (conditional consideration for the attorney dependent on the result of the proceedings) is admissible, but, simultaneously, attorneys are bound to arrange the consideration adequate to their labour output in the case with the represented party and they are bound to make all such arrangements in writing.

The financing of proceedings by third parties is admissible, although it is rarely practiced.

Practice and significance of the institution. Development trends

So far the institution of class action proceedings has not enjoyed much popularity in Italy. It is estimated that by the end of 2015 only about 50 class actions were initiated. Moreover, many of them were found inadmissible. Hence, the conclusion of group proceedings with a content-related decision has been a rarity so far (cf. the judgment of the Tribunal in Naples of 18th February 2013, file ref. no. 2195/2013 and the judgement of the Tribunal in Turin of 28th March 2014, file ref. no. 32770/2011 –
). The judgement of the Tribunal in Naples of February 2013 – rendered in the case against organiser of tourist services which did not meet the agreed conditions – had a substantial significance due to the fact that in this judgment, the Tribunal in Naples allowed the claims of a part of injured consumers while at the same time dismissing the remaining claims because they did not meet the premise of “identicalness”. Simultaneously, the Tribunal indicated that the amendment of 2012 which changed the premise of admissibility of group proceedings from the condition of “identicalness” to the condition of “homogeneity” of the pursued claims should improve the effectiveness of the class action mechanism in future. Partial acceptance of the consumers’ claims was also seen in the judgement of the Tribunal in Turin of March 2014.

Group proceedings in Italy have gained more publicity in connection with the issuance of a decision on allowing consumers’ class action against the Volkswagen Group for consideration by the Court of Appeals in Venice in June 2016. In this action, consumers demanded damages on the grounds of perpetration of unfair commercial practices by the Volkswagen Group consisting in manipulating carbon dioxide rates in cars manufactured by Volkswagen.

The low popularity of group proceedings in Italy is explained by high costs connected with initiating and prosecuting such actions. As a result, group members more often decide to form an association to pursue claims on their behalf. It is also noted that the lack of a clear definition of homogeneity of the pursued claims, a premise of admissibility of group proceedings, is an additional obstacle for the wider use of the class action mechanism.

In October 2018, the lower chamber of the Italian parliament adopted a draft of a fundamental reform of group proceedings in Italy. The project transfers the regulations on group proceedings from the Consumer Code to the Code of Civil Procedure (drafted Articles 840 bis et seq.), vesting these proceedings with a universal nature. According to the proceeded statute, the admissibility of group proceedings will no longer be limited to pursuing consumers’ claims and it will extend to any and all homogeneous subjective rights. The sector limitation of the category of cases present in the current Italian Consumer Code will also be abolished. In its new shape, the group proceedings mechanism will rely on the opt-in model, whereby the draft provisions expressly provide for a possibility of joining the group and extending the effects of judgements also to those who will accede the group already after the judgement is issued, within the maximum of 180 days after the issuance of the judgement. Moreover, the reform includes an array of detailed provisions on evidentiary proceedings and the deadlines aimed at speeding up the duration of the proceedings, including a thirty-day period for the court to decide on admissibility of the group proceedings.