The new Class Action
By Paolo Pototschnig | Valeria Mazzoletti | Elisa Cazzani
On 3 April 2019 the Italian Senate definitively approved the draft law n. 844, reforming the regulation of the class action, with the aim of encouraging the use of this instrument. In addition to the relocation of the class action from the Consumer code (“Codice del consumo”) to the Civil Procedure Code, the new rules contain remarkable innovations in favour of the subjects potentially entitled to take such action, which can be brought against both enterprises and entities managing public services.
- The list of subjects entitled to bring the class action has been extended, and includes now all holders of “homogeneous individual rights” (“diritti individuali omogenei”), regardless of their character of consumers or users, both as individuals and through organizations or associations registered with a public registry, to be held by the Ministry of Justice.
- The action appears to be extended to all cases of contractual or non-contractual liability; for instance, it can be brought to claim environmental damages.
- The system of advertising of the whole proceeding has been enhanced, through the utilization of the public area of the telematics services portal (“portale dei servizi telematici”) run by the Ministry of Justice. The competent court office will perform this activity as of the application initiating the action, and will also publish measures that, in the phases of the proceeding, should encourage the participation of other holders of homogeneous individual rights.
- The procedure has been modified by adopting the “summary proceeding” (“rito sommario di cognizione”), which can not be converted into an ordinary proceeding; this will accentuate the managing role of the judge in the proceeding and should result in a greater celerity.
- Class actions will be assigned to the Court Chamber specializing in business matters (“Sezione specializzata in materia di impresa”) of the region in which the defendant enterprise is registered. Such chambers are established in the main town of each region, with the exception of Lombardy, Trentino-Alto Adige/Südtirol and Sicily (where the Chambers are established in two towns) and Aosta Valley (for which the Turin Chamber is competent).
- The proceeding starts with a first phase – concerning the admissibility of the action – which could last less than five months but may be suspended in case of evidentiary activities performed by administrative authorities or independent authorities (for instance, the Italian Competition Authority “Autorità Garante della Concorrenza e del Mercato”) with a possible effect on “follow-on” claims for damages. The decision on the admissibility can be challenged before the Court of Appeal, by a rapid procedure.
- If the action is declared admissible, a second phase begins, for the recognition of the rights. In this phase, the judge has a wide discretion as to the form of the proceeding, and the position of the applicants is eased by specific rules of evidence. The most relevant rules appear to be the provisions regulating the possibility to obtain the discovery of documents in the possession of the defendant, even if they are confidential (in this case, the judge has the power and the duty to indicate some precautions, to be assessed as to their effectiveness); the consequences in case of non-compliance with the discovery order, including, on the one hand, the possibility for the judge to assume as proven the fact which the applicants intend to demonstrate and, on the other hand, the issuance of a penalty from Euro 10.000 to Euro 100.000; the possibility for the judge to ascertain the liabilities on the basis of statistical data and rebuttable presumptions; the duty of the defendant to make advances of fees of the technical consultants and expenses.
- The purpose of encouraging the use of the class action may be reached especially thanks to the provisions aiming at the participation by the holders of homogeneous rights. A first “opening” is during the phase concerning the admissibility of the action, but the most relevant innovation (and, at the same time, the most debatable one) is the possibility of joining the procedure after a decision ordering compensation for damages or restitutions in favour of the applicants.
- If the decision at the end of the second phase is favourable to the applicants, a third phase The third phase is managed by a judge nominated in the decision (“giudice delegato”); the latter should also provide for the appointment of a common representative of participants. In this concentrated procedure, the representative drafts a “project” of individual rights, i.e. the basis for the decree to be issued against the defendant. In the event of an appeal, the enforceability of the decree may be suspended only for serious and grounded reasons.
- With such decree the defendant is ordered also to pay the fees directly to the common representative of participants as well as to the lawyers who assisted the applicants up to the issuance of the court decision at the end of the second phase. The amount of the fees is provided by the law and is calculated on the number of participants and on a percentual basis, in relation to the overall amount of the liquidated damages.
- Further protections include the collective enforcement of the decree, and, especially, a collective interim injunction, which has a particular subjective and objective scope: it can be demanded by “anyone who is interested in the issuance of an injunction against acts and behaviours, performed in the detriment of a plurality of individuals or entities”, before the Sezioni specializzate in materia di impresa.
First considerations on the new law, in brief
The new law will enter into force after 12 months from the publication in the Gazzetta Ufficiale (expected in the short term), to allow some modifications to the informative system of the Ministry of Justice in view of its application.
The future and overall framework of the class action allows a reflection on the possible effects of these rules on enterprises and on the management of the class actions, in both a preventive and a defensive perspective. The most delicate aspects involve the range of subjects and rights concerned by the new rules; the evidentiary facilitations in favour of supposed holders of rights, with the possibility of a substantial reversal of the burden of proof to the disadvantage of the defendant, in a proceeding which may have a very strict timing for the defences of the enterprises; difficulties in assessing the risks arising from disputes, also under an economical and temporal point of view, as the supposed holders of rights can decide to participate in consideration of the outcome of the case, with no need to waive individual actions or participations in other class actions; the possible abuse of collective interim injunctions, due, also in this case, to a generalization of entitled subjects and protectable rights.
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