Transcript Document

INSURALEX
2014 Seminar
Class Actions in Italy
Paris, 03 July 2014
Alessandro P. Giorgetti
Studio Legale Giorgetti
Milan, Italy
Agenda

Historical Background

Italian Legal Framework

The Procedure

Some cases of Class Action

Implications for the Insurance Industry
Historical Background
The "actiones privatae" opposed to the
"actiones populares"
In the original “actiones populares” the
compensation was determined based on
the mechanism of the “aestimatio” and
the income was for the State
In some cases for the plaintiff there
was a “praemium", i.e. the same citizen
launching the proceeding was sharing
with the State the award and at later
stage the plaintiff was entitled to retain
the entire compensation
Italian Legal Framework
•
The inhibitory preventive and repressive collective
actions have been introduced in 2005 by articles 37
and 139-140 of the Consumer Code
•
Right of action rest with consumer associations
meeting the standards of the Consumer Code article
137
•
Against unlawful, anti-competitive behavior/s
and/or conduct detrimental to the fundamental
rights of the consumer
•
Economical sanctions cashed by the State for late or
uncompleted respect of the Tribunals' orders, but
no damages awarded
Italian Legal Framework
The Class Action has been introduced in 2008 by articles 2,
codicils from 445 thru 449 of the Law No. 244/2007
•
•
•
•
•
•
Italian court must have jurisdiction upon one or more of the
proceedings
a group of plaintiff must be identified by way of common issues of
fact or law
decision binds everyone who has opted-in
representant of the Group can be only:
(i) private associations; trade unions or foundations
(ii) a public authority or body whose identification was left to
vague legal requirements
common issues are heard in one sample proceeding which is
binding on the merit of the case, the Quantum debeatur shall be
determined by way of a mediation and if this fails by a further
proceeding in Court;
costs follow the events and claimants have no facilitations
Italian Legal Framework

The actual Class Action - whose renewed
discipline can be found in art. 140-bis of the
Consumer Code in accordance to article 49 of
Law No. 99/2009 provision - came into effect
on January the 1st 2010.

The action is available in relation to loss
events that occurred on, or after, August 15,
2009 (date in which Law No 99/2009 became
effective).

In January 2012, the discipline of the class
action was further amended by the so-called
deregulation Decree (D.L. 1/2012, converted
with amendments into law No 27/2012).
Italian Legal Framework

The Legislative Decree November 20, 2009
No. 198 introduced into the Italian legal
system also a collective action for the
enhancement of the efficiency of public
administrations and concessionaires of public
services

This class action can be exercised against a
public administration or a public service
concessionaire for the consumer/users’
prejudice consequent to:
i. breach of terms or non-adoption of
administrative acts which were to be
adopted or issued within a period laid
down by a law or regulation,
ii.
breach of the obligations contained in
the user statutes or service standards
violation
The Procedure
The right of action
The class action can be brought by:
i. individual consumers personally
ii. associations or committees to
which the former gave the
mandate of representation.
The associations to be entitled to bring a
Class Action must be representative at
national level so that they are included in
the national list at the Ministry of Economic
Development (art. 139 of the Consumer
Code), or being associations and committees
specifically and adequately representing the
collective interests considered in the specific
litigation.
The Procedure:
The Class Action scope (1)
The Class Action scope is:
i.
the assessment of a liability or the
determination of a breach of contract or
statutory duty imposed in the consumers
interest;
ii.
the award of damages and the condemn to
refund undue prices and/or costs to
individual consumers or users; and
iii. compelling the Public Administration to do or
to eliminate, within a given timeframe,
something that they were obliged to do or
obliged to prevent and they did not.
The Procedure:
The Class Action scope (2)
Legal situations grounding such actions can be
divided into three categories:
i.
breaches of contract by a company which gives
rise to consumers and/or users homogenous
rights to indemnification and/or restitutions,
including rights pertaining to uniform or standard
contracts according to articles 1341 and 1342
c.c.;
ii.
homogenous rights accruing to final consumers of
a particular product or service (the latter only as
of 2012) against its manufacturer/provider, even
in cases where no direct contractual relationship
exists;
iii.
consumers and/or users homogenous rights
arising from unfair trading practices, or anticompetitive behaviors.
The Procedure:
The introduction of the action
The class action is proposed by way of a writ of
summons, to be served also at the competent
court Public Prosecutor Office.
The action must be presented at the ordinary
Tribunal competent for the capital city of the
region where the company has its registered
office; the Tribunal shall run the case collegially.
By way of derogation from this general policy,
art. 140-bis Consumers Code expressly indicates,
for some Italian regions, the competent court
(i.e.: for the Basilicata and Calabria the Naples
Tribunal shall have territorial jurisdiction or for
the Abruzzo, Lazio, Marche, Molise regions
competent will be the Rome Tribunal).
The Procedure:
Opt-in: the adhesion mechanism
The Writ of joining the class action must contain:
i.
ii.
the election of domicile;
the description of the constituent element/s of
the right relied upon;
iii. the personal documentary evidence of the
joining party.
The writ can be personally filed with the competent
Court Clerk office - without the need of the
assistance/appointment of a lawyer - and (from
2012) also by way of a certified e-mail or fax.
The adhesion entails the adherent’s waiver of any
individual action or right to damages founded on
the same title upon which the class action is
grounded.
The Procedure:
The first hearing: “the filter"
At the end of the first hearing, the Court decide,
by order, upon the admissibility of the class
action application, declaring it inadmissible
when:
i. is manifestly groundless;
ii. there is a conflict of interest;
iii. the judge sees no homogeneity amongst the
individual rights actioned;
iv. the proposer doesn't seem able to treat
adequately the class interest.
The order is appealable at the competent Court of
Appeal, within 30 days from its communication or
notification, whichever occurred first. The appeal
does not suspend the ongoing procedure.
The Procedure:
The Court Order of Admissibility
With the order that declares the application
admissible the Tribunal shall:
i.
establishes the terms and conditions of the advertising
to be made for the purposes of informing membership of
the class;
ii.
defines the characters of individual rights interested in
the claim, specifying the criteria according to which
those who want to join are included in the class or must
be excluded from the action;
iii.
establishes a peremptory term, not exceeding 120 days
from the expiry of the deadline for the execution of the
advertising, in which the writ of joining must be
received by the Court Clerk (after such deadline no
further class actions can be presented for the same
titles/acts and in respect of the same enterprise);
iv.
determines the procedure timeframe ensuring respect of
due process and of equitable, efficient and prompt
handling of the proceeding.
The Procedure:
The Court Ruling
The judgment, upholding
application, shall provide:
i.
ii.
the
class
action
the final amounts due to each who have joined
the action, or
the homogeneous computing policy to determine
the indemnity due to each member of the class.
In this latter case a homogeneous computing
policy, the Tribunals gives to the parties a period
not exceeding 90 days, to reach an agreement
upon the damage liquidation. Should the granted
term expire without the agreement has been
reached, the Tribunal, at the request of at least
one of the parties assess the sum due to each
individual members.
The judgment became enforceable after 180 days
from its publication.
The Procedure:
The Appeal
Against the judgment, upholding the class action
application, the losing party has full right of
appeal.
On the interested party request, the Court of
Appeal can:
i.
suspend the enforceability of the decision of
the Court, considering the overall entity the
amount liquidated in judgment, the number
of creditors and the possible difficulty of
recovery of the sum paid in case of the
appeal upholding;
ii.
provide that, until the judgment should not
become definitive, the total sum due from
the debtor is frozen and remains blocked in
the manner deemed most appropriate.
Some Cases of Class Actions
Statistics
Since January the 1st, 2010:
i.
34 class actions, pursuant to art.
140-bis of the Consumers Code,
have been launched
ii. 07 have been declared admissible
iii. 04 has been successful (?)
iv. 21 announced new class actions
Some Cases of Class Actions
Admissible
Class actions, pursuant to art. 140-bis of the Consumers
Code, declared admissible are :
1.
Voden Medical Instruments Spa (Tribunal of Milan –
2010)
2.
Banca Campania (Tribunal of Naples - 16.11.2011)
3.
Polyclinic "Agostino Gemelli"
20.04.2012)
4.
Istituto Bancario Intesa SanPaolo (Tribunal of Turin 15.06.2012)
5.
Wecantour tour
28.02.2013)
6.
Comune di Petacciato and Comune di Montenero di
Bisaccia (Tribunal of Rome - 02.05.2013)
7.
Trenord Srl (Tribunal of Milan – 05.03.2014)
operator
(Tribunal of Rome -
(Tribunal
of
Naples
–
Some Cases of Class Actions
Succerful (?)
The sole class actions, to date, where the
Court sustained the claim :
1.
Wecantour tour operator (Tribunal of
Naples – 28.02.2013)
2.
Voden Medical Instruments Spa (Court
of Appeal of Milan – 27.08.2013)
3.
Trenord Srl
05.03.2014)
4.
Istituto
Bancario
Intesa
SanPaolo
(Tribunal of Turin – 11.04.2014)
(Tribunal
of
Milan
–
Implications for the Insurance Industry :
The Insureds‘ View
 Higher limits needed
 Defense costs inside or outside limits
 Increased premium
 Need for better risk management &
corporate governance
 Need of better information governance
Implications for the Insurance Industry :
The Insurers‘ View

New kind of claims previously not seen in
court


Potentially larger claims
Higher defense costs
(€40/50,000 admission
phase and €100/150,000 merit and decision phase)
 New types of clients affected
 New opportunities of business
 Need for new specialized legal consultants
QUESTIONS?
Thank you for your attention
Alessandro P. Giorgetti
Studio Legale Giorgetti
Milan, Italy
INSURALEX VZW
Web-site: http://www.insuralex.com