In May, Jones Day published a
Commentary discussing recent developments related to class
actions in Italy. It primarily focused on the so-called
"compensatory" class action ("azione di classe
risarcitoria") provided for by Art. 140bis of
the Italian Consumer Code (Legislative Decree n. 206/2005 and
subsequent amendments). This type of class action enables groups of
consumers or users and any of their relevant associations to seek
compensation of damages arising from violation of their rights in
the context of their relationship with business entities.
Italian law also provides for another type of class action: the
so-called "public" class action, introduced by
Legislative Decree n. 198/2009, which may be brought by a group of
consumers and users and/or their representative associations in
order to seek protection against the wrongdoings of the Italian
Public Administration, including government entities or other
public or private bodies providing public service. Such wrongdoings
could include, for example, breaches of the rights of a plurality
of individuals deriving from violations of quality and economic
standards of the service rendered, any violation of terms, or
failure to issue an administrative act.
Public class actions were established by Law 4 March 2009, n. 15
(a.k.a. "Legge Brunetta," named after the
relevant Minister of Public Administration and Innovation). This
law is aimed at, inter alia, boosting productivity in
public employment as well as efficiency and transparency in the
Italian Public Administration.
In this Commentary, we will first touch upon the main
characteristics of the civil "compensatory" class action
and then compare them with the "public" class action,
which is the focus of this article.
"Compensatory" Class Actions in the Context of Unfair Commercial Practices
The type of class action set forth in the Italian Consumer Code may be brought by consumers, users, and relevant associations before Italian civil courts and is aimed at obtaining a declaration of the defendant's liability, as well as compensation of damages, in violations of the following specific rights, as provided for by Art. 140bis,par. 2, of the Italian Consumer Code:
- Contractual rights arising out of standard contractual terms and conditions binding the plaintiffs and a business entity;
- Rights in respect of defects of products or services, regardless of any contractual relationship between the plaintiffs and the manufacturer of such product/service; and
- Rights to compensation accorded to consumers or users for unfair commercial practices or anticompetitive conducts.
Compensatory class actions are therefore mainly filed against
business entities, such as individuals, corporations, or other
legal entities acting within the scope of their business. In
addition, they may be brought against "providers of public
services" ("gestori di servizi pubblici o di
pubblica utilità ", Art. 140bis, para.
12), which may be public entities or, alternatively, private
companies providing a public service. This type of class action
concerns the violation of rights of a group of consumers/users in
contractual and commercial matters; it may not be brought in the
context of the relationship between consumers/users or citizens and
Public Administrations.
"Public" Class Actions Against the Inefficiencies ofGovernmental Entities and Other Public Bodies
The public class action, introduced by Leg. Decree n. 198/2009,
is more closely connected to public action or, more precisely, to
the action of Public Administrations, such as government entities,
public bodies, and providers of public services, and it is intended
to stimulate and improve the quality of such entities'
actions.
Also known as "collective action for the effectiveness of the
action of government entities and the providers of public
services," a public class action may be brought by the holders
of relevant identical interests, such as citizens, consumers, or
users or any association representing their interests, in cases in
which such interests are violated by the Public
Administration.
Public class actions are aimed at protecting the right holders
against violations of quality standards of public services,
regardless of the public or private nature of the entities
providing such services. Indeed, the public class action tool is an
expression of the principle contained in Art. 97 of the Italian
Constitution, according to which "quality performance"
and "impartiality" of the Public Administration shall
always be guaranteed.
In particular, public class actions are directed to "restore
the correct course of the administration's duty or the correct
provision of a public service" in instances of a direct,
tangible, and current violation of identical material interests of
a plurality of users/consumers (Art. 1, par. 1, Leg. Decree
198/2009) caused by the Public Administration's violation
of:
- Terms/deadlines or lack of issuance of general administrative acts that do not have the features of a rule of law and must be issued within a mandatory term fixed by law or regulations;
- Obligations contained in "charters of services" ("carte di servizi", i.e., the means through which any entity providing public services specifies the standards of its performance, declaring its goals and recognizing specific rights to citizens, users, or consumers. Therefore, through these charters, entities providing public services undertake to respect given quality and quantity standards, with the purpose of monitoring and improving the provision of such services);
- Quality and economic standards set, as to providers of public services, by the authorities in charge of the regulation and control of the sector and, as to other government entities, by the latter entities according to the applicable provisions (Art. 1, par. 1, Leg. Decree 198/2009).
In practice, the defendant Public Administrations may be
government entities, other public bodies, and providers of public
services, excluding independent administrative authorities,
jurisdictional bodies, legislative assemblies, constitutional
bodies, and the Presidency of the Council of Ministers (Art. 1,
par. 1-ter, Leg. Decree 198/2009).
Unlike the compensatory class action, which is brought before
civil courts, exclusive jurisdiction for public class actions lies
with the Italian administrative courts (Art. 1, par. 7, Leg. Decree
198/2009). Indeed, in this context, the Public Administration is
not deemed to carry out civil or commercial activities but
administrative activities connected to its ability to exercise
public powers.
As to procedure, a public class action may be brought only after a
warning letter is served on the defendant entity, ordering it to
comply with its obligations or remedy its violation within a 90-day
term (Art. 3, par. 1, Leg. Decree 198/2009). Only upon expiration
of such term, failing a full compliance of the entity with the
terms contained in the warning letter, may the right holders bring
the action within one year of the expiration of the 90-day term.
The statement of claim is then duly published on the official site
of the defendant entity, and notice thereof is given to the Italian
Public Administration Minister (Art. 1, par. 2, Leg. Decree
198/2009).
Moreover, as to the relief sought, public class actions may be
directed only to obtain the removal of the inefficiency in the
public service caused by the relevant violation and not to obtain
compensation of damages (Art. 1, par. 6, Leg. Decree 198/2009).
Hence, a decision upholding the plaintiffs' request will merely
order the defendant to remedy its proven wrongdoing. Notice of the
decision issued at the end of the proceedings is then duly given in
the same fashion the statement of claim is communicated at the
outset of the class action (Art. 4, par 2 juncto Art. 1,
par. 2, Leg. Decree 198/2009).
In this regard, a few commentators have criticized the advantage
given to Public Administrations, which may not be required to
compensate damages in public class actions, compared to the less
favorable position of commercial operators, which may well be
required to compensate damages through the compensatory class
action. In particular, this privilege is viewed as being in
contrast with the recent effort to increasing efficiency and
morality in the conduct of public entities, which is contained
inter alia in the above-mentioned Brunetta
reform. Although, ultimately, it would be possible to obtain
compensation of damages from public entities through ordinary means
(Art. 30 of the Code of Administrative Proceedings), such avenue is
undoubtedly more burdensome.1
Cases
Since the introduction of public class actions, a few cases have
been decided by Italian administrative courts, which gave their
interpretation to some of the rules governing such procedural
tool.
For instance, the Basilicata Region Administrative Regional
Tribunal ("T.A.R."), in the judgment T.A.R. Basilicata,
September 23, 2011, n. 478, decided on an action inter
alia taken by a number of single users/consumers and an
association, Agorà Digitale, representing the collective
interest of "defending digital freedom and developing internet
communications directed to involve and inform the public." The
plaintiffs complained that the Basilicata Region did not publish
its certified email address on its official website, as provided by
law, thus forcing the citizens to physically access the
Region's offices in order to use any of the regional services,
since they were unable to benefit from the advantages of digital
communications. The Basilicata T.A.R. ultimately held that the
Region's conduct amounted to a relevant violation and ordered
it to publish its certified email address on the Region's
website.
However, the Tribunal issued its decision in favor of the
above-mentioned association only. In fact, the T.A.R. preliminarily
rejected the claim brought by the individual citizens because they
merely alleged, abstractly, that the Region's behavior was not
compliant with the legislative provisions and failed to prove a
direct, tangible, and current violation of their rights (which is
specifically prescribed by Art. 1, par. 1, Leg. Decree n. 198/2009,
with the aim of preventing public class actions from being used as
an alternative tool to the administrative–political control
of the actions of Public Administration).
Conversely, the T.A.R. admitted the claim of the mentioned
association, stating that, in respect of locus standi of
the associations protecting collective interests, it is not
necessary to investigate the existence of a tangible violation,
given that the harmfulness of the offense is assessed in an
abstract manner, in relation to the associations' effective
ability to protect the interests of the category that is allegedly
harmed by the conduct of the public administration. This part of
the decision has been criticized by some commentators, however,
based on the fact that the association only incidentally protected
the interests of the harmed category (i.e., the rights of the
users/consumers to "digitally" access Regional services),
whereas its ultimate aim was broader access to digital
technology.2
Under a different approach, in a subsequent decision issued by the
Lazio Region T.A.R. (T.A.R. Lazio, September 3, 2012, n. 7483, in
Guida al diritto 2012, 40, 63), the Tribunal specified
that public class actions may in principle be brought by
"associations or committees" pursuant to Art. 1, par. 4,
Leg. Decree 198/2009. However, under the same provision, these
entities must do so with the aim to "protect the
interests of its members," i.e., the holders of legally
relevant interests that may be subject to a direct, tangible, and
current offense caused by misconducts of the Public Administration.
Unlike the Basilicata T.A.R., the Lazio T.A.R. held that the
plaintiff consumer association would in principle have been
entitled to bring the action, but it should have done so in
representation of the interests of its members, specifically
indicating, for each of them, the title and the subject matter of
their claim. Hence, in the case in question, the Tribunal dismissed
the claim inter alia because these elements had not been
specified by the plaintiffs.
In addition, the Lazio T.A.R. dismissed the claim for another
reason. The plaintiffs based their claims on the fact that the sued
Public Administrations did not adopt adequate measures to prevent
hydrogeological risks in several different geographical areas.
However, the relevant situations were numerous and diverse, and the
plaintiffs failed to allege which public act was lacking in each
situation. In addition, such situations were described only in
general terms by the plaintiffs. Therefore, the T.A.R. dismissed
the claim, stating that the general principle of sufficient
specificity of the object of judicial claims
("petitum"), which also applies to public class
actions, was not respected in the case at hand.3
Finally, in a recent decision issued by the same Lazio Region
T.A.R. (T.A.R. Lazio, September 6, 2013, n. 8154), the Tribunal
upheld the action taken by a number of plaintiffs complaining that
certain Public Administrations systematically failed to meet the
set 90-day term in issuing their residence permits and that they
suffered inconveniences due to the delay. In particular, they
requested the judge: (i) to order the timely issuance of such
residence permits and (ii) to take any possible measure to persuade
the Public Administrations involved to apply a specific
interpretation of the Italian immigration law, as to the merits of
the residence permits.
The Tribunal upheld the first request, holding that it fell within
the first prerequisite set forth for public class actions by Art.
1, par 1, Leg. Decree 198/2009, given that it concerned the
violation of terms to adopt general administrative acts. The second
request was dismissed, stating that a class action directed to
persuade the Public Administration to adopt a specific
interpretation of the law lay outside the scope of application of
the public class action itself, as conceived by Leg. Decree
198/2009, and, moreover, it would have amounted to an undue
interference with the inherent powers of the Public
Administration.
Relationship Between "Compensatory" and "Public" Class Actions
Compensatory and public class actions may overlap when they are
brought against providers of public services, which may be sued
both in a civil compensatory class action for violations concerning
contractual rights of users and consumers, and in a public class
action for one of the described inefficiencies in the standards of
services provided.
The common requirement for both actions is the violation of rights
of a plurality of plaintiffs. However, the actions differ in
respect of the results: a compensatory class action, if successful,
may end with a decision on the compensation of the damages suffered
by the plaintiffs. Conversely, compensation of damages may never be
granted by the administrative judge in a public class action. In
other words, the first action is directed to obtain monetary
compensation of damages, whereas the second is aimed at obtaining
the judge's order compelling the government entity or the
services' provider to comply with their obligations of duly
providing public services to the users/consumers.
In fact, the rationale underlying the two actions is very
different. On the one hand, compensatory class actions protect
identical rights of consumers and users vis-à-vis companies,
in the context of violations deriving from the imbalance of their
positions on the market, with results affecting the contacts
between the parties (whether contractual or not). On the other
hand, public class actions have direct effects on the very process
of production and management of public services and are directed to
obtain any relevant specific performance.4
As to the risk of parallel proceedings, Art. 2, Leg. Decree n.
198/2009 governs the relationship between the two actions. If, for
the same violation, a compensatory class action is already pending,
a public class action may not subsequently be brought. However,
when a public class action has been brought first, such action
shall be stayed until the second compensatory class action has been
finally decided.5
Footnotes
1.F. Caringella, M. Protto, Manuale di diritto processuale amministrativo, II edition, Dike, 2012, p. 1535.
2.E. Zampetti, Class action pubblica ed effettività della tutela. Public class action and effectiveness of judicial protection, in Foro amm. TAR 2011, 12, 4104.
3.See comment by D. Giuliani, La c.d. class action pubblica: una tutela potenziale, in Corriere del merito, 2013, fasc. 1, pag. 97-102.
4.Seeinter alia Italian Council of State's Opinion, June 9, 2009, n. 1943.
5.G. Palliggiano, Così il giudice si insinua nelle disfunzioni degli enti, in Guida al Diritto, 12.2.2011, n. 7, p. 40.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.