IMPLEMENTING THE EUROPEAN PERSPECTIVE
The European Union has adopted directives of broad and general scope to address product liability and product safety:
- Directive 85/374/EEC (creation of no-fault, strict liability regime);
- Directive 1999/34/EC (strict liability for defective and unsafe products);
- Directive 92/59/EEC (general safety requirement that "no producer shall place a product on the market unless the product is a safe product"); and
- Directive 2001/95/EC (general product safety; introduction of the obligation upon manufacturers to notify the relevant government authorities if they have information that their product poses a risk to consumers, which may lead to a mandatory product recall).
Italy has implemented Directive 85/374/EEC (the "Product Liability Directive") by Law No. 224 of May 24, 1988; Directive 1999/34/EC by Legislative Decree No. 25 of February 2, 2001; and Directive 92/59/EEC by Legislative Decree No. 111 of March 17, 1995 (both amended by Legislative Decree No. 206/2005—the "Consumer's Code"); and Directive 2001/95/EC by Legislative Decree No. 172 of May 21, 2004.
CONSUMER PROTECTION AND PRODUCT LIABILITY LEGISLATION IN ITALY
ARTICLE 2043 OF THE ITALIAN CIVIL CODE
In Italy, product liability was traditionally based on the general torts provision set forth in Article 2043 of the Italian Civil Code ("ICC"). This article provides that any person who by willful or negligent conduct causes unfair detriment to another party must compensate that injured party for any resulting damage (the "neminem laedere" principle). Article 2043 ICC allows consumers to sue manufacturers for damage caused by defective products. Negligence is typically an element necessary to establish liability.
In general, under Article 2043 ICC, the plaintiff must prove:
- The defect of the product;
- The damage suffered;
- That the product defect caused the damage; and
- The defendant's negligence or fault.
In accordance with this provision, moral damage1 can be compensated, and no one is exempt from liability. It can be difficult for a consumer to provide evidence of fault in connection with products that have complex manufacturing processes. Consequently, some court decisions and legal scholars have developed the theory that the defective nature of a product alone is sufficient to prove negligence in the manufacturing process. In their view, the manufacturer's fault can be proved by the mere existence of the defect generating the damage.
Claims brought under Article 2043 ICC are subject to the general five-year tort liability limitation period, starting from the time when the claimant could exercise his or her rights. The time limit is extended if the tort is connected to the perpetration of a crime. Moreover, when the damage is of a continuing nature or is aggravated over time, the limitation period starts from the aggravation that gave standing to sue.
Article 2043 ICC coexists with the strict liability system governed by Legislative Decree No. 224/1998, which implements the EU's Product Liability Directive (85/374/EC) and which has been consolidated by Legislative Decree No. 206/2005—the Consumer's Code.
LEGISLATIVE DECREE NO. 206/2005—THE "CONSUMER'S CODE"
The Consumer's Code harmonizes and consolidates the laws of purchase and consumption in order to ensure a high level of protection to consumers and users in accordance with the principles of the European Union's legislation. The Consumer's Code has been in force since October 23, 2005.
The Consumer's Code, in conjunction with general law (such as the ICC), provides rules designed to protect consumers, such as those on transparency in banking and consumer credit agreements; regulation of contracts and liability of financial brokers; insurance contracts; and regulation of the retail trade.
With respect to product liability, the Consumer's Code:
1. Recognizes "fundamental" rights of users and consumers (such as health, safety, information, correctness in advertising, consumer awareness and education, and propriety and fairness in contracts);
2. Regulates some aspects of consumer contracts, including warranties applicable to the sale of consumer goods and post-sale duties;
3. Regulates product safety and product liability; and
4. Addresses consumer access to justice and the form of collective actions.
The Consumer's Code introduces a strict product liability regime. It defines "product," "defective product," "manufacturer," "supplier," and the scope of manufacturers' and suppliers' liability. The injured party must prove the damage, the defect in the product, and the related causation, but not the manufacturer's fault.
Article 117 of the Consumer's Code provides that a product is defective when it does not provide the safety that one can reasonably expect, taking all circumstances into account, including:
1. The way in which the product was distributed; its packaging, evident features, and instructions; and the warnings supplied;
2. The product's reasonably expected use and life cycle; and
3. The period during which the product was distributed.
Furthermore, according to this provision, a product cannot be considered defective simply because a safer one was marketed later. A product is defective if it does not offer the safety normally offered by other samples from the same range.
To summarize, in product liability claims under the Consumer's Code, the injured party must provide evidence of:
- The product defect under the Consumer's Code definition;
- The damage incurred (based upon general tort rules);
- The causal relationship between defect and damage (on the basis of the general principles of causation in tort laws, proof of causation is often achieved through presumptions); but
- Unlike under Article 2043 ICC, no evidence of fault is required. Since the plaintiff has no burden of proving fault, the defendant must provide evidence excluding liability (e.g., proving the plaintiff used the product inappropriately).
Other laws do not affect the product liability legislation directly but involve consumer protection and incentives to increase competition. See Law No. 248 of August 4, 2006, and Law No. 40 of April 2, 2007 (confirming Legislative Decree No. 7 of January 31, 2007).
THE DOUBLE-TRACK PROTECTION: THE EUROPEAN COURT OF JUSTICE AND ITALIAN SUPREME COURT DECISIONS
Litigation by injured plaintiffs against product manufacturers is increasing. Because the Consumer's Code allows a consumer to seek (alternatively or cumulatively) other forms of protection provided by law, a product liability plaintiff will likely sue under both the Consumer's Code and Article 2043 ICC.
Article 13 of the EU Product Liability Directive permits cumulative theories of liability. Article 13 provides: "This Directive shall not affect any rights which an injured person may have according to the rules of the law of contractual or non-contractual liability or a special liability system existing at the moment when this Directive is notified." The European Court of Justice has clarified Article 13 of the Product Liability Directive:
The reference in article 13 to the rights which an injured person may rely on under the rules of the law of contractual or non-contractual liability must be interpreted as meaning that the system of rules put in place by the directive . . . does not preclude the application of other systems of contractual or non-contractual liability based on other grounds, such as fault or warranty in respect of latent defects.2
The Italian Supreme Court (Corte diCassazione) has confirmed the double-track protection system, based on both the EU's product liability regime and domestic rules on tortious liabilities.3 In a case concerning damage caused by a defective car, the Supreme Court ruled that product liability claims can be grounded in the tort rules based on fault or negligence set out in Article 2043 ICC, in addition to the strict-liability regime under the Product Liability Directive. This double-track protection system allows the consumer compensation for damage that is not expressly provided for in Article 123 of the Consumer's Code,4 such as moral damage.
It remains to be seen whether the double-track protection system for injuries caused by a defect in a product will be permitted when the ICC's domestic no-fault system of product liability conflicts with the EU's Product Liability Directive. The EC legislature wanted to prevent this sort of tension when it adopted a product liability directive promoting maximal harmonization, based on the principles of Article 100 of the EEC Treaty (now Article 94 EC). In theory, Member States may not maintain or establish provisions that depart from Community-harmonizing measures in their fields of operation.
LIABILITIES FOR SALES OF GOODS APPLICABLE WARRANTIES
Italian law distinguishes between warranty rules for the sale of goods to: (i) an entrepreneur ("B2B Sales") and (ii) a consumer ("B2C Sales").
With regard to B2B Sales, the ICC requires the seller to provide the buyer with several warranties.
Defects warranty. Pursuant to Article 1490 ICC, the seller must warrant to the buyer that the sold goods are free from defects that may: (a) make the goods unsuitable for their intended use; or (b) considerably decrease the value of the goods (collectively, the "Defects").
The Defects warranty has a minimum term of one year, commencing on the date of delivery of the goods. Any agreement or contractual clause that excludes or limits the Defects warranty is not effective if the seller has intentionally hidden the Defects from the buyer.
The buyer may make a claim within eight days of the discovery of any Defects, unless the law or the parties provide a different term. Any late notice of Defects is ineffective. As a remedy for breach of the Defects warranty, the buyer is entitled to ask for: (i) termination of the agreement; or (ii) a reduction of the purchase price. If, according to custom, termination of the agreement is excluded for certain kinds of defects, the buyer may ask only for a price reduction.
If the buyer asks for termination of the agreement, the seller must also reimburse the purchase price to the buyer and all expenses lawfully borne by the buyer in connection with the purchase of the goods. On the other hand, the buyer must return the purchased goods.
Whichever remedy the buyer selects, the seller is obliged to pay the buyer for damage (including damage deriving from the Defects), unless the seller proves it acted with out fault.5 Finally, the Defects warranty does not apply if: (a) the buyer was aware of the Defects before purchase; or (b) the Defects were easily identifiable, unless the seller declared that the goods were free from Defects.
Failure of the promised or essential qualities. Pursuant to Article 1497 ICC, the sold goods must have the qualities that: (a) the buyer promised; or (b) are essential for their intended use. Failing these qualities, the buyer is entitled to terminate the agreement, provided that, according to custom, the missing qualities are relevant. The buyer must request the termination of the agreement within eight days of the discovery of the failure of the represented or essential qualities, and the warranty has a maximum term of one year from the delivery of the goods.
Good running warranty. Pursuant to Article 1512 ICC, the seller may (but is not obliged to) warrant to the buyer the good running of the goods for a determined period of time. The good running warranty6 can be added to the Defects warranty but cannot replace it.
If the seller gives the buyer a good running warranty, the buyer must bring any claim within 30 days of the discovery of the defect concerning the running of the goods unless the parties agree otherwise. Any late notice is ineffective. The good running warranty has a term of six months from the discovery of any defects concerning the running of the goods.
The Consumer's Code applies to all sale agreements (and related warranties): (a) concerning "consumer goods"; and (b) between an entrepreneur (a person who enters into the sale agreement in connection with its business) and a consumer. The Consumer's Code defines "goods" to be any movable things, even if they are component parts or are to be assembled, except for, inter alia, water, gas, and electricity.
The Consumer's Code requires two kinds of warranties to accompany the sale of consumer goods:
Legal mandatory warranty. Under a legal mandatory warranty, the seller is obliged to deliver to the buyer consumer goods that are fully consistent with the parties' sale agreement. This consistency is assumed in certain cases, including, inter alia, where the goods are suitable for their intended use or have their represented qualities. A legal warranty has a term of two years commencing from the delivery of the goods. The consumer must bring any claim within two months of the discovery of the inconsistency. Any late notice is ineffective.
The consumer is entitled to select one of three remedies for breach of the legal warranty: (a) substitution or repair of the goods or, upon the occurrence of certain conditions, (b) reduction of the purchase price, or (c) termination of the agreement.
Voluntary additional warranty. The seller may decide (but is not obliged) to provide to the buyer a voluntary additional warranty along with the legal warranty. The seller is strictly bound by the terms and conditions of any voluntary warranty. A voluntary warranty must comply with certain requirements of the Consumer's Code: it must indicate its term and the other main conditions and must be drafted in Italian. The voluntary warranty may supplement, but cannot replace, the legal warranty.
TORT LIABILITY OF THE MANUFACTURER
Pursuant to Article 103(d) of the Consumer's Code, a "manufacturer" is:
any manufacturer of goods or supplier of services, or an agent thereof, or any importer of goods or services within the European Union or any natural or legal person presenting himself as the manufacturer by identifying the goods or service with his own name, trademark or other sign having a distinctive character.
Furthermore, "anybody dealing with the sale, lease, hire or any other form of marketing of the product is considered a 'manufacturer' as long as it has dealt with transferring the product from the manufacturer to the consumer, including persons in charge of delivering the product for mere advertising purposes."
All goods sold in Italy must be safe for users. Goods are deemed "safe" if their ordinary or reasonably foreseeable use (including their term of use, installation, and maintenance) cannot pose any risk or may pose risks so irrelevant that they are acceptable according to a high standard of protection of human health and safety, taking into account both the characteristics of the goods and the users who may run a risk by using them.
A good can be considered "defective" when it does not provide the safety that one can reasonably expect, taking all circumstances into account, including: (i) the way in which the good is distributed and its packaging, evident features, instructions, and warnings; (ii) the use to which the good can reasonably be placed on the market and the life cycle which the good can be reasonably expected to undergo; and (iii) the period during which the good was distributed. Finally, the good is considered to be defective if it does not offer the safety normally offered by similar goods.
The manufacturer is obliged to: (i) sell safe goods exclusively; (ii) provide the users with detailed information on the prevention and evaluation of any risk connected to the ordinary or reasonably foreseeable use of the goods; and (iii) adopt any possible measures to make the users aware of the product's risks and how to prevent them. In addition, the manufacturer is obliged to comply with applicable safety standards and rules for the goods. Article 114 of the Consumer's Code provides for the manufacturer's tort liability. The manufacturer is liable for the damage caused to any third party by its defective goods. Any agreement or contractual clause that excludes or limits in advance such tort liability is null and void.
Product liability also attaches to importers of products made outside the European Union (although the importer will be entitled to sue the manufacturer by filing an action for contribution). Administrative fines and criminal sanctions may also apply in case of breach of specific orders or measures adopted by the public authorities. As consumers may not be aware of the distinction between a "trademark" and a "brand or merchandise mark," liability is not limited to the manufacturer of the defective product but is also extended to the product's marketer. If the name of the manufacturer is known to consumers, it shall be liable to the marketer.
The damaged party (which is not necessarily a consumer) must provide evidence of the defect, the injury or property damage, and the causal connection between the defect and the injury or damage.
Damages may be recovered for: (i) death and injuries caused by the defective goods; and (ii) the destruction and deterioration of assets other than the defective goods, provided those other assets are mainly and normally intended for private use by the damaged party. In the case of other property damages, only damages exceeding €387 are refundable.
The damaged party must claim for damages within three years of the time he or she became aware (or should have become aware) of the damage, the defect, and the identity of the responsible person. Any late claim is ineffective. In any case, the damaged party's claim for damages is extinguished 10 years after the defective goods were placed on the market.
If more than one person can be deemed liable for the same damage, those persons are jointly and severally liable toward the damaged party. In addition, a person who has paid the damaged party has recourse against the other responsible persons. The liability is shared between all responsible persons on the basis of: (i) the risk attributable to each of them; (ii) the seriousness of each person's fault; and (iii) the consequences deriving from such fault.
Italian laws do not provide for punitive damages, and the Italian Supreme Court has ruled that punitive damages are contrary to public policy.7 Only in specific cases can there be liability for damages to some extent, irrespective of the actual loss.
Exclusion of Liability for the Manufacturer
According to Article 117 of the Consumer's Code, a manufacturer shall not have liability if:
- The manufacturer has not distributed the product;
- Any damage-causing defect did not exist when the producer began distributing the product;
- The defect is due to product compliance with a mandatory legal requirement or some binding measure;
- The state of scientific and technical knowledge at the time at which the producer distributed the product would not have considered the product to be defective;
- The defect is entirely due to the form of the product in which a component or raw material was incorporated or to the component supplier's compliance with the producer's instructions.
TORT LIABILITY OF THE SUPPLIER
Specific rules govern and limit the liability of a supplier of defective goods. The European Court of Justice has ruled that, in principle, liability for defective products as regulated by the Product Liability Directive lies with the manufacturer and will rest on the importer and distributor only when the manufacturer is not identified. In particular:
- The damaged party has the right to obtain from the supplier the manufacturer's name and address;
- If the supplier fails to reply to the request of the damaged party within three months and the manufacturer is not identified in any other way, the supplier is subject to the same liability as the manufacturer;
- In the case of a trial initially started against the supplier, the manufacturer can be requested to attend the trial at any time as an interested party. If the manufacturer does not challenge such a request and attends the trial, the trial continues exclusively against the manufacturer, and the supplier is considered free from any liability to the damaged party.
As provided by Article 104 of the Consumer's Code, manufacturers may place only safe goods on the market. Manufacturers are required to provide consumers with all relevant information to enable them to assess the risks inherent in a good throughout its normal or reasonably foreseeable use, where those risks are not immediately obvious without adequate warnings. These warnings do not exempt manufacturers from compliance with other requirements of law.8
Finally, the authorities can further require manufacturers to provide better warnings. The authorities can subject product marketing to prior conditions so as to make products safe.
Likewise, if a product presents risks to certain individuals, the authorities can require that any such individual be given notice of those risks in good time and in an appropriate form, including the publication of special warnings (e.g., special advertising on the web site of the producer or in the national newspapers). As provided in Article 112, paragraph 3, of the Consumer's Code, except where an action constitutes a more serious offense, producers or distributors failing to comply with the required special warnings shall be liable for a fine of €10,000 to €25,000.
LIABILITY FOR DANGEROUS ACTIVITIES—THE PRESUMPTION OF FAULT
Article 2050 ICC provides that whoever injures another party in carrying out an activity that is dangerous per se is strictly liable for damages unless the person proves that he or she adopted all possible measures in order to avoid the damage. Some Italian court decisions have applied this provision to the marketing and distribution of toxic chemical products and blood derivatives, which are considered "dangerous activities." They have held manufacturers liable for not having taken the necessary measures to avoid damage after circulating the dangerous products, notwithstanding full compliance with applicable laws.
Like the strict product liability regime implemented in the Consumer's Code, Article 2050 ICC provides for a presumption of the defendant's liability, independent of the defendant's fault. In principle, Article 2050 ICC can apply only to products that are either "dangerous" by an express provision of law or likely to cause damage to the user even if appropriately handled. Furthermore, according to European Court of Justice decisions,9 Member States may not apply national strict liability systems that provide consumers with a higher level of protection than the Product Liability Directive.
THE OBLIGATION TO RECALL PRODUCTS
Article 104, paragraph 7, of the Consumer's Code requires producers and distributors, when they know or ought to know that a product which they have placed on the market poses hazards to the consumer incompatible with general safety requirements, to immediately notify the competent authorities (to which Article 106, paragraph 1, refers) of the actions taken to prevent risk to consumers.
The new legislation imposes a number of additional duties on manufacturers and distributors. They must provide consumers with all information necessary to evaluate the risks arising from the product's normal and foreseeable use, adopt measures proportional to the product's characteristics that will enable the consumer to identify the risks, and take any necessary steps to avoid those risks.
Product recalls are regulated in greater detail in Article 104, paragraph 8, of the Consumer's Code. Manufacturers and distributors are required to organize direct removal of the products from consumers, destroy unsafe products, and support all related costs.
CRIMINAL SANCTIONS UNDER THE CONSUMER'S CODE
Article 112 of the Consumer's Code provides that the competent public authorities can forbid the placing on the market of any dangerous product and also adopt any necessary measures to ensure compliance with such a ban. As provided by Article 103, paragraph 1(b), of the Consumer's Code, a "dangerous product" is any product that does not meet the definition of "safe product."10
A manufacturer placing a dangerous product on the market is criminally liable and may be punished with imprisonment of up to one year and a fine of €10,000 to €50,000.
If his or her conduct involves the perpetration of a more serious crime, then the relevant criminal provision will also be applied (Article 112, paragraph 2).
Likewise, a manufacturer or distributor placing a dangerous product on the market in violation of a restriction order issued by the relevant authorities is criminally liable and may be punished with imprisonment of six months to one year and a fine of €10,000 to €50,000. If the conduct involves the perpetration of a more serious crime, then the relevant criminal provision will also be applied (Article 112, paragraph 1).
Criminal charges are brought against individuals only. According to basic principles of Italian criminal law, the competent authorities shall analyze whether there is a direct connection between the individual's unlawful conduct and the consumer's damage.
In the absence of a ban, placing a dangerous product on the market is punishable with up to one year's imprisonment and the fine mentioned above.
Furthermore, in the case of potentially dangerous products, the authorities can temporarily ban their sale for the period needed to evaluate their safety. They can order that products already marketed be adapted to comply with safety requirements within a given deadline. Failure to comply with any of these requirements can bring a financial penalty ranging from €10,000 to €25,000. Fines of an administrative, noncriminal nature are imposed in cases of failure to cooperate with the authorities in carrying out product checks and acquiring information and samples.
BRIEF DESCRIPTION OF ITALIAN CIVIL PROCEEDINGS AND THE CLASS ACTION PROCEDURAL OVERVIEW
The ordinary civil action in tribunal unfolds in three stages: introductory, proof-taking, and decision-making. The introductory stage begins with the drafting, filing, and service of the summons that initiates a case; states the legal and factual grounds upon which the prayer for relief is based; and describes the evidence that the plaintiff wishes to be considered.
An answer is filed, stating the defendant's denials, defenses, setoffs, counterclaims, and evidence. No sharp line divides the introductory from the proof-taking stage. Although new claims may not be brought, modification of legal, factual, and evidentiary grounds for the relief initially requested and for the defenses originally raised is usually permitted.
Evidence is taken during the proof-taking stage at various hearings, separated by periods of weeks or months. The Italian legal system does not have any principle resembling the U.S. discovery process. The plaintiff has the sole and full burden of providing conclusive and documentary evidence of its claims. Evidence is taken during the proceeding by the parties' filing of specific defensive briefs.
When the taking of evidence is complete, a final hearing takes place and the parties submit their final motions and arguments to the judge. After that hearing, the judge renders a judgment.
Appellate jurisdiction is vested in courts of appeal11 composed of panels of three judges. Notwithstanding the fact that only two hearings take place in the appellate proceedings (the first for the appearance and the second for the submission of final motions and arguments), the court of appeal usually issues its judgment three to four years from the date of service of the appeal.
Appellate judgments may be appealed on a point of law (e.g., breach of law or fl awed reasoning) or procedure (e.g., nullity or lack of jurisdiction) before the Supreme Court. It is the highest general court in the land, and its functions include ensuring the correct and uniform application of the law. The Supreme Court usually issues its judgments three to four years from the filing of the petition to the Court.
THE ROLE OF JUDGES AND JURIES
In civil proceedings, judges hear and decide the cases (whereas in the criminal sphere, some crimes will be tried before a judge and jury). The proceedings are adversarial in nature and based on the claims made. The parties are the ones who must adduce the evidence. The court's inquisitorial powers are extremely limited but include those of appointing its own expert, ordering whatever inspections it deems useful for deciding the case, questioning the parties or persons to whom the parties have referred when setting out their case, and requesting "estimatory oaths." A judge may request an estimatory oath concerning the amount of damages if the claim for damages was proved but the amount could not be proved or was not ascertainable otherwise. However, in such a case, the judge shall determine the maximum amount of damages.
TIMING AND PLEADINGS
Ordinary proceedings are instituted by the claimant serving a writ of summons. The case is then docketed and a judge is assigned to it. The writ of summons must specify, inter alia, the parties' details, the claim, the facts and law underlying the action, and the sources of evidence on which the claimant will rely.
At least 20 days prior to the hearing, the defendant must enter an appearance by filing its statement of defense and associated documents with the court registrar. The statement of defense must include several items, failing which the defendant will be barred from raising them later:
2. Third-party claim (which will lead to the postponement of the first hearing to enable the third-party summons to be served); and
3. Procedural objections that the court cannot raise at its own motion (e.g., lack of jurisdiction over foreigners). The defendant must also state its position with respect to the claimant's arguments and specify its sources of evidence.
During the course of the proceedings and subject to the deadline set by the court at the first hearing (Article 183 of the Italian Civil Procedure Code), both parties will be afforded an opportunity to clarify and amend the claims and defenses already made (but not to raise new matters) as well as to specify new sources of evidence and submit further documents.
At the conclusion of the evidence-gathering stage, the court reserves judgment in the matter, subject to granting the parties time to file final briefs and replies. The court may also grant an oral hearing.
In product liability litigation, some advance technical findings may be useful, and to this end the claimant, prior to the commencement of the proceedings on the merits, may request the court to appoint an expert to verify that injury or damage has occurred and to determine the amount and cause of the damage. The duration of the first-instance (trial) proceedings depends on the case's complexity. These generally last up to two or three years (or even longer for particularly complex cases or where judges have very heavy workloads).
The judgment of the court of first instance is enforceable. However, in case of appeal, the losing party can file a petition to the court of appeal to suspend the enforcement upon showing serious and urgent reasons for the suspension. Although Italian law does not specify those reasons, Italian court decisions (inter alia, Supreme Court Decision No. 4060/2005, Court of Appeal of Bari, section No. III, issued on November 30, 2006) have found "serious reasons" where: (i) a huge payment order issued by the judge of the first instance shall have a relevant impact in peius on the losing party's financial condition; or (ii) the execution of the judicial order would cause serious and irreparable harm to the losing party.
LEGAL AND PROCEDURAL COSTS
During the proceedings, each party must pay its own costs. At the end of the proceedings, the general Italian rule is that the winning party shall obtain the refund of legal costs, including attorneys' fees, from the losing party. However, the court usually fixes the amount of legal costs to be paid by the losing party at an amount lower than the costs actually incurred by the winning party. Furthermore, the court can decide to set off in whole or in part the costs between the parties. Finally, when the claim is granted for an amount that does not exceed a settlement amount offered by one party and rejected by the other party without valid reasons, the party that refused to settle can be ordered to pay legal costs even though it has won in court.
In Italy, the class action came into force in 2010. This new legal action allows each consumer or user to act for the protection of the rights of a determined class of persons. Associations that have received a mandate from consumers or users can also bring class actions. In Italy, specific associations (e.g., Adiconsum, Adusbef, and Codacons) are entitled to bring class actions on behalf of consumers seeking protection against damage caused by defective or unsafe products or unlawful activities (e.g., unlawful application of bank interests). Article 49 of Law No. 99 of July 23, 2009, amending Article 140 bis of the Consumer's Code, regulates the class action. A class action can be applied only to offenses completed after the effective date of Law No. 99/2009. Consequently, a class action must be based on unlawful conduct performed after August 15, 2009, that caused damage to consumers.
Any natural person who is sufficiently representative can bring a class action before the court of the capital of the region where the defendant (business entity) has its headquarters. If the business is not established in Italy, it may be sued in the place determined by applying the ordinary criteria for territorial jurisdiction.
The proceedings will require a preliminary decision on the admissibility of the class action in terms of:
1. Its not being clearly unfounded;
2. The absence of a confl ict of interest;
3. The suitability of the claimant to represent the interests of the entire class; and
4. The identicalness of the class members' rights.
The class action is an opt-in one, and other claimants must join by the deadline set by the court at first hearing. Other collective actions against the same business enterprises may not be brought relating to the same facts.
Since Law No. 99/2009 went into effect, only two class actions have been introduced. The first judgment, rendered on May 27, 2010, by the Court of First Instance of Turin, decided that the class action was not admissible in a case involving alleged unlawful application of bank interest charges. In the second case, the Milan Court of First Instance allowed a class action related to tests for avian fl u and the new fl u H1N1 (swine flu).
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1 As provided by Italian law, "moral damage" (danno morale) is commonly used to designate and describe every damage inflicted upon interests that are not considered patrimonial, such as mental anguish, humiliation, and emotional distress.
2 European Court of Justice Decision No. C-285/08.
3 Italian Supreme Court Decision No. 13432/2010.
4 Article 123 of the Consumer's Code provides for the refund to the consumer of only: (i) damages resulting from death or personal injury caused by a defective product; or (ii) damage to or the destruction of any item of property other than the defective product itself.
5 According to Italian law, the basic principle of "fault" is that anyone should be able to contemplate the harm that his or her actions may cause and therefore should aim to avoid such actions. "Fault" is the liability for or cause of wrongdoing or the failure to do something to avoid harm for one's actions.
6 A good running warranty (Garanzia diBuon Funzionamento) guarantees that no product defects shall arise from the buyer's use.
7 In Decision No. 1183/2007, issued on January 19, 2007, the Supreme Court held that, in the Italian legal system, damages are unrelated to the concept of punishment or to the wrongdoer's conduct. Rather, they are intended to compensate an innocent party to a contract or a person injured by a tort for a loss. The Italian legal rules on liquidated damages and compensation for moral damage are not of the same nature as punitive damages because punitive damages relate to the defendant's conduct, not to the plaintiff's loss. Moreover, they are characterized by a disproportion between the compensation granted and the injured person's loss. In considering liquidated damages, the Court observed that, if an amount to which the parties agreed is found to be manifestly excessive, the judge can equitably reduce it. As for moral damages, the Court noted that the system of tort liability is intended to compensate a person injured by wrongdoing for a loss—not to punish the tortfeasor—by the payment of a sum of money that is intended to remedy the tort. Therefore, a connection must exist between the plaintiff's actual harm and the amount awarded in damages. Thus, the Court found no analogy in either case with the concept of punishment inherent in punitive damages. It concluded that punitive damages have no equivalent in the Italian legal system and confirmed the view that foreign punitive damages awards conflict with public order and may not be recognized or enforced in Italy.
8 The producer shall adopt measures, commensurate with the characteristics of the products that they supply, enabling consumers to be informed of the product's risks. The producer must take appropriate action, including, when necessary, withdrawing a product from the market, adequately and effectively warning consumers, or recalling the product from consumers. According to Article 104, paragraph 4, of the Consumer's Code, these measures include: (i) indicating on the product or its packaging the producer's identity, details about the producer, and the product reference or, where applicable, the batch of products to which it belongs, except where the producer is reasonably justified in not providing that information; and (ii) sample testing of marketed products, investigating, and—if necessary— keeping a register of complaints and informing retailers of such monitoring activities.
9 E.g., European Court of Justice Decisions No. C-52/00, Commission of the European Community v. French Republic; No. C-154/00, Commission of the European Community v. The Hellenic Republic (Greece); and No. C-183/00, María Victoria González Sánchez v. Medicina Asturiana, S.A.
10 Article 103, paragraph 1, of the Consumer's Code states that a "safe product" is any product that (under normal conditions of use or those which may be reasonably foreseen, including shelf life and usage, installation, and maintenance requirements) presents no hazard or only minimal risks arising from the product's use and considered acceptable and consistent with a high level of personal health and safety, taking into account: (i) product characteristics, including its makeup, packaging, and instructions for assembly, installation, and maintenance; (ii) its effect on other products, where it can be reasonably foreseen that it will be used with other products; (iii) the product's appearance and packaging, its labeling, any warnings and instructions for use and disposal, and any other general information about the product; and (iv) those categories of consumers who are at risk when using the product (particularly children).
11 Courts of appeal also have original jurisdiction in a number of specific matters, such as antitrust lawsuits, actions to set aside arbitral awards, and proceedings for recognition of foreign judgments.
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