The Dispute Resolution Review: Italy
Introduction to the dispute resolution framework
Italy is a civil law country. The law is not created by court decisions, as in common law countries, but through legislative statutes.
Disputes on civil and commercial matters are resolved by either state courts of law or private arbitrators.
The state courts having jurisdiction over civil and commercial disputes are the following: courts of first instance, courts of appeal and the Supreme Court.
i Courts of first instance
There is one justice of the peace and one tribunal in all major municipalities.
The justice of the peace is a single honorary judge whose competence is limited to specific disputes, including disputes relating to movable goods for a maximum value of €5,000, which will be increased to €30,000 starting from 31 October 2021.
Tribunals, in addition to deciding on appeals against the decisions of justices of the peace, rule on all civil and commercial disputes that fall outside the competence of justices of the peace. Tribunals can be composed of one or three ordinary magistrates, depending on the nature of a dispute.
Certain tribunals have specialised divisions that deal with specific matters (such as employment, bankruptcy, corporate and intellectual property).
ii Courts of appeal
There are 26 courts of appeal in Italy. Courts of appeal are composed of three ordinary magistrates and rule on appeals against decisions of the first instance court and challenges against arbitral awards.
Generally, only the claims, objections and evidence submitted by the parties before the first instance tribunal are admissible in appeal proceedings.
If, following appeal, the decision of a court is overruled, the court of appeal also decides on the merits of the dispute and its decision replaces the annulled decision. Particular rules apply in this respect where the court annuls an arbitral award.
iii Supreme Court
There is one Supreme Court in Italy, in Rome. The grounds for recourse to the Supreme Court are strictly established by Article 360 of the Italian Code of Civil Procedure (CCP).
The year in review
i Position paper of the research department of the Italian Supreme Court of 8 July 2020
The topic of a paper issued by the research department of the Italian Supreme Court is an in-depth analysis of certain provisions and principles of Italian law that, according to its author, allows it to be argued that, when an unexpected event like the covid-19 pandemic occurs and overturns the equilibrium of a contract, the affected party is entitled to ask the other to renegotiate the contract, even if such contract does not provide any hardship clause or similar remedies. Each party has to carry out the renegotiation in good faith. In addition, the paper affirms that if the parties fail to successfully renegotiate the contract, a judge can modify it when he or she can forecast the outcome of negotiations conducted in good faith.
ii Supreme Court, sitting en banc, 18 September 2020, No. 19597
The Supreme Court has ruled that default interest rates are also subject to the anti-usuary provision of Article 1815 of the Italian Civil Code. Consequently, if a contract sets out default interest that exceeds the usuary threshold, this provision is null and void and no interest has to be paid.
i Overview of court procedure
The CCP establishes the general rules that govern first, second and third instance proceedings before state courts relating to civil and commercial disputes. Moreover, it governs enforcement proceedings and special proceedings such as summary proceedings seeking interim protective measures or payment injunctions. It also establishes the general rules that govern arbitration (see Section VI).
The CCP provides for three paradigmatic categories of court procedures: ordinary proceedings, summary proceedings and labour proceedings.
However, there are other laws that govern proceedings before state courts that relate to particular disputes on civil and commercial matters, such as bankruptcy (Royal Decree No. 267/1942, which will be replaced by Legislative Decree No. 14/2019 starting from 1 September 2021), divorce (Law No. 898/1970), and intellectual property (Legislative Decree No. 30/2005).
ii Procedures and time frames
Ordinary proceedings before the courts of first instance begin with a writ of summons served by the claimant.2
Should a defendant intend to raise counterclaims or objections that only the parties can raise, or call third parties, the defendant must file a statement of defence at least 20 days before the first hearing. If not, the defendant can file its statement of defence on the hearing date.
At the first hearing, at the request of one of the parties, the court must authorise both parties to simultaneously file three subsequent briefs within strict deadlines (30 days, 30 days and 20 days). In these briefs, the parties must better specify their claims and objections and offer further evidence.
The subsequent hearings are devoted to taking evidence, which the court admits at its discretion.
When the court holds that no further evidence needs to be taken, it schedules a hearing at which the parties must state their final conclusions. The parties must then file two conclusive briefs within 60 days and 20 days of the hearing date. However, different rules may apply.
Generally, the court issues decisions within 30 or 60 days of the date of filing the second and final brief, depending on whether the court is composed of one or three judges.
These proceedings start with an application filed directly with the judge, who then fixes the hearing for the parties' appearance. After having been served with the notice of application and the judge's order fixing the hearing, the defendant submits a written reply 10 days before the hearing. During the hearing, if the judge concludes that the parties' defences can be examined summarily, he or she proceeds in the most appropriate manner and issues an order, which has the same effect as a judgment.
The CCP allows a court to grant interim measures in favour of one party, prior to or pending a trial, on one party's application.
The subject of the interim protective measures varies from case to case. Protective measures range from an order to refrain from interfering with the applicant's right to freely dispose of its properties, to an order to refrain from calling a first-demand performance bond issued by the applicant's bank, to a temporary seizure of goods or property held by the defendant, etc.
As a general rule, interim protective measures can only be granted if the applicant provides the court with clear evidence of the existence of both the right that the measure is aimed at protecting and the serious and actual risk that the right be harmed if not temporarily protected pending a trial on the merits. Protective measures can be granted ex parte if the circumstances so dictate subject to confirmation, revision or annulment at a later stage, after a hearing, based on the defences of the other party.
iii Class actions
In Italy, class actions were reformed by Law No. 31/2019. The new articles (Articles 840 bis to 840 sexiesdecies of the CCP) should have entered into force on 19 November 2020. However, Law No. 176/2020, which encompasses various measures to deal with the covid-19 pandemic, has moved the date of entry into force of the reform to 19 May 2021. The new rules will govern unlawful activities allegedly carried out after that date. This section therefore examines the legislation currently in force and provides an overview of the most significant upcoming amendments.
Class actions are currently governed by Article 140 bis of the Consumer Code.3 This Article entered into force on 1 January 2010 and applies to allegedly unlawful activities carried out after 15 August 2009.
Consumers may bring class actions against companies and other entrepreneurs for damage caused by breach of contract, by product liability, and by unfair and restrictive business practices. Only consumers may bring class actions and appear in court, and they may be represented by associations and committees of which they are members (provided that they prove they can adequately represent the interests of each class member). Class actions must be brought before the civil court of the capital of the region the company has its registered office in; however, certain regional courts have jurisdiction over smaller regions.4 At the first hearing, the court decides and issues an order on admissibility. The order may be challenged before the court of appeal within 30 days.5 The order also sets out the means of public announcement to enable interested parties to join the class and the requirements and deadlines for doing so (consumers who join the class need not appoint legal counsel).
A class action is admissible only if multiple consumers are affected by the alleged violation and the asserted rights of the consumers are homogeneous. A class action is inadmissible if the court holds that:
- it is clearly ungrounded;
- a conflict of interest exists;
- the asserted rights are not homogeneous; or
- the class representative appears unable to adequately represent the interests of all the class members.
After the admissibility stage, the proceedings continue in accordance with the instructions set out by the court.
When a court rules in favour of the class, it either orders the losing party ex aequo et bono to pay the amounts due to the claimants or establishes the criteria for calculating the amounts.
The class action legal framework is based on an opt-in mechanism, meaning that the court's ruling is binding only on the parties that joined the class action (the class must be joined within a limited period of time after the admissibility order). Non-joiners may file individual claims, but a class action relating to the same facts and brought against the same parties as in another class action may not be filed after the deadline to join the other class action.
With the new law, class actions will no longer be restricted to those who qualify as consumers under the Consumer Code; nor will they be restricted to certain types of unlawful activities allegedly carried out (i.e., breach of contract, product liability or unfair and restrictive business practices). Class actions will therefore be available to anyone seeking compensation for damage (for either contractual breach or tort) caused by unlawful activities, on condition that the asserted rights are homogenous and the violation is attributable to a business activity.
Moreover, under the new provisions, class actions can be brought by associations and committees (which so far could only represent the class members) and will have to be brought before the specialised division in business and intellectual property of the court of the company's registered office.6
The new provisions maintain the admissibility phase and the opt-in mechanism but significantly extend the time limit for joining a class: a class can now be joined not only right after the admissibility ruling (as in the current legislation), but also after the court has decided on the merits of the case and ruled in the claimants' favour. The reform also introduces a new stage of proceedings following a court ruling in the claimants' favour on the merits of the case. The new stage focuses on determining the compensation for everyone who joined the class and – given the potentially high number of parties involved – is modelled after insolvency proceedings.
The reform in general – and the amendments outlined above in particular – are expected to increase the efficacy of class actions brought before Italian courts (and, consequently, the number of class actions and the number of parties who join the proceedings). As a matter of fact, so far very few class actions have progressed beyond the admissibility stage since class actions were introduced in Italy. Moreover, one of the very few class actions that ended with a ruling in favour of the claimants7 has been annulled by the Supreme Court, with Decision No. 14886 of 31 May 2019. The Supreme Court held that non-economic damage can be compensated in class actions but found that there was no proof in the given case as for the homogeneity of the rights of the class members.
Other pending class actions that have progressed beyond the admissibility stage include the following:
- two class actions against two major automobile manufacturers (for unfair and restrictive business practices involving the misrepresentation of vehicle emissions and fuel economy performances);
- one action against a major smartphone and tablet producer (which allegedly misrepresented the storage capacity of its devices); and
- one action against a water supplier brought by people who are resident in certain towns in central Italy (the defendant allegedly invoiced undue fees to its customers).
Another type of class action (governed by Legislative Decree No. 198 of 20 December 2009) may be brought against the public administration and public services providers. This type of class action does not seek to obtain damages, but rather to restore the correct performance of a function or a service to the public, and thereby enhance the quality of the public administration.
iv Representation in proceedings
Parties, both individuals and entities, must be represented by a qualified lawyer before state civil courts. However, an individual may stand in trial without counsel before a justice of the peace provided that he or she is at least 18 years old and is not legally incapacitated, and the value of the case does not exceed €1,100.
v Service out of the jurisdiction
The service from Italy to a Member State of the European Union of judicial and extrajudicial documents relating to civil and commercial matters is governed by EC Regulation No. 1393/2007.
With regard to the service of documents to a non-Member State, Italy has ratified the Hague Convention of 15 November 1965.
If the country of destination has not ratified the 1965 Hague Convention, but a bilateral treaty is in place, the service method established by the treaty shall apply. In the absence of a bilateral treaty, service shall be made according to Articles 37 and 77 of Legislative Decree No. 71/2011 (i.e., transmission from and to consular authorities) or, if not possible, according to Article 142 CCP (i.e., transmission by the court's clerk of two copies, one by mail directly to the addressee and one through the office of the Public Attorney to the Ministry of Foreign Affairs, which will then deliver it to the addressee).
vi Enforcement of foreign judgments
If a judgment has been rendered by the court of a Member State of the European Union, the various EU regulations on recognition and enforcement of judgments, including Regulation No. 1215/2012 on civil and commercial matters,8 will apply and no declaration of enforceability is required.
If the judgment has been rendered by the court of a non-EU state, it will be recognised and enforced according to the specific bilateral or multilateral treaty between Italy and that state. In its absence, it will be automatically recognised in Italy under Article 64 et seq. of Law No. 218/1995 (although the counterparty has the right to raise an opposition) if specific conditions are met:
- the court that issued the decision had jurisdiction according to Italian rules on jurisdiction;
- the defendant was served with the writ of summons according to the lex fori and the principle of due process has been complied with;
- the judgment has become res judicata according to the lex fori;
- the judgment does not contradict a judgment issued by an Italian court that has become res judicata;
- there are no proceedings pending before Italian courts between the same parties and on the same dispute that were commenced prior to the foreign proceedings; and
- the judgment is not contrary to public policy.
vii Assistance to foreign courts
The assistance by Italian courts to courts of another Member State of the European Union (other than Denmark) in the taking of evidence in civil or commercial matters is governed by EC Regulation No. 1206/2001.
The assistance by Italian courts to courts of another state that is not a member of the European Union shall take place according to the specific bilateral treaty between Italy and that state. In its absence, it shall take place in accordance with the provisions of Law No. 218/1995, according to which both a party in a foreign trial and the court before which the trial is held may request the assistance of the Italian courts in the taking of evidence in Italy.
viii Access to court files
The parties and their officially appointed counsel may access the court file at any time.
Third persons may not access the court files. However, unless otherwise provided, the court must grant permission to third parties to make copies of acts or documents contained in the file (Articles 743 and 744 of the CCP).
Courts' final judgments are public.
ix Litigation funding
The parties bear litigation costs. Each party must advance the relevant fees. However, as a general rule, the court shall order the losing party to refund the legal expenses borne by the counterparty, unless either both the parties have partially lost or the question of law of the case was exceptionally new, or there was an overruling or the expenses borne by the winning party were exorbitant or unnecessary.
Litigation can be funded by a third party; however, this is not common in Italy.
i Conflicts of interest and Chinese walls
As of 15 December 2014, conflicts of interest are regulated by a professional code of conduct (Code). The relevant provisions are binding on Italian lawyers and foreign lawyers working in Italy. The sanctions are provided for by the Code and are meted out in proportion to the seriousness of the infringement, ranging from a simple warning to disbarment.
Lawyers must carry out their professional activity with loyalty. Any behaviour that can be construed as consciously acting against a client's interest is cause for disciplinary action.9
With some specific exceptions, a lawyer has the right and the duty to not divulge, and to keep confidential, the professional activities performed on behalf of a client, as well as all information received from a client or of which he or she has become aware as a result of an assignment. The duty of confidentiality also applies to former clients and persons who requested the lawyer's services without the lawyer accepting the assignment.10
Lawyers must refrain from performing any professional activities in favour of a client if doing so would or may potentially cause a conflict with the interests of another client, or would interfere with the performance of another assignment, even a non-professional one. A conflict of interest would also exist if, in carrying out a new assignment, a lawyer should disclose information concerning another client, or if the cognisance of a client's business could unfairly favour another client, or if the carrying out of a former assignment could limit the lawyer's independence in performing a new assignment.11
If a lawyer acts in situations of conflicts of interest even after having obtained clear and conscious consent from every client, he or she will infringe the ethical rule.
Accepting an assignment against a former client is only possible two years after having completed the former client's assignment, and provided that the object of the new assignment is unrelated. Furthermore, a lawyer cannot use information acquired on account of the preceding assignment.12
Article 24(5) of the Code establishes that a lawyer's duty to refrain from acting in situations of actual or potential conflicts of interest applies also where the parties with conflicting interests consult two different lawyers belonging to the same firm or partnership, or working in the same office.
Chinese walls are possible and frequent, but do not necessarily excuse lawyers from complying with their duty to refrain from acting in situations of actual or potential conflicts of interest. Even where information barriers are put in place, every lawyer should decline an assignment in cases of existing or potential conflict if these barriers are insufficient to exclude the conflict.
ii Money laundering, proceeds of crime and funds related to terrorism
Legislative Decree No. 231 of 21 November 2007 (as last emended by Legislative Decree No. 125 of 4 October 2019, which transposes European Directive 2018/843 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing) binds lawyers to strict obligations regarding due diligence measures concerning clients when participating in financial or corporate transactions, including when providing tax advice; and reporting to the authorities any suspect transactions.
Furthermore, by virtue of deontological rules, a lawyer must not accept any assignment from a potential client when he or she can reasonably assume that professional services would be connected with an illegal business or transaction, and must not receive from or manage any funds of a client where the client cannot be properly identified.
Lawyers must record and keep all documents and information relating to clients' transactions for 10 years after the business relationship with such client has ended.
As regards the reporting obligations, on their own initiative lawyers must promptly inform the competent authority where they know, suspect or have reasonable grounds to suspect that money laundering or terrorist financing is being or has been committed or attempted, or where they know, suspect or have reasonable grounds to suspect, that funds, regardless of their own amount, come from criminal activity. However, pursuant to Article 35(5) of Legislative Decree No. 231/2007, this obligation does not apply to information acquired by lawyers in relation to any judicial proceedings, or in the course of ascertaining the legal position of a client; therefore, legal advice remains subject to the obligation of professional secrecy.
iii Data protection
On 25 May 2018, the General Data Protection Regulation (GDPR) came into force, repealing Directive 96/95 and forcing national legislators to change domestic law. Thus, Italy's legislative framework for the processing and protection of personal data is now subject to the GDPR and Legislative Decree No. 196 of 30 June 2003, as amended by the Italian Data Protection Code.13 The GDPR changed the data processing rules and introduced new principles (such as accountability); however, the basic rules and principles remain the same. Thus, the role of privacy information notices has remained the same, as has that of requiring a legal basis for data processing, but consent no longer has a central role: it is now on the same level as the other legal bases required by law.
The legal bases are the following:
- the data subject's consent;
- the necessity to perform a contract to which the data subject is party or to take steps at the request of the data subject before entering into a contract;
- a legal obligation to process data;
- the necessity to protect the vital interests of the data subject or of another natural person;
- a public interest in processing data or the exercise of official authority vested in the controller; and
- a legitimate interest pursued by the controller or by a third party, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject that require the protection of personal data.
Thus, a controller's legitimate interest in processing personal data (i.e., the processing is necessary to carry out an investigation or to exercise or defend a legal claim or right) constitutes an adequate legal basis to do so.14 As the practice of law generally involves exercising or defending a legal claim or right, a lawyer authorised by client or a private detective hired via a written agreement may carry out processing for this purpose without the data subject's (i.e., the client's or a third party's) consent. Clients themselves may also process the data in these cases, for instance, to audit work email accounts or computers to seek evidence against employees.
The ability to carry out the above type of investigation without a data subject's consent is confirmed by the Italian Code of Practice Applying to the Processing of Personal Data Performed with a View to Defence Investigations (published in Official Journal No. 275 of 24 November 2008).
The Code – which still applies – stresses the importance of respecting the minimisation principle. Indeed, the following applies to lawyers when processing personal data for investigative purposes.
Purpose limitation, data minimisation and non-excessiveness principles shall be applied, the envisaged safeguards shall be assessed as to their substance rather than their form and the quality and amount of the information to be processed shall be taken into account along with the risks.
Similarly, the sharing of personal data between lawyers (whether nationally or internationally)15 is allowed only if strictly necessary to defend a legal claim or right, and the principles above must be applied.
In any case, to lawfully process personal data for investigative purposes it is necessary to provide the data subject with a specific information notice. A lawyer or a private detective must not provide the information notice if data is collected from third parties16 or is processed exclusively for as long as may be necessary to establish or defend a judicial claim or for the purpose of defence investigations. It is possible to postpone the information notice provision when a disclosure of the investigative purpose would lead to the detriment of the investigation itself.
Moreover, the Italian Data Protection Authority in December 2018 approved the new 'Deontological rules relating to the processing of personal data to carry out defensive investigations or to assert or defend a right in court'. These rules foresee guidelines that must be followed by both lawyers and private investigators to lawfully process data during investigations.
Finally, the admissibility in civil legal proceedings of personal data processed in breach of data protection rules must be assessed solely based on the CCP – not the Data Protection Code.17 The CCP does not provide a specific rule for unlawfully collected evidence, but according to most legal doctrine and case law, a breach of the Data Protection Code does not preclude personal data being used as evidence in civil proceedings if the evidence is genuine, verifiable by the court and relevant.18 Conversely, personal data collected through equipment used to monitor employees and processed in breach of data protection rules may not be used as evidence in labour law proceedings.
Documents and the protection of privilege
The CCP contains no rules relating to correspondence among counsel and parties.
According to Articles 210 and 118 of the CCP, the court may order a party to produce documents, or may order the inspection of specific places if it deems it relevant for the purpose of deciding a case. However, the court may not uphold the request by one party to order the disclosure of documents if this may cause unjustified harm to the other party or violate a professional secret.
Article 48 of the Code establishes that, unless otherwise provided, correspondence between the parties' counsel expressly qualified as confidential, or regarding the negotiation of an amicable settlement, cannot be filed or referred to in court proceedings.
The Code does not apply to in-house counsel. If in-house counsel is registered with the Italian Association of In-House Lawyers (AIGI), he or she must abide by the rules of conduct provided by the AIGI's code. Although this does not contain specific provisions regarding confidential correspondence, it establishes in its Article 7 that in-house counsel must keep confidential all the information of which they become aware by reason of their professional activity, even after termination of their employment.
ii Production of documents in civil litigation
As a general rule, the burden of proof lies on the party asserting a right or entitlement (under Article 2697 of the Italian Civil Code).
According to Article 115 of the CCP, the court might issue a decision not only on the basis of the evidence filed by the parties, but also on the basis of the uncontested facts, and might even rely on factual elements that are common knowledge.
In the Italian civil judicial system, the key role in the taking of evidence is played by the parties, as they may produce all the documents that prove the facts on which their claims rely without any prior authorisation by the judge.
With certain exceptions (e.g., notarised deeds), the court can evaluate any evidence at its cautious discretion19 provided that specific motivations of such evaluation are given in the judgment. Notarised deeds, unless proven to be false, conclusively prove the declarations of the parties set out therein and the facts that the notary declares to have occurred in his or her presence.
Email and electronic documents are considered signed documents if they bear the electronic signature of their author in accordance with Legislative Decree No. 82/2005.
According to Article 210 et seq. of the CCP, subject to certain conditions, the court may order a party or a third person to produce a document that has not been filed.20
Alternatives to litigation
i Overview of alternative dispute mechanisms
The law allows civil or commercial disputes to be resolved either directly by the parties (e.g., by a settlement agreement), or by the parties assisted by a third person deprived of decision-making authority but empowered to suggest possible solutions (e.g., mediation) or, if the type of dispute allows it, by a third party entrusted by the parties with decision-making authority (i.e., arbitration).
The rules in general
Arbitration on civil and commercial disputes is very common in Italy. Although arbitration is faster and ensures a high level of technical expertise and confidentiality, court proceedings are often preferred as costs can be lower.
The arbitrator's decision shall be legally binding on the parties and is as enforceable as a state judge's decision.
The general rules governing arbitration are set out in Articles 806 to 840 CCP. Specific rules are established by Legislative Decree No. 5/2003 for corporate matters, and by Legislative Decree No. 50/2016 for disputes arising out of public procurement contracts.
The arbitration agreement
A dispute may only be referred to arbitration through a specific agreement of the parties (i.e., the arbitration agreement). To be valid and effective, the arbitration agreement must be in writing (not necessarily in a single document), and the concerned parties must have the legal capacity to enter into it.21
An arbitration clause may also be set out in a contract.22
With the exception of specific cases provided by the law, an arbitrator cannot order interim measures.23 Consequently, only a state judge may grant such measures prior to or pending the arbitration proceedings.24
A dispute may be referred to arbitration only when it concerns rights of the parties deriving from a relationship of civil or commercial nature that the parties can dispose of.25
In addition, other specific limits are provided for by the CCP and other laws. For example, individual employment disputes are arbitrable, but only if the collective employment contract or the law so provide. Disputes concerning bankruptcy and other insolvency proceedings are subject to the exclusive jurisdiction of the state courts.
Domestic and foreign arbitration
If an arbitration is domestic, the support and verification measures regarding the arbitration will fall within the jurisdiction of the Italian judiciary: Italian judges have jurisdiction to appoint or replace arbitrators,26 to decide on challenges against arbitrators,27 to issue interim measures and to grant the exequatur of the arbitral award.28 The party wishing to enforce the award in Italy must deposit the award within the competent court of first instance, which, after verifying its formal regularity, will declare it enforceable. This rule does not apply if the arbitral award has a contractual nature (non-jurisdictional arbitration, see below). If the place of the arbitration is in Italy, the parties may challenge an arbitral award before the Italian courts.29 The annulment proceedings will be governed by Italian law.30
In foreign arbitration, the parties cannot seek support measures from Italian courts. A party seeking recognition and enforcement of a foreign award must apply to the competent court of appeal, which will decide on the basis of the regime set out in Articles 839 and 840 of the CCP (reflecting the criteria established by Articles IV and V of the 1958 New York Convention on the Recognition and Enforcement of Arbitral Awards, which entered into force for Italy on 1 May 1969).
Arbitration can be either ad hoc or administered.31 In Italy, arbitration governed by institutional rules (e.g., those of the ICC or the Milan Chamber of Arbitration) is quite common.
When parties agree to this type of arbitration, the arbitral award has the effect of a contract between parties. It is debatable whether this contractual determination is subject to the recognition and enforcement rules established by the 1958 New York Convention.
The challenge of an award
An arbitral award can be challenged before the court of appeal of the district at the seat of arbitration.32 The parties to the arbitration may request that the award be annulled or revoked. Moreover, a third party may file an opposition against the award where it causes prejudice to its rights.
A challenge for the annulment of an award must be notified to the defendant within 90 days of the day on which the award has been notified to the appellant or, failing the notification, within one year of the day the arbitrator has signed the award.33
Grounds for challenge are established by Article 829 of the CCP and there are two types: procedural errors and errors of law (i.e., incorrect application of the law).
A challenge on the grounds of procedural errors is admissible in any case, even if the parties have agreed that the award is not subject to appeal. An appeal based on errors of law is admissible only if expressly provided by the arbitration agreement or by the law.
An award can be revoked if it stems from one party's fraud, or if it is based on evidence that is proven to be false after the award, or documents that could not be filed in the arbitration proceedings because of force majeure or the other party's behaviour are discovered after the award, or the award stems from the arbitrator's fraud established by a final decision by the judge.
An opposition against an award may be filed by a third party if it causes prejudice to its rights, and by one party's creditors if the award stems from one party's fraud that is detrimental to them.34
With regard to certain matters (e.g., insurance, financial and banking agreements), Legislative Decree No. 28/2010 provides for a compulsory attempt at conciliation with the assistance of a qualified mediator prior to commencing court proceedings.
iv Other forms of alternative dispute resolution
Arbitrage is governed by Article 1349 of the Civil Code and is entirely different from arbitration. In arbitrage the parties delegate a third person, by means of an ad hoc agreement, to determine an element of a legal relationship in the process of being created. The parties commit themselves to the third person's determination.
Contractual expertise is not regulated by the law. By means of an ad hoc agreement, the parties appoint a third party to ascertain a certain fact requiring specialist knowledge, committing themselves to the expert's decision. Contractual expertise is rather common, especially in insurance matters to determine the amount of damages.
Lawyer negotiation is a procedure regulated by Law Decree No. 132/2014. It must be triggered by the party wishing to begin a lawsuit in the specific cases indicated by the law. The result of this negotiation is a written agreement, which – in the case of breach of the obligations provided therein – is title both for the commencement of an enforcement proceeding and for the raising of a mortgage against the defaulting party.
Outlook and conclusions
The reforms enacted from 2009 to 2014, designed to reduce the number of pending disputes before Italian courts and to expedite the average duration of court proceedings, have been partially successful: the number of pending cases has significantly decreased from 5,700,105 as of 31 December 2009 to 3,321,149 as of 30 June 2020.
In 2020, the legislator introduced several rules on civil procedure to deal with the covid-19 pandemic, which allowed pending proceedings to progress and new proceedings to start while protecting the health of judges, clerks and lawyers. Among those rules, the ones allowing hearings to be held via videoconference, or to be replaced by an exchange of written briefs among the parties, save the right for each party to ask that such hearing be held in their presence, have been often applied. This innovation has proved to be effective and cost-efficient, and in most cases has not caused any significant detriment to the parties' rights.
1 Monica Iacoviello, Vittorio Allavena, Paolo Di Giovanni and Tommaso Faelli are partners at BonelliErede.
2 Article 163 bis of the CCP.
3 Consumer Code Legislative Decree No. 206/2005.
4 Only 11 civil courts have jurisdiction over class actions: the Court of Turin has jurisdiction over the Valle d'Aosta region; the Court of Venice over the Trentino-Alto Adige and Friuli-Venezia Giulia regions; the Court of Rome over the Marche, Umbria and Molise regions; and the Court of Naples over the Basilicata and Calabria regions.
5 The Supreme Court has clarified that a court of appeal's ruling on the admissibility of a claim may not be further challenged (Supreme Court Decisions Nos. 26725 of 23 October 2018, 2610 of 1 February 2017 (sitting en banc) and 23631 of 21 November 2016).
6 Specialised divisions in business and intellectual property were established by Legislative Decree No. 168/2003. There are 21 of them, one located in each civil court of the capital of the 20 Italian regions, with the exception of Valle d'Aosta, which is under the jurisdiction of the business and intellectual property division of the Court of Turin, and of Lombardia and Trentino-Alto Adige, which both have two business and intellectual property divisions (Milano, Brescia, Trento e Bolzano).
7 Court of Appel of Milan, Decision No. 3756/2017 of 25 August 2017. The class was made up of a group of roughly 6,000 commuters who had suffered a series of delays and cancellations of trains in December 2012. Each claimant was awarded €300 as compensation for damage suffered following a series of delays and cancellations of trains from 9 December 2012 to 17 December 2012.
8 See also, inter alia, Regulations Nos. 2201/2003 on recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility: 805/2004 on European enforcement order for uncontested claims; 650/2012 on recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession; 861/2007 on European small claims procedure; and 896/2006 on European order for payment procedure.
9 Article 10 of the Code.
10 Article 28 of the Code.
11 Article 24 of the Code.
12 Article 68 of the Code.
13 Italian Data Protection Code, Legislative Decree No. 101 of September 2018.
14 Before the GDPR, Article 24(f) of the Italian Data Protection Code/past provisions of the Italian Data Protection Code (Article 24(f)) expressly provided that no consent was needed for legitimate, lawful investigations.
15 Data may be transferred outside the EU only if a lawful basis for doing so exists and the European Commission has issued an adequacy decision or other appropriate safeguards are in place, in accordance with Article 46 of the GDPR. The GDPR provides derogations in the absence of these conditions: for example, if a transfer is necessary for the establishment, exercise or defence of legal claims. The European Data Protection Supervisor (formerly the Article 29 Working Party) has adopted a strict interpretation of the defence exception for personal data transfers outside the EU (see working document on a common interpretation of Article 26(1) of Directive 95/46/EC of 24 October 1995, adopted on 25 November 2005) aimed at avoiding 'massive' personal data transfers. In this regard, the processing of personal data for the purposes of defending a legal claim must be necessary.
16 For example, data is not collected from the data subject if it results from a lawful remote monitoring activity, in particular where such monitoring does not entail any direct interaction with the data subject.
17 As expressly stated in Article 160 bis of the Italian Data Protection Code.
18 Supreme Court decision No. 7783 of 3 April 2014, confirmed by Supreme Court, Criminal Section, decisions Nos. 43414 of 13 October 2016 and 33560 of 28 May 2015.
19 Article 116 CCP.
20 Supreme Court decisions Nos. 31182 of 29 December 2017, 6511 of 4 April 2016, 13072 of 8 September 2003 and 4363 of 16 May 1997.
21 Articles 807, 808 and 808 bis CCP.
22 Article 808 CCP.
23 Article 818 CCP.
24 Article 669 quinquies CCP.
25 Article 806 CCP.
26 Articles 810 and 811 CCP.
27 Article 815 CCP.
28 Article 825 CCP.
29 Articles 829 and 831 CCP.
30 Articles 827–831 CCP.
31 Article 832 CCP.
32 Articles 828 and 831 CCP.
33 Article 828 CCP.
34 Article 831 CCP by reference to Article 404 CCP.