Italy To Overhaul Class Actions

The Situation: Under the new Italian framework, class actions will no longer be limited to consumer protection matters, and collective redress may be sought through simplified proceedings.

The Developments: A recently proposed European directive aims at creating a horizontal EU approach to collective redress in consumer harm situations. The new Italian law not only matches the objectives of the proposed directive but even goes beyond them.

Looking Ahead: The new framework means companies should stay alert to an increasing number of class actions, as claimants will benefit from updated redress proceedings.

The New Class Action Framework in Italy Anticipates EU Legislation

So far, consumer opt-in procedures and relatively high costs have limited the number of class actions filed in Italy. To streamline procedures, the Italian Parliament overhauled the applicable framework regulated under the Consumer Code with the enactment of Law No. 31 of April 12, 2019 ("New Law"). The New Law will become effective in April 2020 and will likely pave the way to an increasing number of class actions. Businesses should thus expect that a new wave of court actions may be filed.

Remarkably, the timing of the New Law is in sync with the EU-level plan to harmonize class actions across Member States. In April 2018, the European Commission issued a proposal for a directive intended to ensure more effective remedies for mass consumer harm situations ("EU Proposal") by supplementing—not replacing—national regulations. The New Law is not only substantially in line with the EU Proposal's provisions but attempts to go several steps further by: (i) covering a broader range of infringements in different businesses (e.g., financial services, energy, environment); (ii) extending its scope of application to anyone (not only consumers or users) whose rights may be affected; (iii) ensuring faster and more efficient procedures to keep procedural costs from becoming a financial obstacle to bringing collective actions; and (iv) providing different types of remedies as appropriate, depending on the circumstances of the case.

Main Features of the New Law

The New Law provides that whoever holds "individual homogeneous rights" has standing to bring a class action against private entities or providers of public services acting within the scope of their businesses. Likewise, certain nonprofit associations, e.g., consumer associations, duly enrolled in a specific registry will have...

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