Italy: Litigation

In Italy, civil and commercial disputes are resolved primarily through judicial proceedings before ordinary courts. However, recourse to alternative dispute resolution methods such as arbitration and mediation is growing steadily. Several legislative measures have supported alternative methods in the last decade to decrease the courts’ caseload. Mediation proceedings, in particular, are a mandatory pre-requisite to the filing of court proceedings in several types of disputes, such as defamation, medical liability, insurance, and banking contracts. In addition, an “assisted negotiation” procedure, introduced in 2014, offers incentives for the parties to settle the dispute with the professional assistance of their lawyers. The procedure is mandatory for specific disputes and for all those whose value is below 50,000.00 Euros.

Under the Italian Code of Civil Procedure (“CCP”), ordinary civil or commercial suits are initiated by the claimant’s service on the defendant(s) of a statement of claim containing the summoning to enter an appearance before the court on a fixed date. Before the first hearing, the defendant may file a statement of defense. If the defense includes a counterclaim, it must be filed at least 20 days before the first hearing.

At the first hearing, the court verifies the regularity of the summoning. Then, if so requested by the parties, it grants the parties the opportunity to file three subsequent briefs within assigned deadlines. In these briefs, the parties may amend the requests for relief, submit documents, and file other requests for evidence acquisition, including witnesses’ and experts’ examinations. Once the evidence is gathered, the court schedules a hearing for the parties’ final submission of their requests for relief, followed by final briefs. The court may also schedule a hearing for discussion, should a party so request.

As a general rule, first instance disputes are assigned either to local justice magistrates (“Giudice di pace”) or local tribunals (“Tribunale”), based on the subject matter, the amount in dispute, and territorial competence.

Specialized sections of local tribunals deal with specific matters, such as labor disputes and commercial ones. In particular, specialized commercial courts are competent over IP rights, unfair competition, and corporate disputes.

Decisions of local justice magistrates are subject to appeal to the local tribunals, acting as appellate bodies. First-instance judgments of local tribunals are subject to appeal to the territorially competent courts of appeals.

The court of last instance is the Court of Cassation (“Corte di cassazione”).

The defendant must be granted a minimum term of 90 days between the date of the service of the claimant’s statement of claim and the first hearing. The minimum period is 150 days if the defendant is domiciled abroad.

On average, getting to the phase of taking evidence takes almost one year from the service of the statement of claim.

In principle, only final hearings, set explicitly for public discussion of the case, are held in public unless exceptional circumstances exist. However, these hearings are rare in practice since the parties usually only exchange their final briefs in writing. Hearings other than those set for final discussion are not public.

Documents filed by the parties in legal proceedings are confidential and available only to the parties and their counsel.

Under Art. 2946 of the Italian Civil Code (“CC”), the ordinary limitation period is ten years unless the law provides otherwise. There are several exceptions to this default rule, which make a case-by-case analysis appropriate. For example, the limitation period for tort claims and claims concerning corporate law relationships is five years. Furthermore, the right to remuneration becomes barred after three years, while rights arising from insurance contracts expire after two years.

Legislative Decree No. 28/2010 introduced mediation proceedings as a mandatory pre-requisite upon which admissibility of specific claims is conditional. The condition is fulfilled by appearing at the first meeting before the mediator, even if no settlement ensues.

Decree-Law No. 132/2014 introduced negotiation proceedings (where counsels must assist the parties) as a mandatory pre-requisite for other specific disputes, including all monetary claims not exceeding 50,000.00 Euros.

Rules concerning mandatory mediation and assisted negotiation do not preclude the filing for interim measures and ex parte injunctions.

Should the court in ordinary proceedings find that the claimant failed to introduce the mandatory mediation or assisted negotiation proceedings, it shall set a deadline to cure the failure. Should the claimant fail to cure, the court shall dismiss the claim.

Ordinary civil and commercial proceedings are usually initiated by serving on the other party a statement of claim (“atto di citazione”), which is then filed with the court’s chancery. However, several specific proceedings are initiated by filing a writ (“ricorso”). The claimant then serves the other party with the writ, along with the court’s order fixing the first hearing date.

Arts. 137 to 151 CCP set out, in general terms, the rules for service of judicial and extrajudicial documents. As a rule, service is performed by a judicial officer. However, under specific circumstances identified by special statutory provisions, judicial documents may be served by lawyers by ordinary mail, fax, or certified email.

Italian ordinary courts determine ex officio at any stage or phase of the proceedings whether they have jurisdiction over a claim vis-à-vis administrative and other special courts.

As to international jurisdiction, in intra-EU matters, the relevant criteria and timeline for assessing jurisdiction are established in Regulation (EU) No. 1215/2012 (“Brussels I-bis Reg.”). Otherwise, Law No. 218/1995 (the Italian statute on private international law) applies without prejudice to other bilateral or multilateral conventions. Art. 11 of Law No. 218/1995 states that the court may decline jurisdiction at any stage or phase of the proceedings provided that the defendant did not accept the court’s jurisdiction expressly or implicitly.

With the sole exception of cases of exclusive competence, the internal territorial competence of Italian courts, and their competence based on the subject matter or value of the dispute, cannot be questioned unless the defendant raises the competence defense in the first brief timely filed in the proceedings.

Art. 5 CCP mandates that the court’s decision on jurisdiction and internal competence be based on the claimant’s description of the claim and relevant cause of action.

Italian courts determine the governing law based on the conflict-of-law rules contained in Law No. 218/1995.

Law No. 218/1995 has been superseded by EU private international law instruments in several matters. These instruments include Regulation (EC) No. 593/2008 on the law applicable to contractual obligations (“Rome I Reg.”) and Regulation (EC) No. 864/2007 on the law applicable to non-contractual obligations (“Rome II Reg.”), both of which have a universal scope of application. In addition, several multilateral conventions apply to determine the governing law in specific matters.

Under Article 14 of Law No. 218/1995, the court may ascertain ex officio the content of the applicable foreign law, availing itself of the services provided by experts, specialized institutions, and the Ministry of Justice. If the relevant foreign provisions cannot be identified, the court must resort to alternative conflict-of-law criteria. As a last resort, the court may directly apply Italian substantive law.

As a general rule, first instance claims are settled through a full trial, whose length and thoroughness depend upon the peculiarities of the proceedings. However, Art. 702-bis ff. CCP now provides for a mechanism of fast-track proceedings. It applies to disputes where no (or very limited) evidence acquisition is required.

Appeals may be disposed of according to a so-called “filter” procedure, under which the court may dismiss prima facie groundless claims. However, in this event, the losing party is entitled to file a further appeal before the Court of Cassation.

Italian law provides for both protective and interim anticipatory measures. Both measures are available subject to the applicant’s proof of the risk of irreparable harm pending the resolution of the dispute (“periculum in mora”) and the likelihood to prevail on the merits of the dispute (“fumus boni iuris”). The measures may be sought before or during the dispute on the merits.

The main types of interim protective measures are judiciary seizures, evidence seizures, seizures for security, and urgency measures.

Interim measures issued before the commencement of the dispute expire if the applicant fails to file the proceedings on the merits within the deadline fixed by the court, which cannot exceed 60 days.

Art. 700 CCP provides an atypical anticipatory measure to protect the applicant’s rights from potentially irreparable harm. As this anticipatory measure can constitute a final solution of the issue at stake, unlike other interim measures, it withstands even if the applicant doesn’t initiate proceedings on the merits.

Documentary evidence encompasses writings, sketches, models, and mechanical and digital reproductions. The latter include photographs, recordings, films, and other means of reproducing events or things mechanically or digitally. Special rules govern the bookkeeping records of registered entities.

Documents can be submitted only with the opening briefs or by the peremptory deadlines granted by the court to the parties at the first hearing. After that moment, parties can only submit documents that were unavailable to the party by the relevant deadlines.

Under Italian law, parties are not bound to disclose relevant documents that are available only to them.

Upon specific request of one party, the court can order another party or a third party to disclose specific documents, provided that they are essential to determine the facts of the case, the disclosure does not cause severe damage to the requested party, and disclosure is not in contrast with the protection of secrets under Italian law. Protected secrets include professional secrets of prosecutors, lawyers, technical consultants, and notaries, secrets of religious ministers, and those of medical professionals.

Moreover, correspondence between lawyers concerning a discussion on an out-of-court settlement cannot be disclosed without consent.

As a general rule, witnesses appear in court and give oral evidence. The judge questions each witness based on specific lists of questions submitted by the parties. The judge can ask any additional question deemed useful. Cross-examination is not permissible. Only in exceptional circumstances, and with the consent of all parties, can judges ask witnesses to reply to questions in writing.

Expert opinions are obtained through technical consultation. Expert opinions are not evidence per se. Instead, the expert assists the court in obtaining and evaluating existing evidence. Therefore, the court is not bound by expert opinions, although they are usually highly influential in practice.

The court may appoint an expert either on its own initiative or upon the request of a party. The parties may challenge the expert on the same grounds that may disqualify a judge. The court-appointed expert must swear that he/she will perform his/her duties faithfully and is subject to criminal sanctions in case of unfaithful or false statements.

When the court appoints an expert, the parties may likewise appoint their party-appointed experts. Party-appointed experts may submit written observations, which the court-appointed expert must consider in his/her final report.

As a general rule, final judgments issued by a tribunal can be appealed before a court of appeals to seek a review of both the facts and the law. Moreover, under Article 111 of the Italian Constitution, all final rulings are subject to an appeal before the Court of Cassation on matters of law.

Interim decisions are also subject to appeal, usually within shorter terms, but specific exclusions exist.

An appeal against a judgment must be filed within 30 days of the service of the decision (60 days for appeals to the Court of Cassation). Absent the service, the standard term for appeal is six months from the publication of the judgment.

Specific means of appeal, such as revocation and third-party opposition, may be available also after the elapse of the deadline for appeal.

In civil and commercial matters, foreign judgments rendered by courts of EU Member States are automatically enforceable in Italy under the Bruxelles I-bis Regulation.

As to decisions rendered outside the EU, Italy is a party to several multilateral and bilateral conventions on mutual recognition and enforcement of judgments, including those adopted by the EU on behalf of the Member States, such as the Lugano Convention.

In the absence of multilateral or bilateral agreements, the enforcement of foreign judgments is possible under Art. 64 of Law No. 218/1995, provided that due process and the right to be heard were observed, that the decision is final and not in contrast with a previous Italian decision, that it does not address issues on which Italian proceedings are pending, and that it doesn’t produce effects contrary to public policy.

The general rule under Italian law is that “costs follow the event”. Accordingly, the prevailing party may recover from the losing one court expenses, attorney fees, and costs relating to court-appointed experts.

Italian courts can consider other circumstances when fixing costs, such as the parties’ conduct throughout the proceedings, the prevailing party’s refusal to accept a settlement proposal, and the reasonableness of the expenses claimed. Moreover, the court may decide that each party must bear its costs when the outcome of the proceedings is partially adverse to all of them, the dispute raised novel legal issues, or the judgment overturned established case law.

From a practical standpoint, the court awards attorneys’ fees in the final judgment following Decree No. 55/2014, which adopted the official Lawyers’ Tariff, setting standard fees based on the value in dispute. As a result, in practice, the attorneys’ fees awarded in the final judgment are often lower than what the winning party agreed to pay its counsel under the terms of the professional engagement.

Law No. 31/2019 introduced a new set of detailed provisions governing class actions (Arts. 840-bis to 840-sexiesdecies CC).

The revised class action may be brought against companies and providers of public services by non-profit organizations and entities registered with the Ministry of Justice, representing and protecting collective interests and individuals pursuing homogenous interests. Standing is not limited to consumers, nor is the class action restricted to specific causes of action.

Proceedings are commenced by filing an application (“ricorso”) before the competent court. Subsequent phases can be divided into three distinct stages: the admissibility of the action, the assessment of liability, and the quantum of liability, respectively.

Third parties may become party to pending proceedings by a voluntary joinder, upon request of other parties, or by the court’s order.

A voluntary joinder may be filed by a third party claiming a right over the subject matter of the dispute or based upon the same cause of action on which the claim in dispute is based. Furthermore, a third party with interest in the outcome of the proceedings may join the proceedings for the sole purpose of supporting one of the litigants.

Parties may be authorised to join third parties into the proceedings, should their position be connected to the subject matter in dispute, or should the requesting party claim a right to be indemnified by the third party.

Finally, the court may order the joinder, on its own motion or upon request of one of the parties, if it deems the third party’s participation necessary or appropriate in light of the subject matter in dispute.

Consolidation of separate proceedings pending before the same court may be ordered by the court on its own motion or upon the request of a party, provided that the proceedings involve the same cause of action or are connected.

Italian law does not expressly contemplate, let alone regulate, forms of litigation funding other than contingency agreements between lawyers and their clients, which, as a rule, are forbidden. Nonetheless, based on the general principle of freedom of contract, it is widely held that third-party funding is permissible. Moreover, only highly impecunious parties are entitled to State legal aid, and successful parties may recover legal costs only after the end of the proceedings. Against this backdrop, third-party funding is praised as facilitating access to justice. Nonetheless, when drafting funding agreements, parties should be mindful of the funder’s potential conflicts of interest and the lawyer’s professional rules of ethics.

As of today, there seems to be no legal tool to hold a third party funder liable for the costs incurred by the other side.

Following the outbreak of the Covid-19 pandemic, the Italian government adopted measures to reduce the need to access the courts. In particular, all procedural deadlines were suspended, and all hearings in non-urgent cases were postponed after May 11th, 2020. Urgent hearings were held remotely or substituted by the electronic exchange of written briefs.

Starting from summer 2020, the handling of all civil proceedings gradually resumed. Still, several emergency measures were extended to December 31st, 2021, including the mandatory electronic filing of all briefs and submissions of documents by the parties, and the extensive use of remote hearings, or the substitution of hearings with the filing of written briefs, followed by the communication of the court’s decision. Remote hearings and substitution of hearings with the filing of written briefs are still possible and common in 2022. The general perception is that they will remain an option available in Italian court proceedings as an alternative to in-presence hearings.

For a long time, the main disadvantage of litigating in Italy has been the lengthy duration of proceedings. Although the situation has improved in recent years in most territorial courts, there are still some lagging.

On the other hand, litigating a case in Italy also has perks: on average, Italian judges are excellent jurists; the overall costs of commercial litigation are lower than in other EU jurisdictions; some specific procedural tools are available for transnational disputes, such as the mandatory jurisdiction of 11 specialized commercial chambers located in specific courts for disputes involving foreign defendants in areas of IP law, antitrust and corporate-related matters, or the peculiar instrument (“regolamento di giurisdizione”) which allows each party, before the case is decided on the merits at first instance, to demand directly to the Court of Cassation to solve issues of jurisdiction.

The question about the growth areas for commercial disputes can be addressed from at least three different perspectives.

From the perspective of the future development of alternative dispute resolution methods, there is a generalized expectation that in the near future, an increasing number of commercial disputes will be solved through alternative dispute resolution mechanisms, including, in particular, arbitration and mediation.

From the perspective of legal doctrines and areas of the law where commercial disputes are more likely to grow, in the aftermath of the Covid-19 pandemic, the Russian invasion of Ukraine, and the growing inflationary pressure on prices, increasing commercial litigation is expected based on contractual parties’ claims of force majeure or hardship. Moreover, litigation arising from insolvency and corporate restructuring and acquisitions is also likely to grow.

Finally, from the perspective of the commercial sectors where disputes are expected to grow the most, they include sectors that are affected by the current international political and economic turmoil and those that will be involved in the national recovery plan, namely construction projects and those related to energy supplies, ESG and sustainability.

In response to the EU call for national plans for recovery and resilience following the pandemic, the Italian Government submitted to the EU Commission an articulated Plan, which contains a massive overhaul of the Italian judicial system. On 25 November 2021, the Italian Parliament approved the Law No. 206/2021, which sets out the principles that the Government shall follow in reforming civil proceedings, with a view to simplifying and improving the efficiency of civil proceedings. The Government has one year time to implement the reform. Measures under consideration include the generalized electronic filing of briefs and the possibility of virtual hearings.

Moreover, the Ministry of Justice is expected to digitalize court archives over the next few years. The digitalization should also include the Court of Cassation’s department tasked with drafting summaries of the court’s judgments. Furthermore, the Court of Cassation’s electronic case-management platform should be completed and put into full operation, as is already the case with lower courts.

Short-term consequences of the Covid-19 pandemic on judicial activities have been disruptive. However, the pandemic may also have paved the way for changes that may bring long-term benefits.

Indeed, Italy decided to allocate a relevant part of the funds of the NextGenerationEU plan to improve the judicial system by increasing digital services and hiring additional staff. Moreover, the need to face the pandemic has proved to be an opportunity to adopt measures to streamline unnecessary formalities and encourage the use of technology to improve civil and commercial litigation.