Italian Class Actions Eight Months In: The Driving Forces

Article by Dr. Renzo Comolli, Dr. Massimiliano De Santis, and Dr. Francesco Lo Passo*

On 1 January 2010, it became possible to file consumer class actions in Italy.¹ An explosion of media coverage, loud proclamations, and filings purportedly claiming billions of Euros in damages saluted the new law. Since then, the pace of filings has slowed down somewhat, though alleged damages are still in the billions. Both Italian and foreign companies have been called to the mat.

In this paper, we provide an overview of the first eight months of the Italian class action experience, from 1 January 2010 to 31 August 2010, through our economists' eyes.² We focus on the economic incentives created by the law and by the role of consumer associations as de facto plaintiffs. In particular, because consumer associations are nonprofit and do not stand to gain directly from a settlement or damage award, they may not necessarily aim to maximize settlements or recoverable damages,