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The new Italian Law on Class actions and its impact on the current private antitrust enforcement regime in Italy

  • United Kingdom
  • Competition, EU and Trade

11-12-2019

The Italian legislation on private antitrust enforcement (Legislative Decree no. 3 of 19 January 2017 - Decree) has implemented the EU Directive no. 2014/104.

The Decree sets out the rules according to which any natural or legal person who has suffered harm caused by an infringement of competition law is entitled to claim the full compensation. The latter must cover the actual loss, the loss of profits suffered as a result of the infringement and the interests accrued from the time the damage occurred until when the compensation is actually paid.

The Decree establishes that any infringement of competition law as ascertained by the Italian Competition Authority (ICA), by the EU Commission or by a Court not subject to any further challenge shall be deemed to be irrefutably established for the purposes of an action for damages with specific regard to the nature of the infringement and to its material, personal, temporal and territorial scope.

The limitation period for private enforcement actions is of five years pursuant to Article 8 of the Decree and shall not begin before the infringement of competition law has ceased or the claimant can reasonably be expected to know (i) the nature of the behavior and the fact that it amounts to an infringement of competition law; (ii) the fact that the above behavior has caused him/her a harm; and (iii) the identity of the infringer. According to Article 8 para. 2 of the Decree, if the action is brought after an infringement is ascertained by the ICA, i.e. in cases of so called follow-on actions, the limitation period shall start to run only after the ICA’s final decision has been made public. The claimant can bring its action against all the undertakings which have taken part in a competition law infringement and which shall be jointly and severally liable for the harm caused, with the effect that each of them is in principle bound to compensate the full harm and that, consequently, the injured party may ask full compensation from any of them.

According to Article 18 of the Decree, the claimant may bring its action only before the section specialized in business matters of the Courts of Milan, Rome or Naples – depending on the location of the defendant’s registered office.

The new Italian Law on Class Actions

Such regulatory framework applicable to antitrust actions for damages under Italian law will be significantly affected by the recent adoption of the new Italian general law on class actions (Law. No. 31 of 12 April 2019). This law has added numerous articles (from Article 840-bis to 840-sexiesdecies) to the Italian Code of Civil Procedure.

Law no. 31/2019 establishes that homogeneous individual rights - as the ones related to antitrust infringements’ victims operating at the same level of the supply chain - may be enforced through a class action.

In this light, any representative organization registered in a specific list managed by the Italian Ministry of Justice, as well as any holder of the above described rights may act against the infringer to claim full compensation of the harm suffered.

The action shall be brought before the section specialized in business matters of the competent court, depending on the location of the defendant’s registered office. Once the action is brought, the notice of the same shall be published on the Ministry of Justice’s website, together with the decree fixing the date of the first hearing,

After 60 days from the publication of the action’s notice, any other action possibly brought to enforce the same homogeneous rights shall be declared inadmissible. On the contrary, any action brought before the expiration of such term shall be linked with the first one.

By the ruling possibly granting the claim for compensation, the competent court shall: a) decide in respect of actions for damages brought by any claimant; b) ascertain whether the defendant has breached the homogeneous individual rights; c) identify such homogeneous individual rights and the documents to be provided; and d) establish the amount to be paid to adhere to the class action.

Furthermore, by the same ruling the court shall set a term, ranging between 60 and 150 days, within which any party, holder of the rights harmed and in possession of the relevant documentation, may adhere to the class action. To this end, the party may use the Ministry’s website and the forms to be published thereon. All the adherents shall be defended by a single legal representative.

Within 120 days from the expiry of the term for the participation to the class action, the defendant shall lodge its observations specifically contesting all the facts put forward by the claimants. In this regard, all the facts not specifically contested by the defendant shall be considered as proved.

Within 90 days from the expiry of the term indicated above, the single representative of the claimants shall file a proposal of compensations to be granted to all the class action’s claimants. Starting from the date of the filing of this proposal, both the claimants and the defendant shall submit their observations within the successive 30 days. Having regard to these observations, the single representative may amend the proposal.

With its final decision, the court shall condemn the defendant to pay the compensations due to all the claimants, fixing their respective amounts, as well as the fees due to the claimants’ single legal representative.

It is to be noted that, in order to avoid the judicial framework described above, at any time before the hearing the court may issue a settlement proposal to be communicated to all class action’s claimants. A settlement proposal may also be issued by the claimants’ single representative after the decision which ascertains if the defendant has breached the homogenous individual rights. In the latter case, the representative’s proposal shall be deemed mandatory for all the claimants, with the exception of those who specifically contest it within 15 days from its communication.

Such law on class action will enter into force on 18 April 2020 and the relevant provisions will apply only to unlawful conducts committed after the date of its entry into force. The law is likely to have a significant impact on private antitrust follow-on damages actions in Italy. In fact, based on the new law, bringing a damages action based on an antitrust infringement should be substantially easier, considering that a single claim would be capable to trigger a class action, thus encouraging parties harmed by the antitrust infringement to act for the compensation of all the damages suffered.

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