Italy transposes EU Directive 2020/1828 on representative action for the protection of consumers' collective interests
Italy has finally implemented the EU Collective Redress Directive. It introduces a new type of action representative bodies can bring against businesses if they breach EU consumers’ protection laws. This tool will grant consumers an enhanced protection against domestic and cross-border infringements in a broad range of areas such as product liability, data protection, travel and tourism, financial services, energy and telecommunications, and it will enable consumers to seek for a wide range of remedies, including declarations of law, injunctions, or financial compensation.
Introduction
The Italian government has enacted Legislative Decree no. 28/2023 (the Italian Collective Redress Legislation) implementing EU Directive 2020/1828 of the European Parliament and of the Council issued on November 25th, 2020 (the EU Collective Redress Directive). The Italian Collective Redress Legislation aims to strengthen consumers’ protection against domestic or cross-border infringements of EU laws committed by any individual or legal entity in relation to their trade, business, craft or profession.
With the Italian Collective Redress Legislation, Italy has added to the current regime of collective action provided for consumers and non-consumers by art. 840 bis et seq. of the Italian Civil Procedural Code, a new representative action mechanism that representative bodies may address to protect collective interests of consumers whose rights have been harmed (or may be harmed) by the infringement of one (or more) of the 68 EU laws listed in Annex II-septies to art. 140 ter of the Italian Consumer Code.
The Italian Collective Redress Legislation has been incorporated in art. 140 ter et seq. of the Italian Consumers’ Code and will come into force on June 25th, 2023. According to art. 4 of Legislative Decree no. 28/2023, the new representative action will be available for consumers’ representative bodies for infringements committed from June 25th, 2023 onwards.
Scope of application
The new representative actions serve as the exclusive means against domestic and cross-border infringements of the laws referred to in Annex II-septies to art. 140 ter of the Italian Consumers’ Code that harm, or may harm, the consumers’ collective interests. Representative bodies can bring actions even in cases where the infringements had ceased before representative actions were brought, or where those infringements had ceased before representative actions were concluded.
According to Annex II-septies to art. 140 ter of the Italian Consumer Code, this new type of representative actions can be brought for infringements committed in a broad range of areas, including (i) breaches of the legislations on safety and product liability, (ii) unfair terms in consumer contracts, (iii) sale of consumer goods and related warranties, (iv) e-commerce, (v) data protection in the electronic communication sectors, (v) distance marketing of consumer financial services, (vi) unfair B2C commercial practices and misleading and comparative advertising, (vii) tourism and travel (including sea, air, and land transport of passengers), (viii) payment services, (ix) energy and telecommunications, (x) medical devices and in vitro diagnostic medical devices, and (xi) contracts for the supply of digital content and digital services.
The representative actions’ scope of application can be extended by the Italian Ministry for Business and Made in Italy as new EU laws for consumers’ protection are issued.
Domestic representative action vs cross-border representative action
Representative bodies can seek for the release of injunctive and redress measures by bringing a domestic or a cross-border representative action.
The key element distinguishing a domestic representative action from a cross-border representative action is that the latter is initiated whenever the representative body brings the action before the court of a Member State other than the one on which it was designated.
For infringements of one or more EU laws affecting (or that may affect) consumers of different Member States, cross-border representative actions can be brought by either one (or more) non-Italian representative bodies (even jointly with an Italian consumers’ representative body) before Italian courts or by one (or more) Italian representative bodies (eventually with the consumers’ representative body designated by another Member State) before a non-Italian court.
Legal standing
Domestic and cross-border representative actions can only be brought by qualified entities, even without being previously mandated by consumers. Unlike the current regime for collective action provided for by art. 840 bis et seq. of the Italian Civil Procedural Code, consumers are not entitled to bring domestic or cross-border representative actions on their own.
One of the main innovations of the Italian Collective Redress Legislation is that the legal standing to bring domestic or cross-border representative actions has also been extended to national independent public bodies referred to in art. 3(6) of EU Regulation 2017/2394 (including, amongst all, the Italian Antitrust Authority, the Italian Privacy Authority, the Ministry for Business and Made in Italy). From the June 25th, 2023 onwards, Italian public bodies entrusted to take public enforcement measures will be also entitled to start collective actions for the private enforcement of the administrative measures taken, or for the fine imposed in relation to EU law infringements affecting the collective interests of consumers.
Domestic representative actions can also be brought by (i) national associations of consumers or users complying with the strict requirements provided for by art. 137 of the Italian Consumers’ Code, as well as by (ii) non-Italian entities designated by Member States to bring cross-border representative actions before the court of a Member State other than the one on which they were designated.
National bodies or associations of consumers or users wishing to bring cross-border representative actions must fulfil the requirements provided for by art. 140 quinquies of the Italian Consumer Code. Amongst all, they must prove they have adopted a by-law that provides for rules:
- ensuring the body/association’s independence from any person other than consumers (and from traders with an economic interest in bringing the representative action or third parties funding the litigation); and
- preventing and solving conflicts of interest that may arise between the body/association, the third party funding the litigation and the interests of consumers.
Although there’s still no specific legislation at a national level, third-party litigation funding was for the very first time mentioned by Italian law as a viable means for financing cross-border representative actions.
Types of remedies available
Another significant innovation introduced by the Italian Collective Redress Legislation concerns the types of remedies available.
Qualified entities can seek either for injunctive measures aimed at ceasing or forbidding any conduct in breach of EU Laws or redress measures aimed at remedying the consequences of the infringements of EU provisions on consumers.
Unlike the current regime for collective action provided for by art. 840 bis et seq. of the Italian Civil Procedural Code, the two measures can be jointly granted by the court in the same proceeding.
Representative actions started to obtain the release of injunctive measures can be brought only where defendants have not complied with an out-of-court request to cease conduct in violation of one or more EU Laws. This request is to be sent by qualified entities via registered letter or certified email in the 15 days prior the filing of the representative action. An interim measure may be also granted, if justified reasons of urgency are met.
As far as it concerns redress measures, in addition to the compensatory measures provided for by art. 840 bis et seq. of the Italian Civil Procedural Code, qualified entities can also seek for the reduction or full reimbursement of the price paid, repair or replacement of the good/service purchased, or termination of the contract entered by consumers with the defendant, according to the applicable EU law violated.
Limitation period
The Italian Collective Redress Legislation has also introduced a bespoke regime on limitation period for this special type of representative actions.
By derogating to the ordinary regime set forth in art. 2943 et seq. of the Italian Civil Code, art. 140 duodecies of the Italian Consumer Code provides that the filing of representative actions by qualified entities tolls the applicable limitation periods for consumers having rights homogenous to those for which the representative action was brought.
The provision is part of a process aimed at bringing the Italian legislation in line with other Member States and it is aimed at ensuring that consumers’ expectations to obtain an injunctive or redress measure will not be jeopardized by the time barring of the applicable statute of limitation periods.
The provision promises to be of great impact on the management of this special type of representative action.
