On April 3rd 2019 the Parliament approved a bill on class action, that significantly extends the previously existing class action mechanism. From 2020 on, every party claiming to have suffered a damage by either a company’s or a public body’s behaviour,  will be entitled to act for damages before courts without bearing the cost of an individual action. Moreover, a favourable decision’s effect extension may be requested by members of a class even after the judicial decision is rendered. Workers, for instance, may act together for the recognition for the favourable treatment provided by trade union agreements, or against any discriminatory behaviour, whereas customers may sue the seller for any breach entailing defective purchased products.

1. The previous regulation

Until today, class action was only admitted in cases of illicit companies’ behaviours harming consumers’ general interests such as unfair trade practices or one-sided unfair clauses and it was characterized by the following provisions: its scope was limited to consumer legislation’s breach; it was shaped on the opt-in model (members of the class should individually choose to participate to the proceeding); there was a first judicial screening on the adequacy of the action; and thestarting plaintiff of the claim was responsible for the participants.

Essentially, the purpose of class action, was to enhance access to judicial proceedings and the mechanism was meant to be as much inclusive as possible. It is to be noticed, that, nowadays, there is a variety of circumstances under which the same conduct may bear consequences on a large number of people. The opportunity of bringing claims in a collective manner through the opt-in mechanism surely decreases costs, since the claim participants no longer need to pay for lawyers, and makes possible to grant legal protection to rights having modest economic value, the so-called small claims.  It is however to be noted that the accumulation of claims may result in an award of damages of relevant economic value, thus harming the company.

Furthermore, the class participation to the action may put the enterprise under strong pressure even during the preliminary phases of the judicial proceeding, not only under psychological view-point (companies and legal bodies ought to be worried for the consequences to their public image ), but also under an economic point of view, forcing defendants to ponder the costs they may have to face with all the implications relating to balance provisions and that are likely to eventually suggest the same defendants to amicably settle the dispute and to cease their illicit conduct .

2. The new law

With the recently approved bill, the legislator took a choice consisting in extending the scope of application of the class action beyond consumers’ disputes, and thus, potentially including any behaviour of entrepreneurs or companies in charge of public services (labour law, suppliers’ claims, customers’ controversies, agents rights). 

According to the reform the new class action provisions will be included to the civil procedure code (articles from 840-bis to 840-sexiesdecies). Such choice may lead to potentially disruptive economic, social and business consequences. Extending class action “to all homogenous individual interests deriving from a source of an obligation according to article 1173 of the Civil code” forces to deem eligible for collective action also common individual rights of workers. Those latters have a history of association and unlike consumers, they generally meet on daily basis and can arrange common strategies and share information.

It is of fundamental importance to understand how the new opt-in modalities work. The former existing regulation deemed claims admissible not before decree of first judicial scrutiny, and not after the final decision. Pursuant to the legal framework contained in the approved reform, intervention to the action may happen in two different moments:

• Right after the first judicial scrutiny about the admissibility of the action (article 840-quinquies)
• Once the decision defining the first process is rendered (art. 840-sexies). Accordingly, the Tribunal, with its final decision, concedes between 60 and 150 days to opt-in.

 

The introduction of the latter term makes the consequence of an unfavourable decision impossible to foresee, since an indefinite number of people may decide to join the proceeding.

3. A particular case: workers

Lowering of costs and opt-in provisions make collective workers’ actions particularly effective. Actions that are likely to be brought to courts through the renewed class action mechanism are those against employers’ discriminatory conducts or policies. Actually art. 15 and 16 of the Workers’ Statute provide for protection against political, sexual, age, religion, race, physical conditions discrimination (e.g., when someone is not hired, reduced in task qualities, transferred, sanctioned, or paid less because of a prejudice).

Italian case law has been quite restrictive on such point, but after the re-shaping of class action the court’s doctrine may change. For instance, all female workers of a company could claim that they are paid less solely for sex discrimination reasons. This could also happen when there is no ground for legal actions of single workers since there is no single individual’s prejudice. Notably, the bill limits the application of such provisions to injunction orders, but allows any single interested person to request the issuance of the aforementioned measures, and thus the action may be subject to improper usages..

BLB Studio Legale can provide you with an assessment about the effects that the newly introduced law may determine on your business.