ITALY: An Introduction to Dispute Resolution

Italy Substantially Amends Its Rules to Litigate

After two years marked by the COVID-19 pandemic health emergency, 2023 opens a season of major changes in the Italian dispute resolution arena.

To implement the National Recovery and Resilience Plan, the Italian legislature has set ambitious goals to reform its civil litigation system: on the one hand, the use of ADR is encouraged to deflate litigation and to reduce court backlog; on the other hand, the civil process is intended to become faster and more efficient.

The Italian Reform (also known as the Cartabia Reform, taking the name from the former Italian Minister of Justice) adopts a more streamlined procedure, a more extensive use of digital civil process tools – already in place in first instance, appellate and Supreme Court proceedings and now extended to the small claims court as well – and paves the way for online hearings as the rule, and no longer the exception.

One of the drivers is to overcome the standard bias looming over the domestic legal system as an unfavourable setting to attract foreign business investors.

Needless to say that the success of a thorough review of rules will hinge on how they will be applied by all legal players: judges, counsel and even clients. The ability to absorb innovation and to deploy the necessary resources will bring the real change.

With the approval of the 2023 Italian Budget Law last December, the entry into force of the Cartabia Reform is scheduled (with very few exceptions) for 1 March 2023.

Encouraging mediation and lawyer-assisted negotiation

The objectives of the Reform on mediation and lawyer-assisted negotiation are two-fold: expanding the scope of ADR and encouraging its use by clients.

Mediation will become mandatory before lodging a lawsuit related to partnerships, consortiums, franchising, work, networks, supply, subcontracting contracts and corporate partnerships. Lawyer-assisted negotiation shall be compulsory for all claims relating to vehicle and watercraft accidents, in addition to employment-related disputes.

Access to ADR and active participation by clients has also been encouraged through free legal aid for persons lacking sufficient resources, tax benefits and tax credits in the case of successful completion and the use of digital devices to conduct the procedures.

New, faster first instance proceedings 

The key word of the new first instance proceedings is – undoubtedly – speed.

The starting phase of proceedings is more concentrated. No more than 120 days must elapse between service of the writ of summons on the defendant and the first hearing before the judge (which may be postponed in case of third-party joinder).

However, before the said hearing, plaintiff and defendant must complete more steps than in the past: the defendant has to file its reply and both parties have to submit all claims, counterclaims and exceptions, rebut those of their opponent, and file evidence and discovery requests.

The aim is to give the judge a complete picture of the case from the very first hearing, when the trial schedule is set. A challenging goal indeed for players in multi-party or complex litigation.

The Reform also provides new summary orders, which can be granted by the judge to decide the matter well before the final decision, when facts and rights of the plaintiff are established and the defendant’s defences are baseless or when, conversely, the plaintiff’s relief is patently groundless.

Shorter times to reach a decision should be ensured by a new simplified procedure, which will be applied by the judge when facts are undisputed, or the claim is based on documentary evidence or can be easily solved or requires only simple investigation.

Accelerating proceedings before the Court of Appeals

With reference to appellate proceedings as well, the Reform mandates simplification, greater celerity, and efficiency.

The appeal must indicate clearly and concisely the elements of the first instance decision which are sought to be reversed, the specific objections to the facts’ reconstruction by the lower judge, the violations of law detected and their relevance to solving the dispute.

The current mechanics to dismiss ungrounded or inadmissible appeals shall be replaced by a simplified oral discussion procedure: when the appeal is inadmissible or manifestly unfounded, including based on previous case law, the judge shall immediately require the parties to file their final briefs and shall schedule the final hearing to discuss the appeal, after which a concise decision shall be rendered.

For the remaining appeals, the decision phase shall be amended by the Reform to accelerate it and to avoid a formal final hearing which was often used in the past to simply request deadlines for closing briefs. The parties will now be assigned three mandatory deadlines before the final oral discussion hearing: 60 days to specify final reliefs sought, 30 days for closing arguments and 15 days for rebuttal. The decision by the court shall then be rendered in 60 days as from the final hearing.

Rationalising Supreme Court proceedings and adding a preliminary ruling referee procedure

Proceedings before the Italian Supreme Court are also addressed by the Reform, which seeks clarity and concision and to adapt such proceedings to the introduction of digital civil process tools.

To reverse a lower decision before the Italian Supreme Court on violation of law grounds, the petitioner will now have a more specific obligation to clearly state the facts underlying their petition and to submit specific, concise and complete legal challenges to the decision of the lower courts. Given the novelty of the digital process, access to the Supreme Court shall no longer require electing domicile in Rome, which is replaced by digital domicile.

Finally, a brand-new tool introduced by the Reform (which has been applicable since 1 January 2023) allows lower Judges to defer a purely legal issue to a preliminary ruling of the Italian Supreme Court, when such legal issue: 

– is essential to decide the case,

– has never been addressed by the Supreme Court,

– involves serious difficulties of interpretation, and

– is likely to be raised in several proceedings.

Such preliminary ruling, in any case, will be binding only on the proceedings where the ruling is activated.

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Different players are warming up to the new rules with diverging expectations. Be ready for kick off!