To most of us, product liability is straightforward… Either pursue a strict liability claim, a negligence claim, or a breach of warranty claim. But navigating a civil law system is both confusing and may not come naturally to U.S. businesses. Read here to learn more!
(Disclaimer: This post is long and provides detailed information for a reason – we want you to come out knowing everything you need about the a) the Italian legal system b) a civil law system)
1) Sources of Law Governing Product Liability:
In Italy, the tort and contract sections of the Civil Code and the Consumer Code govern product liability. Essentially two different liability approaches coexist in our system:
- A traditional, fault-based tort liability regime and
- A “new”, strict product liability regime.
The fault-based approach is the oldest and it based on section 2043 of the Italian Civil Code that provides a general torts clause. Under this approach a consumer can sue a manufacturer for damages caused by defective product even without a direct contractual relationship but the burden of proof he must bear is very demanding (as explained in point 5).
“Strict Liability” Approach:
A more favorable approach to the consumer/victim is provided by section 2050 of the Italian Civil Code in case of dangerous activities. Said section states that whoever injuries another in carrying out an activities which is dangerous per se is liable for damages unless he proves that he adopted all possible measures to avoid the damage.
The Consumer Code introduced a strict product liability regime and it shifted the burden of proof to the manufacturer. Indeed, unlike the tort liability, the consumer doesn’t need to prove the manufacturer’s fault. Due to the strict liability regime actions brought under the Consumer Code became more and more frequent.
2) Procedural structure and hurdles: EVERYTHING YOU NEED TO KNOW
What is the structure of the civil court system? What are the main pleadings filed by the plaintiff/defendant? Are there specific rules set for a product liability action?
In Italy there are 3 levels of courts: trial court, court of appeal and Court of Cassation. The Italian civil proceedings are governed by a single judge or, in a second-instance courts and in the court of last resort (Court of Cassation), by a panel of judges. Unlike common law tradition, Italy does not contemplate trial by jury (a jury is required only in few specific criminal cases).
A case starts with the plaintiff’s complaint, which states all the claims against the defendant and all the facts and points of law supporting his claims. A plaintiff may also include the evidentiary means that he/she intends to submit to the court in his first pleading but, as we will see below, the claimant may also submit the request for evidence after the first hearing. The defendant’s answer is similar to the plaintiff’s pleading; it needs to contain any defense arguments (facts and points of law) and means of evidence (if he/she does not decide to postpone the latter after the first hearing). This differs slightly from the requirements of a defendant in a typical U.S. civil case.
A trial can generally be divided into three phases:
- introductory phase, in which the judge takes care of the formal and procedural regularity of the proceedings and decides which evidence to admit to the trial;
- evidentiary phase, in which witnesses are examined by the judge and experts, if appointed, render their written opinions; and
- decision phase, in which the judge evaluates the evidence, the experts written opinion and the closing arguments of the parties to reach the final decision.
A product liability action is governed by the same rules as are set for ordinary proceedings by the Code of Civil Procedure.
3) Class Action:
Is there any class/group action available to product liability claimants?
The class action in Italy has been introduced by the Law No. 99/2009, section 49 which modified section 140-bis of the Consumer Code. The class action became effective on January 1, 2010.
On one hand the Italian class action presents some similarities with a US class action, such as the commonality and typicality requirements and the role and obligations of the representatives. On the other hand our class action does not need the “numerosity” requirement [US Federal Rule 23(a)(1) i.e. a requirement that the class be so numerous that joinder of all members as individual named parties be “impracticable”].
Section 140-bis, 2nd period, describes the cases in which class action treatment will be permitted.
The procedural structure presents some differences in regard to an ordinary civil proceeding. Indeed in a class action suit the plaintiff is also required to notify the pleading to the public prosecutor. The first hearing represents the center of all the proceeding since the judge must decide how and if to proceed. He/she can be denied certification of the class only if:
- the consumers’ claims are clearly without any basis;
- there is a conflict of interests;
- the consumers’ claims (questions of law) are outside of the provisions states in section 140-bis, 2nd period and
- the representative party is not able to fairly and adequately protect the interests of the class.
After having certified the class the judge must decide the best way to notice the potential members of the class and to proceed with the case.
The final decision is binding for all the members of the class.
4) Possible respondents:
Who can be held responsible for a defective product between a manufacturer, an importer, the distributor, and the supplier?
The basic rule is that the manufacturer, as defined by section 115 of the Consumer Code, shall be liable for damages caused by its products. Suppliers may also be held liable but only in the event that the manufacturer is not been identified. Nevertheless a supplier can avoid liability by allowing the identification of the manufacturer.
5) Burden of proof in a product liability action:
Does the Consumer Code soften the burden of proof for the consumer?
Yes, it does. Normally in a tort action, under section 2043 of the Civil Code, a plaintiff must prove:
- the defect of the product;
- the damages suffered;
- the causality (in other words, the plaintiff must prove the nexus between defect and damage under probabilistic criteria) and
- negligence or willfulness of the manufacturer.
On the contrary the Consumer Code is based on a strict product liability regime and it shifts the burden of proof to the defendant (manufacturer, distributor, etc). Indeed section 120 of the Consumer Code does not require the plaintiff to prove point n. 4.
6) Defendant’s tools:
What are the possible defenses for a manufacturer?
According to section 118 of the Consumer Code a manufacturer may avoid liability if:
a. the manufacturer did not place the product on the market;
b. the defect that caused the damage did not exist when the manufacturer released the product onto the market;
c. the manufacturer did not manufacture the product for sale or any other form of distribution against payment of consideration, and did not manufacture or distribute the product in the exercise of his professional activity;
d. the defect depends on the compliance of the product with a mandatory legal rule or a binding measure;
e. the state of scientific and technical knowledge at the time when the product was released on the market did not allow the existence of the defect to be discovered; or
f. the manufacturer or supplier of a component part of the product fully complied with the instructions given by the manufacturer who used the component or the defect is fully due to the concept of the product in which the part was incorporated.
There are two more circumstances that may avoid or reduce a manufacturer’s liabilities:
- the manufacturer may be held liable only if the product is defective in relation to its specific use; and
- according to section 122 of the Consumer Code:
- if the consumer contributed to cause the injury or damage, the assessment of damages shall be reduced consequently and
- If the consumer was aware of the defect or of the danger of the product and nonetheless he/she decided to use the product and expose himself/herself to the risk no damages can be granted.
The Consumer Code (section 124) states that any clause that rules out or limits liability in advance shall be considered void.
7) Statute of limitations
Are there any time limits on seeking damages?
Yes, there is and it depends on what kind of legal path the plaintiff decides to follow.
If the action is based on tort provision, the status of limitation period is 5 years from the day the consumer became aware. However, a contract liability action has a period of 10 years.
Under the Consumer Code (section 125) the limitation period is 3 years from the day on which the injured party becomes or should have become aware of the damage, the defect, and the identity of the liable party. In any case the consumer’s claim is barred after 10 years from the day on which the product was placed on the market (section 126).
What types of damage can be recovered by a plaintiff in Italy?
Unlike most of the common law countries, the Italian legal system does not contemplate punitive damages but only compensatory damages. Apart from that general principal the types of damages a petitioner may recover depends on whether the plaintiff sues under contract law, tort law or under the Consumer Code.
In the first case, the claimant may only recover material/economic damages resulting from a breach of contract such as actual damage and lost profit.
On the contrary under tort law the victim, in addition to material/economic damages, may recover moral damages.
Under the Consumer Code (section 123) a plaintiff may recover:
- the damage for injury to life or limb and
- the destruction or deterioration of property other than the product itself, but only if the amount of damages exceeds euro 387.
9) Final decision:
How long does it take to get a first instance decision?
The length of a product liability action depends on:
- the complexity of the case and
- the amount of evidentiary means offered by the parties and admitted by the Court.
Having a large number of witnesses or appointing one or more experts (called consulente tecnico ’ufficio, CTU) may significantly lengthen the duration of a trial. Usually a civil proceeding lasts 3 years.
Tackling a foreign legal system is a daunting task especially when the legal system is based on principles that are unknown. However, assessing a foreign legal system’s pros and cons prior to business entry is imperative. Use this guide to navigate the Italian legal system and watch this space to learn more about Italy.
- By Fabrizio De Fabritiis, Esq. with input from Anitha Cadambi, Esq.