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The Italian legal system

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published on 4 May 2021 | reading time approx. 4 minutes




International jurisdiction

According to Article 3 of Law 218/95, the general criterion for jurisdiction in the country is the defendant's domicile or residence (in English “residence”) in Italy. Furthermore, a foreign party may be summoned in Italy in accordance with EU Regulation No. 1215/12, or, if applicable, international treaties; as a general remark, a foreign party may be summoned in Italy if the disputed obligation has a strong connection with the country.

 

Recognition and enforcement of European titles and foreign arbitral awards

The recognition and enforcement of foreign judgments are governed by Law No. 218/95, Regulation No. 1215/12 and international treaties (the complete list is available on the website www.esteri.it).

 
The recognition and enforcement of foreign judgments is governed by Law No. 218/95, Regulation No. 1215/12 and international treaties (the complete list is available on the website www.esteri.it). According to Law No. 218/95, it is possible to recognise and enforce a foreign judgment if the said judgment has been issued in compliance with certain criteria (it must have been issued by a competent court; the procedure must have taken into account the defendant's right to submit pleadings, statements and claims; the judgment must be final and binding; the decision must not violate the Italian order public).
 

The recognition and the declaration of enforceability of a foreign arbitral award shall be governed by the rules of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) in accordance with the procedure established by Articles 839 and 840 of the Italian Code of Civil Procedure.
 

Structure

Italy is a “civil law” country and the courts are not bound by the decisions of other courts, even if they are superior. The jurisprudence has a considerable importance and in particular, the decision of the high court of cassation usually judges the decisions of other courts. The courts are independent of other organs of power (Article 104 of the Italian Constitution). Judges are selected by public deliberation and are not elected (Article 106 of the Italian Constitution). The court system is divided into four branches, in particular

  1. civil litigation,
  2. criminal litigation,
  3. financial litigation and
  4. administrative litigation.

 

For civil litigation, three different levels of jurisdiction are granted. The first instance is the Civil Court (or the “Justice of the Peace” for disputes with a value of less than 5,000 Euro), which is divided into specific areas (bankruptcy, intellectual property rights, labor law, some corporate and commercial litigation). The second instance is the Court of Appeal (or the Civil Court in the case of a judgment of the “Justice of the Peace”), which re-examines the facts and the application of the law of the case. The third instance is the Court of Cassation, whose decision is limited to re-examining the relevant law applied to the dispute in limited cases (Article 360 of the Italian Code of Civil Procedure). The same instance is also provided for criminal disputes (although in some cases the jury is decisive). Financial matters are regulated differently; the first instance is the Provincial Tax Commission and the second instance is the Regional Tax Commission. Subsequently, there is the possibility of access to the Court of Cassation, but only in limited cases. For administrative litigation, the first instance is the Administrative District Court (“TAR”), the second instance is the “Consiglio di Stato” and the third instance of jurisdiction is the Court of Cassation, but this instance is limited only for reasons concerning the jurisdiction of the Court. 
  

Court costs

In terms of court costs, a distinction is made between court fees and attorney's fees.

 
The court usually orders the losing party to reimburse the winning party for the fees and charges incurred.

 
However, in particular if the claim is partially upheld or the action is dismissed, the court may order that each party shall bear all or part of its own costs of the proceedings. In special situations, Law No. 115/2002 provides for free legal assistance after an examination by the competent Bar Association.

 

Obligation to bear costs/reimbursement of costs

In Italy, there are no restrictions on fee agreements, even if they are based on hourly rates, flat-rate fees, a single service phase or a percentage of the goodwill.

 
Meanwhile, there has been much debate over the past year as to whether an agreement that provides for a percentage of the amount reimbursed to the client in a dispute as the lawyer's fee, in whole or in part, could be considered null and void. In Italy there is no specific regulation regarding third-party funding. In all cases, the lawyer has the duty to protect the interests of his client and therefore the third party paying the fees cannot have control over the litigation.

 

Average duration of legal proceedings

The duration of the proceedings is an important problem in the Italian jurisdiction. Although some courts make decisions faster than others, the average duration for the first instance is three years.

 
As a rule, proceedings before the Court of Appeal/Consiglio di Stato/Regional Tax Commission can take an average of three years, although this time can vary considerably from court to court.

 
In this specific case, the duration of proceedings in a possible third instance (Court of Cassation) is not taken into account, which could possibly lead to a further prolongation of the proceedings.

Provisional legal protection

Provisional legal protection is granted by Article 669 bis of the Code of Civil Procedure. As a rule, interim judicial protection is not final and should not prejudge the final decision. After termination of the ordinary proceedings, the granted interim relief is replaced by the final decision. In any case, it is common practice to apply for measures that could be considered final even without the need to initiate ordinary proceedings (see Article 700 of the Italian Code of Civil Procedure). In general, interim relief loses its effectiveness if the main proceedings are terminated or do not begin in time.

 
During the interim relief period, the standard of assessment is reduced. Only a so-called quick (approximate) review takes place. The judge can grant interim relief only after reviewing two basic conditions. The first is the so-called periculum in mora, i.e. the risk that the excessive duration of the proceedings will cause damage to the applicant. The second is the so-called fumus bonis iuris, i.e. the likelihood that the right asserted by the applicant actually exists and will be recognised at the end of the ordinary proceedings.

 
The court decision is made on the basis of the presented or known facts, on the circumstances substantiated by the applicant, and on the evidence required by the judge. Witnesses are admitted. The application for interim relief may or may not be approved by the judge, and as a general rule it is not possible to re-submit an application for interim relief after it has been rejected (otherwise in case of changes in circumstances or new factual or legal grounds).

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