Italy Archives - EURO LIT INSIGHTS

Corporate Liability is Extended to New Predicate Crimes Under Italian Law

by Fabio Cozzi and Giuseppe Tinello | Aug 7, 2024 | Legislative Update, Italy

As it is widely known, Italian Legislative Decree No. 231/2001 (Decree 231) governs the liability of legal entities (including Italian subsidiaries of foreign companies) in case certain offenses (the Predicate Crimes) are committed in the interest or to the benefit of the entity by its directors, managers, representatives, or employees under their surveillance.

The legal entity might avoid liability under Decree 231 if, inter alia, (i) it has adopted, effectively implemented, and kept up to date an internal organisational, management and control model (the Model 231), and (ii) it has appointed a Supervisory Board (Organismo di Vigilanza) to monitor and ensure company’s compliance with the Model 231.

The adoption and implementation of a Model 231 is not mandatory under Italian law. However, failure to do so could expose a company to potential risk of liability if a Predicate Crime is committed in its interest or to its benefit, insofar the entity would not have the chance to demonstrate that a compliance system was set in order to prevent offenses of the type occurred (i.e., there was not an organizational fault).

The Italian legislator frequently modifies the list of Predicate Crimes (and/or the definitions of specific Predicate Crimes) for which a

The Italian Supreme Court Paves the Way to Further Expansion of Litigation Funding in Italy

by Fabio Cozzi and Giulio Marconcin | Aug 2, 2024 | Italy

Litigation Funding is fast-growing in Italy. According to one of the most experienced Litigation funders operating across several jurisdictions including Italy, [1] the investment potential is equal to ~EUR 185 million and it is estimated to reach 325 million in 2027. Currently, the most relevant cases in Italy involve antitrust litigation, international arbitration, commercial litigation, and intellectual property disputes. In the future, those related to climate change and sustainability are also expected to increase significantly.

Due to the development of the practice, Italian Courts have started to issue the first decisions concerning the formal requirements that litigation funders are requested to meet under Italian law to enter a credit assignment transaction with the litigant. In this regard, the Italian Supreme Court took its view in the context of disputes arising from claims brought by the passenger against an operating air carrier under Article 7 of Regulation (EC) no 261/2004.

The Cases

By decisions no 4427 on 20 February 2024 [2], no 7375 on 19 March 2024 [3], no 7635 on 21 March 2024 [4]], and,more recently, no 13749 on 17 May 2024 [5], the Italian Supreme Court ruled on cases

Corporate Compliance: A Ruling from the Court of Milan Further Clarifies How to Prevent Corporate Criminal Liability in Case of Directors’ Criminal Violations

by Fabio Cozzi | Jun 3, 2024 | Regulatory/Compliance, Italy

The Italian Supreme Court recently stated that the director’s criminal liability cannot automatically trigger the recognition of corporate criminal liability, as company’s organizational fault must be specifically demonstrated by the Public Prosecutor.[1] Now, the Court of Milan[2] specifically clarifies how an appropriate and effective Organization, Management and Control Model (Model 231) pursuant to Italian Legislative Decree 231/01 (Decree 231) can shield the company from corporate criminal liability.

On January 25, 2024, the Court of Milan convicted the senior managers of an Italian joint-stock company (owned by a foreign-based multinational company) for false corporate communications, pursuant to Article 2621 of the Italian Civil Code (ICC), which provides the criminal liability of directors, general managers, managers in charge of preparing corporate accounting documents, auditors and liquidators when they represent false material facts or they omit material facts whose disclosure is required by law concerning the economic or financial situation of the company or the group.

The Court’s Overview of the Preconditions for Corporate Liability for Criminal Violations

In addition to the analysis of the liability of natural persons, the Court of Milan examined the legal requirements for the company to be deemed liable for crimes committed by

Claim for Damages Against Directors of a Foreign Company: Do Italian Courts Have Jurisdiction?

by Fabio Cozzi and Giulio Marconcin | Jun 3, 2024 | Court Judgment, Italy

Corporate disputes often have a transnational dimension, including in connection with directors liability for wrongdoing. Italian courts are frequently called to decide claims against corporate directors with links with other legal systems, such as the company being incorporated under the laws of a foreign State. This poses relevant procedural issues.

The Court of Milan (decision no 4789/2023) provided valuable insights on the application of the criteria to determine jurisdiction and applicable law in case of a claim brought by a shareholder of a company incorporated outside Italy against the sole director (having his domicile in Italy).

The Dispute

The dispute originates from a complaint brought by the minority shareholder of a limited liability company incorporated under the laws of the United Republic of Tanzania, against the other shareholder and sole director of the company (an Italian resident), allegedly responsible for misappropriation of company’s funds. On these grounds the minority shareholder (assuming that Italian substantive law was applicable to the dispute) brought two actions against the sole director:

a derivative claim under Article 2393-bis of the Italian Civil Code (ICC), according to which the minority shareholder is entitled to act against directors on behalf and in the interest of the

Climate Change Litigation in Italy: The First Judgment From the Court of Rome

by Fabio Cozzi and Giulio Marconcin | May 14, 2024 | ESG, Procedural Legal Update, Italy

The total number of climate change court cases has more than doubled since 2017 and is growing worldwide, according to the UN Environment Program (UNEP) and the Sabin Center for Climate Change Law at Columbia University. Most of the cases are pending in the US, however the EU and (even more significantly) developing countries are facing an increasing number of disputes, related to the purported inaction of the States in the fight against climate change. The Court of Rome recently decided the first climate change litigation brought in Italy, dismissing the case for lack of jurisdiction.

By writ of summons served on June 4, 2021, seventy nine private citizens and twenty four associations (the Plaintiffs) sued the Italian State for breach of its “climate obligations”. In particular, the Plaintiffs asked the Court of Rome to force the Italian State to implement appropriate regulatory measures to reduce greenhouse gas emissions (by 92%) and namely to review the current climate action enacted by the Italian State and to amend the National Integrated Energy and Climate Plan (the national energy and climate policy plan, issued in the compliance with EU Regulation 2018/1999 and providing for the goals set for 2030 in order to,

New Whistleblowing Rules in Italy

by Fabio Cozzi, Francesco Bianchi, Stefano Mechelli and Massimiliano Moruzzi | Feb 12, 2024 | Legislative Update, Italy

On March 15, 2023, Legislative Decree No 24 of March 20, 2023, transposing EU Directive 2019/1937, was published in the Italian Official Journal. The new law entered into force on March 20, 2023, and must be implemented. The new rules came into effect on:

July 15, 2023, in the case of all public entities, and private entities with an average of 250 or more employees
December 17, 2023, in the case of private entities with an average of 50 or more employees.

The new rules include within the notion of whistleblower not only employees, but also self-employed workers, freelancers and consultants, volunteers and trainees, shareholders and persons with administrative, management, control and supervisory or representative functions, and former employees.

A whistleblower is protected against retaliation, even indirect retaliation including dismissal, suspension, downgrading or non-promotion, demotion, negative references, intimidation or harassment, reputational damage, etc. and benefits from supportive measures such as information, assistance and advice free of charge on how to report and on protection from retaliation.

The Decree extends the obligation to implement reporting channels, adopt procedures for making reports, and ensure safeguards applies to all private entities that:

in the last year (ending for the first

New Reform Makes Italy Even More Attractive for Arbitration

by Fabio Cozzi, Francesco Bianchi, Stefano Mechelli and Massimiliano Moruzzi | Feb 9, 2024 | Arbitration, Procedural Legal Update, Italy

A significant and extensive reform of the Italian Code of Civil Procedure (ICCP) was recently enacted by the Italian Government. Legislative Decree No. 149/2022 (the Reform), became applicable as of February 28, 2023.

The Reform introduced material changes to the rules governing proceedings before State Courts, with the aim of increasing efficiency and cutting the time required to decide a case. Extremely relevant changes also impacted arbitration, making Italy an even more arbitration-friendly jurisdiction. Below the most significant features.

Reinforced Impartiality and Independence of Arbitrators

With a view to aligning Italian arbitration law with the practice of the main international arbitration institutions, the amendments impose on each arbitrator a duty to disclose, at the time of acceptance of their appointment, the existence or absence of any circumstances that could lead to a challenge pursuant to the relevant Italian law provision (Article 815, para. 1, ICCP).

Without this declaration, the arbitrator’s acceptance will be considered null and void.

Moreover, article 815 of the ICCP provides a list of grounds for challenging an arbitrator. Until now, such grounds were specific and mostly related to the arbitrator’s relationship with the parties. With a view to strengthening the guarantees of impartiality and independence of

The New Representative Action in Italy

by Fabio Cozzi, Francesco Bianchi, Stefano Mechelli and Massimiliano Moruzzi | Feb 7, 2024 | Procedural Legal Update, Italy

A new kind of class action has been introduced to the Italian legal system. Legislative Decree No 28 of March 10, 2023, transposing EU Directive No 1828/2020, has introduced the so-called “Representative Action”. The provisions applied as of June 25, 2023 with respect to violations occurring after application date.

The main features of this new class action are as follows:

Scope: the new representative action is intended to protect the collective interests of consumers, i.e., those arising from violations of EU regulations and directives expressly listed in Annex II-septies of the Decree and include product liability, unfair terms in consumer contracts, consumer price indications, e-commerce, personal data protection, unfair commercial practices, and misleading advertising.

Plaintiffs: the representative action can be brought only by EU representative associations included on the list held by the EU Commission, or domestic associations on the list held by the Ministry of Enterprises and Made in Italy and the independent public bodies named in EU Regulation 2017/2394.

Defendants: The representative action can be brought against any natural person or legal entity, public or private, including one acting through another entity, for purposes relating to its commercial, entrepreneurial, or professional business activity.

Territorial scope: for infringements of

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