Elements of Italian law

Litigation in Italy – how long does it really take?

ClockWhenever assessing a case for a client, despite my many years experience in foreign legal jurisdictions, I still feel somewhat apprehensive when we arrive at the inevitable question ‘How long will it take? The reply “Potentially three to four years” still doesn’t roll off my tongue as it does my Italian colleague; she has no trouble with it.

The statistics tell you that, with all the appeals, a civil dispute in Italy can take up to eight years to settle, which is almost four times the OECD average. Enforcing a contract in Italy takes on average around 3 years compared to little over one year in the UK. Of course some cases do not take so long, but you can rarely predict with any certainty.

What are the reasons?

Some of the causes are well known and subject to regular debate.

  • Italy is one of the most litigious countries in Europe and has more lawyers than other any EU country.
  • Whilst the legal process is considered to be thorough (there are at least 4 or 5 court hearings for each case) the courts cannot cope, and there is currently a backlog of several million cases to be heard.
  • The system is somewhat inefficient and very politicised.
  • Judges have a great deal of power and control over their jurisdiction and how they manage cases.

Are things changing?

courtImprovements are slowly being made, such as the introduction of online submission for court documentation, aimed at reducing the ubiquitous long queues of lawyers ever-present in the courts waiting to simply submit documentation. This created a role for ‘professional queuers’ who, for a fee, keep your place in line, allowing you to return a few hours later, after having presumably got on with something more productive. There are also new measures being introduced to dramatically reduce the time required to conclude a divorce.

However, it will take a much greater shift in regulation and culture before we see any palpable improvements to the majority of decision times.

Addressing this problem isn’t a case of attempting to homogenise cultures in the name of global efficiency, at the expense of a country’s culture and identity. It causes real harm to the economy, and from my perspective working with international investors; the main problem is that such circumstances (not unique to Italy) act as deterrent to investment.

  • It creates a degree of uncertainty with regard to the practical enforceability of contracts.
  • Businesses become burdened by recovering debts that may take many years.
  • The slow pace of banks recouping defaulted loans keeps the cost of credit higher.
  • Companies may be reluctant to employ staff because of the time required to settle labour disputes in court.
  • Businesses don’t expand because it is safer to work with existing trusted suppliers, as a contractual dispute with a new partner may take years to settle.

It is hard to say whether the everyday Italian has gradually adapted his/her way of life to accommodate this situation, or if in fact it is the very underlying culture that created it in the first place. Either way most people want to see change, but as with any entrenched bureaucratic system, it will not be ‘streamlined’ overnight.

Can anything be done to speed cases up?

hourglass 2It is no revelation to say that the system can be used, some might say abused, for those who have the knowledge, time and money to spin cases out. Whether you consider this to be a good or bad thing depends which side of the action you are on!

However, doing so does come with risk as exposure to costs escalates, but it is sometimes a reality that the mere prospect of several years of litigation is sufficient to deter some people, especially foreigners without good legal advice.

There are a few things that can be done to help the situation:

  • First of all try to negotiate an out of court settlement, and be realistic about assessing the value of ‘x’ amount now versus the potential of receiving ‘y’ sometime in the future.
  • Be open to a making or receiving a settlement during the case. The judge will be more than happy to facilitate a solution to prevent further court hearings, and may even become frustrated with one party who refuses to accept a fair offer.
  • If you do go to court, present a very strong and thorough case from the outset with the intention of cutting off as many avenues as possible that may be used to frustrate and prolong the process. There are enough grey areas in life without creating your own. Keep on top of this throughout.
  • The smaller courts usually have shorter waiting times than the major cities.
  • In certain situations, depending upon the circumstances, you can request a fast track process that means the case will be heard within a several months. Although don’t get too excited, not may cases fall into this category!

In conclusion, if you have followed my other blogs you will notice a theme of avoiding problems in the first place. Taking a small amount of advice early from a lawyer or consultant experienced in international affairs before you commit to agreements can save you a lot of trouble in the future. Many times we deal with contractual disputes based on circumstances and agreements that had we been consulted, we would have strongly advised against in the first instance.

If it is too late for that and you have exhausted all alternatives, in Italy you can generally forget the notion that a ‘strongly worded’ legal letter will bring about fear and submission – it won’t, nor will merely threatening to sue someone, they will both be regarded as empty gestures. The consolation is that lawyers’ fees in Italy are usually quite a bit lower than comparable countries (especially the UK) and the sooner you start, the sooner it will be done. I am often surprised how much time people spend pondering the idea before actually taking action.

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Owning an apartment in Italy

There are any number of property websites providing advice and information on the general issues involved with buying and owning a property in Italy. However, my intention is to uncover some lesser-known elements of property ownership. Whilst the chances of encountering these situations may be slim, being in possession of as many facts as possible allows you to mitigate, if not completely eliminate, the risks.

One such rule falls under the Civil Code of ‘Responsabilita’ Solidale’. In simple terms this means that in situations of joint liability, such as maintenance of a communal apartment building where the management company is unable to pay, a creditor can request payment from all the members. If some do not pay their share, the remaining members can be forced to make up the difference, and in extreme circumstances, i.e. no one else has any money, this could mean just you!

Alternative methods of debt restitution are increasingly being pursued and enforced, however, it is still possible to encounter this principle.

Ways to protect yourself are:

  • If possible, before purchasing an apartment, check the financial health of the building management company – in my experience, most are not in good shape!
  • If you are already an owner, make sure that all contracts for work carried out on the building contain a clause specifically stating that each individual is liable only for his/her own respective share of the debt.
  • Lastly, whilst I can’t advocate the efficacy, some people like to adopt the old fashioned method of self preservation by simply not having too much spare cash in the bank. Although most of us don’t have that problem!
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