On 25 June 2023, the so-called "representative action" (or azione rappresentativa) referred to in Legislative Decree No. 28/2023, which transposes the content of EU Directive 2020/1828, came into force. This is a tool that Insurance Companies should certainly pay attention to, as these initiatives could involve them directly and, in any case, may involve many of their insureds.

The azione rappresentativa stands alongside the "class action" referred to in Law No. 31/2019. However, while both tools are conceived to protect the interests of third-party categories, and both are aimed at reducing the fragmentation of court proceedings and at bringing multiple claims within one single court procedure, the two actions differ in many aspects.

Protected rights and interests

A first difference relates to the protected rights and interests: representative actions aim at protecting the collective interests of consumers. Whereas class actions are aimed at the protection of homogeneous individual rights of individuals who make up the "class" and are not necessarily consumers.

Legal standing to bring the action and participation to it

In relation to legal standing, representative actions can be brought by national consumers and users associations (registered in the list kept at the Ministry of Enterprise and Made in Italy), national independent public bodies referred to in Article 3(6) of Regulation (EU) 2017/2394 of the European Parliament and Council of December 12, 2017, who apply for authorization, and by entities designated in another Member State and included in the list drawn up and published by the European Commission pursuant to Article 5(1), subparagraph 2, of Directive (EU) 2020/1828 of the European Parliament and of the Council of November 25, 2020.

A necessary requirement for the individuals interested in participating in the action is that they must be "consumers." They may benefit from a favourable judgment rendered by the competent court without having previously issued a power of attorney in favour of the relevant association in order to bring the action. Participation in the action is based on a voluntary "adhesion", before or after the successful judgment. It is an opt-in mechanism, that differs from  the one of the U.S. class action, which automatically includes all members of the represented class, who can opt-out to be excluded from the class.

In the case of the representative action, the consumer is allowed to join the proceeding after the decision on the admissibility of the action or even after the judgment upholding the application for compensatory measures. In either case, the "adhesion" to the action must take place within the period set by the court, which is between 60 and 150 days from the publication of the order or judgment. The application of each consumer who wishes to join the representative action is examined by the delegated judge, and the decree granting the application to participate constitutes an enforceable order. As a consequence, if the professionals, against whom the action was brought, do not comply with the compensatory measures ordered by the judge, they may be subject to enforcement.

Entities entitled to take representative actions must indicate on their website the representative actions they intend to bring, the status of those already brought and their outcomes.

Capacity to be sued

With regard to the capacity to be sued, representative actions can be brought against any professional defined as any natural or legal person, public or private, acting for purposes relating to their trade, business, craft or profession. It is therefore a very broad definition that includes any company, public or private, including Insurance Companies (and of course the companies insured by them).

By contrast, class actions can only be brought against "enterprises" and entities operating public services (such as companies active in the transportation sector) or public utilities.

Subject Matters

Representative actions can only be brought in relation to specific matters listed in the Annex to Legislative Decree No. 28/2023 (including, amongst others, product liability, insurance, personal data protection, privacy, unfair business practices). This limitation in terms of subject matter is instead not provided for class actions, which may be brought in case of violation of an homogenous individual right even in relation to matters not detailed in Legislative Decree No. 28/2023.

If a particular dispute falls within the scope of both representative actions and class actions, it must be brought under the rules of the representative action, as the class action is applicable on a residual basis.

Steps to bring the representative actions

The representative action is to be brought before the section of the Civil Court specializing in business matters of the place where the professional who allegedly engaged in the illegitimated conduct is based.

In the application, the qualified entity must specify the identifying details of the group of consumers that have interest in promoting the representative action, the existence of jurisdiction, the applicable law, and the funding for the action brought received or promised by third parties.

Within thirty days of the filing of the application, the court rules on the admissibility of the application.

Available remedies

The representative action is aimed at obtaining compensatory or injunctive remedies.

With regard to injunctive relief, it will be possible to obtain injunctive remedies by which the court orders the cessation or prohibition to repeat certain conducts (including omissive conducts) carried out in violation of the relevant legislation and orders the publication of the remedy in national or local newspapers or the publication of a correction. Notably, with the representative action it will also be possible to inhibit professionals or companies (including, as mentioned, Insurance companies) from adopting contractual clauses that infringe consumers' rights.

In order to obtain an injunction, it will not be necessary to prove negligence or wilful misconduct on part of the professional, nor the losses or damages suffered by the individual consumers, but only the violation of the collective interests protected by the relevant rules.

Instead, compensatory protection offers a remedy for the prejudice suffered by the consumer including through payment of a sum of money, repair, replacement, price reduction, termination of the contract or refund of the price paid. There are no special or different rules as regards burden of proof in the case of compensatory measures.

Settlement Agreements

The qualified entity and the professional may, even at the invitation of the court and until the case is discussed, settle the dispute. However, consumers remain free not to accept the settlement agreement, and in that case it will not be effective against them.

Transnational nature

Representative actions can be cross-border, given that it may also be brought before Italian Courts by an authorized entity, registered in the list prepared by the European Commission, with headquarters in another European Union member state.

Similarly, an authorized Italian entity on the list may bring the relevant action in another EU member state. The representative action may also be brought jointly by authorized entities from different member states.