Italian Class Actions Eight Months In: The Driving Forces
16 September 2010
By Dr. Renzo Comolli et al.
On 1 January 2010, it became possible to file consumer class actions in Italy. An explosion of media coverage, loud proclamations, and filings purportedly claiming billions of Euros in damages saluted the new law. Since then, the pace of filings has slowed down somewhat, though alleged damages are still in the billions. Both Italian and foreign companies have been called to the mat.
This NERA paper provides an overview, from an economic perspective, of the first eight months of the Italian class action experience. The authors focus on the economic incentives created by the law and by the role of consumer associations as de facto plaintiffs. In particular, because consumer associations are nonprofit and do not stand to gain directly from a settlement or damage award, they may not necessarily aim to maximize settlements or recoverable damages, as demonstrated, for example, by their choices in the recent Intesa case. The authors then analyze the goals that consumer associations seem to pursue and derive the implications that these have for damage claims and future settlements. In addition, the paper reviews some of the damages claims that have been made in recent actions and find that, while large, they don’t appear to be consistent with the opt-in model of the Italian class action. The authors also discuss the damage claims to the extent allowed by the information publicly available about them.
