If the market is the carrot, then group actions are the stick. The creation of an EU-wide collective redress procedure is currently being hotly debated in Brussels. In Italy meanwhile, the Italian consumer group Altroconsumo has used this stick 14 times to repair problems in the market. But not all of them brought about ideal results. Some changes might be necessary. The Italian collective redress procedure is nevertheless an opt-in collective legal instrument to obtain compensation for mass damages suffered by consumers, a neat alternative to multiple individual actions.

Article 140-bis of the Consumer Code came into force in 2010 and protects three different types of rights: consumers’ rights with respect to the same contractual term; the right of consumers of a given product/service against the manufacturer/provider; and the right to compensation for unfair commercial practices or anti-competitive behaviour. But there is a downside.

Under Italian legislation the collective redress procedure requires consumers to expressly join it (opt-in). Once the action is started, other consumers and users that are in the same legal situation can join it, within a determined timeframe.

200,000 sign-ups to our class actions

The experience of Altroconsumo, with about 200,000 sign-ups to its 14 group actions in sectors like banking, public transport, dieselgate or big pharma anticompetitive practices, and the most recent being against Facebook, shows that the tool can be among the best instruments for protecting consumer rights. But the exclusive opt-in system requires that consumers affected are duly informed about the action.

This information burden has been legally placed exclusively on the promoters of the actions, which means it is very hard to reach and communicate effectively with all or even some of the consumers concerned. The responsibility to communicate should instead be placed by the courts on the defendant companies once the class actions has been declared admissible.

In Altroconsumo’s experience, the courts have set expensive and inefficient ways, such as traditional announcements in the print media, through which the promoter of the action can communicate with affected consumers , as happened in the dieselgate case. These announcements proved to be useless in reaching out to all the relevant consumers, who were more effectively reached through car public registers.

Room for improvement

In order to improve Italian class action law, Altroconsumo has promoted various amendments to the Italian Parliamentary bill which intended to reform the procedure. We also participated in numerous official hearings where, after highlighting the criticisms above, we also asked to widen the scope of class action remedy to damages resulting from breaches of all consumer protection rules, even if not contained in the Consumer Code and regardless of the contractual or non-contractual liability.

We also claimed that, once the class action is declared admissible, the costs of communication to the public should be borne by the defendant, lowering in this way our legal advertising costs and allowing more freedom in how to inform potential adherents through the internet. A further improvement would be to reduce the time necessary for obtaining the admissibility decision in the court.

The experience of Altroconsumo shows that the tool can be among the best instruments for protecting consumer rights.

Based on our direct experience of these points, we believe the class action tool could become even more effective in Italy,  both to more effectively provide compensation to consumers and to act as a deterrent to repeated offenses by companies. Our request is now in the hands of the newly-appointed Minister for Economic Development and Consumers affairs Luigi Di Maio and the Minister for Justice Alfonso Bonafede. We hope that they will be willing to support our request for a smarter class action tool and to support a European effort to create an effective collective redress procedure which all European consumers can benefit from.

Luisa Crisigiovanni is the Secretary General of Altroconsumo, an Italian consumer organisation.

Posted by Luisa Crisigiovanni