Italian Government Proposes Civil Justice System Reforms

The Italian government has enacted a Decree containing urgent measures to reform the Italian civil judicial system and to deal with the backlog of pending cases. Published in the Italian Official Gazette on September 12, 2014, the Decree officially entered into force on September 13, 2014. Within 60 days of publication, the Italian Parliament must convert the Decree into law; otherwise, it will retroactively cease to be effective. During the conversion process, the Parliament could make amendments to the text of the Decree.

Decrees are issued by the government in cases of necessity and urgency. In the present case, according to the Decree's explanatory report, it was necessary and critical for Italy to reduce the duration of Italian court proceedings in order to put an end to its violations of the "reasonable time" requirement for a fair trial set forth in Article 6(1) of the European Convention on Human Rights. Moreover, the government aims to transform the Italian justice system from a burden on the country's growth to a driving force to assist in resolving the nation's economic crisis.

The new measures are designed to reduce the workload of Italian courts by diminishing the average time required to obtain a decision in civil cases. This would make Italy a more attractive country for foreign investment and work toward the ultimate goal of accelerating economic growth. The Decree was also inspired by a decision to leverage the professional capabilities and skills of Italian lawyers in the judicial system.

The main changes introduced by the Decree include:

The possibility to refer pending cases to arbitration conducted by panels comprising lawyers who have been members of the relevant Italian bar for more than three years (Articles 1 and 9); The introduction of the so-called "settlement negotiation assisted by legal counsel" or "assisted negotiation" as an out-of-court means to resolve disputes, which would become a mandatory prelitigation step for disputes pertaining to certain specific matters (Articles 2-5); The possibility to interrupt statute of limitations by inviting the counterparty to proceed with assisted negotiation (Article 8); A reduction in the number of cases in which the judge may order that each party bear its own costs, thereby discouraging potential losing parties from bringing proceedings as a dilatory tactic (Article 13); The possibility to convert ordinary proceedings into summary proceedings to accelerate the taking-of-evidence phase (Article 14); The introduction of written affidavits to accelerate the hearing-of-witnesses phase (Article 15); Reductions in the periods during which Italian courts are closed in summer, judicial deadlines and hearings are suspended, and judges take holiday leave (Article 16); An increase in the interest rate applicable to pending legal proceedings to limit the use of vexatious litigation by debtors as a means of delaying payments (Article 17); and Measures directed to simplify enforcement proceedings and make them more effective (Article 18-20).1 Referring Pending Civil and Commercial Court Cases to Arbitration (Article 1)

Under Article 1 of the Decree, the parties to pending first instance or appeal court cases that have not yet reached the decision phase—provided that such cases do not concern rights that cannot be disposed of (e.g., labor, pension, and social security disputes)—may jointly request the judge to refer their dispute to arbitration. Once the judge verifies that the dispute is eligible for arbitration, according to the requirements, he or she orders the transmission of the relevant file to the president of the board of the local bar association ("Consiglio dell'Ordine degli avvocati").

The arbitrators are chosen either by the disputing parties, or by the bar president, from lawyers who have been members of the local bar for more than three years and who have not been subject to disciplinary measures. The proceedings then continue before the arbitrators, without prejudice to the effects already produced by the claim brought before the court (i.e., the interruption of statute of limitations, etc.)...