Legal steps for debt collection in Italy

stampa | chiudi

30 Novembre 2009  Scritto da: Francesco Misuraca

Italian "Decreto Ingiuntivo"

The creditor who wants to recover a bad debt in Italy could submit by an Italian lawyer a special claim to the court for the issuance of a Decreto Ingiuntivo (payment injunction or order of payment or cease - and – desist order), so that, the creditor will have to prove that the goods or the service have been regularly supplied/rendered to the debtor. The Decreto Ingiuntivo (injunction decree) is a legal decision issued by the court consisting in a payment injunction ordering the payment of the debt, in addition to interest and some legal expenses. In order to obtain the Decreto Ingiuntivo, when the creditor is a professional, an entrepreneur or a company he will have to provide the court – by an Italian lawyer - with written evidence regarding the debt’s existence, such as: •copy of unpaid invoice for the services/products sold; •copies of documents certified by a notary public or other authorized public officer, such as copies of account book registration; •certified copies of a creditor business`s accounting books; •telegrams; •unilateral promises; •debt acknowledgements. If the debtor confirms the debt by email it must contain the electronic signature so that it shall be considered as valid written evidence for the summary judgment to be granted. Anyway, the debtor may oppose to the payment injunction (Decreto Ingiuntivo) issued by the court submitting an opposition counterclaim (so called Opposizione) within the following 40 days, starting from the day in which the payment injunction has been formally served to him. If no such opposition has been made, the creditor might commence proceedings for the execution of the injunction. The time for the issuance of a Decreto Ingiuntivo by the Italian court is short, usually few weeks. If the debtor chooses to oppose against the Decreto Ingiuntivo, the counterclaim opposition will provoke the starting of an ordinary civil claim. Usually, during this trial the main issues discussed concerns the existence of the debt and the legitimacy of the order of payment. The duration of an ordinary legal lawsuit in Italy, in order to recover a bad credit through the standard legal procedure, generally takes not less than 18 months. For the enforcement (Esecuzione) of a payment in favor of creditor, the Italian procedure rules requires the submission to the judge charged for execution of a fit title, i.e. a sentence, a check (Assegno) or a bill of exchange (Cambiale). Credit Reports and Investigations in Italy Before to start any legal claim against a debtor in Italy it is advisable that creditor shall charge an Italian lawyer to check business information in Italy and abroad on bank accounts, assets and properties of debtor, regarding the corporate background as well as directors, shareholders, financial data, operations, trade, legal background. The Italian law firm charged to recover the credit in Italy shall perform these verifications permitting the creditor to know who he is dealing with before accepting contracts, credit application or sales. Some of these searches / investigations are: •asset search / verification •location / address Search / verification •registration search / verification •vehicle search/ verification •pre - judicial search reports •fact - finding per instructions •liquidation search / death claim search If, on the basis of information collected, it transpires that the debtor owns sufficient assets (moveable property, real estate, income) to pay off the debt, it may be advisable to proceed with legal action. Bankruptcy petition in Italy The bankruptcy law in Italy has been recently modified by an amendment (effective from 1 January 2008) which introduced 3 new requirements for declaration of bankruptcy of a company. 1) The total amount of the debtor’s liability may exceed Euros 500,000. 2) Further, the debtor’s assets must exceed Euros 300,000 a year on aggregate in the three fiscal years before the date on which the bankruptcy petition was filed or operations began, whichever is earlier. 3) The debtor’s gross revenues must not exceed Euros 200.000 a year on aggregate in that time. The new law has extended the powers of creditors’s committee and has limited the influence of the court, in fact, now the liquidation plan must be approved not by the bankruptcy court, but by the creditors committee. Starting a civil action in Italy The Codice di Procedura Civile (Codes of Civil Procedure, C.P.C.) contains the rules governing procedure of civil actions. For the starting of a civil action is necessary the summons. The plaintiff and the sued party must be represented in front of the courts by attorney acting with a proxy, but, in some cases before the Judge of Peace (Giudice di Pace) or before the Tribunal in case of personal separation of spouses or in front of the Judge of Work (Giudice del Lavoro) is not mandatory for parties to be represented by an attorney, but they can act personally. All decision concerning civil cases that are taken by Italian court are founded on law, unless, they may be founded on equity as a consequence of a common decision of parties about any rights that they may dispose of. Since January 1st 2004 has been introduced specific procedure for litigation on matters about banking law, corporate law, capital markets, public works finance. Appeal of judgment in Italy As for general rule any judgment issued in first degree may be appealed in front of next higher court, except that: - for judgment for which appeal is excluded by law, or - for judgment issued by tribunal on basis of equity, or - when parties agreed to not appeal the judgment to next higher court (omisso medio) and instead agreed to start soon appeal to Court of Cassation (in this case the claim could be proposed just for violation of law or for misapplication of law). The claiming party may start appeal in front of Court of Cassation (Corte di Cassazione) against second degree judgment just for items of law. Furthermore, a second degree judgment may be forwarded by the claimant in front of the court that issued it (revocazione) if there has been: - a false testimony or a false proof; - a situation of dolus of one party against the other; - found new essential documents after judgment that party hasn’t exhibited before for the presence of a situation of force major or for act of the other party; - a dolus of the judge who issued the judgment; - an error in fact evidenced in the documents; - a judgment which is in contrast with another judgment between the parties. Taking of depositions out of Italy The EC Regulation No. 1206/2001 of May 28, 2001 on commercial and civil matters has been adopted by since 1st January 2004. Under this Regulation is possible taking evidence in EU member state (excluded in Danmark which didn’t ratified it). In case depositions are to be taken outside of the (and EC Regulation No. 1206/2001 does not apply), it shall be necessary to send the rogatory letter by court, through Foreign Ministry, to the Italian Consulate in the state where witness is living; so that, deposition is taken directly before Italian consul (if witness is Italian citizen) or forwarded by consul to the competent authority in foreign state in case witness is foreigner. has signed the The Hague Convention on 18th March 1970 about the Taking of Evidence Abroad in Civil or Commercial Matters. Kinds of judgments in Italy The decision is given upon the facts and the demands are brought by the parties. The decisions that can be issued by a judge in are of three kinds: - sentenza: through this act the judge issues the decisions or opinions based upon facts and points of law (judgment); the “sentenza contumaciale’’ is the judgment rendered by default; the ‘‘sentenza non definitiva’’ is the judgment given in course of suit upon some intermediate object, without finally deciding suit (interlocutory judgment); - ordinanza: through this kind of decision the judge issues all necessary orders in the course of a suit as a consequence of the instance made by one party with summons of the other party or ex officio; - decreto: through this kind of decision the judge issues orders made on instance of a party without summoning the other or ex officio. Recognition in of foreign judgments and arbitration Judgments issued by a foreign court are recognized in without need of resorting to any proceeding if: - the parties entered appearance in conformity with laws of country of proceedings or their failure to appear was declared in conformity with that law; - the judgment is not contrary to another judgment issued by an Italian judge that became “res judicata”; - no proceedings are pending in front of the Italian judge for the same matter and between the same parties which were initiated prior to foreign proceedings; - its provisions do not produce effects contrary to public policy (as per art. 64, Law No. 218 of May 31, 1995); - judge that issued it could take cognizance of case in accordance with Italian principles on jurisdictional competence; - the claim introducing proceedings abroad was made known to defendant as per the provisions of law of place where proceedings were held and if essential rights of defense were not violated; If the foreign judgment is not in compliance with recognition or there is an objection to recognition or in case it is necessary to proceed with forceful execution, the interested person could claim in front of court of appeal of the place where the judgment should have been implemented to the aim of determine the existence of the requisites for recognition. The decision allowing application of foreign judgment gives to the beneficiary the entitlement to implementation and forceful execution. Recognition in Italy of decisions issued by courts of EU countries The EC Regulation No. 44/2001 of Dec. 22, 2000 (which substituted Brussel Convention of 27th September 1968) allows the recognition and enforcement in Italy of decisions on civil and commercial matters issued by courts of other member states of European Union (excluded Denmark) without any previous approval of special proceeding when: - decision is not contrary to public policy of ; - court of foreign state has not contravened provisions of paragraphs 3, 4 and 6 of EC Regulation No. 44/2001 concerning the summons of defendant; - summons has been properly and timely communicated to defendant who did not enter appearance in proceedings; - decision is not in contrast with any other previous decision rendered between the same parties in Italy or with another decision rendered abroad, which may be recognised in Italy. As per EC Regulation No. 44/2001 the party who wants to enforce a decision in shall have to present the request to the competent Court of Appeal jointly with following documents: - authenticated copy of decision; - statement pursuant to Arts. 53, 54 and Annex V of EC Regulation No. 44/2001. The party who wants to oppose this decision on such request may submit recourse to competent Court of Appeal; the decision of the Court of Appeal can be challenged in front of the Court of Cassation. Recognition in Italy of foreign arbitration awards The party who wants to get recognition in of foreign arbitration awards shall have to present an application to the Court of Appeal of place of residence of the other party, if such party is not resident of the application shall be file with the Court of Appeal of . The foreign award shall be declared enforceable by decree issued by the Court of Appeal; against the decree may be filed opposition, unless: - award contains any provisions contrary to Italian public policy; or - the case can not be settled by arbitration under Italian law. Time limit for civil action in Italy As per general rule, actions must be brought within ten years, but, pursuant to articles from 2946 to 2962 of Civil Code there are the following principal exceptions: - 1 year for: actions to recover broker’s commission; actions to recover damages by reason of collision of ships, insurance on shipping or breach of chartering contract; actions against carriers if the shipment was made in Europe, actions against forwarders; - 18 months for: actions against carriers if shipment was made elsewhere than in ; - 2 years for: actions to recover damages arising from the driving of vehicles; - 3 years of presumptive prescriptions for: actions of professionals, notaries, employees and teachers for period salary exceeding one month; - 5 years for: actions to recover damages, rent or interest due, incomes for life, annuities; actions on partnership agreements, allowances due by reason of termination of employment.