DEBT COLLECTION IN ITALY
We advise and represent you in the settlement of cross-border claims in Italy
Repaying an outstanding debt in Italy can be difficult, both because of the language barrier and the different legal system. We can help you by handling the correspondence with the debtor and also by investigating his financial situation. If the debtor refuses an out-of-court settlement, you have the option of filing a legal dunning procedure or a lawsuit in Germany or Italy, followed by enforcement in Italy.
THE PROCESS IN ITALY
If you are referred to the Italian courts by virtue of the statutory rules of jurisdiction, the action must be brought before an Italian court.
In Italy, ordinary jurisdiction is as follows:
The Justice of the Peace ("Giudice di Pace") has jurisdiction for disputes up to a value of approximately EUR 2,500 and for claims for damages arising from traffic accidents up to a value of EUR 15,000.
Following the abolition of the District Courts, the Regional Courts ("Tribunale") now have jurisdiction over other civil disputes.
The higher regional courts ("Corte d'Appello") are the court of appeal and are also responsible for issuing the Italian enforcement clause for German judgments.
Finally, the Court of Cassation ("Corte di Cassazione") in Rome is the highest court in civil matters.
Due to the continuing congestion of the courts, it is statistically expected that a trial will take up to three years.
THE ITALIAN ORDER FOR PAYMENT
If you cannot recover the debt out of court, the first step is to apply for a payment order.
Similar to our German dunning procedure, Italian law also recognizes a summary procedure ("Procedimento d'ingiunzione") with which you can assert your claim. However, you must be able to fully substantiate your claim with documents (bills of delivery, contracts, register extracts, etc.). The Italian order for payment is issued as a judgment - at the discretion of the judge, with or without an immediate enforcement clause - and without hearing the defendant. It can be contested by the defendant by means of an objection, with the result that the claim is decided in the main proceedings, which begin directly with the objection. The procedure is therefore similar to that of a default judgment in Germany.
In any case, the amount of the costs will be determined in the judgment. The amount of the winning party's claim for costs is practically never identical to the actual costs. This is due to the fact that the court, which determines the amount of costs to be reimbursed directly in the judgment, does not know the lawyer's bill and only estimates the costs.
ITALIAN ENFORCEMENT PROCEEDINGS
Enforcement is the procedure for the execution of court judgments and other enforceable titles. A prerequisite and sufficient condition for the commencement of an enforcement action is the possession of an enforceable title to a claim that is "genuine, of a fixed amount and pending" (undisputed, precisely quantified and due).
The degree of "certainty" varies from title to title. Judicial titles include judgments, settlements and decrees issued by a court during or at the conclusion of legal proceedings. Nonjudicial titles include bonds, public deeds and notarized private documents executed independently by the parties involved.
Which court has jurisdiction?
Enforcement in Italy is the responsibility of the ordinary courts. The law on enforcement is contained in the Italian Code of Civil Procedure. The procedure is similar to that in Germany.
When does enforcement begin?
Enforcement begins when the debtor is served with the enforceable instrument, i.e. an enforceable copy (the original must remain in the possession of the creditor) and the writ of execution ("atto di precetto"), which gives the debtor a final deadline of at least ten days to comply with his obligation. From this point on, legal representation is required. If the debtor still does not comply, enforcement proceedings can be initiated by means of attachment by the bailiff. The aim is to enforce enforceable obligations. Enforcement is possible for payments of money as well as for obligations to deliver movable property or to release real estate. However, the attachment must be made within 90 days of the date of service of the writ of execution ("atto di precetto") (but not before the expiry of the time limit specified in the writ), otherwise the writ becomes invalid and must be served again. The attachment also lapses if the transfer or sale is not requested within 45 days of its execution. Enforcement measures.
Types of measures
The Enforcement Court will issue various types of measures during the course of the proceedings, usually ranging from orders necessary to establish due process to measures to transfer the seized assets, such as an order to transfer the property to the buyer.
What debtor's assets are attached?
Movable property, real estate, claims and shares in companies can be seized.
How does an attachment affect money?
In the case of money, enforcement means that the seized funds are no longer available to the debtor against whom the enforcement order was executed at the time of seizure. Therefore, any transfers of those funds are void and cannot be used to avoid seizure.
Can an appeal be lodged against an enforcement order?
The Italian legal system provides for two types of appeal by the debtor (or third parties indirectly concerned) against measures and judgments relating to enforcement proceedings. The two types of appeal are: - Opposition to enforcement ("opposizione all'esecuzione"), which challenges the right to enforcement (or the creditor's right to proceed with enforcement). - Appeal against the enforcement measures ("opposizione agli atti esecutivi"), which challenges the procedure on the grounds of error (i.e. the legality of the documents used in the enforcement procedure). If enforcement has already begun or the attachment has been notified, special appeals may be lodged with the enforcement court. Third parties claiming rights in the attached assets can still appeal against the enforcement before they are sold or transferred.
Can enforcement be limited?
In addition to items that are declared non-attachable by special laws, many items are exempt from enforcement, such as household appliances that are necessary for the household or that the debtor must keep for the provision of a public service, jewelry, letters and documents, unless they are part of a collection, cannot be attached.
Is there a statute of limitations?
The statute of limitations varies according to the law. In this context, it should be noted that the limitation period may be different depending on the type of document on which the application for enforcement is based. For example, the limitation period for an action based on a court judgment is ten years, although the law generally provides for a shorter limitation period for the type of claim in question.
Enforcement measures will be unsuccessful, however, if the limitation period for the claim has completely expired.
We therefore advise you not to waste any time and to assert your rights immediately!
COSTS OF THE ITALIAN LAWYER
What does a lawyer in Italy cost?
As of January 24, 2012, there is no longer a statutory minimum or maximum fee.
The legal fees in Italy have therefore been liberalized and there is now freedom of negotiation between the lawyer and the client.
The lawyer's fees are therefore determined on a case-by-case basis between the parties, taking into account all the circumstances.
The following fee arrangements are permitted:
(a) on a time basis;
(b) as a lump sum, for individual stages or services or for the entire activity;
(c) as a percentage of the value of the transaction or of what is likely to benefit the recipient of the service, rather than on a purely financial basis.
With respect to attorneys' fees in Italy, it should be noted that even in the event of a complete victory in court, it is not certain that the opponent will also have to pay the costs of the proceedings. The court has discretion in this regard and may take into account the difficulty of the legal issue as well as the financial capacity of the parties involved.
Before filing a default summons or a lawsuit, it is advisable to obtain information about the debtor's financial situation, i.e., to find out whether it will be possible to enforce a title that has been obtained. Otherwise, there is a risk of investing in proceedings to obtain an Italian enforcement order that cannot be successfully enforced anyway, leading to unnecessary costs.
COSTS OF THE ITALIAN PROCESS
What does a process in Italy cost?
The cost of the Italian process depends on so many variables. First, the value of the assets: the higher the stakes, the higher the fees and the attorneys' fees. Then the number of parties: the more parties there are in a case, the more costs there are between pleadings and discovery. Then, the cost of a case will inevitably vary according to its difficulty and the time it takes, aspects that imply a greater commitment on the part of the lawyer and can therefore increase his fee.
Who has to pay at the beginning of the process?
However, the person who files a lawsuit must pay the initial costs.
Every time you start a lawsuit, you have to pay a court fee. This is not always the same, but varies depending on the value of the matter the parties are disputing. In fact, the ability to pay is not determined by the plaintiff's income (as is the case with most indirect taxes), but by the outcome the plaintiff hopes to obtain from the judgment, even if it is only an expectation that is far from certain (in fact, no one can know if the judge will fully agree with him).
Then there is the cost of mediation. It is an attempt at mediation that must be carried out when the dispute concerns matters such as rental of shops, condominiums, insurance contracts, banking or financial transactions, rights in rem, family agreements, compensation for medical and health liability, compensation for traffic accidents, inheritance, etc.