The Impact of COVID-19 on Italian Litigation: Suspensions and Technological Advancements Under "Cura Italia"
The Situation: Litigation in Italy has been unavoidably affected by the novel coronavirus (COVID-19) pandemic. Indeed, the Court of Milan alone holds up to 7,000 people daily, which is incompatible with the emergency rules on social distancing.
The Result: While the administration of justice is implementing technological tools to pave the way to a broader use of "e-trial" services, court proceedings of any nature, administrative procedures run by Public Authorities, and Alternative Dispute Resolution ("ADR") are temporarily suspended.
Looking Ahead: Litigation deadlines have been pushed forward by operation of law. Businesses involved in litigation should consider this when seeking settlement opportunities in parallel to litigation, as well as when drafting financial statements, renegotiating the terms of litigation guarantees, and assessing the effects of provisional relief orders.
Litigation Measures Amid COVID-19
The Italian Government had to strike a balance between the administration of justice, which safeguards the constitutional rights to defense and due process, and the constitutional right to people's health.
The Government's response is twofold: first, a temporary suspension of all litigation activities; second, the implementation of technological tools to carry out proceedings after the suspension period.
A temporary suspension of court activities (including proceedings whether they are ongoing or prospective) is set out in Articles 83 and 84 of Law Decree No. 18, dated March 17, 2020, which rectified certain issues that affected the prior emergency decrees.
- Ongoing civil, criminal, tax, and military court proceedings are suspended from March 9, 2020, to April 15, 2020 (term subject to changes), with certain limited exceptions concerning the fields of family and criminal law.
- Administrative court proceedings are suspended from March 8, 2020, to April 15, 2020 (term subject to changes), with certain limited exceptions concerning proceedings for provisional relief.
- From April 16, 2020, to June 30, 2020, each court may adopt special measures to carry out proceedings and court activities.
The consequences are as follows:
- The terms ordinarily applicable to investigations, motions, judgments, issuance or equivalent; the commencement of new proceedings on the merits or enforcement actions or proceedings for provisional relief, appeals, and in general, all procedural terms falling within the frame of court proceedings (i.e., terms to finalize expert witness testimonies); are tolled, except for those proceedings unaffected by the emergency legislation (such as those concerning certain matters of family and criminal law);
- If a civil, criminal, tax, or military procedural term starts running between March 9 and April 15, its first day of accrual is postponed to April 16, 2020;
- All hearings of whatever nature—except for those proceedings unaffected by the emergency legislation—are postponed after April 15, 2020. Courts are entrusted with special discretionary powers to postpone hearings after June 30, 2020;
- With specific reference to provisional relief, the validity of an order for provisional relief subject to an appeal term or whose validity expires unless proceedings on the merits (or other activities) are commenced thereafter, is extended accordingly; and
- Statute of limitations and forfeiture terms are tolled for the period of time in which the commencement of court proceedings is prevented because of the emergency legislation or because of specific measures adopted by each court as a result of the emergency legislation, from March 9 to June 30, 2020.
Alternative Dispute Resolution
Mediation and negotiation proceedings—voluntary or mandatory—are suspended from March 9, 2020, to April 15, 2020. This applies to any other ADR regulated by Italian law.
As a consequence, the three-month term to conclude a mediation procedure and the agreed-upon term to conclude a negotiation are extended accordingly.
Arbitration appears to follow a slightly different path. On March 25, 2020, the Chamber of Arbitration of Milan (the main arbitral body in Italy) adopted a resolution to suspend all the procedural terms applicable to filings and awards, from March 16, 2020, to April 15, 2020, and postponed all hearings after April 15, 2020, unless the parties and the arbitrators decide otherwise in a way compatible with Italian public order priorities.
All administrative terms (mandatory or not, preparatory, or sub-terms within a procedure) applicable to administrative procedures before Public Authorities and the adoption of the relevant Authorities' decisions, are suspended from February 23, 2020, to April 15, 2020.
Each Authority should adopt measures to minimize the effects of the suspensions, particularly by prioritizing urgent matters.
Effect of Technology Innovation on Italian Litigation
In the past few years, Italy's administration of justice has been at the forefront of technological innovation in order to support a litigation-oriented country.
In particular, Italy introduced the so called civil "e-trial," (i.e., proceedings where the exchange of complaints, motions, appeals, services of process, notifications, exhibits, evidences, judgments, or equivalent, etc.), are exclusively performed on secure online platforms.
From April 16, 2020, to June 30, 2020, e-trial measures should be implemented and used for any type of court activity, both civil and criminal. Each court will establish its own practices and procedures in this regard.
As a consequence, civil and criminal hearings will be held on secure online platforms, to which judges, lawyers, and the parties (including inmates) will connect by video-conference. The minutes of the hearing will be drafted live, and the judges shall ensure that the right to be heard is not hampered.
Four Key Takeaways
- April 15, 2020, currently marks the last day of litigation (of any nature) suspension in Italy.
- Litigation (of any nature) will resume on April 16, 2020, but until June 30, 2020, courts may use enhanced e-trial tools to ensure the continuance of both ongoing and prospective proceedings.
- The suspension of litigation terms will not prejudice trial and substantive rights of the parties. All terms will start running from where they were left off as soon as the relevant litigation activities resume.
- The measures described above are exceptional and must not be broadly construed. When the special application period ends, they will cease to have effect, and the ordinary administration of justice will be restored.
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