3.1. General information
We can supply a professional network of experienced law firms in Italy to perform judicial credit collections activities. This network covers the whole country and is able to manage legal action in all the court districts.
Our lawyer will first send a warning letter (“Lettera Monitoria”) to the debtor via registered post so that there is proof of delivery, or via certified email address (“posta elettronica certificata”). If the debtor does not pay or reply, thereby disputing the debt, the judicial phase will start with the injunction decree (“Decreto ingiuntivo”).
3.2. Legal systems
The Italian judicial system adheres to the civil law system. For credit collections, we refer to the Italian Civil Code (“Codice Civile”), which contains and implements all the rules of the commercial law, and the Civil Action Code (“Codice di procedura Civile”), which governs civil trials in Italy.
The judicial organisation foresees several kinds of judges, according to the amount of credit involved:
- Justice of the peace (for an amount below EUR 5,000)
- Tribunal (for an amount above EUR 5,000)
Traditionally, any legal action starts in the court district of the debtor or in the court district foreseen in an agreement signed by both parties.
Ordinary civil action is rarely used to collect credits founded on written documents such as invoices. Civil action is very long and can last for several years. It’s also expensive due to lawyers’ fees, witness examination, and evidence analysis involved in the case. The main purpose of the ordinary civil action is to determine the existence of the credit that is due and the relationship between the parties. If the credit is based on written documents, the law allows us to use a quicker and less expensive procedure called “summary judgment” (“Decreto ingiuntivo”), which requires only limited intervention from the judge unless the debtor opposes the petition. These are the most common ways of collecting credits in court.
3.3. Required documents
In order to start legal action, the documents we need are:
- Readable copies of the unpaid invoices
- Readable copies of the transport documents signed by the debtor (CMR)
- If there are no CMR documents signed by the debtor, we need an abstract from your books of account authenticated by a notary
- An original power of attorney, enclosed in the petition and signed by the legal representative of your company
The D.L. n. 90/2014, converted into law n. 114/2014, establishes that from 30 June 2014, it is mandatory to start legal action by filing all the documents online, including the petition for an injunction decree ( Decreto ingiuntivo telematico”). So our lawyer will have to send the documents (copies of the unpaid invoices, copies of the delivery notes, a power of attorney signed by the legal representative of your company) to the court from a certified email address to the certified email address of the Chancery. In this way, the lawyer can send documents at any time because there are no office opening hours online and the system is always working.
The advantages of this new procedure are:
- A reduction in the waiting time for the issuance of the decree (from four to five months to from 15 to 30 days)
- A reduction in the activities undertaken by the associated law firm
- A reduction in legal costs
The D.L. n. 90/2014, converted into law n. 114/2014, establishes that:
- It is mandatory to file online from 30 June 2014 any act concerning the procedure of injunction decrees and any act in the civil procedures, such as execution in movable property and immovable property, bankruptcy and insolvency proceedings
- It is mandatory to file online from 30 June 2015 any petition for appeal
This new procedure cannot be applied to legal action handled by the justice of the peace with an amount below EUR 5,000. This has to be filed in the Chancery together with all the enclosed documents as evidence. The judge examines the petition, and, if in agreement, an injunction decree is issued. The duration of the issuance has been reduced from four to five months to from 15 to 30 days.
When the injunction decree is issued, it has to be notified to the debtor’s last known address within 60 days from the issuance of the decree. Upon receiving the decree, the debtor has 40 days to oppose it. If the debtor files for opposition, a civil trial starts. It’s a very long process, as phases required by the Italian Code must be followed so that the judge can issue a judgment. When no opposition is raised, the decree becomes executive, and you can claim an attachment of goods from the debtor. An executive seal is added to the decree and the Chancery will issue a writ of execution (“Precetto”). Both documents have to be notified to the debtor. You have to start forced execution within 90 days (“pignoramento”).
If the debtor does not pay or oppose the debt within 10 days after receiving the decree, the lawyer will bring in an executive injunction decree – an order of injunction to pay – and proof of the notification to the bailiff. If you have unpaid cheques or promissory notes, you can start directly with the writ of execution.
If the debtor opposes the injunction decree or the writ of execution, the summary judgment is suspended and the ordinary civil action takes place. You have to answer the opposition with a proper statement of defence (“comparsa di costituzione e risposta”).
During the first hearing, the judge will evaluate the statements of both parties and the documents. The judge can decide to declare temporary execution of the injunction opposed (“provvisoria esecuzione”), and the summary judgment process will resume with the next steps (writ of execution, attachment, etc.), whilst the civil action takes place in parallel. When you receive the temporary execution from the judge, you have almost won the legal action, and the ordinary civil action will end shortly afterwards.
An appeal against the ordinary civil action can be filed to the court in the area of jurisdiction where the judge issuing the judgment resides or to the Supreme Court.
In the case of notification of the judgment, it’s possible to file an appeal within 30 days from the notification (short-term). If there is no notification of the judgment, the term is six months from the issue date of the judgment (long-term).
3.6. Expected time frame
The average duration of legal action in Italy is from 10 to 12 months, whereas the ordinary civil action can take two to three years, depending on the complexity of the case.
3.7. Costs and interest in the legal phase
All costs are dependent on the outstanding principal amount and are calculated taking into account the amounts kept by each party. There are different fees that can apply during the proceedings that make it difficult to predict the total costs. In addition to this, costs of witnesses and/or experts might also arise.
The injunction decree has to mention the amount of credit to collect, interest (calculated on the basis of D. Lgs. 9 October 2002 n. 231), and legal fees (calculated on the basis of different ranges). When the petition is notified to the debtor, the debtor is ordered to pay the total amount mentioned. During the ordinary civil action, the party who loses the judgment is condemned to pay the costs of the legal proceedings (article 91 of the Civil Action Code).
(End of chapter 3 - Legal collections)