Representative Litigation in Italian Capital Markets: Italian Derivative Suits and (if ever) Securities Class Actions

In this article I investigate representative litigation in the Italian company law and financial law context. In Section I, I will analyze derivative actions, which were introduced in 1998 and which can be considered up to now an abject failure. In Section II, I will cover class actions, which were introduced at the end of 2007 in the form of a new general provision concerning consumer law and also affecting financial investors, but whose entrance into force has been postponed several times and may never become effective due to some unresolved technical problems and, above all, widespread political fears concerning the exposure of Italian firms to large mass litigation. Such fears are likely to be reinforced by the protectionist mood that is following, engendered by the current financial crisis that we are currently experiencing. Since I intend to analyse litigation forms that may appear still born, the interest of my article could appear to be limited and focused, mainly, on the technical reasons why derivative actions are not working and the potential role that securities class actions could play in Italy, if and when they become effective and if and when the obstacles that already prevent representative litigation from operating are removed. However, I will also consider the impact that both these legal transplants can play in the legal reasoning of Italian traditional lawyers. My point is that these instruments, even though totally ineffective individually, can ignite a cultural change that affects the way judges and lawyers see civil remedies in company law and financial markets law. I will analyze the effect that the two transplants might have on the legal discourse of Italian private lawyers in part III, offering an optimistic view of an otherwise dismal landscape.