Italy, Magistrates' Court, Bitonto, 25 November 2003 n. 234/02

Identification of the case

• Article 33 of Law No 287/90

• TFEU, Article 101

Summary of the case

In July 2000, the Italian national competition authority declared that three insurance companies had implemented an unlawful agreement for the purpose of exchanging information on the insurance sector. The Italian NCA (AGCM) revealed that the agreement facilitated an average 20% increase in premiums for compulsory civil liability insurance relating to accidents caused by motor vehicles, vessels and mopeds not justified by market conditions. In the absence of standing for consumers under Article 33 of the Italian competition law No 287/90 and in the absence of collective actions under Italian law, consumers brought individual damages claims before the Italian small claims judge, the Giudice di pace, in order to obtain orders against the insurance companies for restitution of the increase in the premiums paid by reason of the arrangement declared unlawful.

Faced with legal issues that it had difficulty in resolving, the local court asked the ECJ to provide guidance in the interpretation of certain principles of EU competition law, which would allow it to determine whether the applicability of national competition law excluded that of Article 101 TFEU, whether it had jurisdiction over the case, and whether it could award damages under EU competition law.

• Civil judicial enforcement
• Collective enforcement - Class Action
• Other

Compensation for the violation of the individual’s rights by the administration or the judiciary

Damages, applicability of EU competition law, standing, the availability of punitive damages, the level of compensatory damages, and the prescription/limitation of claims

Concerning the right to claim damages for harm suffered through a breach of the competition rules, the Court of Justice in Manfredi reiterated a statement of principle which it had already given in Courage v Crehan (Case C-453/99):

“Article 81 EC must be interpreted as meaning that any individual can rely on the invalidity of an agreement or practice prohibited under that article and, where there is a causal relationship between the latter and the harm suffered, claim compensation for that harm. In the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to prescribe the detailed rules governing the exercise of that right, including those on the application of the concept of ‘causal relationship’, provided that the principles of equivalence and effectiveness are observed.”

Court of Justice also considered whether Italian procedural rules which require litigants claiming damages under the competition rules to commence proceedings before a particular court — thereby incurring increased costs and delays, as compared with proceedings before an inferior tribunal — are compatible with Article 101 TFEU. The Court held that, so long as procedural rules are not harmonised at European level, the respective Member States’ rules must safeguard the rights guaranteed by the Treaty in a manner not less favourable than those governing similar domestic actions (principle of equivalence), and that the procedural rules must not render practically impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness).

Role of the Charter and role of the general principles on enforcement

Charter has not been applied.

• Right to an effective remedy before a tribunal

• Equivalence
• Effectiveness

The Court held that, so long as procedural rules  are  not  harmonised  at  European  level,  the respective  Member  States’  rules  must  safeguard the  rights  guaranteed  by  the  Treaty  in  a  manner not  less  favourable  than  those  governing  similar domestic  actions  (principle  of  equivalence),  and that the procedural rules must not render practically impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness).

Although it is not a matter for EU law to specify which courts or tribunals have jurisdiction to hear actions for damages based on an infringement of EU competition law or to interfere with the detailed procedural rules governing those actions, the provisions that apply should be no less favourable than those that govern claims for damages based on infringement of national competition rules. Furthermore, in order for those procedural rules not to infringe EU law, they should be framed in such a way that they do not render the exercise of the right to seek compensation for damages resulting from a practice prohibited under Article 81 EC either practically impossible or excessively difficult. This also applies to the period of limitation for claims. In any event, if a limitation period is short and not capable of suspension, it could be contrary to EU law if it renders the exercise of the right to seek compensation for damages practically impossible or excessively difficult.

The principles of effectiveness and the principle of equivalence apply merely to the enforcement of individual rights based on EU law. The possible procedural obstacles of damages actions that consumers face in national law can, on the basis of national procedural autonomy, be dealt with by neither the EU courts nor other EU institutions. Disproportionate duration and costs of such proceedings can be capable of frustrating the exercise of consumers’ rights conferred by the Italian legal system, but it is not capable to frustrate their rights conferred by the EU legal system. And as such the Community has no competence to rule on this issue.

Elements of judicial dialogue

• Direct dialogue between CJEU and National court (preliminary reference)

Preliminary reference.

Clarify EU law and principles.

As a consequence of the CJEU decision a Directive on damages actions has been enacted.