ITALY Law and Practice Contributed by: Renato Fiumalbi, Simone Barnaba, Alessandra Lucchini and Valeria Daloiso, Eversheds Sutherland
(eg, the costs and expenses borne) by the aggrieved party and the loss of profit that is an immediate and direct consequence of the non-performance, delay in performance or tort. In Italy, damages are governed by the following prin- ciples: • If the precise amount of the damage cannot be determined, it shall be assessed by the court on an equitable basis. • If the creditor’s fault has contributed to the harm, the damages shall be reduced in accordance with the gravity of the creditor’s fault and the extent of the consequences resulting therefrom. • Compensation is not due for damages that the aggrieved party could have avoided by using ordi- nary diligence. • With reference only to contractual liability, where the non-performance or delay in performance was not due to the fault of the obligor, damages must be limited to the harm that could have been fore- seen at the time the obligation arose. Clauses on Limitation of Liability Pursuant to the Civil Code, any agreement that excludes or limits the liability of the debtor in advance on the grounds of wilful misconduct or gross neg- ligence is null and void. Furthermore, any covenant exempting or limiting liability in cases where the act of the debtor or its vicarious agents constitutes a breach of obligations arising from public policy rules is also null and void. The Penalty Clause The aggrieved party and the obligor may agree that, in the event of non-performance or delay in perfor- mance, one of them shall be liable to the other for a specific performance. Such an agreement has the effect of limiting the damages to that performance, if no further harm has been agreed upon. Such a penalty is due irrespective of proof of damages. Punitive Damages Punitive damages are not regulated by the Italian legal system. The Court of Cassation (the Italian Supreme Court) recently affirmed the decision of a court of appeal recognising a foreign judgment containing an
order to pay punitive damages, holding that: (i) dam- ages, in addition to their compensatory function, also have a deterrent and punitive function; and (ii) punitive damages are not incompatible per se with the Italian legal system, provided that certain requirements are met (eg, that punitive damages are expressly provided for by the applicable foreign law, and such a foreign law provides for the specific cases when the punitive damages can be awarded). 9.3 Pre-Judgment and Post-Judgment Interest Pre-Judgment Interest The successful party is generally entitled to collect interest based on the period before judgment is entered if the claim is for payment of an existing debt. Pre-judgment interest is calculated by applying: (i) the interest rate agreed between the parties; or, if the par- ties did not agree on an interest rate, (ii) the interest rate established by the law for late payments in com- mercial transactions or (iii) the general interest rate established by the law in all other cases (also in these other cases, the interest rate in (ii) above applies after the legal action is started). The successful party is generally not entitled to col- lect interest based on the period before judgment is entered in case of claim for damages, in which case the judge usually determines the amount of damages on the date of the judgment. According to the Civil Code, the limitation period to claim interest is five years. Post-Judgment Interest The successful party is generally entitled to collect interest accruing after judgment is entered. According to the Civil Code, the limitation period to claim interest is five years. 9.4 Enforcement Mechanisms of a Domestic Judgment The general rule is that first instance judgments are immediately enforceable even pending an appeal (unless the appellate judge orders a stay). In excep- tional cases (eg, in case of “constitutive” judgments),
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