Practical experiences of consumer organisations in collective redress: Italy Practical experiences of consumer organisations in collective redress: Italy Marco Pierani Head of Public Affairs, Seminar on Collective Redress Seminar on Collective Redress 24 October Belgrade

23 maggio Who is Altroconsumo? The first and most popular Italian consumer organization ALTROCONSUMO is a consumer organization set up in Milan in 1973 It is independent, effective and representative It is ackowledged by law ex art. 137 – Codice del Consumo (Dlgs. 206/2005) and member of CNCU It’s member of BEUC – the European umbrella organisation that brings together 42 consumer associations from 30 European countries – since 1978 It is member of Consumers International (220 associations from 115 nations) Our activity in figures (2012):  members  more than advices  390 public partecipations, 36 AGCM complaints, 90 dossiers  more than media presences  more than visits to  more than followers on Twitter, like on Facebook  7 magazines and numerous guides  more than 100 test  208 professionals on consumer side

Outline of the presentation  Collective Redress in Italy  The Italian law on Class Action  The Class Actions of Altroconsumo: a brief introduction  VAT on Waste Tax Class Action: a bit more in depth  VAT on Waste Tax Class Action: different phases and integrated communication  (Non) conclusions 3

Collective Redress In Italy Injunctions (artt Consumer Code) –Recognized consumers associations are entitled to ask the Court to inhibit acts and behaviors prejudicial to the interests of consumers; take appropriate measures to correct or eliminate the harmful effects of violations; “Public class action” Legislative Decree 198 of 2009 –Consumers and users have the right to collectively protect their interests against misconducts perpetrated by public agencies or private corporations providing public services in front of Administrative Court “Civil class action” Law approved on 2nd July 2009 and following modified, introducing article 140bis on the Italian Consumer Code 4

Art 140 bis of the Italian Consumer Code – legitimation consumers with homogenous interests have the right to file a class action against a private corporation for the determination of liability and the condemnation to damages and refunds. Consumers may act individually or through associations to which they give a mandate. In order to initiate an action, the plaintiff must file a complaint with the civil trial court in the capital of the respective Region, where the corporation’s headquarter resides 5

Art 140 bis of the Italian Consumer Code – admissibility The court have to evaluate: –if the actions is manifestly unfounded; –If there is a conflict of interest; –if the main plaintiff can adequately represent the interests of the class –and if the rights of the proposed class members are homogenous (not anymore identic) In case the class action is not admitted on the basis of one of the above mentioned reasons the plaintiff may be ordered to pay legal costs and negative publicity By the order with which admits the action the court sets the terms and conditions for the most appropriate publicity for the timely collection of adhesion, within 4 months 6

Art 140 bis of the Italian Consumer Code – causes of action breach of contract unfair commercial practices Anticompetitive behaviors product liability (and from 2012 also) service liability 7

Art 140 bis of the Italian Consumer Code – opt-in system If a consumer wants to be bound by the court’s decision, he must join the class and file his documentation, listing the elements of fact and law on which his claim is based. Nonetheless, joining the class does not imply that the party will directly participate in the proceedings, and, for this reason, he will join the class without the representation of a lawyer. A consumer may also decide not to opt-in. In this case he will be able to file a separate individual action. 8

Class Actions RAI and Banca Intesa Altroconsumo vs RAI – Our First Class Action launched in 2010 for various violation by RAI of the Public Service Contract, among which the talk show stoppage Our Claim for all the adherents: 500 Euro Over pre-adhesions Finally rejected by the Court of Appeal of Roma in July Altroconsumo vs Banca Intesa San Paolo – Class Action launched for recovering illegal fees applied by Banca Intesa San Paolo since 2009 when their clients went in red in their accounts Our Claim for all the adherents: reimbursement of illegal fees undue paid It is the first of our class actions having passed the admissibility barrier. Pending before the Court of Torino We formalized the collection of adhesions by the end of 2012 as required by the Judge: only 102 formal adhesions 9

Class Actions Ferries and Trenord Altroconsumo vs Moby, Snav, Grandi Navi Veloci and Forship – Class Action launched in 2011 for the reimbursement of extra prices paid by passengers as a consequence of the anomalous increases for ferries to Sardinia. Our Claim for all the adherents: reimbursement of 50% of the tickets prices The Court of Genova in November 2012 suspended the decision on the admissibility of the class action awaiting the decision of the Antitrust on the cartel, which is finally arrived in June: More than 8 millions Euro fine! We have collected over pre-adhesions. Altroconsumo vs Trenord – Class action related to the chaos of December 2012 when the delays and cancellations of trains have caused many and significant inconveniences to commuters for several days in Lombardy Region Our Claim for all the adherents: the equivalent of three months of subscription fee We have collected over pre- adhesions First hearing in November before the Court of Milano 10

Class Action VAT on Waste Tax Altroconsumo vs 8 Municipal Companies – What consumers pay for the waste services (so called TIA) is a tax so it should not be subjected to VAT as already stated clearly in 2009 by the Constitutional Court and confirmed in 2012 also by the Court of Cassation The Government, which we brought signatures in a petition, recognized that consumers who have paid VAT on TIA in the last years from a strictly legal point of view would be entitled to reimbursement, nevertheless they responded negatively to our request to find a political solution to repay all the consumers involved The total amount of the due refund is around 2 billion of Euros so we decided to launch a very articulated and challenging action covering large part of the national territory: 8 class action against municipal companies that manage the TIA Our Claim for all the adherents: the reimbursement of the VAT undue paid + interests The first class actions against AMA Roma and Firenze Quadrifoglio were notified, the other will be so shortly. In the Court of Rome against AMA in the Court of Florence against Quadrifoglio the first hearing will be held on November. We have already collected over pre-adhesions. 11 Municipal Companies target of the class action Companies Headquarters Territory covered AMA Roma Roma Roma HERA SpaBologna Emilia Romagna/Marche QUADRIFOGLIO SpaFirenze Toscana IREN SpaReggio Emilia Emilia AMIU SpaGenovaLiguria TRENTA SpaTrento Trento/Rovereto VERITAS SpaVenezia Veneto CONTARINA SpaTreviso Veneto

VAT on Waste Tax: 8 Class Actions territorial coverage Veneto 7% Trentino 15% Marche 10% Emilia 72% Liguria 37% Toscana 28% Lazio 56% Datas refers to percentage of population involved in the action 8 different class actions vs municipal companies that manage the wast tax Such municipal companies cover 7 Regions 217 M unicipalities involved Total consumers involved 14,52% of the Italian Population Total consumers involved 14,52% of the Italian Population 12

VAT on Waste Tax: 8 Class Actions + 67 Warnings territorial coverage Veneto 26% Lombardia 8% Trentino 29% Friuli 11% Sicilia 6% Puglia 1% Abruzzo 4% Marche 19% Emilia 74% Umbria 38% Piemonte 13% Liguria 43% Toscana 42% Lazio 62% Campania 1% Sardegna 8% Datas refers to percentage of population involved in the action Total: consumers involved 22,37% of the Italian Population Total: consumers involved 22,37% of the Italian Population 13

14 VAT on Waste Tax: coverage of our action Phase 1: petition Phase 2: discover if it is possible to have the refund Phase 3: concrete actions to have the refund > 8 class actions and 67 warnings toward municipalities. Users that can have the refund No refund

15 VAT on waste tax ( Phase 2 - Sept>Oct 2012 ) Message: ask the refund, or discover if you can have the refund Call center operator used online services to check if the refund can be asked for Landing Page

16 VAT on waste tax: offline adv (Phase 2) Municipalities in which the VAT was not applied Municipalities in which the VAT was applied

17 VAT on waste tax: online adv (Phase 2) DEM Facebook ADV Google Adwords

18 VAT on waste tax (Phase 3) Offline: introduction of the class action in local adv (newspapers)

VAT on waste tax (Phase 3) social Landing page integrated in facebook (with a facebook app) More than 6000 share 19

Unfortunately, the continuation of the crisis is beginning to dangerously undermine the rights of consumers which, recognized more often only on paper, have become the subject of a tiring day reconquest against both companies and Public Administration Abusing those who, like the final consumers, alone do not have the tools to defend themselves, places substantially in crisis also the foundations of the rule of law. For these reasons we have decided to devote more resources and attention to collective legal redress so that, when our traditional lobbying and advocacy do not achieve the desired results, Altroconsumo can demonstrate that consumers and citizens united are able to pull out teeth when their rights are violated. With our 5 class actions we have so far collected a total of over pre-adhesions. Our class actions are open in free participation of all consumers - our members or not - the more we are, more we count! 20

The most challenging, fun, engaging class actions … will be the next ones those that we have not yet even thought about … will be the next ones those that we have not yet even thought about 21