Italy, Court of Cassation, 27 April 2017

Identification of the case

• Art. 23 of the Legislative Decree n. 58/1998, Articles 35,50 of the Consumer Code
• Consob Regulation n. 16190/2007.

• A brief reference is made to Directives n. 2007/64 and n. 2008/48, though neither of them is at the founding of the Court’s reasoning, and they are instead only referred to in order to strengthen the point upheld by the Court.

Summary of the case

The plaintiffs sued a bank claiming that several contracts concluded with the defendant and concerning the management of financial assets were void on account of the violation of information duties by the bank as well as the lacking of written form with regard to such contracts, contrary to what provided for by Article 23 of the Legislative Decree n. 58/1998. The plaintiffs’ claim was dismissed both by the first instance Tribunal and by the Court of Appeal, which upheld, in particular, that: i) the contracts were signed by the customer and, though not signed by the bank, were respectful as such of the requirements of Article 23; ii) the written form was required only for the contracts and not for every single operation occurring within the its context; iii) the bank had fulfilled its information duties. The plaintiffs challenged the Court of appeal’s decision before the Court of Cassation, claiming, with their first argument – and the most relevant for the present analysis – that the contracts were null and void since the written form under Article 23 requires the signature of both the parties of the contract.  

• Civil judicial enforcement

Declaration of nullity of the contracts challenged and restitution of what paid by the consumer under such contract.

As far as the purpose of this analysis is concerned, the Court of Cassation deals, in the case examined, with the scope of the provision of Article 23 of Legislative Decree n. 58/1998 – and, in second place, of Article 30 of Consob Regulation n. 16190/2007 – , which requires that investment contracts in the banking sector are stipulated in written form and that if such requirement is not fulfilled the contract must be regarded as null and void, although the nullity may be claimed by the customer/consumer only and not by the Financial Intermediary.  In particular, the Court acknowledges that it is debated, between the judges, whether the written form prescribed by the law is to identify with the signature of the customer or the signature of the Financial Intermediary as well. The Courts, after reporting that different interpretations are embraced by the Italian Courts, points out that formal requirements can pursue different goals and the nullity deriving from the lack of such requirements may assume different features depending on the goals pursued. The nullity prescribed by Article 23 of Legislative Decree n. 58/1998, the Court highlights, must be regarded as a nullity aimed at protecting the weaker part of the contractual relationship (i.e. the customer/consumer). Such assumption also explains why Article 23 states that only the consumer is empowered to claim that the contract be declared void. On such grounds, the Courts argues that, once the customer has been properly informed of the content of the contract and his/her consent has been certified through his/her signature, then the signature of the financial intermediaries should not be regarded as essential for the purpose of Article 23. In order to sustain such argument, the Court refers to the CJEU case-law and in particular to the Pannon case, where the CJEU argues that the effective protection of the consumer requires that the judge evaluates on his own motion the unfairness of a clause but such clause may still be applied if the consumer, having been informed of it, objects to the non-application and instead asks for the clause to be regarded as valid. Therefore the Court of Cassation, though not explicitly, argues that, where the written form is prescribed by law with the purpose of ensuring adequate protection of the customer/consumer, then his/her signature alone – provided that he/she has been properly informed – is enough to consider the requirement fulfilled. The Court also points out that the European Legal system – as it can be observed analyzing Directives n. 2007/64 and 2008/48 – does not seem to focus on the fulfillment of a formal requirement – such as the written form – but instead it holds in high regard that the contractual relationship be transparent, regardless of the means employed to reach such goal. Due to the ongoing debate among different chambers of the Italian Court of Cassation, the Court, however, decides to refer the decision of the case to the Joint Chambers.    

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

• Effectiveness

The principle of effectiveness is not explicitly mentioned in the decision. Nevertheless, the Court seems to make an indirect reference to it when assessing the nature of the nullity laid out in Article 23 of Legislative Decree n. 58/1998. In particular, the Court points out that, since such nullity is meant to ensure protection for the consumers, it is on the basis of said consumers’ interests and conditions that Article 23 should be interpreted. As in fact the CJEU reasoned in Pannon, when the will of the consumer is made clear – as it happens when he/she objects to the non-application of an unfair clause or, as in the case here examined, when his/her signature appears on the contract – then the judge should restrain from furthermore questioning the validity of the clause or of the contract. In other words, an effective protection of the consumers under EU Law means that the law and the Courts should ensure that the contractual relationship between the consumer and the Intermediary is transparent and informational duties are fulfilled so that the choice of the consumer is not impaired by lack of information or pressured by the Intermediary. Formal requirements are then to be interpreted according to such purpose.    

Elements of judicial dialogue

• Dialogue among same level national courts within the same Member State

• Direct dialogue between CJEU/ECtHR and National court (out of preliminary reference procedure)

• CJEU C-243/08, Pannon
• CJEU C- 618/10, Banco Espahol de Credito SA

As far the vertical judicial dialogue is concerned, the Court of Cassation seeks to ascertain whether the EU Law, as interpreted by the CJEU, holds in regard a strict interpretation of the formal requirements aimed at protecting consumers or it upholds an interpretation directed at ensuring that the contractual relationship involving the consumers is transparent and informational duties are fulfilled, regardless of the formal instruments employed.

As far as the horizontal dialogue is concerned, the Court of Cassation cites several of its other decisions, acknowledging an ongoing debate and trying to argue, on the basis of a EU Law-oriented interpretation too, for a thesis which does not require that an investment contract is signed both by the customer and by the Intermediary. Nevertheless, it decides to refer the decision to the Joint Chambers, with the purpose of defining a clear position.