Debt Recovery through the Italian Courts

The main legal remedies for debt in Italy

If you have Italian debtors who owe you or your company sums of money, what are the the principal legal remedies?

On the basis of the current procedural rules, Italian law offers two main options:

1. Ordinary Action (Azione Ordinaria), and

2. Decree for Payment (Decreto di Ingiunzione):

The Ordinary Action is – as the name would suggest – a standard action which is notified or served upon the debtor by way of Summons, requiring him to appear before the court where he has his residence. The length of this process is usually greater than that of the Decree for Payment. The average length of an Ordinary Action is approximately 3 years up to the issuing of Judgement by the Court of First Instance which, in Italy, is however immediately executive, in that the debtor is obliged to pay immediately upon Judgement being issued.
Where the debtor does not pay spontaneously it is possible to proceed with Judicial attachment/property seizure or with the Judicial sale of all his goods until the debt is paid off in its entirety.
In order to initiate this type of procedure, the documentation necessary is – a photocopy of the documentation signed by the client, from the payment requests, from the account statement on unstamped paper; in any case no authentication is necessary by the Notary.

The Decree for Payment is the alternative route. The instance must be presented before the Court where the debtor has his residence. Once the Decree for Payment has been issued by the Court, the debtor has forty days (commencing from the date of notification of the Decree) in order to lodge opposition.
Where the Decree for Payment is unopposed, the Decree becomes executive and, therefore unchallengeable and the debtor is obliged unconditionally to make payment of the sum due.
The Decree requires to be registered at the Register Office; following this the Writ of Execution (Atto di Precetto) is notified and the debtor’s goods will be seized/attached for sale by the competent Court.
The duration of the phase of the Decree for Payment is approximately 4 months from the lodging of the Motion for Decree up to attachment of the debtor’s goods; thereafter, the judicial sale follows. At this point, a further 12 months is necessary in order to collect sums due – again, this depends on the efficiency of the particular Court.
Where the debtor lodges opposition, an Ordinary Action (see above) is initiated with all the characteristics and timescale plus the extra costs evisaged with this type of action. In order to request a Decree for Payment it is however necessary that an Italian Notary authenticates all the original copies of account statements or other documentation. As regards all the other documentary evidence, the same applies as in the Ordinary Action above.
Where an ‘Expert Opinion’ is required, this is almost always requested by the debtor, and is in this case paid for by him.
Where the debtor does not pay after notification of the Decree for Payment it is necessary to add in the costs of registration of the Decree, Writ of Execution, Attachment and Judicial Sale.

Who pays the costs of Court Action?
The normal rule in most jurisdictions is that the loser in Court has to pay the legal fees of the winner. This is also true in Italy. However, it should be borne in mind that the creditor will always be, in the first instance, responsible for settling his lawyer’s costs (including court dues etc). Where the debtor has insufficient funds to pay the creditor either the principal sum or costs, clearly this is a cost which the creditor will have to pay. Comas can help you judge whether taking legal action through the courts is commercially worthwhile, through a series of checks and verifications of the debtor’s economic/financial profile – see Credit Recovery Report.

Comas provides a comprehensive debt collection service in Italy, from the Extrajudicial phase through to fully-concluded court action with decree in the Judicial phase through a network of expert debt collection lawyers.