The standard doctrine, The status quo interest, Good name, The market : entering in and checking out, detrimental reliance.
The main provision on torts in Italy is art. 2043 c.c. : a transplant
of famous art. 1382 C.nap. It was translated in English1
as follows : " Any fraudulent, malicious, or negligent act that causes
an unjustified injury to another obliges the person who has committed the
act to pay damages".
As a matter of principle it is quite evident that no distinction is
made between physical damages and pure economic losses. Both may be an
unjustified injury.
The standard doctrine was that an injury is unjustified whenever there
is an offence to an absolute right of the victim such as property, liberty,
life or reputation. Only in such cases the tortfeaser should be bound to
pay damages, otherwise the victim could not recover, except when the tort
was intentional.
From a comparative perspective the standard doctrine in interpreting
a transplant from French legsilation was quite similar to the provisions
of the German Code (par. 823 and 826 BGB) !
In principle the recovery of pecuniary losses was not a problem, as
long as they derive from an offence to an absolute right of the victim.
As a matter of fact, anyway, an injury to property or to the person is
quite always a phisical damage. Besides the business reputation was not
protected, and so far Courts have not been addressed to solve cases on
false informations. But the standard doctrine was widened during the sixties
and the seventies.
The S.C. held in Meroni 2 that a creditor can recover
damages for the pecuniary losses he suffered from an injury to his debtor.
It was the case of a famous soccer player killed by a car. The soccer
team, Torino f.c., sued for damages alleging an economic
loss3 .
The creditor had only a relative right derived from the contract with
the player, and no kind of an absolute right on him against third parties,
but notwithstanding the S.C. stated that in principle he could recover
damages: it was clear that the old doctrine collapsed.
This Meroni doctrine is now used whenever an employee is wounded or
killed in an accident. In these cases the employer, bound by Statutes to
pay wages or other sums to the employee or his family, is allowed to recover
damages from the tortfeasor.
It is quite evident anyway that the the injury at the origin of the
economic loss of the employer is a physical damage to the employee.
An important case of pure economic losses was decided by the S.C.
in Failla v. Paskwer ved. De Chirico 4.
Failla was considering to buy a picture of De Chirico. He was not at
all convinced by the seller that the picture was not a copy. So he decided
to approach the painter. De Chirico was quite old at the time. He recognized
as his the picture and painted on it a second signature. Later it was discovered
that the picture was in fact a copy. De Chirico died meanwhile and Failla
sued for damages the widow Mrs. Paskwer. It was granted for sure that DeCirico
didn't act intentionally, but for negligence only.
The S.C. held, in favour of Failla, that everybody has a right not
to be economically worsened : a right protecting his pecuniary status quo
interest.
This right was infringed by De Chirico because he negligently gave
Failla false informations determining a loss in his "Patrimonio", which
is the set of all assets and properties belonging to a person.
According too the S.C. everybody has a right to the "integrity of the
Patrimonio", and the right of Failla was violated because we wasted money
buying a copy.
The S.C. also stated that Failla had a right to freely decide to buy
or not, and that the misinformations he received from De Chirico violated
his right of free choice.
It is to me also clear that the S.C. approached tha case in terms of
a right of the victim, and not in terms of a duty of the tortfeasor because
of the old doctrine centered on the idea that an injury to be "unjustified"
must be an injury to a specified right of the victim. Even if a right not
to be worsened is anything but specific.
Whatever one may think about this mass of nonsenses it is crystal clear
that whenever there is a damage (other than a moral damage) the "Patrimonio"
suffers a loss, so the rule became that no damage can be
left where it felt 5.
Anyway the Courts used this "new" doctrine in a more limited way.
In Limoni s.n.c. v. Guerlain S.A. e Guerlain S.p.a.
6 the S.C. faced a case in which Limoni snc was merchandising without any
license products of Guerlain. The name of the licensee has been cancelled
and the original tag - with a number to identify the single product - has
beene removed. Guerlain alleged that his commercial practice to merchandize
through authorized licensees was intended to preserve his good business
name, and that the tags on products were essential to identify defects
and so to protect the customers. The S.C. held that Limoni committed a
tort against Guerlain and used the idea of an injury to the "Patrimonio"
of Guerlain, transferring a doctrine created in the field of false informations
to protect the business good name of a famous perfume-producer. Besides
it was not the pecuniary status quo of Guerlain which suffered. Actually
Guerlain did'nt waste money. Guerlain alleged a possible future loss of
prestige on the market with a possible negative consequence to his revenues.
In Soc. Valentino Garavani c. Soc. Postalmarket ,7
Postalmarket bought many products from the authorized licensees of Valentino
and merchandized them in a Mail catalogue addressed to a lower class target.
Giuliani, J. held that this was a tort against the prestige and good business
name of Valentino quoting Limoni v. Guerlain as a precedent but without
any further reference to the pecuniary status quo interest.
So the protection of business good name became established indipendently
of the Failla - De Chirico doctrine.
In Veuve Cliquot, Ponsardin, Moet et Chandon,Mumm etc.
v. Zarri 8 , Zarri commercialized soaps in the shape of famous champagne
bottles. The Court confirmed the rule but denied damages to the Champagne
producers, because their good name and reputation was not actually offended.
Selling soap is a total different business that selling wine, and besides
their reputation was even strongened by the affaire.
In Sindacato provinciale giornalai v. Tirelli e Comune
di Roma 9 the syndacate of news publishers and vendors denied for 30
years to Mr. Tirelli the right to sell news.
To become a news agent a public license is required, and Tirelli got
it from the Rome authorities. But besides it is patently necessary to contract
with the Syndacate to receive copies of newpapers and journals to sell
them to the public. Even if Tirelli had his license the Syndacate always
refused to contract with him. The Court of Appeal gave
judgement in favor of Tirelli 10.
According to the Court the practice of the Syndacate was an offence
to economic freedom arguing that art. 41 of Italian Constitution11
grants to everybody a right to access on the market. The S.C. in a
precedent12 invoked by the Court of Appeal stated in a similar case
that to boycott the access on the market could be an unfair commercial
practice (Concourrence déloyale). But the action now was brought
in tort, and the S.C. in this case reversed the decision of the Court of
Appeal and gave judgement for the Syndacate.
The S.C. held that Tirelli had no absolute right to enter the market
of news selling, so he was not allowed to recover damages for the loss
of a business opportunity he had not the absolute right to start.
The Court held that in the case the agreement among producers and vendors
was not arbitrary: they didn't exclude Tirelli without reason. They just
fixed general standards and Tirelli did not comply with them. Besides no
Statute was imposing on the Syndacate a duty to contract with everybody.
The Court referred to Meroni and De Chirico as "exceptions" to the
principle of the necessity of an offence to an abolute right of the victim.
Exceptions which must not be widened without purpose.
In other financial cases the Courts refused to enlarge the domain of
liability for economic losses.
In Curti c. Ciampi 13(the former President of Bank
of Italy and former prime minister) Curti was a deluded shareholder of
Calvi's Banco Ambrosiano spa (BASPA). When Calvi was found hung in London
evidence revealed that BASPA bankruptcy was due to many crossboard operations
which at the time had to be patrolled by the Bank of Italy. Since no information
at all was given to customers about these risky and eventually illegal
operations, and since the
Bank had a statutory duty to exercise control, Curti having lost his
investment in BASPA sued for damages Mr. Ciampi on behalf of the Bank of
Italy. The Court refused to assess damages because in the case Curti had
not a "right", but just a legitimate interest in a proper
administrative control 14.
According to italian version of Balance of Power a civil judge has
no power to order to do something to other branches of government. So he
has also no power to check the diligence of PA in exercising a power of
control. The civil judge can just assess damages when PA commits a "clear"
tort against a private citizen, such as an offence to an absolute right
as property, health, reputation etc. The case was indeed a case of false
informations on the market due to negligence (if not worse) of the central
Bank provoking a mass loss to many customers nobody paid for, but the courts
refused to refresh the old doctrine widening liability.
The same principle, grounded upon the distinction between "rights"
and "legitimate interests" was applied in Cassa Conti e
sovvenzioni v. Min. Tesoro e Banca d' Italia 15 . The plaintiff was
put out of business because of an illegitimate refusal by the Bank of Italy
and the Treasury Dep. to release him the required public license for banking.
The refusal was declared illegal by an Administrative Court but the civil
law judge refused to assess damages because the Cassa had no absolute right
to enter the market of banking.
In Faillla - De Chrico the S.C. created an unlimited possibility
to sue for economic losses. This new doctrine is fully applied in cases
of detrimental reliance.
E.g. whenever someone makes without negligence reliance to the statement
of another he can recover damages if the statement is negligently false,
so an action in tort can be brought even if someone signed a contract because
of the false informations he received while bargaining16.
Detrimental reliance is indeed at the root of the Ratio decidendi of
Failla-De Chirico when the customer bought the copy picture, worsening
his position, because of the negligent false informations he received without
any fault on his side. A typical case in which a wide protection of the
status quo interest is fully justified17.
Italian Courts used in a rather funny way this doctrine to assess protection
to Business Reputation. Now if you suffer economic losses because of an
offence to your good business name you can recover damages.
But notwithstanding the large propositions used in Failla-De Chirico
courts have not been too willing to widen the scope of liability, and in
particular tort has not been used to assess protection to new-comers on
the market, and to give relief to customers against public authorities.
2 Torino calcio spa v. Romero, Cass. civ. , S.U., 26,
1, 1971, n. 174, GI 71, I, 1, 681 nota VISINTINI; FI 71, I, 342 nota BUSNELLI.
The case is universally known in Italy not by the name of the parties,
but of the soccer player who died in the accident.
3The Court held the principle stated above, but the
Team did not succed in recover damages because the evidence of an actual
damage was not deemed satisfactory.
4 Cass. civ., 24 maggio 1982, n. 2765, per Sgroi J,
in Foro it., 1982, I, c 2864.
5 As in the original literal meaning of art. 1382 C.nap.
6Cass. civ., 25 luglio 1986, n.4755 per Maltese J,
in Resp. civ. prev., 1987, p. 833 nota P. Balzarini; cfr. M. Libertini
in Nuova giur. civ. comm., 1987, I, p. 392; E. De Francisco, Il c.d diritto
soggettivo all'integrità patrimoniale tra illecito aquiliano e illecito
concorrenziale, Rivista Dir.civ. 1988, II, p. 683; A. Di Majo, Ilproblema
del danno al patrimonio, in Riv. crit. dir. priv. 1984, p. 298.
7Pret. Roma, 7 aprile 1987 (ord.), in Resp. civ. prev
1988, p. 114.
8 Cass. civ 21, 10, 1988, 5716, FI 89, I, 764.
9Cass. civ., 15 marzo 1985, n. 2018, per Sgroi, J,
in Foro it., 1985, I, c. 1663, nota PARDOLESI.
10App. Roma, 21 aprile 1980, in Giust. civ., 1981,
I, p. 382
11The Cort followed the opinion of a learned scholarP.G.
MARCHETTI, Boicottaggio e rifiuto di contrarre, Padova, 1969. As a matter
of fact art. 41 states that private economic intiative is free !
13Trib. Milano, 6 aprile 1982, D.Fall.,1986, II, 619
14I have not the time to develop here this distinction,
which is essential in Italy to determine Civil and Administrative Jurisdiction.
Anyway legimate interests are "private interests of a status less than
legal rights which may have procedural protections against administrative
abuse or unfairness" cfr. R.E.RIGGS, Legitimate expectation and Procedural
Fairness in English Law, 36 AJCL, 395 (1988) with ref. to Ridge v. Baldwin
[1964] AC 40 (1963); CERTOMA, The Italian legal System, London, 1985, 20-24;
G. SAMUEL, Le "Droit subjectif" and English Law, 46 CLJ 264 (1987).
15Cass. civ., Sez un, 25 marzo 1988, n. 2579, in Foro
it., 1988, I, c. 8328.
16Cassazione civile sez. I, 17 aprile 1993, n. 4545
Giust. civ. Mass. 1993, 688.
17 Cfr. (of course) Fuller and Perdue, The Reliance
Interest in Contract Damages, I, 46 Yale LJ 52 (1936), II, 46 Yale LJ 373
(1937).